Welcome to the Customer Data Platform era. When did this era officially begin? Somewhere between the confluence of when third-party cookies were no longer an option, personalized CX became the primary focus of CX and first-party data became the top currency for marketers.
Granted weaker versions of Customer Data Platforms (CDP) have been around for a while. Many organizations have found themselves trying to utilize weaker CRM systems to handle the continually increasing demands for heightened customer service and individualized consumer experience, only to discover that a robust, data-driven, and unsiloed CDP is the only platform that will compete in today’s uber crowded eCommerce landscape.
Today’s Customer Data Platforms (CDP) need to enable businesses and marketers to optimize their data by creating a unified and centralized customer database. This database contains all data from various customer touchpoints and allows for segmentation, which is critical for creating personalized marketing campaigns. It needs to eliminate traditional data silos that limit how you can utilize your data and prevent companies from creating consistent experiences for their customers across different channels and platforms. A modern, capable CDP can include use cases including data unification, better control or retargeting of customer profiles, predictive analytics, and being able to leverage different data types collected from various sources.
These extensive capabilities are the reason why the CDP industry continues its rapid expansion. The CDP Institute estimates that revenues will increase 25% to reach $1.6 billion. The forces driving CDP growth will remain strong past 2023 as data-dependent digital transformation programs, privacy-driven focus on first-party data, and customer demands for a more personalized experience continue to increase. Vendor funding, expansion, and acquisitions will also continue as investors and software companies recognize the need for unified customer profiles is here to stay.
5 CDP Trends to Keep an Eye On
So, what does 2023 hold for CDP makers and users? Continued growth, for sure. But it won’t simply be more of the same. Today, there are five essential trends occurring in the CDP space that can actually allow brands to deliver on the promise of “right person, right message, right time” marketing.
1. Expansion Beyond Marketing
CDPs have always been used outside of marketing departments. Indeed, some of the earliest CDP vendors provided lead scoring for sales teams and unified profiles for customer success managers. But digital transformation and integrated customer experiences have highlighted the need to share customer profiles across all departments of the enterprise. At the same time, increasingly stringent privacy regulations have made every use of customer data an enterprise-level concern. The result has been an increase in brands who treat their CDP as an enterprise resource and are looking for expert advice on how to best manage and deploy the vast amounts of data that a comprehensive CDP can house and use. While larger brands are building up their in-house data teams to oversee CDP operations, smaller brands who can still greatly benefit from a CDP-focused CX are using companies like Group FiO to implement and manage their CDP efforts.
This switch to enterprise-level CDPs need to handle larger volumes and varieties of data than marketing-focused CDPs. They need to connect with more source and destination systems. They need to support more analytical processes and meet higher standards for security, reliability, and performance. They must adjust more quickly to changes in data and user requirements. On the other hand, enterprise-wide systems are less likely to need departmental applications such as marketing campaign execution. This may mean that CDP vendors with their roots in marketing automation or message delivery systems find themselves relegated to those roles while relying on an enterprise CDP to assemble their data. This has advantages since many CDPs are stronger at one of these than the other.
Such dual-CDP configurations are already more common than often recognized. Even if CDPs specialize as either profile building or departmental applications, the change leaves customer experience orchestration as a territory where they overlap: experience orchestration is an enterprise-wide function but requires advanced applications for journey analytics, campaigns and interaction management. Adding to the confusion, there’s no widespread agreement about the organizational home of customer experience: candidates include operations, customer service, IT, and marketing, each of which often sees itself as in charge. Look for new software categories, including customer experience platforms and digital experience platforms, to attempt to occupy this space, with contestants including CRM systems, marketing clouds, communications platforms, and content management systems. Nearly all of these will have the equivalent of a CDP lurking under the hood.
2. CDPs Will Have More Users in 2023
In the digital age, there’s a wealth of data that companies have to deal with. Businesses are now collecting different types of information about their customers from multiple sources and various touchpoints.
