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Three reasons why enterprise CDP adoption lags

30-second summary:

  • The main selling point of CDPs is the ability to achieve a 360 degree view of the customer. However, if you are tasked with consolidating and analyzing data from different repositories, they fail. As a result, access to a uniform customer profile is not possible.
  • A true CDP acts as a repository for customer profile data for the entire company. It connects the points between interactions and touchpoints and enables brands to deliver relevant experiences regardless of the channel.
  • While marketing directors take responsibility for CDP, more and more CDPs ignore critical sales and service solutions during implementation and data exchange. The silos created pose challenges in achieving personalization and customer experience (CX) outside of marketing.
  • Companies are trying to double the customer interaction and engagement to meet the demand. Many ignore CDPs that prioritize marketing initiatives over the general adoption of personalization and CX.
  • When companies try to expand digital strategies and get a holistic view of their customers, they need a CDP that adheres to customer-set boundaries, protects their data, and deals with GDPR and CCPA.

In the midst of challenging business conditions and tighter budgets, companies are investing heavily in customer data platforms (CDP) to unify their customer data. According to a recent report, the CDP market size is projected to increase from $ 2.4 billion in 2020 to $ 10.3 billion in 2025.

For businesses, however, it’s a completely different script. For them, the CDP category is crowded and watered down, and the term is slowly losing its meaning. Now many are wondering whether CDPs are actually the holy grail for solving customer data problems, or is it just another redundant tool in the martech stack?

To answer this question, let’s first look at the three reasons why companies are delayed in adopting CDPs and the challenges the solution must overcome in order to achieve their full potential.

Identity resolution makes or breaks CDP

For many CDP vendors in the market, the lack of identity resolution and matching capabilities that bring data together is pushing businesses out.

The main selling point of CDPs is the ability to achieve a 360 degree view of the customer. However, if you are tasked with consolidating and analyzing data from different repositories, they fail. As a result, access to a uniform customer profile is not possible.

Now, departments across the company are armed with incorrectly created customer profiles and insufficient insights to inform customer interactions. Later on, these results are used to outline customer journeys, relying on unsuccessfully personalized content to meet shoppers’ needs.

Businesses understand that off-base communications are holding consumers off, especially at a time when every touchpoint matters – they need a CDP that delivers on its promise.

Identifying and understanding the identity of a single customer across multiple data sets is not easy – especially for companies with millions of customers and billions of potential data points.

However, True CDP acts as a repository for customer profile data for the entire company. It connects the points between interactions and touchpoints and enables brands to deliver relevant experiences regardless of the channel.

A narrow focus on marketing activities

On paper, real CDP takes into account the needs of all departments within a company and allows everyone to build on customer interactions. In reality, CDP solutions continue to limit their focus to use cases such as marketing campaigns or customer approach.

While marketing directors take responsibility for CDP, more and more CDPs ignore critical sales and service solutions during implementation and data exchange. The silos created pose challenges in achieving personalization and customer experience (CX) outside of marketing.

Since there is little or no access to customer data profiles, trading, sales and service platforms are unaware of individual customer preferences and behavior and cannot quickly keep up with them or meet requirements.

When teams struggle to achieve a good CX and rely on non-existent cross-channel data to inform their clients’ recommendations, inadequate CDP can cost business revenue and clients.

Companies are trying to double the customer interaction and engagement to meet the demand. Many ignore CDPs that prioritize marketing initiatives over the general adoption of personalization and CX.

Many take a methodical approach to what technology they introduce into their processes and make sure that none creates a data gap or silos that they have worked so hard to fix with previous investments.

Miss the privacy boat

Privacy and security are at stake for any technology that manages and collects consumer data. When businesses seek to expand digital strategies and gain a holistic view of their customers, they need a CDP that adheres to customer boundaries, protects their data, and complies with general data protection regulation and California consumer law.

Even so, CDP providers lack the boat in terms of data protection and corporate governance.

For example, customers have to reassign their consent every time conditions or business requirements change. With consent, a company can save all customer data in its respective uniform profile, which makes it easier to control and adapt to other systems. When customer data is moved into the appropriate system, consent and preferences are enforced, which enhances the overall customer experience.

Today, CDPs lack a solid data protection foundation and adequate data consolidation in a central repository, making it more difficult to find data even for a government audit or customer inquiry.

Data silos and poor privacy compliance are a recipe for disaster, especially when it comes to collecting data under the microscope.

As companies move to a customer-centric business model, CDPs will be the white horse to share their data. To be among those customer-owned businesses, companies need to review the tools they are planning to fully implement. You need to make sure your technology investments are paying off.

Large companies weigh the pros and cons of new technology implementations. At the same time, they want a single customer truth that informs other areas of their business, not just marketing. And since data collection is scrutinized, they need a tool that is tailored to the way they handle customer data.

Until companies realize the value and benefits of CDP, they will continue to misclassify their customer data and view CDP as another unnecessary marketing technology tool.

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