EP095 CDPs 101: Understanding the Value of Customer Data Platforms in E-Commerce
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[00:00:06] DARIN NEWBOLD: Good day and welcome to Commerce Today. My name is DarIN Newbold and with me as always is Joshua Warren. And we are here to talk about what's happening in the world of commerce and what's happening today. And today it's all about CDPs. So, Josh, I'm going to let you be the one that tells the world what's going on.

[00:00:25] DARIN NEWBOLD: What exactly a CDP is and why they are essential to e commerce success.

[00:00:31] JOSHUA WARREN: So A CDP is a customer data platform. not a CRM. It's not a DMP. it's not an ERP , it's not an O-M-S-W-M-S, all these fun acronyms we have. A CDP is exactly what it sounds like. It is a platform designed entirely. For holding your customer data and it unifies that customer data from multiple sources, online sources, offline sources, your in store sources, and it builds out a single, unified customer [00:01:00] profile.

[00:01:00] JOSHUA WARREN: And that's big, just because that allows you to create such better personalized experiences, better segmentation, more actionable insights. it's really core to e commerce Oh, I get that. 

[00:01:14] DARIN NEWBOLD: Well, I get that and I can see how that's important. And I'm guessing that somewhere in here, you're going to answer this question.

[00:01:20] DARIN NEWBOLD: That's just tickling. My mind is how does it differ from a CRM? But before we do that, I guess maybe there's some, some really even more key pieces of where you see e commerce businesses and why they need this CDP.

[00:01:35] JOSHUA WARREN: Yeah, so there's so much more competition. it's a constant theme here on Commerce Today's, you know, back in my day when I started in e commerce, you launched a site and I mean, back then, In your site header, you put the keywords that you wanted Google or Yahoo to rank you for, and they did, and that's how you got traffic.

[00:01:55] DARIN NEWBOLD: Yahoo. It

[00:01:56] JOSHUA WARREN: a long, long time ago. Not Ask Jeeves, not that far back, [00:02:00] but, Now there's so much more competition. You can't just put an e commerce site out there on the web and expect to get traffic and expect to convert that traffic. There's such a higher bar and barrier to entry. You have to be able to provide personalized experiences.

[00:02:16] JOSHUA WARREN: also everyone expects an omni channel shopping experience and for their in store persona and data to be tied to their web data and vice versa. customers are really expecting a very tailored experience. I'm seeing more and more where the future of e commerce, there's been more experiments where.

[00:02:34] JOSHUA WARREN: You don't necessarily even have to search that. you, the homepage of the site will just personalize itself to what it already knows you want. And you can't do that without really deep data on your customers, but overall.

[00:02:46] DARIN NEWBOLD: little bit scary.

[00:02:47] JOSHUA WARREN: Oh yeah. Yeah. I don't, don't get me started about, 

[00:02:51] DARIN NEWBOLD: they Soon you 

[00:02:52] JOSHUA WARREN: what they

[00:02:53] DARIN NEWBOLD: have

[00:02:53] JOSHUA WARREN: soon, you won't even have to shop the AI will do it for you, but that's a whole other episode, but this has been on my [00:03:00] mind.

[00:03:00] JOSHUA WARREN: You know, I mentioned the, the, whole thing of back when I started, you could just launch an e commerce site and business and get traffic and be successful. And I, had a great 30 minute e commerce problem solving session last week with a very experienced e commerce executive. And he actually put out there to me, he said, you know what?

[00:03:17] JOSHUA WARREN: I don't think you should even try to launch an e commerce experience, especially if you're a retailer without first building a CDP. And thank you, Jim. that was, that got me thinking and realizing that. We don't talk about this piece often enough. And so we are actually going to break this into two episodes and talk about it a lot.

[00:03:36] JOSHUA WARREN: And we're going to start today, talking about some of the top commercial CDPs on the market. Next week, we're going to talk even more about open source CDPs, which they do exist. I think most people don't even realize they exist. They exist. There's some good options. And then we'll talk more next week about really how to use those to power your e commerce business.

[00:03:56] DARIN NEWBOLD: Well, that's, that is awesome. And, and it's great that you got [00:04:00] that insight from that 32nd, kind of free 32nd, ask Josh e commerce questions to bring that forward.

[00:04:07] DARIN NEWBOLD: So that's awesome. what are some of the real, the key benefits? You talked about kind of the commercial side of these CDPs. So what are the key benefits that you're finding there?

[00:04:16] JOSHUA WARREN: Yeah. So the, the benefits and really the roles that the CDB plays, and this is a good, you asked earlier, what's the difference between a CDP and a CRM?

