What is a CDP and Why Do Marketers Need It?

Speakers:

• Alec: Host, CMS Wire
• Brian Carlson: Founder, ROC Consulting, CMS Wire Contributor
• Josh Francia: Chief Growth Officer, Blueshift

Welcome and Introduction

Alec: Good morning, good afternoon, and welcome to today's CMS Wire webinar. My name is Alec, and I'm here to help answer any of your general or technical questions. I'd like to welcome you all to today's webinar titled, "Activate Customer Data More Effectively with a Smart Hub CDP."

Here's a rough overview of today's presentation:

• My introductions will take about two minutes.
• We have about 35 to 40 minutes of presentation.
• We'll leave 10 to 15 minutes for Q&A at the end.

If you have a question at any point, please click the Ask a Question tab underneath our webcams. If you run into any technical issues, submit those in that Q&A box as well, and I'll work with you to get them resolved. You can download other resources from today's sponsor in the Resources tab, appearing above the slides.

If you stick with us until the end, you'll be automatically entered to win one of two $50 Amazon gift cards or a donation of equal value to a nonprofit. So stick with us!

A little bit about CMS Wire: Founded in 2003, we cover three primary topics: the digital customer experience, the digital workplace, and information management. Find out more at CMSWire.com.

I want to take a moment to thank today's sponsors, Blueshift. We've been working with them on this webinar for the past couple of months, and it's been an absolute pleasure. We really appreciate the support of Blueshift on sponsoring today's event.

My guests with me today that you can see in tiny little boxes under me, they will expand once they start their presentation. We have back with us for another time, Brian Carlson, founder at ROC Consulting. And with Brian, we have our guest from Blueshift, and that's Josh Francia, the Chief Growth Officer over at Blueshift. It's my pleasure to have both of these fellows with me here today. With that being said, Brian, let's go ahead and get things started.

Brian Carlson: Well, thanks so much, Alec. I really appreciate the introduction and really looking forward to this webinar. Hi, everyone. My name is Brian Carlson. I am the founder of ROC Consulting. We're a consultancy that's really focused on the intersection of technology, marketing, and content as those three things affect the digital experience and customer experience through the full buying journey.

One of my absolute favorite topics is CDPs, if I can be a little biased about it. So I'm very excited to be talking about CDPs. They're definitely a focus of mine. And CMS Wire is very heavily committed to the CDP space. I'm doing a webinar on CDPs at least once a month with them and lots of great content on CDPs as well. So check it out as you can.

Josh Francia: Awesome.

Brian Carlson: Today we've got a really interesting discussion. I'm excited to be here with Josh and talking in more detail. We're going to have a little introduction, give you kind of an overview of how we're going to, you know, what the angle and discussion on today is. Let's give you a little bit of an update for the market. You know, I think that's great because things have changed a lot in 2020. 2021 has already been an eventful year in the last five months and six months. And so there's a lot of updates.

Josh is really going to then walk you through a really comprehensive state of marketing set. And then I will talk a little bit about, you know, how CDPs are kind of bucketed, how vendors are starting to define them. This changes really almost annually just because the market's still a bit in the emergent state while it's becoming more settled now. So we'll talk a little bit about how things are being sliced and diced.

And then we're really here to talk about, you know, kind of the Smart Hub CDP. We're going to go into a lot of detail on that, how that Smart Hub CDP really works to help to, you know, activate customers, orchestrate journeys in addition to managing data. So we're going to talk a lot about that. And I think that's going to make it a pretty interesting discussion. All right. Awesome. So let's start with our introduction.

Moving from Compliance to Customer-Centricity

Brian Carlson: Look, here's what's been going on. The acceleration of consumers engaging with brands through digital channels due to the pandemic, there's been a concurrent expansion in the volume, velocity, and types of data. All those trends we know were already happening before the pandemic. The pandemic kind of hit the gas pedal and accelerated a lot of pre-existing trends. And that has helped to just increase this massive amount of data that needs to be handled and wrangled by companies.

As you may have heard over the last couple of years, the initial reaction of companies hearing about new privacy and compliance mandates like the GDPR and CCPA have been compliance. "Oh, how are we going to get in compliance? How are we going to provide the right to be forgotten?" The kind of things that businesses need to do.

