Customer Data Platforms (CDPs) have become indispensable tools in today’s data-driven business landscape. They empower organizations to centralize and use customer data for improved marketing, sales and customer service strategies. However, with the rapid evolution of technology and increasing data privacy concerns, choosing the right CDP can prove to be a daunting task.
Amid large-scale changes that are happening in marketing, including the rising use of AI and Google’s deprecation of third-party cookies, selecting the right CDP is more critical than ever. By considering key factors such as data integration capabilities, usability, business impact, reliability, performance and scalability, businesses can make informed decisions that align with their unique strategic objectives and regulatory requirements.
In this article, I’ll demystify the complexities of the CDP selection process and discuss how a comprehensive framework can help decision-makers choose the best option to meet their specific needs and drive value for their business.
First Things First, Know Your Use Cases
Diving into the world of CDPs starts with nailing down your goals. Maybe you’re looking to develop personalized marketing messages for your customers, decode their likes and interests, or streamline their experiences across various channels. Perhaps your focus is on boosting customer loyalty, anticipating their next moves, ensuring privacy compliance, or engaging with them instantly.
Understanding the use cases you are trying to solve for will set you up to choose the right tools effectively. By doing so, you’ll be able to harness the power of your data, securing a competitive edge that sets you apart.
10 Questions to Ask Yourself When Selecting a CDP
The conversation around CDPs and their ability to resolve identities is louder than ever. As the landscape evolves, it’s clear that the promise of many CDPs to unify customer data into actionable insights aren’t always as they appear. The reality is that sophisticated, modern identity resolution capabilities, essential for creating a truly unified customer view, are scarce. This discrepancy raises several critical questions for marketers looking to tap into the full power of their customer data.
Let’s jump into those questions:
1. Are you starting with a clean data foundation? How important is data accuracy to ID resolution?
Relying on outdated, third-party-based ID resolution solutions is a common pitfall. The most effective data for ID resolution is the data your company already has. Ensure the CDP can use your data effectively for identity resolution.
2. What is your strategy for enriching customer data with AI?
The algorithms behind identity resolution are paramount. ID resolution should go beyond merely linking keys. With most businesses having keys for only 15-20% of their customer data, it’s essential to have a strategy for the remaining data. A sophisticated ID resolution algorithm can use all of the available data to link customer information, providing a more comprehensive customer view.
3. When new data sets are added, how do you ensure stable IDs?
As new data is introduced, the generated IDs representing customer records must remain stable. Unstable IDs render downstream processes unusable, defeating the purpose of ID resolution.
4. How do you configure matching rules?
Manual rule sets for matching are not only expensive and difficult to maintain but also prone to quality issues. Opt for a CDP that uses machine learning (ML) models for matching rules, as they offer greater accuracy and easier maintenance.
5. How do you handle multiple forms of PII for one person?
It is not uncommon to have dozens of different attributes for a customer – this is disproportionately common in your best customers. It’s critical to have ID resolution capabilities that force you to choose or enable you to capture the value of all of this data.
6. Do you have household linking capabilities?
The ability to link individuals within the same household is crucial, considering shared devices, accounts, and more. A CDP should offer the flexibility to handle complex householding scenarios.
7. What does your QA process look like?
A rigorous QA process for data is essential to correct for over- or under-matching. A CDP should have a defined, repeatable QA process to ensure data accuracy.
8. What does the cost structure look like as profiles are continuously updated?
ID resolution is computationally intensive. Be wary of providers that pass these costs onto you, as this can significantly increase the total cost of ownership for your CDP.
9. Is there a way to unmerge data in the event unwanted uploads occur?
Mistakes are inevitable, but correcting them should not incur additional costs. Ideally, a CDP will proactively detect and prevent the introduction (or use) of bad data.
10. How flexible is your ID resolution process?
No two businesses are the same, and your ID resolution process shouldn’t be either. Look for a CDP that allows for customization of the ID resolution process to fit your unique business needs without having to start from scratch.
Finally, don’t forget to ask vendors for examples of real-world use cases that showcase the impact of their platform in terms of ROI and speed to value.
Consider Brooks Running, a leading manufacturer of running shoes, apparel and accessories. With the use of a CDP, the company’s marketing team has enhanced its campaigns across all channels. This has led to significant improvements, including a 260% increase in paid search click-through rate, a 150% average increase in paid social engagement metrics, and a 128% return on ad spend. Additionally, email open rates more than doubled, showcasing the effectiveness of personalized communication.
Navigating the CDP market requires a discerning eye for the capabilities that truly matter. Sophisticated identity resolution is at the heart of understanding and engaging customers effectively. By scrutinizing potential CDPs against these critical questions, marketers can ensure they choose a platform that not only promises but delivers a unified, actionable view of their customer data.
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ABOUT THE AUTHOR
Derek Slager, co-founder & CTO, Amperity
Derek co-founded Amperity to create a tool that would give marketers and analysts access to accurate, consistent and comprehensive customer data. As CTO, he leads the company’s product, engineering, operations and information security teams to deliver on Amperity’s mission of helping people use data to serve customers. Prior to Amperity, Derek was on the founding team at Appature and held engineering leadership positions at various business and consumer-facing startups, focusing on large-scale distributed systems and security.