5 Key Elements to consider when selecting the right Customer Data Platform to grow your business


A Customer Data Platform (CDP) serves as a solution to help businesses unlock the potential of their customer data, which usually resides across many siloed databases and operational systems. As businesses become more sophisticated, they layer on more channels, more technologies and more databases; each holding key pieces of data about your customers that when unified to reveal the complete picture of a customer, can be used to improve targeting, segmentation, personalization and analytics – if only it was easily accessible and usable! 

Businesses usually start evaluating CDPs when they realize the limitations of their current marketing solutions (the CRM, email platform etc). Typically, these channel solutions do not fully integrate with each other, they each hold different information about your customers, and none provide the central source of truth (or a single customer view). The need to move data between systems with ETL or custom-built processes therefore becomes the obligation of the IT department, leading to massive inefficiencies. Ultimately, mature businesses understand the benefits of better using data to personalize marketing messages across many channels, but when data is scattered across systems this can create complexity, bottlenecks and inefficiencies for the business, where a more effective use of the IT department's time could be to solve other infrastructure needs. 

Selecting the right Customer Data Platform for the unique needs of your business is not always that easy however with most CDPs having as many differences as they do similarities. At Relay42 we believe there are 5 key elements that businesses need to consider when evaluating CDPs. 

Watch the 5 Key Elements when Evaluating CDPs or read on… 

#1 Consider how a CDP can help you with rich first-party data 

Depending on your business type (B2C, B2B or B2B2C) and industry (retail, travel, insurance, etc.) it will dictate what you need from a Customer Data Platform, in terms of how it will structure your data. While a B2C retailer will typically view an individual of legal age as a ‘customer’ they commonly also need to join specific customers to household addresses. This could require a 1-to-1 relationship where any customer can have any address (potentially the same address), or a 1-to-many relationship where one address can be joined to multiple customers to better understand the makeup of a family. Similarly, a media company or publisher will think about a household view for their offline subscriptions (ultimately to deliver a newspaper or magazine to an address), but then require individual views of consumers for online subscriptions to enable 1-t-1 personalization, and B2B organizations will be more complex still with multiple 1-to-many or 1-to-1 relationships needed between company site addresses, a company headquarters, specific departments, etc. Pet nutrition retailers, for example, may also want to treat both the pet and the owner as an individual to enable personalization tactics that understand the relationship between a pet and its pet owner(s), as well as to link both a pet and its owner to a postal address. By understanding how you count your customers, and the relationship structures you need for your first-party data, you can start to narrow in on the best type of CDP for your unique business requirements, because not all CDPs are built the same. While some handle B2B and B2C data structures, others can only handle B2C, and in some cases are primarily built for B2C retail data schemas only. 

So when researching a Customer Data Platform for your business, we recommend first establishing how you define a customer, and consider what data you have (and need) as that will dictate whether a CDP can support the structures you need or not. 

Secondly, based on your core requirements for a CDP you should evaluate and prioritize the types of first-party data that you most value in the solution to generate the biggest impact. For example, if you are focused on acquisition use cases to convert more anonymous website visitors (aka visitors who have not logged in or authenticated in some way via a form), then you need a CDP that supports the real-time identification of visitors on your website . If the CDP does not provide that functionality, it probably doesn’t make sense to continue a discussion with that vendor. 

Thirdly, with the ongoing privacy-movement towards first-party data to power digital advertising you should think about the future states of your marketing data needs. Consider how reliant you are on third-party cookies for your advertising and select CDPs that can help unlock first-party data through real-time integrations to adtech solutions, DSPs, social platforms, and other experimental ad solutions like Google's Protected Audience API or Data Clean Rooms. 

#2 Connect to owned and paid media channels 

Depending on your customers and business-type it may also dictate which channels you invest more budget and time to fully optimize. A millennial-focused eCommerce business is likely to invest far more in digital advertising, TikTok and social channels than an insurance business that provides retirement products for an older generation of customers where direct mail and call centers would work best.  

Therefore, understanding the most important channels you need to optimize for is a prudent task before approaching a CDP vendor. Some do not support digital use cases very well, while other CDP's provide built-in name and postal address hygiene to support the costs of direct mail (and therefore more suited to the insurance business). Other CDPs focus on real-time matching of identities to trigger real-time activation in paid channels or to personalize an in-the-moment experience, and thus is a more suited product for the millenial ecommerce brand.

