In 2024, the importance of customer data has never been greater for companies wishing to refine their consumer understanding and personalize their offers and experiences.
In this context, Customer Data Platforms (CDP) are proving to be essential technological allies. However, choosing the right CDP, especially for large organizations or those with specific needs, requires an attentive, informed, and, above all, structured approach.
How did the CDP market evolve?
In the customer data management landscape, companies embrace the customization era with CDPs, whether "composable" or "packaged." Composable CDPs offer a high degree of flexibility, enabling companies to build tailor-made solutions by selecting and combining modules specific to their needs (e.g., relying on an existing data warehouse for data storage). At the same time, packaged CDPs present a ready-to-use solution ideal for companies looking for fast, efficient integration with less technical complexity and fewer tools to integrate.
While Artificial Intelligence and Machine Learning push customer experience analysis and personalization to new standards, data compliance and security remain paramount. Companies must navigate between possible modular combinations offered by composable CDPs and the "all-in-one" management promised by packaged CDPs while navigating increasingly stringent regulatory frameworks. This challenge underlines the importance of choosing the right CDP for your business and technological context rather than the trendiest CDP available.
The two main categories of Customer Data Platforms
Identify the right strategy for choosing your CDP in 5 steps
1. Define first your strategic objectives, then your needs:
Identify strategic objectives: determine what you want to achieve with your CDP. Is it to improve your marketing campaigns' effectiveness? Is it to better understand your customers (and prospects) and optimize their journeys? Is it to increase segmentation efficiency? Is the CDP project intended to simplify your technology stack or to accelerate specific components? Assign quantified goals to your objectives to understand your priorities regarding use cases.
Define your use cases: list a limited number of use cases related to your objectives, then order them by priority. They will help you establish the essential functionalities that your future CDP must offer. Common use cases include, for example, enhancing customer experience personalization to create more virtuous (and more effective, business-wise) engagement, building unified customer profiles that can be truly activated across all channels, or addressing the customer journey in a multi-channel context by utilizing more valuable data. Remember that certain use cases can be related to solving technological challenges, such as real-time data integration, freeing up precious time for IT teams.
Audit existing data: start by taking a complete inventory of all customer data available within your organization. What data is needed for your selected use cases? How can this data be accessed? This includes, for example, behavioral data from your websites and mobile applications and data from sales (CRM), marketing, customer service, points of sale (POS), etc.
Stakeholder consultation: start discussions with all stakeholders involved in your CDP project, including marketing, sales, CRM team, IT department, data experts, customer service, and Data Science teams, to understand their needs and expectations. Remember to involve an executive-level sponsor to address strategic objectives as well.
2. Evaluate your resources carefully
Budget: clearly define a budget for your CDP setup and maintenance, including initial costs, subscriptions, and planned integrations. This often neglected step can considerably impact your CDP project's overall TCO and thus challenge the expected return on investment.
Technical skills: assess your team's ability to integrate, maintain, and operate your chosen solution. Since a CDP is a technological project, IT teams are essential to its success. Consider whether you need to set up additional training courses, recruit dedicated profiles, or call on the services and experience of an agency.
Project team: consider the importance of setting up a team to coordinate the CDP project. Just as any CDP project without a sponsor is doomed to fail, a CDP project without proper governance runs a similar risk.
Existing IT infrastructure: analyze your current technology infrastructure and stack to identify any integration challenges with your chosen CDP.
3. Explore all options without limiting yourself to market definition
Traditional vs. Composable CDP: compare the advantages of a traditional CDP, which offers turnkey solutions, with a composable CDP, which allows you to build on existing investments. Choosing a hybrid solution may be relevant to your technological reality - it could combine the Data Warehouse that already stores your data with a more traditional CDP for segmentation and activation, for example.
Suppliers and Solutions: draw up a list of potential suppliers, considering their reputation, capacity to evolve with your needs, and any use cases applicable to your field.
4. Consider technical and operational aspects
Integration: make sure your CDP can be easily integrated with your existing systems, such as CRM, analytics and BI tools, or marketing platforms.
Evolution and scalability: the solution must be adaptable to your customer data growth, scalability challenges, and the evolution of your marketing needs.
Compliance and security: check that your chosen solution complies with data security regulations (e.g., ISO standards, SOC2 Type II, data encryption at rest and in transit, etc.) and personal data protection regulations, such as the EU's RGPD.
5. Plan implementation and deployment: think ahead!
Roadmap: create a detailed roadmap for implementation, including deadlines for each project phase.
Team training: organize training sessions for key users to ensure CDP adoption and effective use.
Piloting and fine-tuning: start with a pilot deployment to test and fine-tune your strategy before rolling out the CDP to your entire organization.
Alternatives to CDPs
While composable and packaged CDPs (Customer Data Platforms) present themselves as complex and relevant solutions for managing and activating customer data, it's essential to recognize that these technologies are not the only route to effective data management. For some organizations, particularly those with less complex needs or significant budget constraints, optimizing existing systems such as Analytics, CRM (Customer Relationship Management), Marketing Automation, or Data Warehouse solutions can offer a concrete, easy-to-implement, and cost-effective alternative. This approach makes the most of existing resources, avoiding the additional costs associated with adopting and integrating a new platform.
Lastly, it is also possible to develop a CDP in-house, using available IT resources. While attractive for organizations with particular resources and skills, one must carefully consider the pros and cons of this approach. Developing an in-house CDP requires a significant initial investment in time and resources, as well as an ongoing commitment to its maintenance and evolution. Organizations must also be prepared to manage the challenges of integrating their customized solution with other existing systems and technologies in a fast-moving technological environment.
Conclusion
Companies can efficiently transform their customer data into effective activation levers and valuable insights by integrating the latest market trends, following a structured approach to selecting and deploying a CDP. These insights can then be used to improve customer engagement, optimize purchase paths, and drive growth. Relying on best practices and a well-defined strategy, choosing the right CDP becomes a powerful lever for gaining a competitive advantage and establishing a perennial technological foundation in a volatile environment.
Once your choice has been made, read our complete guide to implementing your new CDP to ensure that your company utilizes this tool to its fullest potential. And of course, don’t hesitate to contact us if you have any questions - we’re happy to help!
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