A Roadmap to CDP Success

According to Extrapolate, the global Customer Data Platform (CDP) market is forecasted to expand, with a compound annual growth rate (CAGR) of 17.9% from 2022 to 2030.

The market is estimated to surpass $5.7 billion by 2026, reflecting the increasing demand for solutions that unify customer data and enhance personalized experiences.

However, before you jump on the bandwagon, it's essential to consider a few key factors. I've outlined the most important considerations to keep in mind before adopting a CDP.

Establish a Use Case

First, not every business requires a CDP. Depending on your company, adopting a CDP may require substantial effort and investments before it can bring in benefits.

Hence, it would be best to consider why your company needs a CDP. Here are three questions to get started:

Which aspect of my business will I use a CDP for?
How can my business benefit from a CDP?
What metric can I use to measure the benefit?

For example, suppose you run an e-commerce company called SmoothSkin. It sells beauty products and heavily relies on email marketing to drive traffic to your website. Here is how you can answer the questions above.

Knowing the specific challenges and goals that a CDP can address will help determine whether it's right for your business! You wouldn’t want to waste valuable company resources on a platform that doesn’t grow your business.

Review Data Ecosystem

Regardless of how sophisticated a CDP is, it will never perform at its best capabilities without data. A CDP only improves on an existing data ecosystem.

To understand your data ecosystem, ask yourself four simple questions:

Where does my business collect data, if any?
How is the data stored?
Who is in charge of the data?
How is the data used to improve the business?

Back to SmoothSkin. If your website supports account creation, you may collect user data like email, age, or gender. To evaluate the success of email campaigns, you also gather metrics like click-through rates.

Depending on your website setup, a cloud service or database may contain your user data. Campaign metrics can be in a third-party platform, or manually collected in files.

Usually, engineers, digital marketers, and project managers take ownership of said data. They may already use it to understand and improve business operations.

Reviewing your data ecosystem will help to gauge your digital maturity. Digital maturity measures your readiness to adopt and integrate digital technologies into existing operations.

As you may expect, different levels of digital maturity demand unique solutions and efforts to adopt a CDP. Lower digital maturity may require more foundational work, such as creating data collection practices, before leveraging a CDP.

Establish CDP Stakeholders

Adopting a CDP requires cross-functional collaboration across your company.

You will ingest data from various teams like marketing, sales, analytics, and customer service. Technical teams, such as IT and software, should be involved to resolve any technical challenges.

Additionally, organizations in regulated industries like healthcare and financial services may need legal representatives to navigate compliance with data regulations.

More importantly, your company should align everyone's mindset to be CDP-focused. If adopted, everyone in an organization should collectively use a CDP.

Then, decisions across the company are made based on a unified view of your customers.

Select a CDP

If you browse the Internet, you'll encounter many CDPs developed by companies of different sizes, each marketing its unique features and market differentiation.

You may be inclined to choose a CDP based on flashy features or buzzwords like "Powered by Artificial Intelligence."

While features are important, below are three crucial factors to consider.

Customer Support

Adopting a CDP is not an easy task. No matter how user-friendly a vendor claims their CDP is, you will encounter issues.

While some problems can be resolved through the CDP’s documentation, others may require immediate assistance from the vendor.

For instance, if you face problems while starting a marketing campaign with the CDP, you would want these problems addressed promptly to avoid delays.

Therefore, expect prompt customer support from your CDP vendor. The CDP should also be transparent about ongoing incidents and keep stakeholders informed.

Ease of Integration

A CDP is a new addition to your existing data ecosystem. Rebuilding your current systems around a CDP doesn’t make business or financial sense.

Instead, focus on integrating the CDP seamlessly into your current infrastructure. Review the CDP’s documentation or consult customer support to understand the supported data sources and integration methods.

For example, if your data is on Google Drive, check if the CDP can automatically ingest data from Drive. Evaluate the reliability of this ingestion—can it recover automatically if a failure occurs, or does it require manual intervention?

Also, consider whether you need technical expertise for data ingestion. If so, how easily can this knowledge be transferred to your business teams?

Data Privacy & Security

Because you give a CDP access to your user data, you should assess its ability to handle data securely.

You can read the article below to learn more about data privacy in a CDP.

Conclusion

Using a CDP will not bring you returns in a day or two. It is a gradual process that involves setting up, integrating, and optimizing the system over time.

Before you adopt a CDP, you should assemble a team of stakeholders to review your use cases and data ecosystem.

Then, when considering a CDP, prioritize ease of use, customer support, and data security over flashy features.

If you're unsure, don't hesitate to consult with CDP vendors or experts for advice. They can help you identify areas where a CDP could provide value and guide you in making an informed decision.

🫵🏻 If you’re interested in leveraging a CDP to enhance your data ecosystem, feel free to reach out to discuss tailored solutions for your use cases.