Customer Data, Industry Trends

Do You Know the Different Types of Customer Data Platforms?

Customer Data, Industry Trends | June 22, 2020

In a recent blog post, we talked about how to start the process of choosing the right customer data platform for your organization by defining your business requirements. But did you know that there are different types of customer data platforms?

It’s important to understand these categories so that you can see how each one fits your specific requirements, because there are vendors who claim to offer a CDP but really aren’t doing so. These vendors may be looking to capitalize on the popularity of CDPs by piggybacking on the phrase. As a result, the definition of what is a “real” CDP can feel muddled, which has led to confusion among those looking to buy one.

How does the CDP Institute define a CDP?

The CDP Institute (CDPI), a leading authority on all things CDP-related, defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” CDPI further clarifies the terminology in its definition in the following ways:

Packaged software: The CDP is packaged software bought and controlled by business users, most often in marketing. This distinguishes it from a data warehouse or data lake which is usually custom-built by the corporate IT department. The packaged nature of the system makes it much easier to deploy and change as new needs arise. Corporate IT must cooperate to set up and maintain the CDP but most technical resources are usually provided by the vendor or an agency hired by marketing.

Persistent, unified customer database: The CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results. CDPs work primarily with data gathered by a company’s own systems about identified individuals. They may also include data from external sources and about anonymous individuals. The CDP is able to retain all details of input data indefinitely, although users may restrict what is stored and how long it is kept.

⇨ Download Now: Why a Unified Customer View is so Important For Marketers ⇦

Accessible to other systems: Data stored in the CDP can be used by other systems for analysis and to manage customer interactions. The CDP restructures the data, adds calculated values such as trends and model scores, and shares the results in formats that other systems can accept. Access methods typically include APIs, database queries, and file extracts.

How does the CDP Institute classify the CDPs on the market today?

Given the growing popularity of CDPs over the last few years, it’s not surprising that many vendors classify their products as a CDP. But not all CDPs are alike, and this is an important distinction to recognize as you begin your search for one. To help buyers further understand the differences found in the wide variety of CDPs on the market, CDPI has identified four CDP vendor categories: Data, Analysis, Campaign, and Delivery. Here’s how CDPI defines these vendor categories:

1. Data: These systems gather customer data from source systems, link data to customer identities, and store the results in a persistent database available to external systems. This is the minimum set of functions required to meet the definition of a CDP. Systems in this category often employ specialized technologies for data management and access. Many began as tag management or Web analytics systems and retain considerable legacy business in those areas.

2. Analytics: These systems provide data assembly plus analytical applications. The applications always include customer segmentation and sometimes extend to machine learning, predictive modeling, revenue attribution, and journey mapping. These systems often automate the distribution of segment lists to marketing automation or advanced analytics products.

3. Campaigns: These systems provide data assembly, analytics, and customer treatments. What distinguishes them from Analytics CDPs is that Campaign CDPs can specify different treatments for different individuals within a segment. Treatments may be personalized messages, outbound marketing campaigns, real time interactions, or product or content recommendations. They often include orchestrating customer treatments across channels.

4. Delivery: These systems provide data assembly, analytics, customer treatments, and message delivery. Delivery is typically through email, Web site, CRM, or several of these. Products in this category often started as delivery systems and added CDP functions later.

These four categories are a tiered classification system based on increasing functionality, meaning that CDPs in the Delivery category include the functionality of those found in the Data, Analytics, and Campaigns categories on top of their delivery features. Vendors whose products fall in the CDPI’s Delivery category offer the most well-rounded and complete CDP offerings available on the market. A complete vendor breakdown can be found in the CDP Institute’s Customer Data Platform Industry Update: January 2020.

While every organization's needs are unique and may not warrant going with a CDP in the Delivery category, those that do choose to invest in a Delivery CDP are far less likely to have to upgrade their product in the future or purchase another platform to fill a gap. And no organization wants to go about having to carry out two technology implementations in a short period of time when the job could just be done right the first time around.

As an early innovator, QuickPivot’s CDP meets the Delivery requirements

Like many modern businesses, you’ve likely encountered the problem of struggling to fully leverage and integrate your customer data. You may be using a variety of systems to design, orchestrate and measure multichannel campaigns, but doing that across different channels and vendor solutions is a challenge. CDPs promise to solve this by centralizing data collection, unifying customer profiles, and creating and managing segments in priority channels.

Without a proper understanding of the various categories into which today's various vendors CDPs fall, on the surface it may seem they all offer similar features and functionalities to fully leverage your customer data in their products. This might lead you to believe that any old CDP could meet your requirements, which couldn't be further from the truth. As you dig deeper, clear differences in capabilities emerge.

In addition to its vendor classifications, last year CDPI introduced RealCDP, a program which seeks to measure potential CDPs against five core capabilities required to support common CDP applications. In order to be considered a RealCDP, a product must:

  • ingest data from all sources (most users expect real-time ingestion);
  • retain all original detail;
  • store data for as long as users want;
  • build unified customer profiles (usually including identity matching); and
  • make the profiles available to external systems

At QuickPivot, we've been an innovator in the CDP space since its beginning, and our CDP is RealCDP certified. The QuickPivot CDP falls into the CDP Institute’s Delivery category because our product has features that go well beyond just assembling and managing customer data. Our CDP features capabilities such as identity resolution, cross-channel campaign management, customer segmentation, reporting and analytics, and seamless third-party system integration. Our direct mail support feature makes QuickPivot particularly effective for retail catalog companies. QuickPivot's speed to implementation is another feature that sets it apart from the rest of the pack -- we can get you up and running with your new CDP in weeks and provide valuable insights within days.

Together, these features help marketers take control of the data they have at their disposal, organize it, and put it to use to create personalized marketing campaigns designed to target various customer segments across a variety of marketing channels. And beyond marketing, the QuickPivot CDP provides a simple system to store, manage, and match customer data to create unified customer profiles.

Avoid a costly mistake and choose the CDP best for your needs

With a full understanding of the different types of customer data platforms on the market today, you can take the next step toward picking out the right one for your organization. The addition of a CDP to a technology stack is proven to be a worthwhile investment that delivers both near-term and long-term results, as QuickPivot customer MacKenzie-Childs can attest to. But if you don't have a complete understanding of what a CDP is and how it can help your organization, the buying process remains just as challenging.

As you assess your business requirements and begin to determine which category of vendor is right for your needs, we encourage you to check out our recent whitepaper, "The Future of the Customer Data Platform," which discusses the current state of the CDP industry and how CDPs rapidly evolved to become critical parts of MarTech stacks. And if you’re interested in learning why the QuickPivot CDP is one of the premier CDPs options on the market, reach out to us today. We'd love to show you how our CDP can take your marketing and data management to the next level.

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