The CDP Institute (CDPI) is basically THE body providing key resources for organizations that are researching Customer Data Platforms. As a vendor-neutral organization, its main aim is to act as an authority on customer data management and distribute materials or news that will help marketers to make the best use of their data. Every year the CDPI member survey is sent out in an effort to better understand the CDP buyers’ needs around customer data management.
For those that want to read the full CDP Institute Member Survey 2020 report, you can access it here, or for a summary of the key findings from the report, alongside commentary from Anthony Botibol (BlueVenn's VP of Marketing and CDP Institute Advisory Board member), read on:
1. "Companies are finally unifying their data."
According to the CDP Institute Member Survey Report:
After years of slow progress, with lots of marketers retaining disparate, siloed customer-facing systems within their stacks, the fraction of respondents feeding customer data into a central system has risen from 37% in 2017 to 52% in 2020. Progress was especially impressive for consumer marketers, who had previously lagged behind other sectors. In fact, they’re now twice as likely to have a unified customer database (although still less likely to connect systems to a marketing automation or CRM platform).
Anthony's take:
The finding that 52% of respondents are now feeding customer data into a central system is probably accurate, but it would be interesting to ask how they are doing so as a follow-up question. Various past surveys I've seen from Gartner, and indeed our own Customer Data Excellence report, have indicated that many marketers are still confused by what a CDP is, or does, and lots of organizations have attempted to use CRM technologies to achieve data unification, while others have enterprise data warehouse or data lake solutions.
In terms of the spread of this rise in popularity, CDP adoption has been more prevalent in both the US and UK markets, while the rate of adoption across mainland Europe and other regions is probably a year or two behind. Through our own results, as well as through BlueVenn's strategic partnerships around the world, we are seeing large spikes in CDP interest that mimic the hype that CDPs generated in the US back in 2017-2018. Whereas interest in US and UK markets has plateaued somewhat, we are seeing brands in France (+190%), Germany (+133%), the Netherlands (+210%), Australia (+159%), India (+176%) and many other parts of the world showing increased interest in investing in Customer Data Platforms.
2. "Martech best practices make a difference"
According to the CDP Institute Member Survey Report:
Best practices may include the establishment of Centers of Excellence to train marketers, long-term planning before deployment, putting martech staff in charge of their own technology, and selecting systems based on their functionality rather than cost or marketers’ familiarity with them. Companies that deploy leading management methods report substantially higher levels of satisfaction in their martech investments, compared with companies that do not – although overall satisfaction levels are fractionally rising. Meanwhile, companies that deploy a shared orchestration engine alongside their unified database are the most satisfied of all.
Anthony's take:
The fact that following best practice makes a positive difference to your satisfaction with the purchase is relatively unsurprising. Buying a CDP and expecting it to make revolutionary changes is like buying any technology platform without gathering the right requirements, essentially a doomed venture.
Getting to understand the enormous amounts of fragmented customer data that reside within your business (and even the many spreadsheets that staff are using), along with the necessity, quality, access and usefulness of each data source, is a process that can take a lot of time and slow down a CDP project. Especially in the case of a large or multi-national organization, this data discovery work can take months, or even years, but must be undertaken before connecting a CDP to create a Single Customer View. (Otherwise you may end up with a "partial customer view" instead, which kind of defeats the purpose!)
You will also need to determine the people that must be involved to make the investment work, the processes that will need to be put in place to support the technology, and the business culture that should be established to make the project a success. (For more on this you should check out our Marketing Transformation eBook to learn how to combine people, processes, technology, data and culture to make the right purchase decisions.)
Each of these cogs is essential in the mechanism of good customer data management, and every cog needs to be in place if marketers are to realize the significant benefits that others have seen from a CDP purchase. Lots of marketers have become accustomed to just buying the next shiny, new bit of tech, but this slap-dash decision making strategy is fraught with danger when it comes to investing in a CDP, with projects being far more likely to fail if they are rushed.
At BlueVenn, we find that prospects often come to us wanting to buy a CDP, and go live, all within 30 days. It’s possible to make that happen, but only if the groundwork has been laid and planning done in advance, which in our experience is rare. We often roll back the process with our clients to ensure that they follow the right path to purchase and use best practice in the setup process. That can be frustrating to anyone looking for a quick fix, but it creates a much better relationship between vendor and client, and helps our clients to realize the value of their investment more quickly.
