When do you need a Customer Data Platform (CDP)?
By Max Werner•
On Jul 28, 2023
Other Parts of the Series
- Part 1 - What is a Customer Data Platform (CDP)
- Part 2 - When do you need a Customer Data Platform (CDP) <-- This Article
- Part 3 - How to Get Ready for a Customer Data Platform (CDP) - Coming Soon!
Are there employee or revenue number guidelines for when you need a CDP?
Let's get that out of the way first. We will not be talking about the "when" in terms of company size, employee count, revenue, or similar measures. Customer Data Platforms come in all shapes and sizes and can be useful for SMBs, all the way to large multinational enterprises.
When the addition of a CDP makes sense for your organization can be gauged much better when looking at some day-to-day data workflows. A rough rule of thumb would be that when the number of data related issues reach a level or frequency where managers want to start throwing more bodies at the problem, a CDP might be a good choice to streamline those workflows.
What are the Common Warning Signs?
Here are some of the common warning signs that we've encountered that indicate that a CDP tool could be beneficial:
- Are your analysts trying to answer questions about one customer using multiple data sources, such as app analytics, billing information, and CRM data?
- Did you create or acquire new business units that have different needs from a tech stack?
- Do existing tools in your tech stack interact with each other, syncing data from one to the other (but not to all other tools)? For example:
- Does the support system know which CSM should be notified of a new ticket?
- Does the marketing system know the current subscription status of every customer, so that special offers only go to actually eligible customers?
- Do your CSMs and AEs have a customer's renewal date available to them?
- Do you need to own the raw data collected from your customers on your websites / web apps / mobile apps? Is this maybe a regulatory requirement like the GDPR?
- Do you have so many on-site pixels that your website's performance is negatively affected or are ad-blockers and browser privacy features skewing what percentage of your users you are actually collecting data from?
- Are you dreading the addition of any new tool to your stack because such an implementation could take weeks or months of engineering time?
When to implement a CDP?
If any of those warning signs sound familiar, or when you think you can just add a few more analysts to keep up with reporting and analysis demands, a Customer Data Platform, in combination with a Data Warehouse (or Data Lake) can help.
With a Data Warehouse and CDP you can centralize and organize your data pipelines, enabling everyone and every tool to operate from the same, single source of truth. Besides reducing the chance of manual errors and an increase in speed of common data workflows, this kind of tech stack is also far more flexible and extensible than it was before.
When implementing a CDP, we generally try to turn this kind of complicated web of point-to-point integrations into a more streamlined system:
With this kind of stack, adding new destinations, or pulling more data from the warehouse to enrich existing destinations usually turns to a matter of hours and days, rather than weeks and months. And even better, more often than not, those extensions don't even require any bandwidth from your engineering team!
If you think that a CDP could help you with your data problems, feel free to reach out to us! We're always happy to hop on a call and see if we can help you on your data journey.
Not quite sure yet? Stay tuned for part three of this series, that will go into what is necessary before starting a CDP implementation!