But while that was the way people were thinking about it first, forward-looking businesses are going to think beyond compliance. They're going to start thinking about how to leverage that customer data for business benefits. That's a lot of what we're going to talk about here today. It's not just compliance. CDPs, Smart CDPs can really take you to the next level.

All that disparate data we just talked about is going to need to be centralized. It's going to need to be managed. And in order to do that, you're going to be able to use it in customer-centric, data-driven business strategies. So without good data, without centralized data, without clean data, without unified data, you know, you can't affect and run those types of modern customer-centric, data-driven strategies. So that's key.

But getting data integrated is only really part of the challenge. Marketers, forward-looking marketers, really need to be looking at how they're going to activate their customers and orchestrate that data, as well as secure it. And that's going to provide value to the customer as well as the business. I think that's an important part I'm going to try to bring out in this discussion, which is how value, and the concept of value for the business and the customer, is something that needs to be embraced in marketing departments and digital marketing departments. And that's how you're going to build relationships with your customers. Being customer-centric means providing value. "What does my customer want? What do they need? When do they want it? When do they need it? When am I going to give it to them?" So I think the fact of value and customer-centricity are integral.

The State of Marketing: Post-Pandemic

Fantastic. Okay. So things have changed a lot since the pandemic. Here's kind of, so these are good stats, by the way. Most of these are pretty recent.

• 60% of customers now have higher expectations of their digital experiences than before COVID.
• Everybody got digital and went primarily digital over the last year. They started seeing better and better experiences with apps and other things that they're working on.
• All of a sudden, they have higher expectations from your business, your brand.
• Not only do the customers expect those more personalized and relevant interactions, but with so much happening with them across channels, marketers themselves have a much smaller window of opportunity to communicate to those heavily loaded individuals.
• Customers expect customer-centricity. They're like, "Don't waste my time. I'm overloaded. You need to step up."
• Really brands who need to accelerate their digital transformation, if you're slow on it, if you're at some pace, you got to move it up because you got to deliver those personalized digital experiences in order to engage with your customers and create more active customers in between transactions.

We're going to make a big point of that during this webinar today. And I think that's a really interesting discussion that we're going to have. But I also think that that continuous engagement is beneficial for the customer as well as the business if it's done right and well.

This is a brand new report. It actually released yesterday, so I included it in our presentation today because I thought it was really interesting and it reinforces a lot of what we're talking about. Audiences in this report by Kite Technology were:

• 2x more likely to engage with personalized video compared to non-personalized video.
• Personalized creative drove 85% higher engagement than non-personalized creative.

And no surprise, with such wonderful stats, 68% of CMOs at large-scale brands expect to increase their MarTech investments through 2021. So, personalization, people are okay with it as long as it's done well. It drives better results for the business. You got to do it. You got to get modern technology that's going to allow you to do that.

The CDP Market is Growing

So let's talk about a real quick market update, and then I'm going to let Josh take some time to talk to you as well. This is from January 2021, so it's pretty recent, about four months old. This is from the CDP Institute, as well as a recent survey from Twilio.

• In the second half of 2020, the CDP industry added 13 vendors, 800 employees, and $250 million in funding.
• The revenue will reach $1.55 billion in 2021. That's a 20% increase over 2020, which shows that even with disruptions caused by the pandemic and supply chains and all that other crazy stuff going on, businesses see that CDPs are necessary for their future to not only ensure privacy, but to start leverage some serious benefits as well.
• That's a 29% growth in CDP deployment from 2019.
• 73% of decision makers say CDP will be critical to their customer experience efforts.

So, CDPs in the past few years have gone from, you know, kind of, okay, a new market, new technology category to something really well established, and people looking at them as their central management solution. While that initial reaction was data privacy regulations, compliance, actually 70% of organizations report significant business benefits from prioritizing data privacy, from improving operational efficiency to accelerating agility and innovation. So there's a lot of benefits to building up that privacy as well.

All right. And before I talk way too much, which I have a tendency to do, I'm going to pass it over to Josh right now and let him talk to you for a little bit.

The Active Customer: A New Growth Flywheel

Josh Francia: Great. Thanks, Brian. Very interesting stats on CDPs and on the market in general. I want to just take a few minutes and talk to you about some of the things that we've seen in marketing and where, you know, we believe the future of marketing, the current state of marketing is.

