Customer Data Platforms are Ineffective, and Here's Why

Customer data platforms are a significant part of the modern marketing landscape, but they're not without their flaws. This blog post will look at why customer data platforms aren't always effective and how and when you can use them to your advantage.

What is a CDP?

A CDP is a platform that your company can use to get, organize, and analyze customer data. Essentially, it's where you'll find all of your customers' information in one location. This makes it easier for you to market to them and keep track of how they're using your product or service.

But there's a problem with these platforms: they often don't work as intended. Many companies have been using CDPs for years now, and they have yet to achieve the promised benefits that come with implementing one. So what's going on here?

The main reason most CDPs fail is that they don't consider what actually matters when it comes down to customer data: context!

What makes a CDP ineffective?

Customer data platforms (CDPs) are a dime a dozen—there are literally more than 150 in the customer data space.

But not all CDPs are created equal, and with so many options out there, it's essential to know what makes a CDP good or bad. And there's a lot of bad news out there.

Most CDPs just aren't up to the task of being your go-to customer data hub. Why? Because they're not built to handle customer data all in one place. Instead, they offer many different tools that don't work well together and require you to log in to different systems and manually move your information around.

If you're thinking about investing in a CDP, there are two things you should absolutely be looking for:

1. A single source of truth for your customer data
2. An automated system that pulls in every single piece of customer data you have across all systems

It's easy to see why a customer data platform (CDP) can sound appealing with all the bells and whistles. But before you make the purchase, it's important to ask yourself whether it will actually help your team be more effective.

Here are some things to look for:

- Is it user-friendly? A CDP that requires hours of training or background in coding won't save any time.

-Does it fit in with how your team works? If a CDP is only compatible with one specific software system, it won't do much good if your team uses another system.

-Will it help you achieve your goals? The best CDPs fit your company's goals and allow you to increase efficiency while meeting them.

When should you avoid a CDP?

A Customer Data Platform (CDP) is a centralized, unified data platform that accumulates data from all your marketing touchpoints and provides an accessible, easily-analyzable location for this information. However, despite the clear benefits of such a system, there are specific scenarios in which it's better to avoid installing a CDP to manage your company’s consumer data.

1. If you're a small company without much consumer data
2. If you don't have enough consumer data to justify using a CDP
3. If you don't have a marketing automation platform or CRM
4. If you don't have a dedicated team of analysts working with your data every day

When is it practical to use a CDP?

For years, businesses have been given a free pass on the "real-time marketing" bandwagon by citing their uneasiness with the amount of data produced and consumed. Many large companies maintain that they can't afford to spend money on real-time marketing due to budget constraints, but behavioral changes, not just technology, drive most changes in our digital lives. While B2B industries usually suffer from the same motivation issues as B2C businesses—the need for efficient data consumption—it's more important because of how widespread and influential these industries are. Think of a credit card company or health insurer: it doesn't matter how great your marketing campaign is if you can't get new customers through those channels. It matters even more if you can't dial up those conversions because of some glitchy software or outdated infrastructure.

The best way to beat stubborn inertia like this is to implement a CDP: an automated marketing platform that automates your entire sales cycle, allowing you to capture leads, nurture them through engagement activities (like email), and manage contacts across all touchpoints from the moment they're first identified as prospects until they become customers or renewals, effectively closing any and all opportunities at each step along the way.

Make sure CDPs are right for you.

In an era of big data, customer data platforms (CDPs) are a dime a dozen. They're touted as the solution to every business problem—from getting leads to sucking up mountains of information about your customers and prospects. The truth is that they're rarely effective at any of these tasks, even though they've become quite sophisticated over the past few years. The problem is that CDPs don't provide their users with much value when they can achieve this by other means.

To me CDPs aren't worth the effort:

• Firstly, most businesses don't need one. A customer data platform can be useful for certain use cases if you have an excess of resources or are plagued by outdated information in your database; both of these circumstances apply to very few businesses today. It may make sense if you have both, but it may also be time to reevaluate how you handle customer interactions and interactions between your sales and marketing teams.
  
• Secondly, most businesses don't know what information they should be collecting in the first place. Salesforce learned this lesson the hard way: their original idea was that all fields would ultimately be used in providing valuable insight into customer's behavior; however, even after listening to feedback from their customers who were too busy selling or servicing customers to spend all day digging through their database looking for market intelligence they were supposed not to know about, they managed to miss out on some key pieces of information such as what hot deals customers had recently visited on past visits or which channels delivered higher conversions during specific times of day (e.g., Saturday). By failing to learn from its mistakes early on, Salesforce has been forced into expensive efforts like building out multiple metrics dashboards and offering additional services where its competitors' products do one thing well but no more than that based solely on their years-long experience in this field.