Last updated: CDP trends: Customer data platforms enter a new era

CDP trends: Customer data platforms enter a new era


When first-party data overtook cookies as the top currency for marketers, we entered the CDP era. Today, there are three fundamental shifts occurring in the CDP space that will help us deliver on the promise of “right person, right message, right time.” Each of these CDP trends involves a new way of thinking about customer data platforms.

  1. Customer identity and access management (CIAM) becomes core to the enterprise software stack
  2. New marketing tactics will leverage backend connectivity
  3. The emergence of true enterprise CDP

A broader take on CX fuels CDP trends

CDPs are a data management technology for capturing, transforming, unifying, segmenting, and activating first-party people data. Generally, the goal is to improve CX to boost customer loyalty and revenue. The problem is that most of us have too narrowly defined customer experience.

While one of the primary drivers of CDP technology, and will continue to be, driving more personalized experiences in marketing (better e-mail) and advertising (more relevant ads), true CX must go beyond those channels, and consider more human interactions: call center conversations, sales interactions, in-store moments at the point of sales terminal – even what happens at an ATM screen.

Approaching the next phase of CDP

If we agree that CDPs improve customer experience, and that we must define CX more broadly with a “beyond marketing” imperative, what will drive CDP success?

The first is obvious: identity. Building a modern data management infrastructure begins and ends with mastering customer identity – the notion that knowing your customer is the key to everything, and is the basis for the modern technology stack.

In this oversimplified view, identity – both known and unknown data management – is the foundational layer, driving success in intelligence (scaled, unified data drives success in machine learning) and orchestration (one “golden record” that can be activated across many disparate systems).

But the “know” element of the modern technology stack can’t just be about managing consumer identity keys. While creating a single profile from dozens of identity keys (e-mail addresses, cookies, device IDs, mobile advertising IDs, etc.) is critical, the real challenge is mastering the ability to continually enrich that profile with the metadata that drives value. Namely, what are the most recent e-mails someone opened, the last five SKUs they bought online, the last three calls they had with the call center (and their outcome), and how many loyalty points do they have?

Taken individually, any of those data points can drive outsized performance in any number of channels. Taken together, they can reveal true intent and can completely change the way brands engage consumers and go to market.

CDP trend: CIAM rises to the top 

As we look ahead to the future of CDP, the first thing to focus on should include recasting the way we think about “identity.” In a world where digital-only interactions has skyrocketed from a baseline of 25% to over 50%, the way customers access digital experiences is more important than ever. It’s odd that a key foundation of customer identity management – CIAM  – hasn’t had a real seat at the table with marketers and advertisers.

CIAM services such as customer registration, self-service account management, consent and preference management, single sign-on, multi-factor authentication, access management, and directory services– have been almost exclusively the domain of the IT buyer. For players in the marketing technology and adtech spaces, “identity” meant cross-device graphs, user matching with big platforms like Google, and maybe “onboarding” through services like LiveRamp. All of those critical services were delivered without the intervention of the customer.

As we move into a world in which first-party data is king, and privacy regulations demand more direct consent from customers themselves, CIAM capabilities become the core building block of the “know” layer of the stack.

This fundamental shift involves much more collaboration between the CMO and CIO, a further alignment between traditional CRM and the marketing stack, and a much faster evolution of CDP from a marketing-specific solution to a fundamental layer of the overall enterprise software stack.

CDP trend reveals new opportunities 

“If you bought this, then you’ll like this” product recommendations and the marketing tactics they drive will continue to be a big part of the landscape going forward. However, as backend enterprise systems migrate closer to the marketing technology stack, there are opportunities to go beyond the obvious — retargeting, product-driven customer journeys, data-driven call center recommendations — and start thinking more broadly about what types of data drive revenue.

Consider this: Every commerce operation that fell to its knees during the pandemic had nothing to do with a failed shopping cart or a broken check-out process. Rather, it was a result of empty product catalogs caused by the collapse of supply chains.

In other words, those e-commerce operations failed not due to a lack of data-driven marketing, but because of a lack of connectivity between backend inventory management systems and front-end engagement tools. Basically, companies were marketing products that could not be fulfilled and delivered.

What if there was a tighter connection between the systems driving manufacturing on the back end, and the marketing of products on the front end? For centuries, businesses predicted how many of something could be sold, manufactured it, and used marketing to create demand. Over the next decade, we’ll see that flipped on its head: People will buy what they want, and near real-time supply chains will manufacture exactly what was ordered.

Show people products that don’t yet exist, create demand, manufacture, and deliver on demand. This new approach is starting to happen today, and threatens to overturn everything traditional marketers understand about demand generation. Plugging supply chain data into CDP is maybe the most interesting opportunity here.

The enterprise CDP emerges

There are three types of customer data platforms:
  • Systems of Insights are principally concerned with managing customer data, creating a common information model, segmenting customers, and analyzing and activating data. These are most akin to CRM and MDM systems, and considered a “system of record” for customer data.
  • Systems of Engagement maintain a real-time customer profile and are mostly concerned with making sure the right customer gets the right message, offer, or action in real-time. Similar to journey management or real-time interaction management (RTIM) systems, these are great for creating personalized engagement at scale, but not really where an enterprise would actively manage first-party data.
  • The third type imagines an Enterprise strength offering  – a fully integrated, scalable CDP

Big enterprise software companies are working on building these today: Where pure data management capabilities are structurally intertwined with the systems that deliver engagement (marketing, commerce, service, etc,).

In a nutshell, what if you had an infrastructure where a persistent customer profile and the ability to activate it was the foundation for all of a company’s systems? That would solve the problem of siloed data, provision an incredibly rich customer profile, make ML and AI smarter, and help drive experiences at scale across every touchpoint.

As the enterprise vision of the CDP becomes a reality, it means that the way we think of CDP becomes more of a framework for thinking about data management. It will render many of the CDPs in the market today as point solutions, and will transform the way we connect the backend systems (broadly, ERP) to the front end (even more broadly, CRM).

The dawn of new era of customer data protection

In this new phase, we’ll see identity redefined as consumer driven through preference management, and more intelligent ways of connecting user data with the systems that need it.

Supply chain management and customer experience will come together, threaded through data and identity infrastructure. True enterprise “industrial-strength CDP” will emerge as businesses seek to connect the way they operate their enterprise with how customers interact with it.

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