How to decide if your organization needs a customer data platform

To determine if your company needs a CDP, you need to evaluate your organization’s business needs, staff capabilities, management support and financial resources. Here are some questions to guide your assessment.

• How do we handle customer data today? Customer data is often scattered across different departments, such as marketing, sales, purchasing, and customer support. Do you have a system that is the source of truth for customer profiles? Do you know what kind of customer data you have? Do you mix in anonymous data from third parties? How many tools are in your martech stack? And how do they exchange data? Is the data transfer real-time, hourly, or daily? A CDP can help you organize and manage your data more efficiently and consistently. But you may already have a tool that does some of the things a CDP can do.
• How effective are our marketing data processes? Marketing software tools should help you improve your data and campaign efficiency. But sometimes, different systems cause data duplication, inconsistency, and manual work. If you spend more time cleaning data or removing duplicate contacts, and less time running campaigns or measuring results, you may need to automate data integration.
• How can a CDP meet our business needs and what are our use cases for it? Most CDPs offer basic data management features, but some also offer advanced data analytics and orchestration features that can help you achieve various business objectives. What benefits would you get from having a unified view of your customers? For instance, do you want to lower churn by offering more relevant products to your customers? Or increase customer acquisition profitability by creating more accurate lookalike audiences? Before you invest in a CDP, make sure you have use cases that show how it will enhance your marketing performance or lower your costs. The CDP should pay for itself, so run some scenarios to make sure it’s the right solution for you.

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• Is your organization ready for a CDP? “Organizational readiness, not technology, is the greatest challenge for new deployments,” the CDP Institute found in its member survey, with 25% of respondents citing it as a problem. Do you have enough clarity on your use cases and customer journeys to enable you to choose the correct solution? How will centralizing your data and audience definition impact your organization? Are you confident that all of the teams that would need to be involved — from IT to marketing to customer service — can be educated on the potential value of a CDP as part of the adoption project? Have you chosen early adopters within the organization that can provide proof points to other users?
• What systems will we connect with the CDP? Many organizations have a large and complex martech stack. A CDP can help you simplify integration by standardizing data for easy import and export across systems. As more brands use omnichannel marketing with various martech tools, having a single view of the customer is essential for marketing success.
• How will we measure and compare CDP success? What KPIs will you use to evaluate the impact of a CDP and what actions will you take based on the results? For example, do you want to reduce data duplication and see how it affects campaign speed? Or do you want to save time for your marketing staff by automating data transfer between systems? Set your business goals before you implement a CDP so you can track your progress later. Businesses are increasingly looking for the ROI of their martech investments.
• Do we have management support? Management backing is crucial for any major organizational investment. Start with small, short-term goals that show how the CDP is adding value to the business, either by increasing revenue or reducing costs. The main goal is to persuade senior executives that a single, unified view of the customer will boost the organization’s performance.
• Do we need self-serve, full-serve or something in between? CDPs are usually designed for marketing users. However, CDPs have different capabilities and require different levels of training. CDP vendors offer different levels of onboarding, customer support and/or professional services. Make sure you know what your marketing staff will need to learn to use the CDP effectively, or if you need external help, what kind of managed services are offered.
• What is the total cost of ownership? CDP vendors charge monthly license fees based on the number of data records, events (or customer actions) and applications integrated. There may be extra fees for onboarding, APIs/custom integrations or staff training. Make sure you know your business needs, data volume and how you will need to change your systems and staff to run a CDP. Knowing all these factors will help you understand the investment your organization will make. Also, remember that you may see cost savings if the system improves efficiency.