The pandemic brought around a lot of unique circumstances globally. It was a very unique thing to have everyone in the globe experience the same thing all at the same time. And what it did was, you know, it allowed us to have a lot more time that we weren't spending out and about, but we were spending at home. And so how did we use that time? And, you know, maybe a lot of you like me spend a lot more time on streaming devices and watching different shows. Others maybe got into exercise and started buying different treadmills and exercise equipment, spending more time on workouts. Or maybe you learned a new craft. Maybe you took a new course online and learned how to code or do something different.

But one of the things that we've realized and we as consumers do is we reward the brands we like with our activity. As we like brands, we will spend more time interacting with those brands. And those people that spend that time to interact with those brands are essentially active customers. And those customers are what drives that brand's growth. If you have more active customers, you can simply drive more growth.

This is not a new concept, but it was a concept that was relegated to a certain part of the market for a long time. So we all have heard and have used Facebook and social media. And those companies and other ad supported companies, their value was how many active, they call them users, active users did they have on some sort of market. And they were in some sort of timeline, whether it was daily or monthly or whatever. And they said, hey, as long as people are active on our community and our networks, then we have a lot of value as a company. And so they started measuring that. And it was purely because that meant more, they could sell more ads to advertisers and they could get better with targeting and those things.

Now, traditional transactional businesses have also now migrated to this concept of measuring and managing their active customers.

Examples of the Active Customer Concept

• Wayfair: In one of their most recent quarterly reports, they're talking about their 31 million active customers and how those customers are driving the majority of their volume, driving the majority of their repeat purchases, driving the majority of their revenue.
• Uber: Uber is a super transactional business. Their main focus for 2021 is to get more active members. People that actually have more value, spend more time. And their goal is to continue to drive and grow that.
• Nike: Nike is a huge transactional brand, one of the biggest and most well-known brands in the world. Their former Chief Digital Officer said that one of the keys for them is to grow active membership in Nike Plus. They said, because we found that active members spend three times more than passive or guests across Nike and our properties.

This active customer concept is now proliferating more than just ad supported businesses, but it's proliferating all businesses, transactional focus teams, providers, reengagement, customers, all of competitors, business as well as media-focused businesses.

The Shift to Activation Marketing

So if you think about it, it requires a different approach. Traditional marketing has always been channel first. You have a channel marketer, a channel medium, a channel platform, you have channel data, and you advertise to your customers or to your prospects or to your audiences in those channels, bringing them back to an experience, whether that experience is on their website, whether that experience is in a mobile app, whether that experience is in-store experience. And so it's very channel-focused, channel first.

And that needs to shift to be customer first. Activation marketing is really looking at the customer and saying:

• How do I bring the experience to wherever the customer is?
• How do I figure out, based on all the interactions the customer has done up to this very point in time, what's the next best thing I can recommend to that customer?
• Where is the best place to recommend it?
• When's the best place to recommend it?

These things are very fundamentally different.

The Growth Flywheel

If we think about it, the growth flywheel has three core components that most marketers understand:

1. Awareness
2. Acquisition
3. Advocacy

But there's a missing piece that a lot of people don't do, which is you need to activate those customers, or you won't actually have a lot of advocacy, which means your awareness will go down. Brands that are doing this, adding this activation element to the growth flywheel, are able to leapfrog brands that aren't doing it, because they can spend more money on things that make more revenue for them, and not have to spend so much money just to compete in the awareness and the acquisition side constantly. When you have advocates out there, and you've activated your customers, you don't need to reconvert them. And that's a huge thing. And that's a huge value prop for those brands.

So if we think about it, it's a shift. It's a shift from:

• Using marketing data to optimize channel experiences (e.g., "I have all this click and open data. So I'm a really good email marketer. I'm going to use that click and open data to optimize my email campaigns").
• To saying, "I'm going to use customer data to optimize the customer experience wherever that experience is." That experience could be in an email. It could be in a mobile message. It could be on your website. It could be in your store.
• From this one-size-fits-all marketing blast ("Hey, we have a big sale, come and check us out") to actually using AI to understand how can I be relevant to you as an individual all the time at every interaction.
• Lastly, it's breaking down this siloed communication and thinking about customers only in that prism of saying, "Well, I manage the email channel, so that's how I think about communicating with our customers." But your customers don't think about that. They don't think about communicating with your brand just through one channel. They think about communicating with your brand through all available channels.

