Customer Data Platform – The Torchbearer of the Personalization at Scale Movement | Blog

Customer Data Platforms (CDPs) enable brand marketing teams to build hyper-personalized campaigns and retain high-value loyal customers. Seizing opportunities in this growing market can set brands apart. Learn how to achieve personalization at scale in the second blog in our series.  

In our previous blog, The Rising Role of Customer Data Platforms in Data-driven Personalization, we explored the factors driving CDP’s fast growth of 25 percent in 2022. Let’s now look at how to choose a CDP to gain profitable business outcomes.

The dire need for personalization at scale

True personalization is when Spotify surprises listeners with discovery playlists, when Netflix delivers differentiated experiences to each family member, and when Amazon recommends the exact gift a shopper urgently needs. Personalization at scale happens when companies can perform activities like these for millions of customers, in real-time, and at every relevant time in the customer journey.

Making every customer feel valued and loyal to the brand is the power of personalization. This only can be accomplished by knowing what customers want without being told and delivering it on the right channel and at the precise time.

With the surge in customer touchpoints leading to a massive flood of data from disparate sources and increasingly stringent privacy regulations, delivering tailor-made content for tangible and sustainable business outcomes is direly needed. Marketers today must realize that consumers have an overabundance of options, and demonstrating that they know their consumers better than others is the only way to gain a competitive advantage.

The Customer Data Platform – packaged software that ingests data from multiple sources, draws consumer insights through unique 360-degree profiling, and activates channels – plays a pivotal role in achieving true personalization at scale.

Personalization technology – the role of the customer data platform

Building marketing teams to keep up with the growing customer base is the biggest hurdle enterprises face to personalization at scale. The latest technology can enable marketers to take the long leap from merely collecting demographic data to using Artificial Intelligence (AI) and Machine Learning (ML) to harness huge amounts of data from disconnected sources.

That’s where the Customer Data Platform comes in.

A CDP’s core function is to create unique customer profiles by collecting data from multiple sources, such as Customer Relationship Management (CRM) systems, websites, and email campaigns. To achieve personalization at scale, enterprises need best-in-breed platforms that not only collect data but also orchestrate personalized experiences at scale by using smart segmentation, behavioral scores, AI, and ML models that constantly optimize experiences based on real-time interactions.

Choosing the right CDP

Since one size does not fit all, enterprises need to dedicate time and resources to select the right CDP provider that offers expertise aligned with their personalization goals and the use case they prioritize.

Our research finds more than 160 providers offer expertise in these delivery areas and include both enterprise-grade CDPs (such as Salesforce and Adobe) and pure-play CDPs (such as mParticle and Treasure Data).

According to the CDP Institute, four main service categories exist based on capabilities in data, analytics, campaigns, and delivery, as illustrated below:

Exhibit 1:  Customer data platforms categories based on capabilities

Exhibit 1:  Customer data platforms categories based on capabilities

Enterprises need to consider many factors when shortlisting CDP vendors, including marketing technology capabilities, vendor maturity, business use case alignment with the vendor’s core strengths, and pricing flexibility.

Evaluating technology features is extremely critical. The CDP Institute defines “shared features” as essential elements for a platform to qualify as a CDP and “distinguished features” as enhancements to the basic platform:

Exhibit 2: Features of customer data platforms 

Shared Features Distinguished features
Persistent Data Data Management
Unified Profiles Identity Management
Ingest and Retain Data Website Management
Manage PII (Personally Identifiable Information) Mobile App Data SDK
External access B2B specific use cases
Analytics
  Engagement

People and process recommendations

Selecting the right CDP only solves one piece of the entire personalization puzzle. Enterprises also need to further optimize their internal operating models and align their teams with their overall business objectives to ensure success.

Below are the key elements needed to optimize people and processes to achieve personalization at scale:

  • Setting goals – Marketers need to make sure the entire team is aligned with customer end goals before implementing any personalization technology.
  • Removing silos – True personalization only can be achieved if customers have consistent experiences across touchpoints. As enterprises scale and these touchpoints increase, the number of teams that own them rises. This can lead to varied unconnected customer experiences across channels, provoking scenarios where the marketing team promotes a certain offer and the customer care executive denies it to the customer. Brands need open communication across teams to ensure alignment in tone and messaging.
  • Hiring the right talent – In the talent war, enterprises find it extremely difficult to hire and retain the right type of data engineering and data science talent to achieve personalization at scale. Organizations need a talent strategy for their personalization efforts.

Although achieving sustainable personalization at scale can seem daunting, brands that gain the first-mover advantage will benefit by retaining loyal customers and increasing their lifetime value, reducing time to market, and improving workflow efficiency.

Consumers today expect sophisticated experiences that can predict their unspoken demands, and marketers must acknowledge this mindset paradigm shift to remain relevant. Brands that can personalize the customer experience at scale will differentiate themselves in the cut-throat marketing landscape.

To discuss Customer Data Platforms, contact Vaani Sharma at [email protected].

Learn more in our blog, How a Robust CXM Outsourcing Strategy Can Help Enterprises Navigate the Economic Downturn.

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