What a CDP can really do for you

The term Customer Data Platform really appeared in the discourse of marketing decision makers in the mid-2010s, following data warehouses and other DMPs. This type of software has gradually established itself, all the more so as first-party customer data has become central to the marketing strategy of companies.

Concretely, what makes the specificity of a CDP, and what is its place in the data infrastructure of a company? How to properly plan the implementation of a CDP? What are the stakes and the concrete contribution of value of the CDP?

The place of CDPs in the midst of company data systems

What is a Customer Data Platform (CDP)?

Let’s start by defining what a CDP is. For this, let’s take the definitions of two benchmark analysis firms for digital solutions: Forester and Gartner.

Forrester defines a Customer Data Platform as a platform that centralizes customer data from multiple sources and makes it accessible to analysis (insight) and customer activation (engagement) systems.

Gartner defines CDP as a technology that unifies a company’s customer data from marketing and other channels, to enable the modeling of customer profiles and to optimize the timing and targeting of messages and offers.

Concretely, we retain from these definitions the following qualities that a CDP must have:

• It is a solution that centralizes customer data from different sources
• It organizes this customer data to make it usable by other systems
• It facilitates the analysis of data (to generate insights) and the relevant exploitation of data for relational animation (in particular, as we will see, thanks to scoring and segmentation functions)

Generally, the CDP is interfaced with a campaign management and marketing automation tool, since one of the uses is to be able to send messages at the right time, and in a personalized way.

What is CDP not, and how is it different from other customer data systems?

Is the CDP an single customer repository?

In a way, yes, since the CDP centralizes customer data that can come from all available sources of the company: both online and offline contact points. CDP gathers this customer data around unique IDs, allowing a 360 customer view. But it does much more than that…

Is CDP just another name for CRM solutions?

The notion of CRM itself is very broad, and can encompass both customer relationship tools for B2B salespeople and relational animation devices used by marketing teams. Considering that CRM is the central tool for companies to create complete customer views and allow their activation via relational channels (commercial prospecting, customer service, etc.), then CDP is a form of CRM tool, but evolved, and rather intended for marketing purposes. The main difference is mainly due to the fact that the so-called “CRM” systems manage the data of prospect or customer contacts identified, generally by an email address or a customer ID. But these systems are often not designed to work in an ecosystem where a reconciliation of contact identities must also include anonymous individuals.

Is the CDP the new DMP of the 2020s?

The DMP, which has become with hindsight the archetype of buzz words linked to data solutions, and generally synonymous with failure for many advertisers: very often, 6-figure setup budgets, for a low value in use , due to too low a volume of data or the absence of fully thought-out use cases. So, is the CDP just a new acronym, a name change to make up for the failure of the CDPs?

No. CDP is a first-party customer data platform, while DMPs gather third-party data. First party data is better controlled, and its lifespan is longer than third party data. The CDP primarily targets CRM uses, while the DMPs target media uses. Finally, the prospect of the end of third-party cookies has greatly complicated the outlook for DMPs.

What data are managed by the CDPs?

Customer Data Platforms, as their name suggests, manage all customer (and prospect) data available to a business. There is no real limit, but generally it starts with:

• customer profile data: customer typology, consumer profile, stated preferences
• CRM data: contact data, sales area, transactions, interactions…
• behavioral data: websites, applications, reactions to messages, content viewed, etc.

Thus, the CDP must make it possible to centralize data associated with cookies (anonymous users), and with identified users (PII = Personal Identified Info).

To this data, the CDP can add scores:

• level of commitment
• loyalty
• churn risk
• appetite for content or products
• contact preferences
• …

These scores then offer new segmentation possibilities.

The place of the CDP in a data infrastructure

According to the figures released here by CDP.com (a site owned by Treasure Data, one of the main CDP solutions on the market):

• 43% of brands have deployed a CDP and 31% are working on implementing a CDP (2019 Marketing Technology Survey, November 2019)
• 73% of companies say that CDP will have a critical role in efforts to improve the customer experience (Segment: Customer Data Platform report, 2021)

What is interesting is that this trend also concerns B2C industries:

• More and more companies selling goods to individuals (B2C or B2B2C) are deploying a CDP: 24% in 2021, compared to 10% in 2017 (2021 CDP Institute User Survey, November 2021)

If so many companies have deployed a CDP or plan to do so, it is because this type of solution must play a central role in the data marketing ecosystem of companies. Indeed, the CDPs are both a platform for centralizing customer data from the various sources available to the company, but also the tool that must make it possible to activate this customer data on all channels, to create more personalized customer experiences. A large part of the ambition of brands in terms of data marketing is therefore based on this type of solution.

The conditions for setting up a CDP

Creating a CDP is not an absolute necessity for a brand. It is quite possible to manage customer data with a more traditional CRM system and campaign management solutions. In fact, the opportunity to create a CDP depends mainly on the imagined use cases, the potential value of these use cases for the brand, as well as the existence of the technical prerequisites.

Marketing use cases

The first condition is therefore to define the use cases. A subject that we have already covered in our white paper “data or not data”, intended for consumer brands.

First, how can the company collect customer data? With what promise, via what services and what pathways? Then, what are the use cases for leveraging this data? How does the brand use customer knowledge (to guide marketing strategy, media investments, merchandising, product offering, etc.)? And how does it enrich the customer experience (better communication, better service, loyalty offers, etc.)?

The quality and reliability of data collection

The second condition is that of data quality. Does the company have clearly identified data sources, and can this data be reconciled around unique customer IDs? Is the data reliable, managed in accordance with GDPR requirements?

IT architecture

Creating a CDP implies studying beforehand the marketing tools already in place in the organization, in order to ensure that this CDP can be interfaced effectively with the existing IT architecture, and if possible without duplicating the tools already in place. in place.

For example, if a customer data storage solution, a CRM solution or a marketing automation solution already exists, it is useful to check whether these solutions cannot be extended with the functionalities of a CDP.

Why be accompanied by a data marketing agency?

Setting up a CDP is a strategic marketing project, which requires preparation, and key steps to be taken in order:

• define target use cases, for data collection, and data activation
• define priority data, and draw the map of customer data
• project the expected value of implementing the CDP, to model the ROI
• assess the strengths and weaknesses of the different CDPs with regard to the context of the company and its IT architecture, and choose the most suitable CDP
• implement the CDP, from its technical integration to its configuration, then its evolutions

A digital or data marketing agency must be able to support you in these different stages.

In conclusion: what should the CDP bring you?

Customer knowledge

The “analytics” component of the CDP adds an essential part of its value. It allows marketing decision-makers to better know their target, to understand trends, correlations, and to use this intelligence to guide marketing strategy, content to be produced, media choices, and identify friction points. This component is based in particular on the following possibilities:

• scoring
• segmentation
• prediction
• measurement of attribution
• visualization

The possibility of enriching the customer experience

The CDP must also make it possible to activate data to improve and enrich the customer experience. This is based, for example, on the exploitation of the CDP to:

• create personalized and segmented campaigns
• customize content on interfaces
• create new automated scenarios, in PRM and CRM

The contribution of marketing in the growth of the company’s activity

If the CDP is such a strong issue for marketing decision-makers, it is because today, customer data is no longer just a CRM issue reserved for sales teams. Marketing must be data-driven to generate growth: and, data is first and foremost that of customers. Marketing is no longer limited to the adaptation of products through studies, or to the definition of communication strategies for the brand: it must make it possible to identify points of improvement in the customer experience, and create more conversion at all levels of the funnel. The CDP plays an essential role in achieving these objectives.