It is often claimed that data has over taken oil as the world’s most valuable resource. It is debatable whether that is true or not but, just like oil, data is useless until its mined and handled (analysed) in the right way. Those who can get control of their data are the ones who will deliver the greatest performance.
This brings us to the topic of the Customer Data Platform (CDP). We know that the CDP market is growing. Across 2021 to 2022, it grew to $2 billion and it’s expected to grow at the same rate into 2023 (reaching about $2.5 billion in size). Some of this has been driven by the looming end of 3rd party cookies in 2024. But the biggest driver is customers. They are expecting increasingly personalised experiences.
Companies are battling with a wide range of sources – a recent study suggested around 14 or more on average – and the CDP is a way of tackling this. As a result, you’re seeing 61% of brands leveraging CDPs either to help them kickstart a first party data strategy or to enhance their existing first party data strategy. However, it’s not all good news and you can see that some companies are still battling with building that unified view.
The proof lies in the statistics:
- There was a 25% Increase in the size of the global CDP market across 2021 to 2022 to $2 billion. (Statista)
- 61% of brands brands are leveraging CDPs to move to a first party data strategy or enhance their first party data. (Deloitte)
- 45% of marketers feel they have a CDP that provides a unified view of their customers (Capgemini)
Why is this important?
We will increasingly see control over the data model and an increase in integrations. Traditional data workflows will become obsolete as more departments need data. Increased sophistication and nuances will lead to the adoption of Composable CDP.
What's after the data?
For those who are on their CDP journey and have these unified profiles, what’s next? The answer is personalisation. Consumers crave personalisation and have come to expect it. But standard personalisation is no longer enough. They want a deeper relationship with brands – to be heard and to be interacted with as a person, not a segment or group. This has given rise to hyper-personalisation. Unsurprisingly, data is the stumbling block and all the efforts with CDP are driving towards this.
Hyper-personalisation is about treating customers as individuals with distinct tastes and preferences, creating unique experiences for each customer that are tailored to their needs and wants. When done right, it leaves a lasting impression. It makes the purchase journey simpler and it increases the likelihood of conversion.
Hyper-personalisation spans beyond personalising content and recommendations. It’s thinking through the entire lifecycle, understanding where and how we can collect data and how we can reinvigorate previously generic items, such as landing pages, to speak directly to customers. It’s also thinking beyond the bounds of web and understanding each and every interaction we could have (omnichannel service, service chatbots, notifications, loyalty) and how we can bring the personal touch to bear. This is the big trend for 2023 with an increasing number of companies pursuing this ideal.