By Brian Goldfarb, CMO at Amperity
Since the creation of the category five years ago, most CDPs have been touted as a marketer’s campaign tool, a way for them to efficiently target and measure cross-channel spending. As enterprise-scale consumer brands face the disruptions caused by COVID-19, their needs eclipse and transcend the marketing use case for CDP technology.
That’s because the responsibilities for fixing those problems transcend the marketing profession. It’s not a marketer’s problem alone to understand customers, transform the business to be more customer-centric, and act systematically to grow revenue and loyalty. These must be goals shared across the entire organization, and every stakeholder needs speedy access to accurate, updated customer data.
A CDP, by extension, must be able to deliver at that level, operating at an enterprise-wide scale to unite data from different systems, rationalize it, and make it actionable for them to deploy at the speed of business. And as larger brands accelerate their digital transformations, the challenge of operating across an entire organization can only be met by a CDP that can handle massive scale.
Few CDPs can. And now, with so much on the line, it is not the time for enterprises to learn that the hard way.
Enterprise brands. Enterprise problems.
The first is fractured identities. Customers engage across a host of online and offline channels, sharing diverse and inconsistent identifiers that are all but impossible to reconcile using legacy approaches, preventing an accurate, unified customer view. This results in major downstream problems: from inaccurate insights and segmentation to poor personalization and CX. And an over-reliance on 3rd party data to fill identity gaps has proven to be inaccurate, expensive, and, increasingly, poses compliance risks no brand can afford.
The second is siloed unactionable customer data. The customer data brands need is trapped in siloed systems (loyalty, email, online and offline transactions, digital engagement data, and more) where no one can access it. Brands have resorted to highly manual approaches to unlock this data, but they’re notoriously fragile, time-consuming, and incomplete. Combined with massive scale, high latency, and constantly changing systems and needs, enterprises are spinning their wheels in their quest to build the much-sought-after “single view of the customer”.
The third is a lack of insights connected to actions. Marketers and business users have been starved for customer insights and actionable customer data. They need tools that surface insights and shortcut decisions. They need point-and-click access to their data to build segments, activate omnichannel campaigns, and measure the true ROI of their programs at the customer-level (not the channel level).
The Promise of the CDP?
In an ongoing attempt to overcome these problems, IT, Analytics, and Marketing leaders have been cobbling together a combination of 3rd party data services, data lakes and warehouses, ETL and integration tools, marketing automation tools and more. It’s complex, expensive, and generally doesn’t come close to solving their customer data problems.
Enter the CDP. It holds the promise of finally helping brands achieve their customer-centric goals. Unfortunately, most CDPs are mid-market-focused, marketing-only point solutions optimized for one slice of the customer data workflow, not the end-to-end needs of the enterprise. The larger the brand, the more they report CDPs choking on their complex, large-scale datasets, being stuck in implementation inferno, or recognizing only a fraction of the ROI and business impact they intended for their CDP project. Their CDP was built for a narrow use case, and the need is much greater.
Missing Key Capabilities
Analysts and industry observers recognize that most vendors calling themselves CDPs don’t offer everything needed to turn customer data into better customer experiences and better business results. Joe Stanhope and Stephanie Liu at Forrester write, “CDPs lack crucial capabilities to solve for identity resolution, data hygiene, and cross-channel orchestration.” And according to a recent report by David Raab, founder of the CDP Institute, “Many firms offering a CDP or CDP alternative fail to build the complete, shareable customer database that is the heart of the CDP concept.” It’s not enough for a CDP to solve just one customer data problem — it needs to cover the whole range.
Given the scope and scale of those needs, businesses today ask more of the CDP than any marketer’s tool could be expected to deliver. To meet the needs of today’s large enterprises, CDPs must have the computing power to handle data at a massive scale and also be compatible and interoperable with existing enterprise cloud infrastructures. Most importantly, they need to build for the long-haul. Just as the customer data challenge transcends the marketing profession, it also transcends the imperatives of the current moment. Brands need a foundation that can grow and evolve as the world changes: as consumer habits shift, as privacy regulations evolve, as media channels fragment and proliferate.
As long as CDPs are judged by their short-term impact on marketing efficiency, they will fail to live up to this promise.