1 Introduction / Executive Summary

In this Leadership Compass, we evaluate customer data platforms.

The term "customer data platform," or CDP, stands for software (or a collection of software) that creates databases that enable the centralized management of customer data.

Organizations across all industrial sectors face the challenge of their customers expecting a seamless customer journey across various analog and digital touchpoints. This comprises highly individual marketing messages, recommendations, and the right information at the right point in time.

Due to scattered data silos, it is a challenge for most organizations to create 360-degree customer profiles, build customer segments, or manage customer journeys based on complete customer-related information.

Customer data platforms can help in such cases to break down data silos, aggregate information, and create compete customer profiles and segments as a basis for integrated omni-channel customer experiences across all touchpoints by connecting to first- and third-party solutions in best-of-breed technology stacks.

Thus, this Leadership Compass analyzes CDP solutions on the market to give an overview of the market positions of the vendors and the functionality of the solutions itself, with a focus on the following key aspects:

• Unified and persistent databases to access and manage customer data
• Collection, parsing, and de-duplication of customer data (received from any internal or external source)
• Identity resolution of anonymous and registered customers
• 360-degree customer profile building
• Customer segmentation
• Manage data that might be used by any internal or external process or system to ensure optimum customer experiences
• Analyses derived from combined sources of customer data
• Customer activation and customer journey optimization (either based on integrated functionality or by interfaces with third-party marketing automation systems)

In addition, this Leadership Compass evaluates the capabilities of the solutions in terms of security, functionality, deployment models, interoperability, and usability.

The graphic below illustrates the typical functionality of a CDP, starting with data ingestion based on various sources:

• First, profiles are built and unified (i.e., profiles that relate to the same person are merged). Furthermore, identity resolution based on unknown and known (registered) profiles (e.g., based on website visitors) ensures that customer data (e.g., tracking information) will be assigned to the right profile.
• As a next step, profile segmentation creates segments of "similar" profiles, e.g., to address a specific audience with personalized content or special offers.
• Many CDPs offer functionality to support predictions and decisions (e.g., to evaluate whether a specific segment will order a product if a 5% discount is offered at a particular step of the customer journey).
• CDPs offer functionality that support customer activation in order to manage or empower customer touchpoints.
• Typically, customer touchpoints create data that can be used by a CDP to continuously improve customer profiles and further actions (such as segmentation).

1.1 Highlights

• The market for customer data platforms is evolving quickly. The number of vendors has grown significantly within the past years - along with market volume.
• There is a heterogenous situation in terms of vendors:
  • On one hand, there are large and established vendors that have completed their offerings by adding customer data platforms to their portfolios. In many cases these solutions are parts of complete software suites that are focused on seamless and complete customer experiences.
  • On the other hand, there are many specialist vendors that have been founded during the last five to ten years. In many cases these are single-product vendors that provide standalone CDP solutions that are a good fit for existing best-of-breed technology stacks in organizations.
• Most vendors have a background and focus on marketing and sales. On the other hand, CDP is an overarching topic. This leads to the fact that vendors that were focused on other areas (such as ERP) in the past have started offering CDP solutions.
• Most vendors have very complete and ambitious road maps that are focused mainly on a higher grade of automation (e.g., related to prediction and decisioning, supported by machine learning), an even more seamless and complete integration into heterogenous technology stacks, and, continuous development when it comes to customer activation measures, considering new channels and touchpoints such as IoT.
• All solutions offer graphical no-code user interfaces that are made for nontechnical users, even when it comes to data management or machine learning configuration. In addition, some solutions allow customization and coding (e.g., Python or SQL) by technical experts.
• Privacy is a key topic for most vendors, due to legislation and regulations and customer expectations.
• There is a clear trend and necessity for many organizations to move from third-party data to first-party customer data. This is one of the key drivers when it comes to customer data management.
• Most solutions can be deployed as cloud-based SaaS solutions; few solutions are available for on-premises deployment. Many solutions rely on cloud technology such as AWS, Microsoft Azure, or Google Cloud and are flexible when it comes to customer requirements, e.g., when instances in specific regions are required.
• Overall leaders are (in alphabetical order) ActionIQ, Adobe, Bloomreach, Microsoft, Optimove, Redpoint Global, Salesforce, SAP, Twilio Segment
• Product leaders are (in alphabetical order) ActionIQ, Adobe, Bloomreach, BlueConic, Microsoft, Optimove, Redpoint Global, Salesforce, Twilio Segment
• Innovation leaders are (in alphabetical order) ActionIQ, Bloomreach, Optimove, Microsoft, Redpoint Global, Salesforce