GigaOm Key Criteria for Evaluating Customer Data Platforms (CDPs)v1.0

1. Executive Summary

A customer data platform (CDP) is a solution that collects and unifies first-party customer data from multiple online and offline systems in real time to create a single centralized view of all of the interactions and touchpoints between each customer and a product or service to build a profile of every customer. That profile can be made accessible to other systems to analyze, track, and manage customer interactions.

A CDP gathers information from a variety of sources that would not normally communicate with each other. These include systems through which the customer interacts with the company, including websites, social media, email, live chat, digital assistants, customer relationship management (CRM) systems, e-commerce solutions, and contact centers; transactional data, including customer purchases and returns using information from e-commerce or purchase order systems; and demographic data such as name, address, gender, and age.

This information is collated, standardized, transformed, and combined with data from each system to create an increasingly comprehensive customer profile of the customer. The data is reformatted to support marketing processes and systems such as CRM, analytics, marketing automation, A/B testing, content creation and personalization, and social media sites. As more data is collected, the content delivered becomes increasingly personalized. CDP supports lead scoring, product recommendations, optimizing content, and omnichannel automation.

A CDP must also manage data privacy and customers’ personal rights by controlling and managing the flow of data between marketing systems, and manage customer consent to comply with regulations such as the EU’s General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act (CPRA). These laws give consumers the right to access their data as well as have it deleted by exercising their “right to be forgotten.”

Business Imperative
A CDP provides a single location to bring together and store all customer data, creating a single source of truth and potentially replacing multiple applications that store parts of a customer profile. This 360-degree view of the customer allows organizations to create the next best actions or customer offers to increase sales and reduce churn. This capability is tremendously valuable to marketers who need to create engaging, highly targeted content and campaigns that will keep customers returning and buying.

There is nothing new about using analytics to personalize retail experiences—this technology has been available for many years—but the idea of a single platform that brings together customer data from disparate sources and provides many of the capabilities required to manage customer interactions, such as segmentation and personalization, A/B/multivariate testing, analytics and insights, and cross-channel orchestration, is relatively new.

Two main types of vendors provide CDPs. The first is standalone specialist vendors that provide a single solution. These platforms need to integrate with digital experience platforms (DXP), which are the platforms used by marketers to create customer experiences. The second type of vendor sells CDPs as part of a DXP platform. An increasing number of DXP vendors have been adding CDPs to their portfolios. Because DXP is becoming increasingly modular, organizations can generally choose whether to implement the CDP that comes with the DXP, implement a standalone solution, or choose not to use a CDP at all. However, the third option will put organizations at a disadvantage and make it much more difficult to build coherent customer profiles and track customer journeys across multiple touchpoints.

Sector Adoption Score
To help executives and decision-makers assess the potential impact and value of a CDP deployment to the business, this GigaOm Key Criteria report provides a structured assessment of the sector across five factors: benefit, maturity, urgency, impact, and effort. By scoring each factor based on how strongly it compels or deters adoption of a CDP, we provide an overall Sector Adoption Score (Figure 1) of 4 out of 5, with 5 indicating the strongest possible recommendation to adopt. This indicates that a CDP is a credible candidate for deployment and worthy of thoughtful consideration.

The factors contributing to the Sector Adoption Score for CDPs are explained in more detail in the Sector Brief section that follows.

Figure 1. Sector Adoption Score for CDPs

This is the first year that GigaOm has reported on the CDP space in the context of our Key Criteria and Radar reports. This GigaOm Key Criteria report highlights the capabilities (table stakes, key features, and emerging features) and nonfunctional requirements (business criteria) for selecting an effective CDP solution. The companion GigaOm Radar report identifies vendors and products that excel in those decision criteria. Together, these reports provide an overview of the market, identify leading CDP offerings, and help decision-makers evaluate these solutions so they can make a more informed investment decision.