How to Find the Right CDP: Expert Interview

In many ways, 2019 has been the year of Customer Data Platforms (CDPs)Opens a new window .

As my colleague and fellow Toolbox contributor, Pierre-Yves Lanneau Saint Leger explains, “although customer data platforms may be a relatively young marketing technology, they’re fast-becoming key bricks in any robust stackOpens a new window .”

Yet, many marketers find it difficult to make the most of their related investments. Indeed, finding the best CDP for your company’s specific needs can be surprisingly difficult.

That’s why this week, I’ve interviewed Derek SlagerOpens a new window , co-founder and CTO at AmperityOpens a new window , a Seattle-based customer data management company that closed a $50 million investment Series C in July.

Considering Amperity’s mission is to unify disparate customer data silos, the expert insights provided by Derek are highly useful for any brand embarking on a CDP journey.

Question: Many CDPs tackle data-related issues and marketers complain they struggle with those not purpose-built for their specific problems. For example, in one use case you want to map as many consumer data points as possible but that differs from personalization. What kind of research (and window shopping) should marketers conduct to ensure the right choice (or combination of technologies)?

Derek: It’s a difficult task because the CDP landscape is messy and rarely maps directly to one’s unique marketing challenges. The fact that use cases and requirements are constantly changing makes this endeavor particularly difficult.

When using data to design great customer experience, you’re trying to hit a moving target and, as such, a common mistake is to look for a CDP that does (or at least claims to do) everything. The value you actually end up with will end up a disappointment as no single product can solve all of an organization’s end-to-end customer data challenges.

Rather, as brands identify the key data-related issues they need to solve with a CDP, they must ensure they have a comprehensive, 360-degree view at the foundation of their business. This goes a long way towards supporting a variety of use cases.

There are thousands of amazing tools and technologies capable of analyzing and activating data. The right CDP for most organizations will provide a truly comprehensive customer data foundation, creating a platform for change and experimentation. In other words, marketers should look for a CDP that is capable of ingesting and unifying all of an organization’s data, including data that doesn’t link neatly together, as well as transactional data.

With that in mind, I recommend you ask some, if not all, of the following questions when evaluating a CDP. A system that can answer these questions will be far more flexible and durable than one designed around a single marketing use case:

• What are the scaling limits of the CDP? Does it take into account your data growth trends?
• Is the CDP designed to ingest years of historical data, or just new data?
• Can the CDP unify data without explicit linking keys or brittle, manually maintained rulesets? Does it at any point require “humans-in-the-loop” to resolve matches?
• What happens when you need to integrate a new source of data? Is the CDP flexible enough to support this while maintaining active data integrations?
• What steps does the CDP take to ensure that data quality is maintained over time? When new data arrives, can the entire customer database be recomputed to account for the new data without sacrificing quality?Does the CDP limit access to data in any way? Can data be integrated into other tools without restriction?

CDPs have gotten considerable hype lately, with many claiming this martech will revolutionize the way companies manage and leverage their customer data. Yet, many marketers are strugglingOpens a new window to get the systems they invest in to deliver. Rather than attacking a data problem, most CDPs are designed tech-first. But that doesn’t answer many marketing and sales problems — better conversions, higher ROI, increased consumer retention, more engagement and loyalty, improved customer experience. Do you agree?

Derek: Marketers should strive to focus on the potential end results. After all, the martech we use is just a means to these ends.

We often see CDPs overpromise and underdeliver due to the fact that they claim to tackle a variety of areas that will come together to improve your customer experience (CX) across the board.

No matter the CDP, though, generating meaningful business improvements won’t be possible if the necessary step of building a quality data foundation is skipped. It may be cliché, but when it comes to customer data, garbage in, garbage out.

We did an internal study at Amperity across a broad range of customers and found an average lifetime value (LTV) misattribution of 50-60% prior to investing in a strong data foundation. This may be just one single metric, but it still goes to show that any attempts to drive meaningful marketing results on a shaky foundation are a fool’s errand and are likely to fail.

Adding to this, it’s important to note that companies in need of CDPs are looking to solve different problems. So there is no single, turnkey solution. the data you use must be able to be shaped and leveraged around your unique needs, designed to be flexible over time always to meet you where you’re at.

That said, solely focusing on getting the data right also won’t yield optimal results because one size does not fit all. Sophisticated insights that will actually drive marketing goals aren’t going to appear magically. Great tools exist to empower marketers to derive and use insights to drive great customer experience, but they aren’t going to solve the problems by themselves.

Therefore, marketers need to have the right tools and the right skill sets in-house to achieve the results they hope for. A tool with “built-in data science” is not going to produce results in an organization that doesn’t understand data science.

So what can we do after investing in a CDP to ensure it provides the type of high-value insights that lead to actual results? 

Derek: It is especially imperative to build a cross-functional team that spans tech, data management, and business/marketing — start small and grow from there. I can’t stress this enough.

I also believe that too many marketers jump in with lofty ambitions that are hard to achieve. Instead, pick a CDP that allows you to start small with a couple of minimal, but high-impact use cases.

This approach will make it much easier to grow and quickly test and learn what works and doesn’t work. This, in turn, will help you use your solution’s ability to add new sources and reshape your customer overview in order to add new attributes as your customer base evolves.

In fact, what advice would you give those wading into this new martech that would help ensure they get the integration correct from the start?

Derek: First of all, I’d like to get this message across: You may not get it right the first time – and that’s OK.

As long as you have a flexible platform to work with, you can adjust as you go. That’s why it’s so important to go with a flexible CDP solution. Unfortunately, most systems are fixed and rigid — and you’re locked in. So you have to get it right out the gate.

While this is a good question to ask, it’s also emblematic of the wrong approach many brands take when entering this space. They shouldn’t stress about “getting the integration right from the start.” You won’t know how to do that, nor do you know what you’ll be able to derive from the data you produce until you are thick in the weeds. And even if you do, your data universe will always be changing, further emphasizing this point.

Only then will you be able to flex into it and iterate as you learn.