So this activation marketing approach is saying, take a step back and look at the connected orchestration of how are you making the best experience for this customer across every touch point they could interact with.

The Role of Technology: The Smart Hub CDP

So what do you need to do that? This is a strategy shift. But if it's just a strategy shift, then you need something else to support and actually allow you to roll out that strategy. And that requires new technology.

We have data on the left. This is data that consumers are producing at alarming rates. Every time you watch a show on Amazon or Netflix, every time you click a favorite button on Zillow, every time you go anywhere, you are leaving a trail of data. And that company is using that data. As consumers, we're okay generally producing data as long as on the other side, the company is reflecting that data in real, relevant, and personal experiences for us.

On the other side of this chart, you have how we consume the brand. So we produce data on one side, and then we consume it on the other side. So I consume this brand through streaming services on TV, or I consume it through their mobile app. Or I get a lot of emails from it. Or I get a lot of direct emails from it. That's how I'm consuming or interacting with the brand.

The secret is, how do I take the data that you're producing as a customer and use that in an intelligent way to make the data that I present to you and you essentially use and interact with relevant and meaningful? And so you need to fill in the gap.

You fill in that gap with a Smart Hub CDP. We're going to talk more about the components of those. But a Smart Hub CDP:

• Unifies your data. It's an underlying customer data platform as a foundation. This is critically important. If you have all this data in all these different data stores, that's good. It's a good step. But you can't activate it or use it. And sometimes you can't even access it.
• CDPs are built for customer-facing teams. They allow you to have a platform on top of your data. And they orient it and organize it at the customer level where you want to be.
• Once you have it all organized and activated, you can actually then have AI do the best job it can do. AI struggles generally when you have disparate data sources and disparate information. But when AI thrives, everything's organized. And so when you have everything organized, you can actually run really smart AI machine learning algorithms that can help you predict things that are really hard to do without it.
  • It helps you predict things like who's most likely to purchase certain types of products.
  • When's the best time to talk with them?
  • Where's the right channel to message them on?
  • What type of content are they going to respond to?
• Lastly, if you can't orchestrate all this and actually reach that last mile and talk to your consumer, then you've done a lot, but your customers haven't actually experienced any of it. So the hub component is critically important to actually do that orchestration anywhere your customer really goes.

Blueshift is a Smart Hub CDP. It has connected those pieces. And it allows you to really do this relevant, connected activation everywhere your customers are. I'll throw it back to you, Brian.

Brian Carlson: Josh, that was awesome. You know, you said some really interesting things there. Just to reiterate a little bit and talk about something you said, which I thought was so interesting. The concept that active customers come out of the concept of active users, right? And I'd say, you know, what I noticed is same thing with customer first or customer centric behavior. I mean, people would be shocked to learn that 20 something years ago, we used to call it reader centric in publishing, right? And then you created content for the reader, right? And that in turn benefited the business because if the reader bought it, you know, bought your book or bought your magazine or whatever, you know, great, that's revenue for the business.

That eventually grew from reader centric into audience centric, which was talked by audience development managers. "Hey, you got to focus on that." And that became user centric within a web, you know, development sphere or UI sphere, and eventually into that kind of customer first customer centric. So I think that seeing these important kind of trends from one industry make it out and broadening, and that's what's going to be the first time I've heard active customers talked about in that context as growing out of the active user base, you know, which anyway, I thought that was a very interesting point to make.

Josh Francia: It's very interesting to think about, you know, a lot of traditional marketing companies or traditional brands over-index on the transaction. They over-index on the revenue, conversion moment, which is obviously important. But because of that, they tend to miss the bigger picture. And so they're happy to get, you know, a customer transacting or one customer transacting multiple times. And so they focus on the transaction.

But what they're missing is, are they actually building active customers that they actually have a piece of their mindshare? So when someone's in market for whatever product or offering you as a company present, they don't have to think about who they're going to go to actually purchase. They already know because they have this great affinity and they use that affinity beyond just the transaction. They're interacting with the brand in between transactions, which is something very unique that a lot of brands tend not to focus on. It's all about like get them in and purchase. And then, you know, we'll have them back when they come again. And it's like, well, you're actually spending a lot of time and energy reacquiring customers because they forget about you.

