Amidst challenging business conditions and tighter budgets, companies are investing heavily in Customer Data Platforms (CDP) to unify their customer data. In fact, according to a recent report, the CDP market size is forecasted to grow from $2.4 billion in 2020 to 10.3 billion by 2025.
However, for enterprises, it’s an entirely different script. For them, the CDP category has become crowded and diluted, and the term is slowly losing its meaning. Now many are asking themselves, are CDPs indeed the holy grail for solving customer data challenges, or is it just yet another redundant tool in the martech stack?
To answer this question, let’s first delve into the three reasons enterprise adoption of CDPs is lagging, and the challenges the solution needs to overcome to reach its full potential.
With many CDP vendors in the marketplace, the lack of identity resolution and matching capabilities that bring data together drives enterprises away.
CDPs’ principal selling point is the ability to achieve a ‘360 view’ of the customer; however, when tasked with consolidating and analyzing data from disparate repositories, it falls through. Consequently, access to a unified customer profile is unachievable.
Now, departments across the business are armed with defectively constructed customer profiles and inadequate insights to inform customer interactions. Later these outcomes are used to outline customer journeys while relying on unsuccessfully personalized content to meet buyer needs.
Businesses are well aware that off-base communications push consumers away, especially during a time where every touchpoint counts – they need a CDP that lives up to its promise.
Identifying and understanding an individual customer’s identity across multiple data sets is not easy – particularly for enterprise organizations with millions of customers and billions of potential data points.
However, true CDP acts as the repository of customer profile data for the entire business. It connects the dots between interactions and touchpoints and enables brands to deliver relevant experiences no matter the channel.
On paper, true CDP takes into account all departments’ needs within an organization and allows each to build on customer interactions. In reality, CDP solutions continue to narrow their focus to cater to use cases like marketing campaigns or customer outreach.
While marketing leaders hold the reins of CDP ownership, more and more CDPs ignore critical sales and service solutions during implementation and data sharing. The silos created present challenges in achieving personalization and customer experience (CX) outside of marketing.
With little to no access to customer data profiles, commerce, sales, and service platforms are unaware of individual customer preferences and behaviors and cannot swiftly keep pace with them or accommodate demands.
With teams struggling to achieve good CX and relying on non-existent cross-channel data to inform their customers’ recommendations, an inadequate CDP can cost a business revenue and customers.
Enterprises are looking to double down on customer interaction and engagement to meet demands. Many are disregarding CDPs that prioritize marketing initiatives over injecting personalization and CX across the board.
Many are being methodical about what technology they introduce into their processes and ensuring none create a data gap or silos they’ve worked so hard to eliminate with previous investments.
Privacy and security are table stakes for any technology that manages and collects consumer data. As businesses attempt to expand digital strategies and gain a holistic view of their customers, they need a CDP that honors the boundaries customers set, protect their data, and addresses the General Data Protection Regulation and California Consumer Privacy Act.
Nevertheless, CDP vendors are missing the boat on data privacy and the governance of enterprises.
For example, every time terms or business needs change, customers need to re-consent. Consent allows a company to store all of a customer’s data in their respective unified profile, making it easier to govern and adapt to other systems. When moving customer data to its appropriate system, consent and preferences are all enforced, feeding the overall customer experience.
Today, CDPs lack a robust data privacy foundation and adequate data consolidation in a central repository making it harder to find data even for a regulatory audit or customer request.
Data silos and weak compliance to data privacy regulations are a recipe for disaster, especially with data collection practices under the microscope.
As businesses shift to a customer-centric business model, CDPs will be the white horse to liberate their data. Joining the ranks of customer-obsessed companies requires organizations to vet the tools they wish to fully implement. They need to ensure their technology investments pay off.
Large enterprises are weighing the pros and cons of new technology implementations. At the same time, they want a single customer truth that informs other areas of its business, not just marketing. And with data collection under scrutiny, they require a tool that aligns with the manner in which they handle customer data.
But until enterprises realize the value and benefits of CDP, they will continue to classify their customer data incorrectly and deem CDP another unnecessary marketing technology tool.Reblogged 7 months ago from www.clickz.com