The race for great data and data management should not shortcut flavor. CDPs can support the enterprise with processes and standards that invite participation and accountability.
Interest in customer data platforms (CDPs) has been on the rise since 2018, and yet, the ins and outs of what they are, what they do, and how they can benefit a business remain cloudy for many technology buyers. According to Gartner, there are four types of CDP: Marketing Cloud, Smart Hub, Marketing Data Integration, and CDP Engines and Toolkits.
They’ve got skills: The capabilities of all types of CDP
Today’s customers access their accounts with any given company many different ways:
- From mobile phones
- Via their desktops
- Through apps
- Through simple web browsers
- Via email and SMS
- Over chatbots
- Through gaming consoles, and more
Historically, it’s been difficult for all of those systems to recognize a single user, and collect one profile on their usage habits across all devices and browsing experiences.
That historically meant it was even more challenging for marketers to understand when it’d be best to reach out to a customer, on which device, and about which products – making truly personalized marketing an elusive dream.
But that didn’t stop marketers from trying. Many worked hand-in-hand with their data teams to test new tools and sort how to track a customer across all experiences.
All types of CDP can create a persistent unified customer database that allows various departments to gather insights and actively work toward a personalized experience for customers across multiple touchpoints.
Benefits of a CDP
The benefits of CDP, to name just a few, are:
- Real-time analysis: Meeting your customers where they are means actually accompanying them on their journey and planning ways to make it better
- Technology Stack: CDPs play nice with others, integrate with existing tools, or can build to suit
- Single Customer View: CDPs are born from the demands of today and tomorrow, meaning they pare away the unnecessary, bringing only the most salient, actionable data in the data sets you create for your (and your customers’ needs)
- Customer Experience: That’s right, more benefits of CDP are in the design to support CX by building insights for multiple departments to use toward their objectives as they construct the optimal customer experience.
- Data security and compliance: CDPs are instrumental in creating data security plans and understanding how to keep up with regulations for ethical data management.
Through their testing, Customer Data Platforms as a solution came into view, but not all types of CDP are the same.
CDPs are accessible to other systems. Some act as data hubs, sending data to other tools for more detailed analysis and usage by marketing. Others have built a full platform so marketers can put data to the test.
In total, there are four different types of CDP, as defined by Gartner, the organization that ranks them against one another each year.
Which CDP type you choose for your company will depend on a variety of factors, but, as with most tools, the biggest factor will be your company’s existing tools and your team’s willingness to adopt new technologies and processes. Being able to use real-time, party data for unified customer profiles and insights to improve CX is just the start of the benefits of CDP.
Let’s dive in to the benefits of the different CDP types.
What are the types of CDP?
Gartner has stated there are four types CDP:
- Marketing cloud CDP
- Smart hub CDP
- Marketing data and integration CDP
- Engines and toolkit CDP
These categories can help you break down which type of CDP might work best for your organization. In fact, you might already be using a CDP, but don’t call it that.
CDP marketing cloud
Marketing cloud CDPs are best for:
- Marketing teams and organizations already using established marketing CRM and ESP tools that then add on a CDP to their overall offering
- If you already use SAP, Adobe, Salesforce, Microsoft, or Oracle, a marketing cloud CDP may be the best bet for you and your team
Marketing cloud CDPs are the newest CDPand are offered through well-established cloud providers. These organizations were best suited to build out a new suite of tools to capture the demand – an important distinction for marketers, especially at larger companies.
These big platforms are great at capturing data. They allow marketing teams and entire enterprises to work off of a single database. If you’re already using one of these tools for data collection and business management of any kind, it may be best to reach out to your rep to learn more about their CDP offering.
According to Gartner, marketing cloud CDPs “have the strongest integrations within their own ecosystem.”
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Customer data platform as smart hub
Smart hub types of CDP are best for:
- Marketing teams looking for a clear and easy-to-use interface, who won’t need as much deep or technical CDP functionality (especially cross-functionally)
Smart hub CDPs emphasize marketing orchestration and personalization from a single interface from the outset.
Gartner defines one of the benefits of CDP as, “a marketing system that unifies a company’s customer data from marketing and other channels to enable customer modeling and optimize the timing and targeting of messages and offers.”
Smart hub CDPs have done this by building a simple, clean, and easy-to-use backend interface to help marketers take advantage of the tool and strengthen customer experience.
This may mean that these tools sometimes prioritized platform design over functionality, but that can be OK.
If it isn’t easy to understand what to do with the data, or clear on how to implement it to improve marketing metrics, what’s the point?
A CDP for marketing data integration
Marketing data integration customer data platforms are best for:
- Marketers who work closely with data and development teams who have a need for similar data collection and organization beyond marketing’s purpose
- These CDPs are great for cross-functional teams that aren’t on a larger platform
Marketing data integration CDPs focus on the data. They have robust APIs + data governance capabilities, but still provide flexibility + ease of use for marketers.
These platforms will likely need to be used in coordination with additional visualization platforms for the most effective use. That’s ok, though. Marketing data integration CDPs are considered “pure play CDPs,” focused as they are on the main purpose of a CDP: the proper gathering and organization of first-party data.
In many ways, organizations that have strong data and development capabilities might choose these tools over others, and push collected data off to another platform on which the marketers can make use of it.
Once you experience the benefits of CDP and how you can increase the effectiveness of your data and data collections, it’s impossible to go back.
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Engines and toolkit CDP
CDP engines and toolkits are best for:
- Well-funded organizations with very specific CDP use cases that no best-in-class CDP can solve
CDP engines and toolkits are for those organizations that want to build their own solution. These are open-source solutions.
For most companies, building your own CDP isn’t worth the effort – unless your product is that CDP.
Instead, it’s typically considered far better to invest time and resources in improving your own product, customer service, or other key business initiatives, rather than building a completely new tool for which good alternatives already exist.
Why do organizations even consider building their own types of CDP? The same reason many businesses decide to build their own e-commerce or ad platform: They have very specific use cases existing best-in-class tools cannot solve for.
That makes sense.
Best-in-class CDPs solve for the majority of problems marketers face, and when you solve for the majority, you often leave the minority behind.
It’s often more expensive, but the added benefits of CDP personalization that cater to specific needs can outweigh those high costs.
When researching customer data platforms (CDPs), retail brands often wonder if they should build or buy the solution from a vendor. We're breaking down the considerations in this post.
Don’t let decision paralysis about types of CDP slow you down
If your organization is in need of data organization and a clear view of the customer, a customer data platform is likely in your future.
Don’t let confusion around the types of CDP slow you down.
It’s predicted that 70% of CDP vendors will be acquired by larger CDP vendors over the next few years.
It’s a clear sign that the market is maturing. Choose the platform that works best for your existing business tools and processes, fits your budgets, and solves for your highest priority use cases – you can’t go wrong when you do that.