According to Forbes, 93% of executives expect that using more customer data in their campaigns will “create a noticeable shift in their ability to meet disruptive and competitive challenges.”
B2B or B2C
The choice of CDP can depend on the type of your industry and there are CDP tailored for B2C and e-commerce.
There are CDPs that are tailor-made for specific verticals like BFSI, healthcare, e-commerce.
It is important to analyze your omnichannel strategy while choosing CDP. Some CDPs can be strong in providing orchestration with specific channels like email and website and not so much with social media. If your strategy is leaning towards social media, then you have to choose CDP which is strong in all these channels.
Time to Value
CDP deployment can be complex as it needs integration with several other tools like data collection sources on one side and marketing stack tools for data activation. So it is important to understand integration capabilities and time to set up and run and the complexities involved. Also, it is important to analyze how compatible CDP is with your company’s tech stack.
Scale and Performance
CDP, by very nature, needs to deal with a large volume of data and the platform should provide necessary scale and performance.
Choice of Technology
The underlying technology in CDP can be complex and it is important to understand the capabilities of underlying data engine and data integration abilities. Also, AI plays a key role in analytics and building a 360-degree customer view.
Data Privacy and Compliance
Since CDP very often involves storing and managing private data of customers, CDP should have support to maintain data privacy and provide compliance as per local regulations.
In sectors such as banking, finance, and insurance;, healthcare, legal, etc, it is crucial to maintain prospect and customer privacy, as well as have the most real-time, up to date customer data available to communicate with them accurately and securely. So CDP should provide a robust and secure data management stack to facilitate this.
CDP is a great tool for marketers. But they can come at a cost, not just in the cost of the software, but also with additional professional services cost and ongoing support. It is good to understand the total cost implications to deploy CDP fully. However, ROI over a period of time could fully justify this investment.
Challenges in Deploying a Customer Data Platform
Deploying a Customer Data Platform can be complex. Every business is different and comes with its own unique legacy data, which needs to be sifted through and incorporated. Added to that are the business / industry-specific requirements and the marketing objectives, which can further complicate implementation.
Here are some of the common challenges faced by businesses when implementing a Customer Data Platform.
Lag in collecting threshold level data
For a Customer Data Platform to become fully operational in a company, there could be a lag due to time taken for new data to arrive. It could take a considerable time for new data to be gathered and ready for loading to the platform.
Training and Support
For organizations not used to CDP, there would be training and skill-building needed to effectively use CDP. Though CDP is meant for marketers, they could be challenged if they are first time users.
Scalability and Extensibility
Customer data can grow exponentially over a period of time and specifically if it is multi-channel and in a B2C environment. The Customer Data Platform also needs to be future-proof to company growth, else it can become obsolete in no time. A scalable architecture that can handle expected types of integration and sources is important.
Time to Value
Implementation can be easy or hard depending on the current state of data within the business. Also, every business will have different requirements, goals, and tools – so very often, it would be difficult to predict deterministically how long the implementation process will actually take.
RoI of a Customer Data Platform
Research from McKinsey shows companies deliver five to eight times the RoI on marketing spend, and boost sales by 10 percent or more when they leverage data-driven personalization.
But in addition to serving customers and prospects in a meaningful way, a Customer Data Platform can also impact your RoI through:
Operational Savings: With sales, marketing, and service automation getting more advanced, a Customer Data Platform will provide a firm foundation for future operational changes.
GDPR Compliance: Customer Data Platforms play an important role in both compliance and administration, saving on both associated costs and penalties.
Media Savings: Better data enables marketing teams to optimize targeting and save dollars on wasted clicks and impressions.
Data Monetization: Understanding customers also implies the ability to serve them with content or services that they need. Customer Data Platforms can, therefore, enable more paths to monetization through targeted advertising of your products and services as well as your advertisers or partners.
Customer Retention: It costs a business more money to find a new customer than to retain an existing one. A Customer Data Platform helps improve your communication and response with existing customers and delivers a positive impact on your bottom line.