What to think about before investing in marketing technology.
Think back to the last time you bought a car. You probably had a pretty good idea of what you were looking to get out that vehicle:
- Whether you’d be cruising around town or making a long daily commute
- Whether you’d be driving in snowy or off-road conditions
- How many people you’d be transporting on a regular basis
With your use cases in mind, it’s easy to evaluate vehicles against your needs and budget. Imagine investing in a two-door Honda Civic when you live in backwoods New Hampshire with your family of five and plan to regularly haul everyone's ski gear to and from the slopes. Pretty counterintuitive.
Going into a marketing technology purchase should be a similar approach—clearly defined needs, use cases and required expertise should drive the consideration set and purchase.
Unfortunately, that’s not quite what’s happening today in the customer data platform (CDP) market.
According to a Forrester report:
“The lack of structure and go-to-market rigor in the CDP market today makes it difficult for marketers to understand the potential benefits, identify prospective vendors, and make the business case to invest.”
Now, imagine choosing a new car if the dealers did not provide clear information about how many people the car could fit, what the gas mileage was or whether the car had four-wheel drive.
How would you pick one to fit your needs? This is the car equivalent of evaluating a customer data platform today.
Start with identity instead
If you're considering a CDP to solve for enterprise data management, we suggest you pause for a moment.
To make sure you’re getting the right tool for any marketing challenge, the first step is to make sure you have clean, aligned data that you can actually use to solve for the challenge. In other words, you need an identity strategy.
Laying a strong identity foundation is essential to crafting a compelling customer experience—which all of your marketing technology should ultimately support. As the Forrester report outlines, “Identity resolution lies at the heart of customer-centric marketing…"
Having this identity strategy in place means that you have a plan and process for consolidating, cleaning and identifying customer data, as well as normalizing and adapting data formats and applying ongoing hygiene at optimal cadences.
One of our enterprise clients in the entertainment industry initially chose a CDP to solve their data management challenges. A year later, they realized they needed more in terms of identity management services.
Several other clients have found themselves in a similar spot with their CDPs when they realized that identity is more than just matching names and addresses or pulling all of your data into one system. This doesn’t move the needle for enterprise marketing.
To avoid getting stuck in this position yourself, establish a plan to address the key components of a solid identity strategy at the outset:
- Data hygiene. Clean data is integral to marketing success. You need to continuously apply tried-and-true hygiene practices to address problems of data latency and degradation.
- Verification. Once your data is clean, you also need to make sure your contact records are tied to real human beings. This can be done with transaction data or other referential data and keeps you from sending to inaccurate addresses that waste money and skew your campaign results.
- Activation. The last step is activating your data to orchestrate effective communications in each of the channels that matters to you and your customers. Without clean, current data that’s tied to real people, you risk your brand reputation by communicating the wrong messages to the wrong people.
With identity strategy in place, you can start considering where your data should reside. In fact, your data can live almost anywhere—the most important factor in choosing a home for your data is making sure this home aligns with your identity strategy.
Unfortunately, Forrester explains, “CDPs lack crucial capabilities to solve for identity resolution, data hygiene, and cross-channel orchestration. Thus, they can’t meet enterprise B2C marketers’ expectations for personalized and targeted customer engagement.”
Probably not the best home to choose for your enterprise data.
Ask, “Are we too advanced for a CDP?”
You may be wondering why there’s so much hype around the customer data platform if it fails to deliver on these key components of a successful data management strategy.
CDPs offer the alluring prospect of doing more with less—and they may be the perfect solution for mid-sized brands with a single line of business that are looking to get an initial understanding of their data.
But this promise of efficiency only goes so far. As your identity strategy becomes more complex, the CDP’s ability to help you manage and execute on it declines.
As an enterprise brand, you should carefully consider your answers to the following questions:
- Do you have more than one brand or business line you’re marketing to customers?
- Are you looking to store both personally identifiable information (PII) and non-PII data in the same repository?
- Do you need to activate across many marketing channels and platforms?
- Do you need to analyze your data for actionable insights from a single location?
- Do you need to connect your database back to real-time data inputs from various sources?
If most of your answers are “yes,” your marketing organization is probably too advanced to make good use of a CDP and should be considering more advanced technology with clearly defined capabilities that meet your specific use cases.
Consider your human resources
More often than not, marketers turn to tools like CDPs to solve pressing problems. It’s important not to lose sight of the human component that goes into making any technology a successful addition to your stack.
Case in point:
I recently consulted with a restaurant chain on their data management strategy. The brand chose to go with a technology platform instead of our managed services—and the decision-maker left the company shortly thereafter. They are now stuck in a multi-year contract for a tool they don’t know what to do with, how to use or the resources to make anything out of.
On the other hand, we recently had a meeting with a major department store in which they expressed interest in using some exciting new technologies—machine learning and powerful analytics and data science, for example. But they admitted to us that they didn’t have the skills to handle these advanced tools in house and asked us to include resources in our proposal. This kind of self-reflection is incredibly valuable for all brands to do before investing in a new tool.
If you’re still considering a CDP (or any other technology purchase), make sure you have a clear plan for who will be managing and using the platform. Will you need people to complement your in-house resources?
The right people can help you to translate your business requirements into technical requirements and vice versa, then make sure that whatever technology you choose functions to help you achieve your business goals. Finding a partner that offers software and technology with service may be a better option than a CDP alone.
Where to go next
It’s a crowded and confusing marketing technology market out there. It is difficult to choose the right tools and services to meet your needs when the offerings are clearly defined—and CDP offerings are not clearly defined.
If your first challenge is trying to wrangle all of your disparate data for benefit of customer, make sure to clearly define your use cases, establish your identity strategy and consider your human resources before you sign any dotted lines. Carefully compare your needs against each vendor’s specific offerings.
Still have questions on what to do next? Drop us a line. We’ve been around the customer data block, and we’re happy review your needs and make some recommendations.