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Does your company really need a CDP?

Does your company really need a CDP?


Does your company really need a CDP?


The latest Gartner Hype Cycle for Digital Marketing and Advertising report, released this week, shows that Customer Data Platforms have the potential to transform how marketers run their technology ecosystems. But the research firm also noted that CDPs are heading toward the “Trough of Disillusionment” after passing the “Peak of Inflated Expectations,” meaning that marketers who were once excited about the software’s potential may end up being disappointed.

How do you avoid being one of those disappointed marketers? I’d suggest you consult a resource like our Martech Intelligence Report: Customer Data Platforms, a Marketer’s Guide. MarTech Today and Digital Marketing Depot are releasing the second edition today, and, in honor of the occasion, I’ll share a few important tips from this comprehensive report. But be sure to download it yourself for more, including a marketplace overview and tips on selecting a CDP as well as in-depth profiles of 25 leading CDP vendors.

Before you jump on the CDP bandwagon, ask yourself the following questions to ensure that you really need a CDP and that your organization is ready to take advantage of its benefits.

1. How do we currently manage customer data?

Fragmented pieces of customer data often reside in silos in marketing, sales, purchasing, customer support and other departments. Does your organization have a “network of record”? Do you know what customer data it includes? Is third-party anonymous data mixed in? How many systems are in your martech stack? And how does data get from one system to another? These are all areas where a CDP can help to standardize and streamline data storage and processing

2. How efficient are our marketing data processes?

Martech systems are supposed to improve data and campaign efficiency. But many times, disparate systems instead lead to data duplication, lack of standardization and an increase in time-consuming manual tasks. If you find yourself spending more time correcting data errors or de-duplicating contact records, and less time executing campaigns or evaluating campaign performance, it might be time to automate data integration.

3. How would a CDP address our business needs and what are our use cases for the technology?

Virtually all CDPs deliver several core capabilities around data management, but many also provide a wide range of data analytics and orchestration features that address diverse business goals. What would having a single view of your customers do for you? For example, do you want to reduce churn by targeting customers with more relevant offers? Or increase the profitability of customer acquisition efforts by creating more accurate lookalike audiences? Don’t invest in a CDP unless you’re certain that it can perform better than your current systems.

4. Is your organization ready for a CDP?

Do you have enough clarity on your use cases and customer journeys to enable you to choose the correct solution? How will centralizing your data and audience definition impact your organization? Are you confident that all of the teams that would need to be involved – from IT to marketing to customer service – are educated on the potential value of a CDP? Have you chosen early adopters within the organization that can provide proof points to other users?

5. What systems would we integrate through the CDP?

The martech stack is getting bigger and more complex for many organizations. Streamlining integration is a core benefit of implementing a CDP, which can normalize data for easier importing and exporting into other systems. As more brands engage in omnichannel marketing through martech apps — like DMPs, marketing automation systems, CRMs and call analytics platforms — creating a unified view of the customer has become critical to marketing success.

6. How will we define and then benchmark CDP success?

What key performance indicators (KPIs) do you want to measure, and what decisions will you make based on CDP implementation? For example, do you want to decrease data redundancy and track how that impacts the velocity of campaign execution? Or do you want to decrease the time your marketing staff spends on manually transferring data from one system to another? Set business goals in advance to be able to benchmark success later on.

7. Do we have management buy-in?

As with any major organizational investment, management support is essential to CDP success. Begin with small, short-term goals that demonstrate how the CDP is benefiting the business, either through cost savings or revenue gains. The key is to convince senior executives that having a single, unified view of the customer will add to the organization’s bottom line.

8. Do we need self-serve, full serve or something in between?

CDPs are built for marketing end-users. However, CDPs vary in the scope of their capabilities – and it is important to have some level of ongoing training to use them all. CDP vendors provide varying levels of onboarding, customer support and/or professional services. Make sure you understand what your marketing staff will need to know to effectively use the CDP, or if you lack internal resources, what type of managed services are available.

9. What is the total cost of ownership?

CDP vendors typically charge monthly license fees based on the number of data records, events (or customer actions) and applications integrated. There may be additional fees for onboarding, APIs/custom integrations or staff training. Make sure you know your business needs and data volume to understand the investment your organization will make.

About The Author

Pamela Parker is Senior Editor and Projects Manager at Third Door Media’s Content Studio, where she produces Martech Intelligence Reports and other in-depth content for digital marketers in conjunction with Search Engine Land, Marketing Land, MarTech Today and Digital Marketing Depot. Prior to taking on this role at TDM, she served as Content Manager and Executive Features Editor. Parker is a well-respected authority on digital marketing, having reported and written on the subject since its beginning. She’s a former managing editor of ClickZ and has also worked on the business side helping independent publishers monetize their sites at Federated Media Publishing.


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