How to Choose the Best Customer Data Platform (CDP) in 2022

CDPs do this by consolidating data from different customer touch points. By breaking down data silos and bringing together first-party data covering all customer interactions, you can get a detailed, 360-degree view of how customers use your product and what those customers do on your website or mobile app.

A potential customer might start with an organic search on a laptop that leads her to a blog post. The next day, she visits your website again from her phone while commuting to work. Two days later, she signs up for email updates from you. A week later, she clicks through an email for a free trial. Her free trial expires after a week, and then nothing. She doesn’t visit your website again for a month. Eventually, she does come back to your website, and signs up for a monthly subscription to become a new customer.

Without a CDP, that scenario would be hard to track. You’d have all these data points, but it would be stored in multiple places. As a result, you might only know that she took a free trial and then made a purchase. Your CDP brings all of those interactions across different data sources together and consolidates them into a single omnichannel customer profile to help you get a full understanding of customer behavior and engagement.

With that knowledge, marketers can create better marketing campaigns that facilitate customer engagement at the most opportune times. A single customer view enables detailed segmentation (e.g. using demographic or behavioral data) that marketing teams can further use to create personalized experiences and improve conversion rates by targeting the ideal customer profile.

And, CDPs can help with more than just marketing. With a superior understanding of your existing customers and how they use your product, you can improve customer loyalty and retention.

If you’re ready to take that jump and use a CDP to make your company more data-driven, you need to start by comparing different CDPs to find the best one for your company.

Finding the right CDP for your company isn’t an easy process. There are a lot to choose from, but it’s not something that should be taken lightly. Your CDP is going to be handling customer data. Anytime you’re dealing with your customers’ data, you need to be extra sure that their data is safely and ethically handled.

That’s why we put together this guide to help you easily identify the best CDP for your company.

6 steps to choose the best customer data platform (CDP)

Below we walk through 6 important steps that you should go through when choosing a CDP. Following these steps will ensure that you choose a CDP fitted to your goals and resources.

Step 1: Bring stakeholders into the process

Before you even decide which CDPs you’re going to evaluate, you need to bring internal stakeholders into the process. The CDP you choose is going to be working with data from different departments within your company, so it’s important that everyone is bought in.

The question you need to ask yourself at this point is: Who else collects data that your CDP will handle?

There’s a good chance your sales team’s customer relationship management (CRM) platform stores data that your CDP will need access to. A stakeholder from sales should be part of the buying process.

What about your customer success team? There’s a good chance that your customer success team uses tools that handle customer data. A stakeholder from the customer success team will likely be part of this process too.

You don’t need each stakeholder individually evaluating each CDP, but you will need their input on various parts of the buying process. At the very least, talk to each stakeholder and let them know why you’re looking to purchase a CDP and what you hope to get out of it.

Step 2: Define use cases

There’s another big question you need to answer before deciding which CDP is best for your company: What is the reason you’re looking to use a CDP?

It’s easy to get caught up in the fact that you need a CDP because it will consolidate your data into a single customer database, but what are you actually hoping to get out of that? Consolidating your data isn’t going to make you more data-driven. It’s just a step along the way. To choose the right CDP, you need to define your use cases ahead of time.

Take some time to think about what you want your CDP to help with. Then, talk to the other stakeholders about their ideal use cases. From there, try to identify three or fewer ideal use cases. Limiting your use cases to just the top three will make it easier to evaluate all of the CDP vendors.

Here are a few of the most common use cases:

Fully understanding our customer journey
Creating a more personalized customer experience on our website
Creating more targeted multichannel advertising campaigns
Combining online and offline data

Once you’ve defined your use cases, spend some time studying your potential CDPs. Look at their website; read reviews of their products; talk to colleagues at other companies who use these tools. Does your ideal use case fit with what any of these companies are doing? If yes, make a list of those companies. At this point, it’s probably going to be a pretty big list.

Step 3: Determine the tools needed

You need to get a handle on the tools your company uses that will be connected to your CDP.

To get an idea of what tools and functionality you’ll need, start by focusing on your use cases. Which tools do you need to accomplish the specific use cases that you laid out in Step 2? Make a list of those tools.

Next, make a list of all the tools that interact with your customer in one way or another. You’ll want to include website tools, CRM systems, real-time live chat, payment processors, email platforms, and help desk systems, just to name a few.

