As organizations continue to feel the lash of tightened budgets in response to a looming recession, many marketers may be wondering whether a customer data platform (CDP) implementation is worth the investment. CDPs can enable many capabilities that drive significant business value such as identity resolution, audience management, and cross-channel activation. While CDPs offer numerous benefits, there are also alternative technology investments to consider. Further, even if a CDP aligns closely to business needs, there may be prerequisite steps for an organization to take to ensure preparedness before embarking on an implementation.

Is a CDP the right technology for your organization’s needs?

Organizations should first clearly define the use cases they want to enable and then determine whether those use cases are best solved for with a CDP or with an alternative solution. A widely discussed alternative is a Reverse ETL (extract, transform, and load) tool that leverages pre-built connectors that sync data from data warehouses to destinations such as advertising platforms including Meta Ads and Google Ads. Reverse ETL tools can often be stood up with relative ease and would be able to meet many data activation requirements. In contrast, Reverse ETL tools do not store data and cannot serve as a centralized source of truth or consolidate customer profiles as a CDP would.

Is your organization prepared for CDP implementation?

If it’s determined that a CDP is the technology solution that aligns closest to business needs, the next step is to evaluate whether the organization is prepared for a successful implementation. As an example, a B2B organization may have challenges with CRM data (i.e., limited governance, duplicative data, or incomplete data records) and perhaps their account-based marketing (ABM) strategy has not been fully fleshed out. In this particular case, the organization should likely invest first in their CRM platform’s data hygiene and fully develop their customer strategy. If a CDP is stood up before these challenges are resolved, there will be several implications. The CDP will ingest CRM data and therefore the organization’s data hygiene challenges will quickly come back to haunt them. Additionally, crucial elements of CDP implementation planning such as data models and potential integrations will ultimately be dependent on ABM strategy.

As this example illustrates, there are many steps an organization needs to take in order to reach the maturity required for preparedness, and the CDP will not magically do that for you out of the box.

Key boxes to check to ensure readiness

Customer Strategy: The organization has a clear understanding of who their customers are as well as fully developed audience segmentation and channel strategies.

Data: Data models reflect customer strategy, data governance is in place, and data hygiene is not a significant challenge.

People: Your organization has access to resources with data, analytics, and marketing skills that can successfully stand up and maintain a CDP platform.

Processes: Marketing processes, workflows, and project management capabilities are mature.

As these areas of maturity are important prerequisites to a successful CDP implementation, organizations should consider pursuing initiatives that drive maturity prior to standing up a CDP if a gap is identified. These prerequisite initiatives and CDP implementation can often be budgeted and planned for in parallel as part of a broader digital transformation roadmap.

Want to learn more? Check out our new ebook, A Smarter Approach to CDPs here.

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