Checklist: How to choose a customer data platform (CDP)

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Customer data can be your best friend when used the right way. Leveraging data is now one of the most effective ways for brands to understand their customers better and deliver exceptional customer experiences across all channels—and CDPs are the most popular tool for doing so. But how do you choose the right CDP vendor for you?

A 2019 Gartner’s Marketing Technology Survey reveals 43% of businesses polled have already implemented a customer data platform (CDP), while another 31% are in the process of implementing one. In today’s hyper-competitive market, data-driven retail is a must-have for success. To maximize your customer data and personalize your marketing, you need a customer data platform (CDP) system.

Unfortunately, there are far too many companies that describe themselves as a CDP, and distinguishing between the features and benefits of each can be a challenge. This guide provides essential tips to use when choosing the ideal CDP vendor for you.

What is a customer data platform?

A customer data platform (CDP) is a packaged software for creating a persistent and unified customer database accessible to other systems.

In a nutshell, a CDP is a platform that enables you to unify and organize customer data across all channels and make it more accessible to all related departments in your organization. When you keep detailed data in a single customer view within the CDP, you gain 360-degree visibility on all your customers to provide them with a personalized experience. Thus, CDPs act as essential customer intelligence platforms, providing you with the customer insight you need to develop exceptional customer experiences in retail and other industries.

How to choose a customer data platform: 7 boxes to check

1. Current customers and relevant industry expertise

Has this vendor proven results in my industry?

Assessing the current companies using the CDP can be a great way to get insights into whether or not the tool will serve your needs.

Start by generating a list of a few CDPs that fit your use cases and offer the necessary features and integrations. Next, narrow down your list to CDPs that have customers most similar to your company. You should also ensure the CPD you choose has a solid track record of accomplishing similar CDP use cases like yours.

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2. Available integrations and APIs

Does this CDP integrate with all the tools I need to operate my business?

Customer touchpoints keep evolving with time. Your interactions with customers range from social media channels, apps, email, web and offline stores. Before you settle on CDP software, determine how the platform collects data from various customer touchpoints. The ideal CDP should be able to collect and unify data from all the touchpoints quickly and seamlessly. Assess for standard integrations such as Web SDK, App SDK, and APIs for collecting various data from across multiple channels.

3. Activation, automation, and measurement tools

Can I easily activate campaigns, update lists, and measure performance across channels?

Data, by itself, isn’t all that helpful to driving marketing performance—it’s the strategies you use to activate it that make it valuable. When choosing a CDP vendor, look for one that enables you to draw insights, create valuable customer segments, activate omnichannel campaigns, automatically update lists across platforms, and easily measure your performance.

4. Onboarding, support, and strategic consulting services

Can this vendor help me maximize the value I get out of the CDP?

There is a high likelihood you already have some of your own tools for collecting customer data. When choosing the ideal CDP for your marketing needs, determine whether the platform easily integrates with your existing tools and if it can extend its value by enriching your data with third-party data, survey data, and offline data. While at it, find out if the CDP vendor offers continued support and strategic consulting services to help you make the most of the platform once it’s implemented.

5. Out-of-the-box analytics and customer intelligence capabilities

Will this CDP help me gain meaningful customer insights?

The right CDP for you should feature great analytics functionalities and customer intelligence capabilities. Such a platform will provide broader analytics use cases for better actionable insights, such as predictive analytics to help you predict and prevent churn. The right platform should also offer measurement and reporting tools that provide insights on performance and improvements. Ideally, you can use such a platform to personalize and improve your customer experience for increased conversion rates, loyalty, and retention.

6. The ease of use and time cost of using the CDP

Does my team have the capacity and technical expertise needed to operate it?

The ideal CDP should easily connect to a range of your tools to enable faster time to value and a lower cost to deploy. Assess whether the CDP you are evaluating allows easy integrations into your business workflows, automation tools, and visualization dashboarding with less reliance on IT and consultants. In a nutshell, once the initial data connections are configured and initiated, marketers should be able to configure the solution to meet their specific needs while minimizing the time and costs that come with the deployment of a new application.

Lexer’s CDP has been described as having the “smoothest integration” ever experienced in a customer’s 10 years in IT management. Click here to read the testimonial.

7. Security features and compliance certifications

Will this CDP protect my customers’ data?

Given the nature and the amount of data involved, an ideal CDP should adhere to the highest standards for data security and compliance. The right platforms should come with rigorous security protocols and dedication to privacy. It should also offer adequate data encryption between various data sources and integrated systems to guarantee a secure authentication environment. Beyond your own security standards, there are myriads of industry-specific regulations and other organizational standards that you need to adhere to.

Get strategic guidance from Lexer

Not all CDPs are designed to be equal. As the CDP landscape gets crowded, marketers need to fully understand their needs and expectations and ask the right questions when choosing the ideal CDP for your business. If you are looking for a CDP that meets your current and future needs, Lexer has you covered.

Once you’ve decided which CDP vendor is right for you, you need to build the business case to gain buy-in from stakeholders. Click here to learn the six steps for building a CDP business case.

Lexer’s Customer Data and Experience Platform helps brands and retailers gain useful insights into consumer behaviors and engage them with personalized experiences. As the only retail data solution with native tools to support every team and customer touchpoint, we’ve helped some of the world’s most iconic brands drive incremental sales growth. Contact us to ask questions, learn more, or request a demo of our CDP.

Abby Borden
VP, Marketing

Abby Borden believes that at the heart of great marketing is deep human connection. She has spent a decade working with retailers like REVOLVE, Nike, CVS Health, Best Buy, and J.Crew, helping them find human connection with their customers at scale.

Outside of work she enjoys the beach with her pups Franklin and Diego, harvesting vegetables from her garden, exploring new hobbies, and being active.