Customer Data Platforms (CDPs) took the marketing ecosystem by storm a few years ago and became a primary tool in many marketers’ technology stacks. Designed to seamlessly consolidate customer data from various sources into a self-serve, turn-key platform, CDPs promote to offer marketers a more integrated and comprehensive view of their customer base that allow for real-time, actionable insights and personalized 1:1 communication. However, the effectiveness of CDPs in practice can vary significantly from its intended promise.
Now that CDPs have been deployed for several years by many companies, the expected strengths versus the realities of implementing and leveraging them are being revealed.
Promised Strengths of a CDP
- Unified Customer Data: CDPs do integrate data from diverse sources, creating a unified customer profile to help marketers understand and anticipate customer needs and behaviors more accurately.
- Enhanced Personalization: Utilizing unified data, CDPs allow marketers to facilitate targeted and more-personalized campaigns that lead to better customer engagement and conversion rates.
- Data-Driven Insights: CDPs provide analytic capabilities that enable marketers to extract insights to enhance decision-making and strategic planning.
The Reality in Practice
While the above strengths are compelling, organizations often encounter various challenges in actualizing these benefits.
- Integration Complexity: Organizations frequently encounter difficulties in harmonizing disparate data formats and systems due to pre-defined field and table structure requirements leading to implementation delays and increased costs.
- Customer Identity Challenges: CDPs tend to be more “channel centric” than customer centric when managing profiles. It is quite common for customers to have more than one email address and phone number and even share them with family members. Both scenarios can make identity resolution tricky for a CDP that relies on a channel specific ID (like an email address) for resolution. In today’s hyper customer focused environment, it can be challenging for CDPs to go beyond the channel and identify the holistic customer resulting in profiles that may not be truly reflective of your customers.
- Issues with Data Quality: The effectiveness of a CDP is heavily dependent on the quality of the data ingested. Many CDPs do not sufficiently address challenges such as duplication, erroneous, missing, irrelevant, or outdated data. Ingesting questionable data with accuracy, consistency, and completeness issues can undermine the reliability of insights generated.
- Operational Challenges: The actual use of a CDP can be more complex than vendors suggest. Operational and Marketing teams often struggle with the technical aspects of platforms and interface. Depending on the skill-sets of users, this leads to underutilization and/or misinterpretation of the data.
- Limited Real-Time Processing: Some CDPs fall short in delivering timely integrations and insights due to large data volumes or lack of data source connectivity. Lags in data recency can hinder the ability of marketers to respond quickly to emerging trends or customer behaviors.
While CDPs offer considerable potential for enhancing marketing efforts, the gap between the promised capabilities and the actual performance can be significant. Companies considering a CDP must be prepared to address challenges related to integration, data quality, and platform complexity to realize the goal of a unified view of customer behaviors and deliver a consistent customer experience across interaction points.
Vérité Data provides integration, data quality, and other data management services that are core to decisioning and engagement capabilities. We have invested over 50 years in designing and optimizing turnkey data solutions for our clients. If you have invested in a CDP and are feeling any of the pain points in leveraging it, consider partnering with Vérité Data to help you close the gap between promise and reality.
