Uncovering the Overlooked Factors Behind Your CDP Project’s Struggles

It’s not unusual for businesses to invest in new technologies and, after a year, question why they’re not seeing results. It’s somewhat similar to the Jane Fonda phenomenon: “I’ll get fit if I purchase the exercise video.” Unfortunately, technology, much like exercise videos, doesn’t function in that manner.

In this article, I will discuss some of the primary reasons why Customer Data Platform (CDP) initiatives fail, beginning with a broad overview of why any large project or investment may not succeed.

Reasons Your Major Project is Underperforming

There are several potential explanations for why your significant project might not be yielding results.

Lack of Clear Objectives

If you lack direction, you will invariably achieve nothing. Establishing specific goals is imperative for any new endeavor; however, it’s equally vital to remain committed to those objectives and avoid deviation without compelling justification.

Misalignment with Overall Strategy

Sometimes this is not inherently negative. A new technology may be part of an innovative project that doesn’t need to integrate perfectly with your overarching strategy.

Be cautious of this: Innovative technology can become a means to introduce transformative change. A visionary within your organization might regard the company as outdated and believe that adopting a new solution will dismantle the entrenched practices and herald in a new era. This path can lead to significant failures, yet it’s a temptation that many executives encounter.

Insufficient Stakeholder Engagement

All parties affected by the new initiative must genuinely support the goals and processes involved, not merely offer perfunctory agreement. “A person persuaded against their will is of the same opinion still.” Failing to achieve true buy-in will likely lead to resistance down the line.

Departmental Disalignment

Even if there’s consensus on the necessity of the new technology, departments might have divergent views on its intended purpose or application. Buy-in involves having a shared understanding of both strategy and tactics.

Lack of Leadership

Most major initiatives impact various facets of a company, which is why alignment among stakeholders and departments is crucial. However, this doesn’t imply that decisions should be made by committee. A single individual must be in charge, and everyone should acknowledge and respect their leadership.

Inadequate Resource Allocation

The new technology carries an initial investment, but the total cost of ownership encompasses various factors, including personnel for management, potential overruns, added storage or bandwidth needs, and the likelihood of mission creep. While managing mission creep is essential, it’s wise to anticipate it slightly, as it’s improbable you considered every detail when setting initial requirements and goals.

Selecting Ineffective Technology

Cutting corners during your Request for Proposal (RFP) process can lead to costly mistakes later on. Opting for the inappropriate technology can hinder your progress dramatically or force you to restart the entire process.

Underestimating Integration Complexities

Every vendor will assure you that “yes, we can do that.” However, it’s essential to inquire thoroughly to ensure their interpretation of “doing that” aligns with yours. Moreover, if Vendor A claims compatibility with Vendor B, confirm it with Vendor B and their users too.

Overextension

If your organization tends to pursue one objective in January and another entirely different one in March, managing large projects will be a challenge. The person appointed to lead will require resources that you allocated but may now be diverted to the latest trend.

Dive Deeper: The Customer Data Platform Market

Reasons Your CDP Initiative is Failing

Here are certain challenges specific to deploying a Customer Data Platform.

Misunderstanding CDP Functionality

A prevalent and fundamental misunderstanding I encounter is the failure to differentiate between online and offline profiles (or “known” vs. “unknown”). Simply importing your customer data into a CDP doesn’t automatically enable you to target those individuals online. You must link web activity with backend data, often by collecting their email addresses.

CDPs are not instant solutions; they are tools that require understanding and effective usage. The marketing technology landscape is intricate, so before implementing a CDP, it’s beneficial to familiarize yourself with how they operate. For a straightforward introduction, consider reading my new book, “What is a Customer Data Platform? And Why Should I Care?”

Choosing the Wrong CDP

Select a CDP with experience relevant to your sector and similar business models. Different industries have specific expectations and requirements, and you don’t want the hassle of constantly explaining them or battling with misaligned assumptions. A CDP that focuses solely on B2B clients may not cater to B2C needs effectively. Additionally, ensure the CDP aligns with your company size; small firms should avoid large-enterprise-focused CDPs, and vice versa.

Data Quality Issues

To approach the ideal “single customer record” often touted in CDP discussions, it’s essential to integrate customer data accurately. If your data is fragmented, inconsistent, poorly managed, or infrequently updated, achieving this will be challenging. Some CDPs provide tools to streamline this process, while others require external services for data cleansing. Regardless, disorganized data will complicate implementation and ongoing maintenance.

Absence of Defined Use Cases

Earlier, I emphasized the need for clear goals in technology implementation. Once you have established these goals, you must articulate explicit use cases, outlining exactly how your CDP will be utilized to realize these objectives. These should be defined before the RFP stage so that vendors can provide tailored solutions that meet your needs.

Clearly defined use cases are crucial in demonstrating value, which should include how these scenarios contribute to revenue growth or cost reduction. Collectively, the advantages from your use cases should justify the expense of deploying the CDP.

Overrating Out-of-the-Box Features

Have you ever visited a resort boasting an ice-skating rink only to find it smaller than your kitchen when you arrived with your skates? Technology companies can similarly misrepresent their offerings. They might promote a “minimal viable product” version of features to showcase on their websites.

If a feature is vital for your use cases, it’s critical to do thorough research to confirm it meets all your requirements.

Challenges with Integration

Just because a vendor states “we have an integration with them,” it does not necessarily signify “we have a functional, contemporary, user-friendly, and well-supported integration.” Some integrations may have been designed years ago for a specific client and never updated. In the meantime, technologies evolve, rendering the integration ineffective, yet it continues to be advertised.

Some integrations are seamless and can be established in a matter of minutes, while others may present continual challenges that demand intricate workarounds and constant vigilance. Be fully informed about the integration landscape you are entering.

Underappreciating the Requirement for Specialized Knowledge

As CDPs are crafted for marketers, it’s easy to assume that a reasonably tech-savvy marketer can easily handle all use case development and CDP management.

However, this is not the case. In-house expertise in specific technical areas such as JavaScript, SQL, JSON, XML, APIs, and tag management will likely be necessary. If your team lacks this expertise, you may need to seek external support either from the CDP vendor or another partner.

Data Privacy and Compliance Issues

CDPs must adhere to data protection regulations (e.g., GDPR, CCPA). Some CDPs offer integrated consent management tools to facilitate compliance, or they can be paired with third-party solutions.

Overlooking Continuous Maintenance and Evolution

CDPs demand ongoing oversight. If the CDP serves as the central hub for all customer data, the evolving technology landscape will impact all connected systems. Your business will naturally evolve, necessitating adjustments to your CDP implementation. It cannot simply be set up and forgotten.

Furthermore, it’s essential to monitor your CDP’s pricing structure and how it might evolve over time. If charges are based on “profiles under management,” expect that number to grow annually, alongside the size of your database and the volume of tracked events, or however the CDP determines billing.

While a CDP can be an invaluable resource for your organization, remember that it isn’t a magical solution, it comes with costs, and it requires diligent management. Begin on the right foot by addressing the potential pitfalls mentioned above and strategizing to circumvent them.