[00:04:23] JOSHUA WARREN: And there's some differentiation in these items. so first of all, customer segmentation, CDPs, allows you to segment your customers based on purchase history, but also on behavior on demographics. there's so much data that, you know, Even with the death and possible delay of the death of the third party cookie, there's so much demographic data out there that you can purchase about your customers and feed into your CDP.

[00:04:50] JOSHUA WARREN: So, a CRM really allows you, I look at it as a CRM is great for equipping a salesperson to really sell to a [00:05:00] customer. A CDP allows you to equip your entire e commerce technology stack and experience to sell to that customer. So with the customer segmentation benefits of CDPs, you can tailor your e commerce campaigns very specifically based on that customer's behavior.

[00:05:15] JOSHUA WARREN: So instead of, you know, here's one or two segments or one or two versions of this email we're sending, literally every email could be personalized down to the specific recipient. 

[00:05:25] DARIN NEWBOLD: That's

[00:05:25] DARIN NEWBOLD: awesome. Well, and what about, what about that Omnichannel? Cause I know you mentioned that and that was big importance.

[00:05:31] DARIN NEWBOLD: Omnichannel integration. How does that work?

[00:05:33] DARIN NEWBOLD: Yeah. So 

[00:05:34] JOSHUA WARREN: when we're working on an omnichannel project, there's, you know, usually a POS system involved and ERP involved, a, an e commerce platform, obviously involved, and it starts getting tricky of what's the single source of truth for your customer data. Like if you want to know. Not just the customer's online behavior, just their store behavior, but you want to combine that, maybe combine that with their demographics.

[00:05:55] JOSHUA WARREN: Where do you store that? Well, CDP is a natural place to put that because the CDP [00:06:00] can integrate into all of those other systems and really power that single source of truth and create a much more seamless shopping experience. we've done this before where we just build it into the ERP or we just build it into the e commerce platform.

[00:06:14] JOSHUA WARREN: Mm hmm. And you can get by with that. And that works well for some merchants, but more and more having that centralized CDP, is really the way to go for an omni channel implementation. 

[00:06:25] DARIN NEWBOLD: That sounds amazing. I was just thinking as a, as a customer, it'd be interesting to go out and find out what, My CDP looks like. but anyway, besides that, there's obviously the ability to have some, some real time personalization around this.

[00:06:42] DARIN NEWBOLD: Talk about that a little

[00:06:43] JOSHUA WARREN: Yeah. So, I mentioned a little bit with the emails, but just throughout the entire web experience, you can have much more, much deeper personalized recommendations, targeted offers, dynamic content, a lot of things, that really aren't possible without a system that is In [00:07:00] real time, pulling in all your customer data so it knows that, you know, some of the best ones, especially on the omnichannel level, they know in real time, Hey, this person, this user is using our app.

[00:07:11] JOSHUA WARREN: They're in this particular store right now. Okay, let's look at their loyalty account data. Let's see if they made a purchase, oh, they left the store without making a purchase. Let's retarget them. Let's send them in real time. Maybe a text message saying, Hey. 5 percent off if you buy something in store today, and again, that's all because this customer data platform, typically is operating in real time and is pulling in this data from all these different sources versus like an e com platform or a ERP that might be a little bit slower to update.

[00:07:41] JOSHUA WARREN: also kind of related to that, we talk a lot on the AI front about how, AI is only as good as the data you can feed into it. There are some amazing AI tools that if you have the level of data in your CDP and it's updating in real time, it is getting almost a little scary how [00:08:00] well AI can get to know each individual customer and really personalize things in real time to them.

[00:08:06] DARIN NEWBOLD: Wow. There's a movies out there that this is reminding me of as you're walking through the store and, and ads are popping up.

[00:08:12] DARIN NEWBOLD: Well, we also have to do something with his data. We've got to be able to bring it all together. Data unification. I know that's gotta be part of this CDP process. 

[00:08:21] JOSHUA WARREN: CDP process. You're looking at their behavior across multiple websites, multiple stores, and you have it all in one centralized source of truth.

[00:08:44] JOSHUA WARREN: And that is so powerful for sales teams, marketing teams, e commerce teams, retail teams. Like once you get that data all in a great CDP, that's when. Every department's going to start asking, okay, Hey, can we get access to that? Can you run some reports for us? [00:09:00] cause it creates that really incredible single source of truth.

[00:09:03] DARIN NEWBOLD: Well, I'm sure there's some, some real world examples that I know I've lived through some of this for sure, but Josh, tell us, tell us some things that you're seeing that's actually happening out there.

