Sam Ngo, Director of Product Marketing,BlueConic
While many industries experienced downturns in 2020, the customer data platform (CDP) category is booming. And it’s really no surprise.
The pandemic left many companies scrambling to adjust their strategic marketing plans and business models to accommodate changing consumer behaviors and make up for lost revenue. CDPs enable marketing and other teams responsible for interacting with customers and/or driving business growth to react more nimbly to sudden changes in consumer behavior. By providing these teams and their tools with access to unified, actionable customer data when and where they need it, business users can quickly make adjustments to personalized messaging and programs, reduce time to market, and fundamentally transform how they understand and interact with customers.
So, what does this mean for the CDP market in 2021 and beyond? Here are four key predictions:
1. An increased focus on operational efficiency:
Historically, most martech evaluations have been limited to simply comparing features and functions. But this year, everyday marketers and CMOs alike realized that assessing the value of a solution by its impact on clicks, likes, visits, and other channel-specific metrics was missing a much larger opportunity. In 2021, we expect to see more and more business leaders ground their customer data platform (CDP) evaluations, not with checkboxes to compare features, but rather in the operational efficiency and strategic value it provides to both the marketing organization and the business at large. Improvements to marketing KPIs will quickly follow with the right strategy and technology in place.
2. An emphasis on business agility: While many companies have long been striving for greater agility, the coronavirus pandemic reminded business leaders everywhere of how quickly economic conditions and consumer behavior can change. It makes all the difference to have the teams and tools in place that allow for flexibility and speed in response to unpredictable or accelerated market changes – like building new direct-to-consumer channels or making changes to digital products to fit customers’ needs. In the year ahead, CDPs will prove to be the essential tool for companies across industries that needed to quickly adapt their strategic marketing plans and business models in reaction to sudden disruption – whether from a pandemic, ever-changing browser cookie policies and other consumer-focused privacy regulations, competitive pressures, budget cuts, or other internal or external factors.
3. Customer engagement transformation: The year 2020 also brought new urgency to transformation mandates and growth-focused initiatives designed to create new revenue opportunities, improve customer interaction and engagement, and open up new avenues for collecting valuable first-party customer data. Many buyers saw – and will continue to see – the CDP as a critical technology that enabled them to accelerate these broader ambitions and growth programs, including omni-channel acceleration, lifecycle marketing orchestration, direct-to-consumer diversification, digital products and experiences, audience-based monetization, and more.
4. CDPs tested for scale: Over the last few years, CDP buyers have further realized the potential – and limitations – of their initial CDP purchases. Differences between data models, such as an event-based database, profile database, and relational database, can have significant consequences on the use cases businesses can achieve with a CDP. For example, an event database can store every piece of metadata about every single product that was purchased for a particular period of time – but it comes at both an monetary and operational cost. For example, such a heavily transactional approach to customer data requires data to be purged after 30 days or the business faces astronomical data storage costs. Once that data is purged, it’s impossible to run an engagement program aimed at reinvigorating an audience that hasn’t purchased in the last 60 days, but has a high recency and intensity score based on web behavior.