For smaller companies with a limited marketing stack, being able to leverage data to learn more about customer behavior and determine their needs is relatively easy. For larger businesses that offer a variety of products, have multiple marketing channels, and have a wide customer base, leveraging customer data can be challenging.
A CDP like FiO’s Customer Data Platform is an integral tool that enables businesses to have a centralized database of all their customer data. They can then use the insights generated by CDPs to craft more targeted and engaging marketing campaigns.
Because CDPs are powerful and versatile, it’s not only marketers from large organizations who can benefit from the use and application of CDPs. Different teams, such as finance and IT, and businesses of varying scales can use CDPs to come up with more informed solutions and actionable insights for areas like services and products.
3. The Uses and Applications of CDPs Will Go Beyond the Scope of Marketing
Customer data platforms and customer data aren’t just relevant to marketing departments. They’re also widely used by sales teams, customer success managers, and IT departments, among other constituents.
Making customer data accessible to all relevant departments is crucial in achieving a thorough understanding of your customer’s behaviors, needs, and preferences. CDPs give a unified view of customer profiles, which is integral to omnichannel personalization.
For example, corporate IT departments play a role in deploying CDPs. As CDPs are increasingly being integrated with other systems, it’s expected that IT departments will play a bigger role. If CDPs are being adopted across various enterprise-wide systems, then organizations’ CDP requirements should also change.
Flexible, versatile CDPs like Group FiO’s are capable of handling larger volumes and types of data. They allow a more seamless connection between different systems, particularly the source and destination systems. New CDP requirements should also include a CDP’s capacity to support a larger volume of analytical processes and ever-evolving standards when it comes to security and performance.
If you’re thinking of adopting a CDP for your organization, you need to factor in its capability to orchestrate customer experiences across different channels. You also have to think about the different departments, like operations, marketing, and IT, where the responsibility of providing customer experience overlaps. Your CDP should also be able to integrate with your existing tech stack, as this can enable you to better optimize and fully utilize data across different departments.
Even if you already have a flexible CDP that can meet the different needs of every department, you shouldn’t overlook its ease of use. Remember that CDPs aren’t just intended for developers, which is why it’s important to go with a CDP like Group FiO’s that’s user-friendly. This expands its use and application within your organization instead of its functionality being restricted to your IT department.
4. Access to More Build Options
As the use and application of CDPs continues to grow in scope and as business needs change, it’s highly likely that this will push enterprises to create their own solutions, specifically an equivalent for CDPs. This has pushed software companies to come up with digital solutions that are geared toward enterprise IT departments.
To keep up with this shift, CDP vendors are working toward creating CDPs that have more build options. There’s a need to integrate different processes and solutions, such as customer experience orchestration capabilities and the need for real-time access to data and analytics. This spurs enterprises to adopt solutions that combine CDP functionalities for specialized processes and software with data management components.
Also, it’s expected that with more build options and heavier demand for more complex capabilities come more buy options. You can expect more vendors to offer CDPs that are designed for particular industries like health care and financial services.
5. CDP vendors are Expected to Offer Pre-Packaged Programs
One of the greatest challenges for many brands is being able to fully utilize data generated by or collected from CDPs. This is due, in part, to issues in CDP deployment and the lack of individuals who are capable of operating and utilizing CDP data.
To address the issue of data utilization, many vendors have started to offer pre-packaged CDP programs, which include features like content templates and process flows.
It’s worth noting that trends can change. While they may serve as a guide for the direction that CDPs will probably take in the coming years, they’re not 100 percent accurate. Also, these trends shouldn’t take away the fundamental role that CDPs play in data collection and management.
Furthermore, regardless of trends, it’s highly likely that a robust CDP like GroupFiO’s can drive an organization’s agility. For example, by leveraging customer data platforms that have artificial intelligence and machine learning capabilities, enterprises can swiftly make informed decisions and take action on emerging or key industry trends.
When determining what CDP is best for your efforts, you first need to determine what your marketing goals are. From there, focus on finding a CDP that’s capable of helping you meet your goals faster and in a more efficient manner. This enables you to stay on top of things, even as consumer behavior or trends continue to change.