Sunday, March 12, 2017

Should Customer Data Platforms Be "Marketer-Controlled"?

Thomas Wieberneit argues in a thoughtful blog post that companies need one platform for consolidated customer data, but that Customer Data Platform isn’t it because the CDP is “marketer-controlled” by definition, and thus doesn’t support other departments.

This hits a nerve. Many of the CDP vendors have told me their systems are used outside of marketing. Just last week, RedPoint unveiled a “Customer Engagement Hub”* that it defines as extending beyond marketing to all customer touchpoints. When I was recently writing a paper for B2B CDP CaliberMind, they listed sales and customer success teams along with marketing as likely buyers of their product.

As these examples suggest, CDP technology can support all customer-facing departments. It’s true that different departmental applications will probably need the CDP data to be presented slightly differently. But applications within marketing also need different formats, and it’s already standard for CDPs to reformat their data for access by external systems. So there’s no technical reason to limit CDPs to marketing.

Indeed, as I argued in my last blog post, the era of isolated marketing technology systems may be coming to an end as companies return to centralized systems to ensure a seamlessly integrated customer experience. In this world, the CDP is a shared enterprise asset, and, as such, clearly not something that marketers build and control for themselves.

So what’s holding me back from changing the definition? Three things:
  • History. The fact is that CDPs evolved from systems that were built specifically for marketing. This matters because it means marketing needs drove their design. CDPs built to support sales or customer success teams would probably look a bit different, even if they used the same underlying technology. To give a concrete example, systems built for customer success don’t need to advanced identity resolution because almost all the data they care about arrives with a customer ID attached. I know that history by itself isn’t a good reason to retain the marketer-centric definition of CDP since CDPs have outgrown their origins. But it doesn’t hurt to have something remind users outside of marketing that they should look closely at whether any particular CDP can fully support their needs.
  • User control. The primary reason the CDP definition includes “marketer-controlled” is to distinguish CDPs from enterprise data warehouse (or data lake) projects run by corporate IT. That matters because such projects were historically multi-year undertakings that often failed altogether or required so many compromises among enterprise stakeholders that they didn’t meet all of marketing’s particular needs. Moreover, once built, such systems were slow and costly to update, so they didn’t adapt quickly to marketers’ fast-changing environment. This responsiveness is really the biggest change that CDPs introduced into the world of customer data management. As I noted earlier, department-controlled systems may soon be lost in a new round of centralization.  In theory, these new central systems will be vastly more responsive to user needs than the old central systems. But if I were a marketer, I’d be reluctant to give up my own systems until the new ones had proven their agility in practice.
  • Departmental buyers. Whatever the long-term future of centralization, CDPs today are almost always bought by departments.  Even when corporate IT groups are managing the process, they are generally reacting to requests from departmental users rather than executing an enterprise master plan of their own. And when you start looking at which departments are making these purchases, marketing is by far the leader.  It’s true that other departments often find uses for a CDP once it’s deployed. Whether marketers really share control of their CDPs when this happens or simply treat other users as guests, I can’t say. From a seller’s standpoint, I can certainly see companies offering their technology in packages aimed at enterprise buyers, which is exactly what RedPoint just did. But abandoning the large marketing-department segment for the nascent enterprise-buyer segment doesn’t sound like a good idea.
So it seems I’ve backed myself into a corner. CDP technologies work at the enterprise level and, logically, CDPs should be enterprise assets. But the main buyers of CDPs are marketing departments and the CDPs' main attraction is departmental control.  So redefining the CDP as an enterprise system would probably reduce its appeal even though it was technically accurate. Replacing "marketer-controlled" with “user-controlled” or “department-controlled” would broaden the scope but still doesn’t describe an enterprise-wide role. We could drop “control” from the definition and get to the heart of the matter, which is responsiveness – so instead of “marketer-controlled” we could have something like “agile” or, more concretely, “easily changed”. But those seem too vague to be useful.

