Do We Really Need a CDP?

At many brands there is a conversation happening about the need for a Customer Data Platform. Likely, there is a champion from marketing or analytics that is passionate about the value it will create. Also likely, there are doubters in IT and Engineering who are managing the data lake and/or the DMP and/or the CRM and are data fatigued. For certain, there are C-level execs hearing pros and cons from all sides and have to sponsor an executive decision. This blog post if for them.

CDP’s are for the business side of your organization – namely your marketing and analytics teams. This being the case, the first questions you need to answer are, do you have the organizational structure, culture and talent to execute on the CDP? Maybe more important, do you have the right leadership and organizational buy-in so that the data and analytics derived from a CDP are going to drive decision-making? Put another way, is your company prepared to be a true, non-biased, data-led, customer-centered business?

Like any tool, your data applications are only as good as the craftspeople designing your outputs from them. Make no mistake about it, parts of the organization are going to be fearful when something so powerful, fueled by data is controlled by one part of the organization. I’ve witnessed this fear first-hand. From loyal veterans to new hires, people get scared about their own value to the org with the unlock of data control that comes with a CDP. There is real courage necessary to make the decision to get a CDP. The larger and more matrixed your org is, the more courage that is needed.

So, org structure, talent and culture are three large areas where questions need to be asked and answered. Then of course there are the questions about what you’ve bought and use already.

It probably doesn’t feel like that long ago you or a predecessor made a decision on a DMP or Data Warehouse. A lot of thought was given. A lot of promises were made. Some were kept and some lay at the feet of dependencies you didn’t anticipate or were not able to manage. Now, a whole new series of salespeople are calling on you and inviting you to events.

Add to that the platforms for email triggering and site segmentation you’ve stood up and have teams trained and executing on. These are real investments that are bearing fruit. You’re likely hearing from those vendors that they do much of what a CDP can do. The promise of the CDP however is greater than the promises of those other platforms. That is why you need it.

The future of all business is data. How you collect and use data to benefit customers is going to be your entire business. We are now in a world where you are not just competing for customers against the brands in your vertical. You are now competing for customers against the platforms. Google, Amazon, Facebook all have first-party data relationships with your customers. They know them. They can anticipate their needs. To compete against the platforms you need to become a platform yourself. CDPs are the only way to accomplish this.

DMPs are the legacy of a pre-GDPR world where cookies served as identifiers to build audiences. That world was driven by media buying and selling on the media platforms and to be blunt, the only entities that prospered in that world were Google and Facebook. CDPs focus on first-party data centered on identity. Not cookies. It’s a different world. CDPs can also take whatever media data you are generating into them and add it to a customer ID.

But Jon, I already have a system for all my first-party customer data. It’s called my data warehouse. Yes you do! And it’s still important.

If you have a system that can prep your data providing ETL (extraction, transformation and loading) capability and storing it great. Ideally this is going to be the most important data that streams into the CDP (if your tech can stream it). But what it’s certainly not is a 360-degree view of you customers and potential customers. That is what you get with a CDP. Also, some CDPs have more advanced ETL and schema mapping capabilities than the existing data warehouses and can take all the raw data you want to send. For most CDPs, the more data you give them the better results you can achieve.

But what am I really talking about? Give me some use cases! Ok.

Marrying you customer file with your site analytics data to understand what your best customers did on your site last week is a use case only possible with a CDP.

Layering in your email open data with offline conversion data to build better MTA (multi-touch attribution) models is a use case only possible with a CDP.

Taking you data from Facebook campaigns and isolating first-time/first touch referrals-to-customers to predict LTV at a channel level and improve your media-mix model is a use case only possible with a CDP.

I could go on but the important thing to understand is that your current data capabilities are not going to be state-of-the art without a CDP. You are going to lose customers if only because your competition is going to be smarter than you about their customers and faster than you with their data-driven decision making. Allowing that to happen to your brand certainly cannot be the decision you make. So yes, you really need a CDP.