ADA Business Insights & Analytics


Why CDPs Are a Game-Changer for Your MarTech Stack

In a world ruled by data, the quality of customer data is set to grow in importance as the main source of marketing intelligence and competitive advantage for brands. Be that as it may, some 76% of large and medium-sized enterprises in 2020 still struggle when it comes to extracting value from their data, with the biggest hurdle being data relevance. Employees have been reported to spend 17% of their time merely looking for relevant data, potentially incurring $8.5 million of unnecessary costs annually. 

Customer Data Platforms (CDP) have emerged as one viable marketing technology (MarTech) solution to those challenges. Marketers rely on CDPs to unify siloed datasets from across multiple sources, ultimately creating a single view of customers and a single source of truth. The advent of MarTech solutions such as CDPs makes it possible to connect with unknown customers based on data collected from known customers – essentially building a bridge between first and third party data. For brands that have achieved a certain level of digital marketing maturity, integrating CDPs into their MarTech stack may be the key to unlocking a higher return on marketing investments (ROMI). Despite that, only 29% of companies have CDPs as part of their marketing strategy.

A few issues have held back marketers from embracing CDPs. In the first instance, most brands lack awareness of the benefits. CDPs are often confused with customer relationship management (CRM) tools. But unlike CDPs, CRMs neither track anonymous users nor integrate offline with online data. The choice, however, is not a binary one: CDPs and CRMs do complement each other when used strategically. While CRM facilitates the front-end customer interaction, CDPs work behind the scenes to identify specific customer interests that trigger those interactions. 

Second, like all investments in technology, the path to automation and digital transformation is paved with good intentions – and a hefty price tag. Without a clear understanding of what CDPs can do or a clear roadmap for implementation, marketers may struggle to justify the cost and realise the benefits of incorporating a CDP into their stack. 

CDPs: A Revolution in MarTech

Nonetheless, the results of a well-thought-out CDP integration speak for themselves. Annual performance findings comparing ROMI for CDP and non-CDP users among large enterprises found a 9% higher customer satisfaction and 8% greater customer lifetime value (CLV) for the former group. Conversely, non-CDP users suffered a 7% decrease in customer retention compared to a 6% jump for CDP users.  

A Japanese home and lifestyle retailer merged online browsing data and in-store purchase history to build actionable customer profiles via a CDP, allowing them to offer highly-personalised coupons and timely, well-targeted in-app push notifications. That approach led to a 100% rise in coupon redemptions across all store locations, increased CLV, higher foot traffic, and a 46% boost in revenue over a two-year period. Success stories like these are a big reason why the adoption of CDP solutions is anticipated to grow from $2.4 billion to $10.3 billion by 2025.

CDPs can add value to a MarTech stack in three key ways:

1. Breaking down data siloes

With digitalisation and omni-channel touchpoints becoming the new normal, customer journeys are more complex and less linear than ever. For brands, that has meant an explosion in customer data – and accompanying data siloes. CDPs break down those siloes by consolidating offline and online data into a single customer view, so brands can recognise each customer holistically. Furthermore, data unification within a CDP is an ongoing and automated process that enriches customer profiles as new data becomes available, reducing the need for human intervention and enabling brands to aggregate fast-moving data streams in a dynamic and scalable way. 

A bar chart indicating the superior financial success using customer data platforms
Source: Aberdeen (September 2020)

2. Discovering actionable insights

On top of unifying customer data, CDPs go one step further by turning those profiles into competitive  insights through artificial intelligence. For example, brands leverage on CDPs to identify new target audiences by linking specific and low-frequency customer behaviours. Traditionally, marketers relied on a “last-touch” attribution model to measure campaign success. However, that approach fails to account for the entire journey that customers take to get to a sale. CDPs enable businesses to form a multi-touch attribution model by tracking the touchpoints of customers across channels.

3. Enhanced customer experience

By providing visibility over online and offline touchpoints, CDPs can help marketers nip any errant blind spots in the funnel that may be causing customer dissatisfaction. In addition, CDPs come with pre-installed customer profiles that can be leveraged on to define audience segments for personalised messaging. It’s noteworthy that the level of customisation offered by CDPs doesn’t come at the expense of customer privacy, as the platform has built-in consent management tools and allows personally-identifiable information to be safely stored and processed for audience segmentation.

The Power of CDP

Treasure Data CDP
Source: Treasure Data

If data is the new oil, then CDPs are integral to future-proofing the MarTech stack, and brands shouldn’t get left behind. But CDP integration requires a certain level of digital maturity and investment of time and money from brands. To realise their marketing objectives, businesses need to assess their readiness, build a MarTech stack, and identify the right pain points that can be addressed through a CDP.


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Yih Cheng Yak

Head of Consulting,
Marketing Technology