When the pandemic shut down live events early in the year, marketers spent their efforts (and their idle live events budgets) filling the funnel with digital channels. The hottest tech in marketing -- customer data platforms -- grabbed the spotlight.
The fact that Microsoft, Salesforce, Oracle, Adobe and SAP released their CDPs gave the technology fresh exposure to users of those tech titans' applications that will set off a "buying spree" in 2021, said Liz Miller, analyst at Constellation Research. It also will help broaden the market for the dozens of standalone CDP vendors that have been hunting new users, some of them for the last decade.
Customer data platforms first emerged in the early 2010s, as startups exploited an issue big vendors such as Microsoft and Salesforce couldn't solve: Applications that covered different parts of the customer journey couldn't share data with one another. A foundational data platform was needed to reconcile a customer's multiple records scattered throughout those systems and update all the applications in real time.
Customers of those large vendors are looking back and wondering why these supposedly integrated technology stacks didn't just work as promised, Miller said, but they're resigned to plugging into CDPs. The difficult truth that comes with CDP adoption -- and not part of the vendor hype behind CDPs, she pointed out -- is that they require a lot of data-wrangling and normalization before a CDP can be used.
Moving beyond marketing
Miller said that while users deploy customer data platforms primarily for more precise, up-to-date personalized marketing, they hold more potential for enterprises outside of marketing uses.
"The problem [with vendor hype] is that the CDP becomes that mystical, mythical Swiss Army knife that's the last piece of the data puzzle -- now it's all going to work," Miller said. "But if a marketing organization buys a CDP to activate and manage marketing data, they still have a piece of marketing technology siloing data for marketing use."
Smart tech buyers should plan to reap the benefits of CDPs across the various CX teams to get proper return on investment, Miller said. For example, if customer service agents can see what sales activity is going on in real time -- and vice versa -- CDP users will be able to be more tactical in what they say to customers. One common scenario for that is when salespeople know from the CDP that a customer called for service because of difficulties with a particular product, they won't call that customer trying to sell them more.
If a marketing organization buys a CDP to activate and manage marketing data, they still have a piece of marketing technology siloing data for marketing use.
Liz MillerAnalyst, Constellation Research
Other areas CDPs can help enhance CX include consumer privacy compliance and data security, limiting access to data to users who need to see it. Both Oracle and Adobe moved in that direction. And while many CDPs are focused on marketing to consumers, Adobe is taking on the complex technical task of B2B sales with its CDP. This usually involves sales teams selling to customer buying teams for large purchases, many degrees more complicated than one-to-one consumer marketing.
Some vendors also promote their CDPs as ID management and access management tools, which may be an oversell on their capabilities, Miller cautions, and may be a liability. At the very least, she added, users who consider CDPs for those uses should get their IT staff and CISO involved in purchase decisions.
At some level, though, running ID management and access controls through a customer data platform will make sense for some users, CDP Institute founder David Raab said.
"There's been a kind of convergence between access management, which has mostly been about employees, and identity management, which is mostly about customers," Raab said. "As you get more and more customers signing into your website and systems -- and doing more self-service -- then access management and customer management start to overlap."
Developer-oriented CDPs arise
While the likes of Salesforce, Oracle and SAP grabbed headlines with their CDP introductions, Twilio and Acquia made their own news. Acquia bought the AgilOne CDP at the end of 2019, while Twilio -- a unified communications platform with customer service-friendly tools -- bought Segment for $3.2 billion, a deal that closed last month.
Both Acquia, which is the commercially supported instance of the open source Drupal web content management platform, and Twilio might not have the mindshare of Salesforce or Oracle, but they are beloved by developers. They offer a much more customizable CX environment for their users, who tend to be hands-on builders.
Twilio's acquisition of Segment, one of the largest standalone CDP vendors geared for marketing, changes the market landscape, Miller said. It's just not yet obvious how.
"I'm very interested in what they're going to do with it," Miller said. "It certainly puts Twilio in a very different conversation about customer experience -- but I'm still waiting for a verdict on how it all pulls together."
