by Rebecca White, Queensland Agency Director, originally published in Adnews
Given the recent “cookie armageddon” and with privacy law reforms looming this year, customer data platforms (CDPs) are becoming an increasingly vital tool for marketers. The benefits of CDPs are real and there are well documented examples of the ROI they can deliver, but for many the major roadblock to their successful adoption appears to be a lack of technical capability in the marketing or IT department.
The marketing industry has long understood the value of a single customer view (SCV), but for a long time, realising it at scale has seemed like a mirage or an impossible dream. The drive to hit a scalable SCV has led to the growing interest in CDPs over recent years, but the reality remains that many CMOs either haven’t made the jump to invest in one, or if they have, they are yet to realise the CDP’s full potential. This is a result of issues with poor implementation or gaps in understanding how they can be used most effectively.
For those out there who aren’t familiar with a CDP, you can think of it like a superpowered aggregator of customer data, from multiple disparate sources, that builds out a single 360-degree view of every interaction a customer has with your business.
With the changing marketing landscape, CDPs have become much more than just a nice-to-have.
As the age of third-party cookies comes to an end and owning customer data becomes critically important, the CDP has settled into its place as the hub of a business’s customer data set.
CDPs provide far more sophisticated analytics and deeper dives on customer behaviour, like insights into how they are shopping, what products and content they are interested in and even what channels they prefer. CDPs also allow companies to set up automated segmentation of prospects and customers based on combined traits across the data they have, allowing them to push updates to data in their own systems based on the combined customer intelligence gained. Additionally, companies can automatically leverage these audiences across advertising channels to help advertise directly to prospects/customers or to leverage them to build lookalike audiences.
A CDP also helps shift a little bit of the power imbalance marketers face when engaging with digital behemoths like Google, Amazon, Apple, Meta and Microsoft – allowing the business to leverage its customer data as a strategic business asset instead of paying the publishers for theirs.
Ironically, despite the fact that a CDP solves the challenge of having siloed data across business units, one of the more common barriers to their successful adoption tends to be a lack of collaboration and buy-in across siloed business units in an organisation. CDP implementation requires coordination between IT, product development, marketing, sales and data security teams. This is something that is often overlooked and underinvested in during the scoping and planning phase.
To set a CDP up for success, the first step should be investing in an organisation-wide education piece: taking each key stakeholder from each business unit through the value the CDP will provide to the organisation and their department, as well as allaying their specific concerns about its impact.
Aside from organisational alignment, there are a number of other key steps that need to happen:
Define the objective – what are you aiming to achieve? What customer data would help inform or execute your strategies? Take this opportunity to future proof your business and super charge your marketing.
Software selection – do your due diligence. The right CDP should handle data integration from your existing sources, be able to push data out to your desired marketing platforms, be compliant with data security and privacy regulations and scale as your business grows.
Data hygiene – the old adage “garbage in, garbage out” is 100% relevant to CDPs. Cleansing and standardising data is critical to quality of information that is generated. Invest in this at the start to save yourself a mountain of cash down the track.
Data integration – this is the most complicated step particularly if data is currently siloed; the key here is careful planning and not just jumping in headlong.
Integrate CPD with your data warehouse – this will give the data science boffins the chance to dig even deeper into the data to uncover golden nuggets of information about customers, hidden trends and more.
Be ready for challenges along the way and remember that change management for implementing any new technology is critical. It is complex and time consuming, necessitating investment in resources and planning. There is also data integrity to consider with organisations that invest in data quality, accuracy and completeness coming out on top.
With the current economic crisis and questions about future consumer spending behaviours, it’s an uncertain time for brands. While implementing a CDP and getting an organisation’s data cleansed, standardised and integrated is not an insignificant task, it is more important than ever to invest in foundational infrastructure that will deliver a competitive advantage.