How to Pick the Right CDP: Tips from Forrester’s Joe Stanhope (Featured Speaker)

Joe Stanhope, VP, Principal Analyst at Forrester

Consumers are more empowered and connected than ever before, and it’s your job to understand their expectations and deliver the experiences they want and expect.

A customer data platform (CDP) can help you connect the data you need to create the moments that matter. Forrester VP/Principal Analyst Joe Stanhope was a guest speaker on our webinar, How to Pick the Right CDP for Your Business, to discuss how a CDP can help and what to consider when selecting the right one for your company.

Below are Stanhope’s key insights from the webinar and advice to help you future-proof your marketing and select the perfect CDP for your company.

Keeping pace with rapid customer evolution

Customers are constantly evolving. They are more information savvy and can find and share a vast amount of information. The number of devices and channels they use is expanding, yet they want a seamless, integrated experience. They also have a good sense of what they want and advocate for themselves. And they are willing to go elsewhere if your brand can’t deliver.

Stanhope said this is an exciting time for marketers, but it’s also challenging to continue evolving for a nearly infinite set of customer experiences while running the day-to-day campaigns and activities. The answer is to win in customers’ moments.

“A moment is a point in time and space when a person interacts with a brand to get what they want immediately and in context.”

When you find the moments that drive the right interactions and successful engagements, you can break them down into their constituent components, optimizing each component to make the right investments.

Technology is required to escalate this effort on two levels:

1. Engagement breadth (the explosion of touchpoints)
2. Engagement granularity (down to the person level where possible and appropriate)

Data and technology requirements to accelerate customer wins

Stanhope outlined two key requirements for data and technology to support customer moments. First, moments are highly individualized and high velocity. They also happen in real or near real-time.

Second, you will need technology to help predict, automate, and scale up your ability to make decisions, compile, and deliver all these moments across that engagement breadth at a high level of granularity.

Where trends converge: The central role of the CDP

Stanhope notes you can’t have a technology discussion without having a data discussion. He said data has become the differentiator. A CDP can act as a hub or proxy for integration at the data level and bring your tech stack together. It’s why so many marketers and customer-centric teams are considering purchasing one to help them support their critical moments.

With a CDP, you can:

• Build robust customer data profiles: Bring fragmented data together and resolve that data at the customer level. This helps you maximize your knowledge and insights about the customer, making it actionable.
• Create seamless customer journeys: Pull together a complete view of how you engage with your customers.
• New applications for different data: Combine customer, contextual, and behavioral data to help you build new audiences and trigger experiences.
• Individualized engagement: Deliver the right data at the right time to personalization systems.

According to Stanhope, the CDP was at the top of the list of technologies marketers planned to use to help build and deliver experiences. He said this is an opportunity for marketers to reach beyond marketing and across the customer lifecycle.

Top considerations for your next CDP

Every company comes at the selection process differently because they have different data, channels, compliance regulations, data types, technology to integrate, users, and use cases. Stanhope said you need to be thoughtful about selecting and deploying a CDP to make it successful for your specific needs.

Stanhope provides some key advice to help you understand how to pick the right one for you.

Identify your use cases

First, identify the use cases and applications you will use the CDP for. Popular use cases include optimizing ROAS on customer acquisition by leveraging lookalike modeling, increasing lifetime value with targeted cross-sell campaigns, and increasing loyalty program signups and customer retention by targeting anonymous transactors.

Once you do that, Stanhope said, you can understand how a CDP can functionally serve those use cases. You should also know the long-term roadmap of use cases you want to deploy over time.

CDPs are flexible, meaning you don’t have to deploy every use case at once, and you can adapt a use case after it’s implemented. Stanhope said he had clients plan out two to three years of use cases.

Define your customer profile

Once you have your use cases, you can determine what the customer profile needs to look like. What data do you need, where does it come from, and what form does it need to be in?

Look for artificial intelligence (AI)

Stanhope also encourages you to understand a CDP provider’s position on AI. What capabilities have they deployed to date? What’s on their roadmap? How they are taking advantage of new capabilities, such as generative AI.

He said AI will fundamentally accelerate how you get value from your CDP. For example, some CDPs enable natural language querying and prompting to generate insights and build segments.

Think about a complete solution

Stanhope said we tend to think about CDPs from a technology, features, data, and functionality perspective, and that’s important. However, a successful deployment requires working with a solution provider on more than product and code. Assess the CDP provider’s capabilities in these ways as well:

• Performance and security: Do they have the right security mechanisms in place for your data, including supporting data in transit and at rest? Is the system fast and reliable?
• Integrations/partners: Who do they integrate with, and how is the integration managed? Look particularly for the integrations you need.
• Intelligence layer: It’s not just about moving data into and out of the CDP, it’s about making that data smarter as it goes through the system. How does the CDP help generate insights and apply models at the right levels of personalization?
• Service and support: What training and assistance do they provide? How does the customer success team operate?

CDP shopping Q&A

There were plenty of questions in the webinar for Stanhope. Here are a few (you can hear the rest by watching the webinar on demand).

Who should own the CDP?

Stanhope was asked who should own the CDP – marketing or the data team. He said all stakeholders should be involved in selecting and implementing a CDP. If it’s marketing’s budget and the team is getting value from it, they should own it.

There are situations in enterprise organizations where a marketing technology team might sit in an IT or digital business group that leads the project. This team should have a straight line to marketing from a product management perspective.

How do you ensure you have the right resources to utilize a CDP?

Stanhope said CDPs are a relatively packaged solution, so you don’t need a big custom environment to handle the data. He said many companies come from either a non-existent, highly manual, or distributed environment. A CDP brings that together, which means less work is required to prepare data for campaigns and other marketing activities.

There’s an efficiency play and less overall admin, he said. The same resources and staff are involved with the same skills but with fewer hours on average. These resources constantly change and fine-tune the CDP as you expand your use cases.

Should you do a proof of concept during a CDP evaluation?

A proof of concept (POC) requires resources, time, and trust on everyone’s part, including the CDP provider. Stanhope said there is such variance across CDPs, and your requirements will be very specific, so it’s important to get access to some kind of sandbox and see how the CDP performs.

But don’t, he pointed out, use all your data. Work with a partial dataset and test a set of integrations. Find out how it will operate within your workflows.

Can you use a CDP beyond marketing?

Stanhope is big on as many use cases as possible. He said you’ll want to use the customer profile you build across the company because customer experience rewards continuity and consistency. He’s already seeing it start to happen, including seeing personalization extend to a complete set of touchpoints, including ecommerce platforms and the contact center.

What is the future impact of CDPs?

Will the CDP replace other technology in the future? Stanhope said that in the early days of the CDP, many thought it would replace other technology, but that hasn’t happened. He sees it more as complimentary and additive.

There is the potential for a large-scale shift in the work product over to the CDP, though, he said. For example, your CDP could take over all the journey management and orchestration as it becomes more sophisticated, leaving the end systems to pure deployment.

Next-gen customer engagement

Stanhope said there is a lot of opportunity with technology and data to support the next generation of customer engagement, and a CDP is an important part of that. But your success will depend on you taking control, determining what you need from it, and driving towards that.

He encourages you to envision your current and future needs for customer engagement. Define the use cases to know what your data, support, and technology requirements are and use them to select the right CDP.

Finally, take an ultra-prescriptive approach. Talk to the CDP providers and ask how they will help you support these specific needs. “Because that is what a CDP solution is for – you and you alone – and that’s exactly what you need,” says Stanhope.

Watch the full webinar on-demand to hear more of Stanhope’s guidance for selecting a CDP.