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The right way to select a CDP

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The right way to select a CDP


At Real Story Group, we’ve been evaluating customer data platform (CDP) technology on behalf of enterprise buyers for more than four years now. Initially, we saw a wave of early adopters making hasty decisions both to license this type of technology and pick a vendor. As you can imagine, many of those early partnerships didn’t work out so well. Now I see a somewhat different phenomenon: enterprises wanting to select a CDP but feeling more cautious about it.

In general, that’s a good thing. You want to make sure you have the right technology, platform fit and supplier fit, especially for something foundational to your stack. So take your time, and do it right. Here’s how.


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Understand the marketplace

It’s an understatement to describe the CDP market as “fragmented.” RSG evaluates nearly three-dozen vendors, with more added each quarter. This breadth speaks to the rising tide of interest that’s floating so many boats and the breadth of capabilities that potentially fall under the CDP label.

CDP Vendors can be usefully grouped into categories. Source: RSG Vendor evaluations

There are, of course, many ways to slice and dice any tech marketplace. Perhaps the biggest distinction among CDPs is how a platform is more engagement-oriented than data processing-oriented. Or, roughly speaking, a business versus infrastructure platform (more about that below).

We separately break out the biggest “suite-dependent” vendors into a separate category because our research finds they carry the most significant risk for you. This is not unusual in martech.  

Understand your architecture

Indeed, that breadth of potentially available capabilities –  reaching from deep-tunnel data routing, cleaning and transformation, possibly to more front-end services like email messaging and real-time personalization – makes the CDP marketplace unusually wide.  

So what matters here is the specific set of services you want to render unto a CDP, and which you want to (or already) accommodate somewhere else. Consider this handy chart from my colleague Apoorv in his recent MarTech piece.  

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Look at your broader customer data ecosystem to figure out where a packaged CDP will – and will not – fit into your overall portfolio of services. Source: Real Story Group

In that article, Apoorv analyzes various build vs. buy scenarios but concludes that your customer data modernization journey will include ample build and buy for the typical enterprise. Budget accordingly.

Prioritize your scenarios

Explicitly or not, vendors tend to focus on a limited set of use cases imprinted with new technology and then persist as true strengths. It’s not like you can’t stretch a platform to go where it doesn’t want to, but that takes time, money and scarce developer talent. So you want to make sure that your use case priorities align with your CDP vendor’s strengths.  

Below find ten canonical scenarios that RSG uses when critically evaluating CDP solutions.  Again, vendors will argue they’re good at many if not most of these. Pro tip: the typical CDP vendor is only good at three or four. 

CDP technology can theoretically address up to ten different business scenarios, though vendors almost always excel at just three or four. Source: Real Story Group

And while you’re at it, make sure to catalog your true internal capacity to leverage this new platform – particularly around customer data unification and identity resolution, which in many cases will need to take place underneath any packaged CDP solution.  

Take an agile approach

CDPs represent modern technology, so you should take a modern, non-waterfall approach when selecting one. You can read more about this agile approach from an earlier column, but for now, I’d like to stress the importance of testing any platform before you go ahead and license it.  

Sometimes, when working with large enterprises, team members are surprised that they can test-drive martech platforms in general and CDPs in particular. Well, you can, and you should! If a vendor pushes back, drop them from your list. We like to structure week-long sprints with ample business and technical training, ideally separately with two finalists – a.k.a., a competitive bake-off.  

This is easier to do with a CDP than you might think, though it does take some work. Compare that level of effort with the cost of making a bad choice. Also, bake-offs are going to foreshadow the potentially ample organizational change you’ll need to effect for success in any CDP deployment.

Negotiate hard

In any martech procurement, you should negotiate early and often, and not just when you’re down to a single finalist (and have therefore lost much leverage). Unfortunately, over the past year at RSG we’ve seen substantial shifts in CDP vendor pricing. The short story is that it’s becoming more complicated and more usage-based.  

This can lead to strange conversations where vendors ask you to calculate fairly fine-grained usage projections long before you’re prepared. As usual, I’ll encourage you to push back. Ask for a menu of prices and flexible fee structures that align more with value than data throughput.  

This is a hot space, so vendors lead with more aggressive pricing. But even more so, in this young market, vendors want to grow quickly and gain share. Negotiate aggressively.
And let me know how it turns out!

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Real Story on MarTech is presented through a partnership between MarTech and Real Story Group, a vendor-agnostic research and advisory organization that helps enterprises make better marketing technology stack and platform selection decisions.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About The Author

Tony Byrne is founder of Real Story Group, a technology analyst firm. RSG evaluates martech and CX technologies to assist enterprise tech stack owners. To maintain its strict independence, RSG only works with enterprise technology buyers and never advises vendors.



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Only 38% of marketers very confident in their customer data and analytics systems

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Only 38% of marketers very confident in their customer data and analytics systems

Only 38% of marketers globally are very confident in their data, analytics and insight systems, according to a new report from The CMO Council. And, while 91% say direct access to customer data is a critical competitive advantage, only 11% say that data is readily accessible to them. 

Read next: Only 11% of CMOs say they have achieved digital transformation goals

North American marketers. Most of these numbers are global ones, but the ones specifically from North American marketers are not good. Only 28% say they are very confident in their data systems to win and retain customers. Compare that with Europe where 61% answered yes to this. Just 6% of North American respondents said they have high access to customer data vs. 20% of Europeans. On the issue of being able to move quickly from data to action, it is 8% from our side of the Atlantic versus 36% from theirs. And Europeans have a lot more faith in their systems: 46% say they’re confident the martech they have can adapt to future needs versus 20% in the U.S. and Canada.

Source: CMO Council’s High Velocity Data Report.
Used with permission.

Barriers to data access. Nearly three-quarters (73%) said not having the right tools prevents them from getting the data they need. The lack of proper data management processes was cited by 60% of respondents. Next up, both with 41%: Data control being elsewhere in the organization and the data not being available in real time.

Can’t get the most from their data. The biggest things preventing marketers from maximizing the data they already have? Some 55% said a lack of systems connecting data silos and making it easy to access. The talent shortage is No. 2 on the list, cited by 52% of respondents. Next on the list at 44% was not having the money to improve data systems.

Why we care. Good data is gold, bad data isn’t just useless – it can lead to very big mistakes in planning, allocation and all the other parts of marketing. So why can’t marketing departments get the data they need? This study implies it’s because they are failing to convince their own organizations about what they need. This is understandable. Convincing a customer is comparatively easy: They aren’t competing with you for resources and to move up the career ladder. So maybe it’s time to put together a campaign around the needs of the marketing department.


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About The Author

Constantine von Hoffman is managing editor of MarTech. A veteran journalist, Con has covered business, finance, marketing and tech for CBSNews.com, Brandweek, CMO, and Inc. He has been city editor of the Boston Herald, news producer at NPR, and has written for Harvard Business Review, Boston Magazine, Sierra, and many other publications. He has also been a professional stand-up comedian, given talks at anime and gaming conventions on everything from My Neighbor Totoro to the history of dice and boardgames, and is author of the magical realist novel John Henry the Revelator. He lives in Boston with his wife, Jennifer, and either too many or too few dogs.

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