Predictions Series 2022: The Future of CDPs: Less Confusion, More Choice
As we head into a New Year, let’s discuss what the future of CDPs really looks like! Lots of ink has been spilled about the state of the customer data platform (CDP). Industry analysts, brand executives, IT experts — everyone can agree on one thing: It’s confusing.
The market is sprawling, and what started as a straightforward technology proposition has morphed into micro-categories and endless debates about what even constitutes a CDP.
So, is it any wonder that some industry analysts estimate as many as 50% of enterprise brands are replacing their CDPs?
It’s time to consider where we go from here because forcing brands to wade through a murky marketplace isn’t working.
Between a rock and a hard place
Traditionally, enterprise brands had one of two choices: Buy or build.
You may think going with one of the big marketing clouds is a safe choice, but it’s not. You’ll be forced to purchase the vendor’s entire product suite, leaving you faced with years of ongoing deployment and integration work.
And let’s face it — trying to be good at everything means you’re rarely good at anything.
Or you could license a CDP from an independent vendor, but that means adopting a prepackaged solution that will likely create redundancy in your tech stack. And as any exec with their eye on the budget can tell you, having multiple tools to solve the same problem is a recipe for wasted spending.
Either way, neither of these choices plays nicely with your existing technology. So maybe you task your IT team with building an in-house CDP. You think it’ll give you more control, but custom-built CDPs are a tricky proposition. They generally underdeliver because they’re suited to IT or analytics users — not the business users you need to enable. The 80% of your organization without SQL skills will need something more.
A McKinsey & Company study found that 83% of CEOs are looking to marketing to drive growth, but nearly a quarter believe marketers are failing to deliver. You should be able to equip your marketing team with the tools it needs to fulfill that promise — not navigate unnecessary costs, trade-offs and false starts.
So what’s the answer?
It’s so simple it seems revolutionary in today’s CDP landscape: Only buy the technology you need.
The evolution of the CDP: a Customer Experience Hub
How do you achieve true customer-centricity?
By operationalizing your customer data into experiences through a Customer Experience Hub (CXH): a best-in-class solution that helps you know and engage your customers and gives you the freedom to plug and play different technologies as your business needs change over time.
CDPs are designed to collect, unify and store your customer data while making it accessible to your other systems.
But, if you want to democratize that data and empower business users to take action on it, you need applications on top of the CDP to generate insights and activate that data into better customer experiences.
When you combine all this together, you don’t have a CDP — you have a CXH.
CDPs are just one component of a CXH, which does so much more than compile and combine data. It supplies no-code access to customer data for your business teams. It provides a single location to derive customer journey insights. It’s the central hub that orchestrates which customers should receive what, when, and through which brand touchpoint.
When you shake off the CDP tunnel vision, you realize it’s a simple matter of deciding which technologies you need and when.
- Do your IT pros want to manage all customer data internally through a homemade Customer 360?
- Does your marketing team need better customer data to support its campaign management tools?
Your business and its technology needs are unique — they shouldn’t be forced into a one-size-fits-all box.
With a CX hub approach, you can eliminate redundant tech, complement the tools you already have, and evolve your stack as your strategy matures over time. More importantly, you can give your organization the speed and agility it needs to transform customer data into exceptional customer experiences — all while making sure everything is tailored to your specific needs.
So where do you go from here? That depends on your business needs.
Do you already have a tech to unify customer identities but not a way to take action on them?
Leverage that foundational data investment by connecting your CXH business apps so all your teams can self-service insights, segment audiences, and orchestrate experiences.
Have you already invested in tech to personalize cross-channel engagement, but don’t have a way to make sure the data that powers it is accurate and actionable?
Let the CDP portion of the CXH serve as your data unification and activation tool.
Missing all of the above?
Use the entire CXH for all your customer data needs — from ingestion to analysis to orchestration.
The CDP marketplace is confusing, sure, but it doesn’t have to be. Once you take a step back and focus on what you really need — not what vendors are forcing upon you — the clouds begin to lift and the path in front of you becomes a whole lot clearer.
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