[00:09:14] JOSHUA WARREN: Yeah, so both Amazon and Home Depot have kind of led the way in CDPs. and I think this will probably become some LinkedIn newsletter articles because we don't have time to dive into the case studies today. But, just seeing what they have done has been super interesting. Some of my examples I gave earlier about the in the store experience.

[00:09:34] JOSHUA WARREN: That may have been based on both case studies I've read and my own experience shopping at Home Depot. I know Lowe's is also trying to catch up in that area as well. And, one thing we haven't talked about yet that I've seen Amazon do really well is you can also use this CDP to find lookalike audiences and to find potential new customers and lower your customer acquisition costs.

[00:09:57] JOSHUA WARREN: So once you have all of this data in a centralized [00:10:00] place, it really, like I said, it. It's a force multiplier for all your teams. It's not just your e commerce team. It's going to be your marketing team, your sales team, your retail team as well.

[00:10:10] DARIN NEWBOLD: Wow, we have to, we'll have to come back and circle back on the lookalike, process there. That group I can only imagine, but moving ahead and continuing on, and this is going to be a two part episode, so we're only going to get a certain amount of it hit here today.

[00:10:25] DARIN NEWBOLD: But, what are some of the leading commercial CDPs that you're finding

[00:10:29] DARIN NEWBOLD: out there? 

[00:10:30] JOSHUA WARREN: some of the leading commercial CDPs that you're finding? Just like Adobe Commerce Cloud, they really put it in the name exactly what it is and what it does.

[00:10:50] JOSHUA WARREN: So that is their CDP product. It is real time. Probably the biggest strengths for it is it's very tightly integrated with the entire Adobe ecosystem. So it can power [00:11:00] that real time personalization at scale. It can do everything from your experience cloud and the experiences you're offering, the content you're offering, all the way through the Commerce Cloud piece and really doing that real time personalization and commerce.

[00:11:14] DARIN NEWBOLD: Now,

[00:11:15] JOSHUA WARREN: It's complex. It's big.

[00:11:18] DARIN NEWBOLD: I'm sure.

[00:11:18] JOSHUA WARREN: as part of Adobe Experience Cloud, like it's original target was pretty big enterprises. so it can be a little complex to wrap your head around. It can be a little little pricey, especially we're going to look at one today that's targeted at SMBs. Big price gap between an SMB product and Adobe real time CDP.

[00:11:38] JOSHUA WARREN: but especially if you're already using Adobe commerce or one of the other Adobe marketing products, definitely recommend looking at Adobe real time CDP. 

[00:11:49] DARIN NEWBOLD: and then the next one on our list, to me, this is a, this is a natural because they're somewhat the king of the CRM. So tell us about Salesforce CDP. Yep.

[00:11:59] JOSHUA WARREN: So [00:12:00] Salesforce, again, they love just putting it in the name. So Salesforce has a product called Salesforce CDP. you're going to notice some similarities between it and Adobe in that the Salesforce CDP is really designed for people that. Have a lot of salesforce products. So if you have salesforce customer 360, some of their other tools, their CRM, then it integrates really well with those, especially in driving AI personalization across all of those systems.

[00:12:28] JOSHUA WARREN: but again, it is. Can be expensive, can be complex, can be a bit of a beast to implement. and again, the main use case I see with it is if you're already using all the other Salesforce products and you want a CDP kind of makes sense. and that's even, I know both Adobe and Salesforce, I've seen them.

[00:12:49] JOSHUA WARREN: basically you can get a better price because, Hey, you're already buying two or three of our products. We can add a fourth one at a discounted price, that kind of thing.

[00:12:56] DARIN NEWBOLD: thing. Sounds like the insurance companies, if you, in bundling, [00:13:00] exactly. So, so the next one up here, this is an interesting one because I'm slightly familiar with it, but I never thought of it as a CDP, but Twilio, tell us about that

[00:13:09] JOSHUA WARREN: Yeah, so specifically Twilio segment. So Twilio bought ACDP and it's very simple, very flexible, very easy to implement. It is great for SMBs and for startups. so that is kind of its strong side. Now it does, if you scale way up, you DTC brand suddenly is doing a hundred million dollars in revenue.

[00:13:32] JOSHUA WARREN: It can start to get expensive. So the way the pricing model works for small, medium businesses, it's definitely worth looking at. As you get larger, it can price itself out even against Adobe or Salesforce. but you can launch it super fast. So if you're listening to this, First, I would say wait till next week's episode about the open source CDPs.