At this point, go to your other stakeholders and double-check that you haven’t missed any important tools that will need to be connected.

Most often, we see customers start with:

Analytics tools such as Google Analytics
Advertising tools such as the Facebook
Customer success and live chat tools such as Intercom
Business intelligence tools such as Looker
Data warehouses such as Redshift

Once you’ve determined the tools you need, make sure the CDPs you’re evaluating already have those integrations. If one doesn’t have the majority of the tools you use, knock it out of contention. This step might narrow your list by a large number.

Step 4: Gather requirements

There’s more to a CDP than a way to consolidate data and solve your use cases. You also need to think of the other requirements for your CDP. Requirements are different than your use cases because a requirement is more like a feature, rather than an outcome.

For example, let’s say one of your requirements is that the CDP you choose should help you get a solid understanding of each piece of data that you’re collecting. To pull that off, you’ll need a CDP that can help you build a data-tracking plan.

If you’re not sure what other requirements you need to consider, here’s a list of common requirements that our customers have:

We’d like our CDP to help with GDPR and CCPA compliance. If that’s something you’re interested in, then you’ll need a CDP that will that will enable you to suppress data collection or delete customer data when requested, which is a requirement for both the GDPR and CCPA.
Our CDP should help us get a full view of our customer journey. If this is a requirement for your company, make sure that the CDP you’re evaluating has some form of identity resolution, which helps identify users across different channels.
Our CDP needs to have top-notch security. This is becoming a more frequent requirement. Make sure the CDP you’re evaluating has a credible, independent security certification like ISO 27001 or SOC 2. Those certifications ensure that the CDP is continuously monitoring and upgrading their security practices.

Another good place to gather requirements from are the pricing pages of each CDP. Read through the features that are listed on those pages, and make a note of anything that’s going to be important to your company.

For example, you might see that one CDP has an uptime guarantee, while another doesn’t. If an uptime guarantee is important, you might want to make it a requirement.

Step 5: Compare vendors

At this point, you should have a list of just a few CDPs that fit your use cases, have the necessary integrations, and meet all of your requirements. Now, it’s time to compare each CDP. Don’t take pricing into consideration yet. We’ll get to that in the next step.

Start by considering your industry. Find CDPs that have customers most similar to your company. If you work at an enterprise-level company, find a CDP that has a track record of working with companies at that level. If you work at a startup, make sure the CDPs you’re evaluating have experience in that space. Chances are there will be an overlap with CDPs that have a track record in all industries, but that’s okay.

If you’ve determined that all of the CDPs you’re considering have the right experience, it's time to go a step deeper. Make sure each CDP has:

A track record of accomplishing the use cases that you defined in Step 2.
A solution for data compliance. CDPs handle data, so they should enable your compliance with the GDPR or the CCPA.
The right integrations for your current and future use cases. Is each CDP continually adding new integrations to their integration catalog?
Excellent customer service to help you set up, use, and maintain your CDP.

Don’t forget to look at review websites for user reviews of each CDP too. G2and Capterra both have dedicated pages for CDP reviews.

Step 6: Consider ROI

The ROI of the CDPs you’re evaluating is the final piece you need to consider. ROI doesn’t mean that you should choose the cheapest option. It’s more about which option will give you the best value. How do you determine that value upfront, before you choose your CDP?

Start by using our ROI worksheet. This will help you determine the cost of your engineers’ time. Without a CDP, your engineers have to spend hours building and maintaining integrations for each tool. Those hours add up quickly, which can result in significant costs just to build and maintain one integration. If you have ten integrations that need to be handled by your engineering team, you can see that the hours will quickly become unmanageable.

That cost is one of the biggest reasons to use a CDP. Good CDPs should reduce the amount of time your engineers spend building integrations between tools, which can result in a huge cost savings.

That’s why you need to calculate the costs and consider ROI ahead of time. If you choose a CDP that doesn’t give your engineering team the maximum amount of time-savings, it may not be worth the cost at all.

What CDP do you need?

Choosing a CDP isn’t a quick process. You need to make sure you’re doing your due diligence to find the right CDP based on your specific use-cases and requirements.

Once you’ve done that, you’ll be able to get more value out of your data and get a better understanding of your customers. Plus, your engineering team will thank you for reducing their workload since they won’t have to spend time building and maintaining integrations with your tools.