Furthermore, beyond the channels themselves, think about how your data needs to move around your business, and even outside the business. Second-party data partnerships are a way for businesses with common customers to work together to exchange data through contractual agreements or via Data Clean Room solutions, and inside every business there are people and processes that need to be considered alongside the data and technology, so planning for how your people and processes will be impacted is also something to consider.  

#3 Identity Management is key 

The secret sauce of any Customer Data Platform is how well it can identify and merge customer data identifiers to build 360 customer profiles inside the system. Depending on the data that you have, and the quality or velocity of that data, will also dictate which type of CDP you need. CDPs created to manage digital interactions will better handle the velocity of digital data to ingest and unify identities, while a CDP born from traditional direct marketing will have less real-time focus, require different data processes to match identities, but potentially be better at supporting traditional direct channels. Digital advertising requires a lower threshold for identity matching, whereas for an expensive mailshot, or use of call center agents the match rate threshold needs to be a lot stronger. Understanding what types of data you need in the system, how customers can be uniquely identified, and how quickly you need that data available for activation will all be determined by the velocity and robustness of your ID resolution capabilities in the CDP.

#4 Create personalized journeys 

Nobody wants to unify all their data for the fun of it. The core requirements for a CDP usually revolve around the needs for better segmentation and personalization to ultimately drive better customer experiences. Planning, mapping and orchestrating customer journeys are essential therefore to create meaningful personalization in the moments that matter the most. As Google says themself, "be there, be quick, and be useful." While some CDPs are built for combining and structuring your data to push to channel solutions (email, mobile push, SMS,...), others provide campaign management functionality you’d expect to see in a marketing automation (MA) solution, while others provide a full journey orchestration engine (JOE) to coordinate all channels and experiences from one place. 

Journey orchestration is different from MA in that it is channel-agnostic. By that, it means that it should integrate and cooperate with your existing channel solutions or marketing clouds rather than force you into using its own. The ability to design, send and report on email campaigns is ultimately left to the email marketing solution, while the timing of the send, the triggers of other channels and the personalization of the message is all centrally managed by the JOE. While MA solutions (e.g. email marketing) are built to primarily serve up emails, the CDP is designed to orchestrate the moments and journeys that will trigger all your channels, but only if it best serves the customer in that moment. 

The CDP is a much more customer-centric approach to how you provide experiences to customers and so your personalization goals are important to consider. Customer-centricity is a step-change in how marketers need to think about their role in the customer experience, but for those that can move to customer-centric marketing and away from channel-centric marketing, they will see a significant increase in their marketing effectiveness. 

Depending on the maturity of your marketing and where you want to get to will dictate whether a Data CDP, Campaign CDP, Analytics CDP or Delivery CDP will best serve your needs today and tomorrow. 

#5 Privacy and Compliance 

It’s no secret that the whole marketing world is moving towards privacy-first targeting and management of customer data. Depending on your local regulations, industry regulations, geographies of customers, data sovereignty rules, or type and size of business, you will have varying levels of privacy and compliance standards that your CDP needs to adhere to.  

Most businesses understand their role in compliance for their direct marketing channels, but this can get fuzzier when attempting to trace the customer consent for digital channels. By investing in a CDP, it provides the opportunity to centralize your privacy approach as well but, again, CDPs approach privacy differently. An EU-based CDP will be setup for GDPR and high levels of compliance and privacy but may not provide the data sovereignty you need in your own country, whereas a US-based CDP could have the highest levels of privacy controls but may only have support teams outside the EU, thus creating complexity and grey areas relating to data transfers outside the EU. So, rethinking a centralized approach to privacy and complaince is another key element to consider when researching the right Customer Data Platform for your business. 

Final Thoughts

Beyond these 5 elements to consider when evaluating a CDP, there are many hundreds or thousands of potential use cases or requirements that could be important to your business. However, by thinking about these elements you ill be in a good place to start speaking to vendors and working out if the data structures, identity management and privacy tools are the right fit for your unique business needs. You should also consider that the CDP does not need to solve for every use case from day 1. Instead, prioritise what you need most from a CDP in terms of business impact and then layer on more use cases in a test and learn fashion. 

Relay42 Customer Data Platform Use Case Framework

At Relay42 we work exclusively with our customers to identify and prioritize their use cases, construct those use cases inside the tool via a test and learn approach, and then enable easy experimentation of new use cases as and when they become important to the customer. 

Interested to learn more about how CDPs can help your business? Reach our to our team:

Get in touch