[00:13:53] JOSHUA WARREN: But if you're like, man, I want to go launch a CDP tomorrow, Twilio segment, you could do that, [00:14:00] both budget wise and complexity wise. You could actually get up and running probably before our next episode even comes out. That

[00:14:05] DARIN NEWBOLD: That sounds awesome. Well, another one on our list is, not familiar with, or haven't heard of at all, TreasureData. So tell us about that

[00:14:13] JOSHUA WARREN: So now we're getting into the more enterprise niche corners of the market. So treasure data is really excellent for B2B companies. Very strong data management for the B2B use case specifically. However, it does require a lot of technical expertise to implement and support, but it works great if you're a really large B2B enterprise.

[00:14:36] JOSHUA WARREN: You have it. Ton of data. I would definitely evaluate treasure data.

[00:14:40] DARIN NEWBOLD: Interesting. And the next one on our list, I'm going to go with Tealium.

[00:14:46] DARIN NEWBOLD: if that's how you pronounce it.

[00:14:48] JOSHUA WARREN: So, yep. Tealium. they really, so I talked about how Adobe and Salesforce both are very focused on their ecosystem. Even Twilio, Twilio segment is basically a way to sell you [00:15:00] more Twilio services.

[00:15:02] JOSHUA WARREN: Telium kind of does the opposite. They're very vendor neutral. So if you want something that is flexible, that is not really tying you into any ecosystem, they can be a great choice with that neutrality does come more complexity. I do think really all of these other than Twilio segment, you're going to have some complexity and set up.

[00:15:21] JOSHUA WARREN: But, if you need out of the box integrations with existing tools across different vendors, like if you're, you're one of those companies that's using Salesforce, CRM, but Adobe Commerce Cloud, and maybe some other company's product for your CMS, then, Telium could be a good one to look at just because it'll have integrations into more of those platforms.

[00:15:42] DARIN NEWBOLD: Oh, so it's kind of a Swiss Army knife. Well, what would be your guidance for, for our listeners, for the merchants out there on how to choose the right CDP for them?

[00:15:53] DARIN NEWBOLD: so I would 

[00:15:55] JOSHUA WARREN: there on [00:16:00] how to choose the right CDP? If you don't want to spend a lot of time on a custom integration, it can definitely help to basically look and say, okay, which CDPs have proven preexisting integrations into our tech stack. also just look at, you have to balance as always complexity versus scalability.

[00:16:27] JOSHUA WARREN: So you might be one of those large B2B businesses that you just need treasure data because your business and your data is so complex, so large. It just makes sense. But at the same time, you might be thinking, Oh, we're actually, you know, a smaller company. We're just getting started in the CDP world. So then something like Twilio segment might make more sense, at least until you scale past that point where it becomes a little price prohibitive.

[00:16:53] JOSHUA WARREN: and that's that same balance is always on the total cost of ownership of the upfront cost versus the long term [00:17:00] value. Again, Twilio segment, you might be like, Oh, wow, I can start for such a low price. But then when you actually look at what's it going to cost you. Over two or three years, especially if you outgrow it or you start getting a little too large for it, sometimes the TCO isn't there.

[00:17:13] JOSHUA WARREN: So it can become a little bit more of a, complicated decision for sure.

[00:17:19] DARIN NEWBOLD: Wow. This has been, been quite a topic around CDPs and really understanding that they are essential to delivering that personalized omni channel shopping experience for, for merchants.

[00:17:32] DARIN NEWBOLD: However, there is no one size fits all and, and choosing the right one can be, can be a challenge. So, so Josh, Summarize this up for us and give us those final call to action.

[00:17:43] JOSHUA WARREN: Yeah, so definitely look at your current customer data strategy. See if a CDP might fit and might help you better serve your customers. Chances are it will. if you are thriving and growing as an e commerce business right now, You are probably building out a large enough customer base [00:18:00] that a real time CDP especially just makes sense.

[00:18:04] JOSHUA WARREN: if your head is spinning from all of this, I understand, hopefully by next week's episode, we can kind of get you sorted out. But if your head is still spinning, definitely reach out to me on LinkedIn. My name is Joshua Warren. You'll see a gold background behind my head, on my, photo. And I offer free 30 minute e commerce problem solving sessions.

[00:18:25] JOSHUA WARREN: Would love to talk to you if you're evaluating CDPs, maybe you, you have a CDP you either love or hate that you want to give me some feedback on. I always appreciate that as well. and yeah, I'm excited. Next episode is going to be all about open source CDPs as well as, kind of how you extract more value out of using either a commercial or open source CDP.

[00:18:46] DARIN NEWBOLD: Well, I can't wait for, for our next episode. Josh, this has been fantastic. Hope you all, do reach out to Josh. Take advantage of that time and let us know 'cause we always want to hear from you.

[00:18:56] DARIN NEWBOLD: And as always, we appreciate you listening to Commerce today. [00:19:00] Take care. 

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