If your business has a lot of data to manage, a customer data platform may be in order, but what is a CDP? At its core, a CDP is nothing more than a vast display of all customers’ information, from purchase history to credit card numbers. The purpose of a CDP is to help businesses leverage customer data to automate or otherwise improve marketing capabilities. A CDP collects data and helps you use it.
CDPs are divided into three parts, the first of which is Data Ingestion. Data Ingestion is the process by which developers use APIs to track customers’ activity across a business’s applications. When a customer buys something through a web app, this tidbit of information is “ingested” by the CDP. The next component is Identity Resolution, the process by which a CDP organizes customers’ data such that each set of information has a unique identifier per customer. The final component is the Audience Builder, the user-friendly digital interface that allows marketing teams to improve a business’s marketing capabilities with a CDP’s data. A CDP collects data, organizes it, and leverages it against future problems, so here’s why your warehouse ought to be your primary CDP.
- CDPs Are Not The Only Sources of Truth
If you establish your data warehouse as your CDP, only then does your CDP have all the data. Whether you’re in charge of a startup or a massive company, customer data is probably among records in some form. As soon as you start keeping track of customer activity, you have a CDP. It’s just an unsophisticated one.
By themselves, CDPs often lead to disparate databases of information for multiple departments. This hardly allows for the presence of a singular source of truth. At best, CDPs can import data from a warehouse, but they cannot update that data in such a way as to adhere to future, more complex forms of data collection or management. As many business tools as possible ought to originate from the data warehouse in contrast to an outsourced CDP.
- CDPs Cannot Mesh With Data Teams
CDPs are designed to be used by marketing teams, but ultimately, marketers are not always capable of solving complex data problems, depending entirely on the CDP to crunch all the numbers by itself. If your warehouse is your primary CDP, then your data and marketing teams can be in better communication because your data team will be able to see what’s “under the hood” in terms of data management. The tech side of the operation should empower the marketing side, not confuse the marketing side. While CDPs offer immense capabilities to marketers, without help from data teams, marketers may not know what they’re looking at. To allow for better communication between data teams and marketing teams is to run an effective business. A marketing team is useless without an effective data team to back it up.
- CDPs Are Not Flexible
Every business wants to keep track of different traits among customers, but CDPs only allow for a few types of data. Some offer as few as two distinct items of which to keep track: users and accounts. However, users can be part of multiple accounts, and there can be business accounts instead of personal accounts. The list goes on. Simple data structures aren’t going to cut it for the 21st century.
The only way CDPs offer customization is through events. Theoretically, this ought to tick the customization box, but it’s not always easy to solve marketing problems solely with events. If you make your data warehouse your CDP, then you can actually query and model your data in a way that a conventional CDP cannot.
- CDPs Own Your Data
CDPs are not a part of your warehouse. They’re digital interfaces with which to manage data. Being able to leverage customer data is an advantage to wield against all competitors, and you can’t appropriately leverage your data with a conventional CDP. Because a CDP is an all-in-one solution for marketers who don’t necessarily know how to program, it leaves marketers at the mercy of the vendor who provides it. You don’t need to depend on vendors because you can purchase your own digital “cloud.”
- CDPs Fail The Data Ecosystem
Each CDP has to build its own “ecosystem” to support your business. If you send several unclear events to a CDP, then it may not present appropriate tools with which to clean those events’ data. Because data collection is the tip of the iceberg in terms of the entire data leveraging process, your warehouse should serve as your primary CDP. CDPs are more focused on appealing to marketers than they are on being genuinely effective, whereas a warehouse is effective across all stages of data refinement.