A strategist’s perspective on Customer Data Platforms (CDPs)

After some chaotic experimentation of different CDPs throughout the last 8 years, we have carefully built an understanding of the crux and true purpose of CDPs.

Here is the big reveal: the purpose depends, thus, the following questions:

• Are your needs more focused on accessing relevant data? → a UX challenge.
• Are your needs more focused on combining relevant data? → a schema challenge.
• Are your needs more focused on creating powerful audiences? → a segmentation challenge.
• Are your needs more focused on the orchestration of channels? → an integration challenge.

So are CDPs the ultimate remedy for these challenges? It depends.

One thing is certain: at some point, you need to show how much money you have generated with the solution you have selected.

7 hard truths about CDPs (in our experience)

1. Strive to understand the origins and history of the CDP you’re considering.
2. Is it truly a CDP, or just a rebranded CRM?
3. Do everything you can to assess your current data model and identify what’s missing – a CDP can’t fix foundational data issues.
4. Organizations are rarely fully prepared to adapt to a CDP, especially when it comes to changing processes – this is often a competence challenge; your team needs to level up (time to fire up those SELECT statements!)
5. Go through the trouble of calculating – is the investment in a CDP worth it, or could you solve the issues in other environments (such as cloud solutions)?
6. Expect challenges – integrating a CDP into your existing systems is always a hassle!
7. A CDP is not a synonym for automation – it’s a synonym for audience control.

At this point, you might be wondering, “What exactly is a CDP?” If so, check out our introduction to CDPs for a quick overview.

Choosing a CDP is like finding your new home – a recurring analogy

It’s not about the technology you choose, but how you use it and for what purpose. The “what” and “why” are central to making the right decision.

Imagine you’re looking for a new place to live. Choosing a CDP is like deciding whether to build your own house or buy one that’s move-in ready. Building gives you full control but takes time and resources, just like creating a tailored CDP. Buying a pre-built CDP, like a furnished home, is quicker but may not meet all your specific needs.

Next, think about location. Do you want easy access to other services, or would you prefer more independence, even if it means more effort to connect? This mirrors the integration choices with a CDP, whether to prioritize ease of connection or control.

Finally, consider future growth. Just as you’d choose a house with room to expand, your CDP should be flexible enough to evolve with your business needs.

In both cases, your decision depends on your resources, long-term vision, and personal preferences. This is what we will focus on in the following chapters!

Why do you need a CDP – and how do you identify that you need one?

This usually tends to be the section, where most blog texts – about CDPs – tend to get a bit fuzzy and too high level, leaving the reader still thinking about the question, “So, do I need a CDP”. To get some clarity and answer these questions properly, we have put together a checklist to answer the question for you. If you tick at least a couple of boxes in this checklist, you probably should consider getting a CDP. If you already have a CDP, you might need to reevaluate your ways of working with and around it – Avaus can help you with both.

“Do I need a CDP”-checklist:

• We struggle to unify data from multiple sources (CRM, web, mobile, social, etc.) into cohesive customer profiles, leading to fragmented insights. (Roughly ⅓ of marketers agree it’s difficult to collect valuable data from customers.)
• Our inconsistent data prevents us from delivering seamless customer experiences. (More than half of the organizations in this study had more than 11 separate repositories for customer data.)
• We lack the ability to effectively segment audiences for highly targeted marketing campaigns. (Only 17% of marketers think they have a “high utilization” of their CDPs.)
• We need to engage customers in real time, with relevant messaging across multiple channels.
• Our data is siloed, making it difficult to execute data-driven marketing activities. (⅓ of organizations are not satisfied with their ability to use data to engage their customers.)
• We are unsure about our compliance with data privacy regulations such as GDPR and CCPA.
• Our marketing, sales, and tech teams struggle to collaborate due to data silos and lack of shared insights.
• We are looking for a single source of truth to encourage collaboration across teams.

If you tick more than one of the boxes above, then:

1. You are, as you can see, not alone!
2. You are reading the right blog.

The undeniable truths of selecting a CDP for your business

These are what all CDPs have:

Building on the house analogy, there are essential elements that every house needs, walls, doors, and windows, regardless of the style or size. Similarly, every CDP requires certain core functions, no matter how customized or off-the-shelf it may be.

In the CDP context, these “foundations” include:

• Data integration: Ensuring all your data sources connect seamlessly.
• Customer profile management: Creating unified profiles across touchpoints.
• Data cleansing and transformation: Keeping your data clean and usable.
• Segmentation and audience building: Grouping customers for targeted actions.
• Real-time data processing: Responding to customer actions instantly.
• Data privacy and compliance: Adhering to legal standards for customer data.
• User-friendly interface: Making it easy for your team to use.
• Analytics and reporting: Gaining insights from your data.
• APIs and integrations: Connecting with other tools.
• Multi-channel activation: Using your data to power campaigns across channels.

These are the pillars every CDP needs to function effectively, just like the basic structure every house requires.

What to focus on when selecting your CDP

When choosing the right CDP for your business, it’s crucial to focus on what kind of “house” you need to build for your business, rather than getting distracted by the flashy features in vendor demos. Don’t fall into the trap of thinking “everything is possible.” Instead, stay laser-focused on your use cases: what do you want to achieve? This should be your central guide.

With this in mind, you can more easily ask: Does this functionality, platform, or interface help us implement our use cases? Does it align with our strategy and vision?

Imagine choosing a suburban family house when you’re a single person building a career with a company headquartered in the city center. This choice wouldn’t support your lifestyle or goals. Likewise, your CDP must fit your specific needs, just as a city apartment might be better suited for your situation.

Another key aspect to consider is your current situation. While it’s tempting to invest in all the tech and competencies to realize your strategy right away, you’re bound by your existing resources and systems. A complete overhaul is often unrealistic, and even undesirable, due to existing dependencies.

The goal is to strike a balance between your desired outcomes and your current infrastructure. A gap analysis, identifying where you are versus where you want to be, allows you to prioritize and build a practical strategy. Are you, for instance, focused on reducing costs, increasing sales, or boosting customer loyalty?

Some CDPs offer flexibility, while others are more rigid. Are you trying to fill a few technical gaps or build entirely new capabilities?

What’s next?

Now you’re almost ready to choose the perfect CDP for your business – just kidding, there’s still a bit more to figure out. But if you apply some of the ideas we’ve covered, especially focusing on the “what” and “why” to guide your strategy and decisions, you’re well on your way.

If you’re looking for more hands-on support, whether it’s choosing the right CDP or refining your strategy, feel free to reach out. Avaus is full of experienced professionals who are ready to assist. We look forward to hearing from you!