Going back to the CDP Institute report, the finding that ‘companies that deploy a shared orchestration engine alongside their unified database are the most satisfied of all’ is great to see, as it’s a key differentiation feature of the BlueVenn Marketing Hub. From my perspective, what good is unified customer data if you can’t act on it, and what good is marketing automation if your data is inaccurate or missing vital ingredients?! The two go hand in hand! So, whilst investing in a CDP to pipe data into a single database is useful, you will find that fragmented marketing channels can be as big a problem as fragmented data silos when attempting to provide an omnichannel customer experience.
3. "CDP users continue to focus on basics"
According to the CDP Institute Member Survey Report:
'Collecting data from all sources’, ‘identity matching and management’ and ‘extracting customer segments’ are the highest CDP priorities. More complex applications, such as ‘creating predictive models’ and ‘delivering/offering recommendations in real time’, are less common objectives for a CDP project, showing that users recognize CDPs are designed to improve business results, not save staff time and effort.
Anthony's take:
Predictive modeling, real-time recommendations, machine learning and Next Best Action are all hot topics on the lips of marketing professionals, technology vendors, and the experts speakers at nearly every event (or rather, virtual event) around right now. However, the chance of finding marketers who are using models or machine learning to any great degree is in fact very low. You’ll see enterprise organizations with data science or analyst teams dedicated to this, as they attempt to leverage value from their data warehousing, but the 90% of organizations in the world not in the enterprise category are instead reliant on the ‘black box’ algorithms that their marketing automation or campaign management technologies provide them with.
Of course, predictive models require vast amounts of good, clean and trustworthy data to power them (in fact our in-house Data Scientist Paul Schulz likes to have a minimum of seven years of behavioral data for a decent model). Therefore, attempting modeling or machine learning without a unified, holistic and complete database (like a CDP) will result in the creation of predictions that are likely poorer than your own gut instincts. So, whilst marketers like the sound of using predictive algorithms and machines to drive their personalized marketing at scale, for most of them this is still an aspiration.
It is no surprise, therefore, that the requirements for a CDP are largely ‘basic requirements’, since marketing departments at some of the most well-known high street brands are still focused on their inability to even access their data, let alone apply a predictive model to it. Getting a CDP is a great start for modeling, as it enables businesses to begin leveraging all their customer data to drive the predictions and to make real-time recommendations. Going back to the importance of ‘best practice’, therefore, it makes sense to focus on your basic needs (e.g. access to data, better segmentation and personalization) and work to meet those objectives first, before moving onto more advanced aspirations.
4. "Many marketers still see privacy as a burden"
According to the CDP Institute Member Survey Report:
B2C companies are less likely than B2B companies to use privacy as a selling point with customers and do more than meet minimum privacy requirements. Similarly, small companies are much less likely than larger companies to exceed requirements and promote privacy as a benefit.
Anthony's take:
Because of the GDPR, the results around privacy would probably have been very different if the CDPI had split the survey between EU-located brands and US brands. In fact, in our experience, ‘data compliance and privacy’ is rated as a high priority by 100% of the EU brands that go out to tender for a CDP. So, whilst data compliance and privacy is seen as a burden by many, others see it as a key ingredient of a better, more trustworthy customer experience strategy that differentiates them from their competition.
Investing in a Customer Data Platform is actually a huge tick in the box when benchmarking the way that an organization handles customer data and permissions, due to the basic fact that it unifies data in one place, making it accessible and structured, and leading to much better (and legal) use of customer data.
With BlueVenn, all data is checked, cleansed, standardized and enhanced by the system as it enters the unified database through the CDP data loaders and connectors. This work takes customers another step nearer to compliance, by improving their data quality. Then, with compliance controls allowing marketers to generate Subject Access Requests, erase or correct data, or ensure the very best security of that data, we can get them all the way there.
Privacy requirements are not going to go away, so rather than seeing them as a burden, marketers need to change their perspective. If proof was needed that data privacy issues are only going to become more prevalent, marketers got it in the form of the recent announcement from the CJEU, which deemed the EU-US Privacy Shield to be invalid. Since this ruling, we have begun to see a pattern of European-based organizations looking to replace existing US-based technologies with equivalents from EU-based vendors (in the case of one client, the organization would not entertain using any US-based CDP vendors, for fear of this ruling). It will be interesting to see what happens next with regards to the regulation of transatlantic data exchange.
The CDP Institute Member Survey 2020 report
