Alex Bistran, Director, Revenue Marketing, Zylotech
Executives have heard for years that data is the lifeblood of their business. But, if that’s the case, most businesses are in sore need of a lifeblood transfusion. Irrelevant data, incomplete data, erroneous data, duplicate data and just plain bad data undermine the quality and confidence of business decision-making every day. So, if “bad” data exists, then there must be “good” data as well: data that is reliable, fresh, actionable, unified and highly relevant. Where do you find this kind of good data? In a customer data platform (CDP).
CDPs are a relatively new technology born from the daily frustration of dealing with conflicting data, outdated data, etc. We’ve all experienced this frustration at some point. Sometimes, it’s learning that the same customer is receiving conflicting messages from different channels because marketing and sales are using different databases. Or it could be a marketing campaign that succeeds and no one notices because there’s no way to track customer engagement across channels. Every time a sales rep struggles to identify their top prospects or a call center agent pesters a customer for information they should already know, poor data discipline is usually to blame.
CDPs: A working definition
The CDP Institute defines a customer data platform as “packaged software that builds a persistent, unified customer database accessible to other systems.” There are some critical features that distinguish a CDP from a data warehouse, data lake or even a database management system. For example, a CDP isn’t a place to store all of your data. It’s really designed to collect and store first-party customer data (with third-party data enrichment) that is actionable and reliable. And a CDP isn’t a departmental tool like a CRM system; it’s built for everyone to access with the goal of delivering a single customer view across the entire business. Finally, CDPs frequently go beyond the idea of actionable data by orchestrating actions such as marketing campaigns to ensure the right message gets to the right customer at the right time.
Because CDPs are still an emerging technology, features vary from vendor to vendor. Some CDP solutions have very robust third-party integration. Others take fuller advantage of technologies such as AI and machine-learning models. Zylotech’s solution, for example, features both robust integration and AI/ML modeling as well as a unique identity resolution component that is designed to provide accurate, reliable, actionable data for business-to-business contacts.
Do I really need a CDP?
One of the most common misunderstandings around CDPs is where they fit in the broader IT picture. Some enterprises, for example, mistakenly believe that a data warehouse with business analytics on top can achieve the same results as a CDP. They are, in fact, very different solutions. Enterprise data warehouses or EDWs, are large, expansive and owned by IT. They are designed as a data repository for analysis across the entire organization and there is no requirement to match and merge the data, making it inactionable for action oriented teams such as sales, marketing and customer success. EDWs also lack cross channel identity resolution necessary to create a Single Customer View in the same way as a CDP, nor does it support real-time updates. Estimates are that roughly ninety percent of data in a data warehouse is never used for anything, likening them to a dumping ground of sorts for data. .
A CDP on the other hand only cares about customer data (lead, contacts and accounts) and were designed to transform, standardize, normalize and unify first and third party customer data. Unlike EDWs, CDPs include cross channel id resolution to deliver a Single Customer View that is accessible across all sales, marketing and customer success preferred systems of action to reveal actionable insights and predict customer behavior. You can get insights by analyzing data in a data warehouse, of course, but would you feed that data unfiltered into your marketing campaigns or trust it to drive real-time customer experiences? Probably not.
With the deprecation of third-party cookies and growing constraints around the use of third-party data, first-party data has become increasingly necessary, yet B2B organizations are struggling to use it in practical ways. There is more urgency than ever before for B2B sales and marketing teams to take control over their customer data, prioritize managing data collection at the source, ensure they have the ability to create a persistent single view for each contact and account using cross-channel id resolution and implement ongoing data governance. CDPs have thus become the new customer engine in a first-party world where businesses need to understand their customers better than ever before, including who they are, where they are in the marketing/sales funnel, what they want today and what they’re likely to want tomorrow.
I guess you could say that the CDP is the heart of the customer experience after all, because it’s constantly pumping fresh data and insights into all your customer interactions.