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Why You Should Care About CDPs

Marketing Horizons Why You Should Care About CDPs with David Raab

The tools needed to manage your customer data have changed dramatically since the days of “database marketing” in the 1980s. The latest iteration is a CDP, or customer data platform, the subject of our stimulating discussion with David Raab, a leading expert and founder of the CDP Institute. He explains how the tech landscape has become quite complex and continues to morph. The number of systems continues to grow, fed by a proliferation of channels, declining development costs, and easily available funding. Listen in to understand the customer data landscape, why it’s critical to marketing success, and where the technology is going in the future.



Ruth Stevens: What is a customer data platform, and why do I, as a marketer, need one?

David Raab: The official CDP institute definition is that a customer data platform is packaged software that builds a unified persistent customer database that's accessible to other systems. You can buy this thing off the shelf, which means it's faster and cheaper and more likely to work. Unified persistent customer database brings together data from all sources. It stores that data someplace so that you don't lose it if it gets dropped from a source system somewhere. It's a customer database so it's organized around the customer and not around products or about web pages or around retail stores. It’s organized to make it easy to pull together all the data about a single customer. It is designed to share that data so that every system in the company that you need unified customer data has one place to look which saves some effort because everybody is working off the same data so it's consistent. Most companies today have customer data that's stored in a bunch of different systems. When people ask how do I know if I need a CDP, you need a CDP if you find yourself saying you know there's this data in this system that I really need in that system but I can't get to it. There are retail purchases from my point of sale system and my physical store that I'd really like to share with my website so that I can do retargeting on the website based on what people did in the retail store. Or there's a customer history that's captured on the website that I'd really like to share with my call center agents so they can see what people have been doing on the web when they're talking to them. Anything that involves that kind of data sharing, if it's not something you can already do, that's a gap and that's the gap that the CDP is going to fill.

Ruth Stevens: Any tips on one vendor selection or solution evaluation?

David Raab: You always have to start with the end in mind. You have to ask what are the gaps in your business and once you hear what the gaps are then you have to ask what's going to fill those gaps and what are the functionalities that you need. Will CDP be the right tool to fill that because maybe my problem is poor data quality and I really need a master data management system to amp up my data quality and the CDP is not really it now. The CDP institute is a vendor-neutral organization that helps companies do a better job with their customer data. We don't really care if you buy a CDP or not, we just want you to do a better job. We try to simplify that buying process a bit so we classify the CDP vendors based on that scope of functionality.

Ruth Stevens: We we've been told that the retail category was the early adopter of the CDP technology. Is that right?

David Raab: There really were. The other was media, like Netflix. In both cases you have a very strong need to make really good recommendations. Either you're making product recommendations in retail or you're making content recommendations on the media side. Both of those work when you have as much customer data as possible from as many people and it's been assembled in a way that is extremely accessible and usable. The core capability of the CDP is to pull that data together, and to make it usable to a recommendation algorithm.

Cyndi Greenglass: What does the future look like?

David Raab: Well, my crystal ball tells me that sooner or later there's going to be too many of these things. That the proliferation of marking tech systems has happened because there have been so many little niches to be filled. There won't be an end to the growth in the number of MarTech systems, but I think companies have learned that even when they buy one of these cool new MarTech things to solve a particular problem, it adds to the complexity of the overall stack you have to integrate it into. If you don't integrate it, then you don't get that much value from it, so they find themselves buying other things and then not using them fully. Big CRM system cells will not go away and there will be more than one of those, but they will be connected together in a deeper fashion and people will be a little less eager to go off and buy that crazy little new hot app that does this cool new thing.

Key Takeaways/Three Little Piggies

  • We have to search for new technologies with the business result in mind. We have to understand the gaps in our business and identify the missing functionality that any new technology will help us fill.
  • CPD is expanding rapidly into many industries.
  • Despite the proliferation of MarTech that is in our lives to help us understand our customers and better manage our customer relationships, it's all about the people and the business solution and the technology is a facilitator.

Marketing Communications Today presents Horizons, it’s forward-thinking, looking ahead, through the front windshield and beyond, into the marketing future. Join Cyndi and Ruth bi-weekly for new ideas, technologies, tools and strategies that are emerging to help marketers navigate over the marketing horizon.

Meet our guest

David Raab

David M. Raab is founder and CEO of the Customer Data Platform Institute, a vendor-neutral organization with over 10,000 members, which educates marketers and technologists about customer data management. Mr. Raab was named the Customer Data Platform category in 2013.

Mr. Raab has a long history as an independent consultant helping marketers to understand, find and deploy marketing technologies and vendors. His clients include Global 2000 firms in retail, financial services, telecommunications, publishing, technology, and other industries. He began his career as a marketer in publishing and continuities.

Mr. Raab holds a bachelor's degree from Columbia University and MBA from the Harvard Business School. He has written hundreds of articles and blog posts on marketing technology and regularly speaks and teaches at events around the world.

View his blog for more content.



Meet the hosts

Cyndi Greenglass

Cyndi W. Greenglass is a founding partner and Senior Vice President Strategic Solutions at Diamond Communication Solutions, a data driven communications firm specializing in Healthcare, Financial Services and direct response solutions and an adjunct instructor in the Data Marketing Communications online master’s degree program from WVU.

Greenglass has twice been named into the Top 100 Influential BTB Marketers by Crain’s BtoB Magazine and was the 2012 CADM Chicago Direct Marketer of the Year. Greenglass is a member of the Executive Management team at Diamond Marketing Solutions where she is responsible for the strategic planning process, participates in strategic acquisitions, and manages the agency services division.

Ruth Stevens

Ruth P. Stevens consults on customer acquisition and retention, for business-to-business clients. Ruth serves on the boards of directors of the HIMMS Media Group, and the Business Information Industry Association. She is a trustee of Princeton-In-Asia, past chair of the Business-to-Business Council of the DMA, and past president of the Direct Marketing Club of New York.

Ruth was named one of the 100 Most Influential People in Business Marketing by Crain’s BtoB magazine, and one of 20 Women to Watch by the Sales Lead Management Association. She serves as a mentor to fledgling companies at the ERA business accelerator in New York City.


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