I’m tempted to offer something truly lame, like “Enterprise CDP” as an alternative to plain or Departmental CDP.  It might come to that, or I might ultimately just drop “marketer-controlled” without replacing it. After all, if enterprise systems really do become flexible enough to meet departmental needs in a way that past enterprise data warehouse projects did not, then the distinction will no longer matter.

Bottom line: I’ll leave “marketer-controlled” in place for now but suspect its days are numbered.


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*CEH is a Gartner term, which they define as “an architectural framework that ties multiple systems together to optimally engage the customer. A CEH allows personalized, contextual customer engagement, whether through a human, artificial agent, or sensors, across all interaction channels. It reaches and connects all departments, allowing, for example, the synchronization of marketing, sales and customer service processes.As the term “hub” implies, this definition doesn’t specify creation of a persistent database, something I believe is required to build an effective customer profile. Come to think of it, I'm not sure that "architectural framework" is a system at all. 

3 comments:

Thomas Wieberneit said...

Hi David, thanks for your reply to my post. I am glad to have initiated a discussion! I think that you are right with your observation that we are going back to 'centralized systems'. We seem to have gone full circle since the 90s, when suites emerged and got replaced/augmented by departmental point solutions, which was strongly fueled by SaaS as a delivery model. This, in turn, caused a lot of problems with broken process and a strong need for integration again. This is where we are at now. Marketers, too, have realized this, hence the emergence of CDPs (my interpretation, I may be wrong, of course).

Sadly, Gartner has grabbed a good term for a concept without actual implementation, therefor devaluating it. However, CDPs can be an implementation of that concept, or at least a kernel of it. There would be no need for system replacements. Also no loss of focus, but a change of focus from 'department' to 'customer'. That way the CDP becomes strategic.

Just some thoughts from Down Under. Am looking forward to meeting you at CRMe!
Thomas
@twieberneit

Cory Munchbach said...

This is a thoughtful and useful exercise, David, but I think what will largely decide this is the vendors themselves and the ability to align both go-to-market and user functionality. To borrow from Gartner's Quadrant on digital marketing hubs, they identify some solutions as being designed more for IT or technologist folks, rather than the marketer themselves, which is considered a downside or caution. I don't think vendors really can have it both ways because the needs, priorities, and guidelines are so dramatically different across an enterprise (and changing all the time too). I'd argue that it's okay to identify a primary user (maybe a small number rather than just one) and then make it so that persona can interact with the CDP in such a way as to serve other interests. For example, a marketer controlled/managed CDP may very well work closely with a customer service department to support that group's needs with customer data. Or with the commerce team to support better loyalty program communications. These use-cases aren't excluded when we say that the CDP is marketer managed, but rather does what any good company does and starts with a specific user and builds out from there. It's unrealistic to assume a centralized buyer, user, set of requirements, etc. that equally represent a diverse set of groups because trying to be something to everyone means you end up being nothing to anyone.

Romain Gauthier said...


Hi David,

I'd like to thank you for sharing your thoughts on these stakes as we face the Marketing vs IT lead projects on a very regular basis and this is particularly true for customer data in large corporations.

On my end, I really see CDP becoming for customer data what DAM now provides for assets. The DAM projects can be lead by IT or business users but none of them can succeed without the other.

At Jahia, we decided some years ago to improve our WCM / DXP solution with AB testing and personalization. In order to provide this, the need for a CDP became obvious (even though the CDP name wasn't yet broadcasted ). Since our DNA is open source, we decided to work on an Open Source Customer Data Platform : http://unomi.incubator.apache.org/ and we do think that corporate IT - if provided with the right tools - can enable marketers to do their jobs in a agile way.

Many customers still have custom applications running and storing customer data. Integrating with those can be quite challenging using tag management / data layer and server side APIs can be useful.

And if you wonder, Jahia Marketing Factory 1.6 do provide great personalization and analytics using Unomi ;)

Best regards,