Brian Carlson: I think it made some great points. I mean, you know, look, this was a I remember five years ago working in an enterprise digital marketing department and having this type of a conversation, you know, and it was it was pretty heavily resisted at the time, you know, it's like, "What are you talking about? We're selling products here." I think we had had a piece of content at my last job, which was enormously user centric, customer centric and very actionable, right? So it was like, you know, "how to remove an ice dam from your roof," something like that.

Now, the company hated this content, because they saw it as liable. They saw it as, you know, "don't tell people to do stuff like that." But it was the most popular piece of content we had. People loved it. And yes, it helped to bring people into buy products and other stuff and engage those customers and say, "Hey, look, this business is providing information that's useful to me, I'm going to click back on the next time they share me something." So I think it's really nice to see that over the last few years, this has started become a much more predominant conversation within the marketing sphere. Anyway, thank you, Josh. That was fantastic.

CDP Categorization and Components

Brian Carlson: All right, we're going to talk a little bit now about just kind of, I just want to talk about a little bit how vendors are bucketing themselves and the general categories. One second, let me get that set back up. Okay, and so we're gonna talk about that. And then I'm gonna talk a little bit more about the Smart Hub CDP and the features and functionality and how it's going to, you know, kind of create that ongoing active, active customer, which I think is, I think works both ways. And that's part of what the conversation here is. It's beneficial, not just for the business, but for the customers.

Okay, so, where did CDPs come out of? Look, a lot of CDP vendors in the industry came in from different starting points. That's just the reality of it. Some vendors have come in from more traditional packages that may not be core CDPs to start, and they may have repackaged their existing offerings. They may have different product positioning. They may have even gone in and tacked some APIs onto some existing software and said, "Hey, we've got a CDP now. Look, it's got ADP highs."

From my opinion, and this is my opinion, and, you know, probably David Raab and others would agree with it somewhat. A true CDP is one that's built from ground up based on APIs as a way to interconnect and provide interoperability with other technology platforms that can be affected by it. So they're built with the intent to interoperate, to deliver that data out to other platforms like digital asset management systems and personalization engines that are going to be able to affect that experience and those offers and those things and tailor that digital experience in real time. So that, to me, is core with what a CDP, a true CDP is that's not kind of a side CDP or one that's grown into one.

The way you can slice CDP vendors and products is all sorts of different ways. And like I said before, the market, it's not quite emerging anymore. It's pretty well developed, but, you know, there's still kind of slicing and dicing things. So whether it's Gartner or anyone else, the way they slice it, is debatable as what it'll be next year.

Gartner right now slicing into four different buckets, the way they're dividing up vendors. I'm only going to talk about kind of the way we're talking about it in this context, but a few of the Gartner buckets do fall in here. So that's what we're relaying off of a little bit.

Data Management vs. Data Activation CDPs

So let's talk a little bit about the first type of CDPs.

• Data Management Type CDPs: These are going to tend to be a little bit more IT-led. They're going to be focused more on moving data from one place to another, bringing data together. They may have things like a core CDP engine. They're also going to have kind of like toolkits in addition. And those toolkits, you know, they may be open source. They're going to include feature sets that are going to allow those IT-led teams to build new apps on top of that core CDP. And like we said, it's really focused on data handling as opposed to marketing operations.

But then you've really got kind of this new group of Data Activation CDPs.

• Data Activation CDPs (Smart Hub CDPs): These are more inclusive. They're taking those data management capabilities, the piping functionality that allows you to hoover it together, combine it, send it back out. But that now it's with the ability to activate that customer. So, these are the Smart Hub CDPs, which, by the way, is a Gartner terminology. It's not a marketing term or something. Smart Hub CDP is how Gartner is defining these types of CDPs that have AI that allows them to do orchestration and personalization at scale for event-triggered and buying journeys.

Smart Hub CDPs are going to fit, if you read the Gartner documentation, in this kind of hub-and-spoke configuration. And it's allowing marketers to focus on messaging from a single interface. And it's going to have features like predictive analytics, segmentation, UI for customer journey are all kind of typical functionality within that. So, Josh was talking about this before, that single UI and interface that's marketing-friendly, giving you an overall view into a single view of a customer that's going to allow you to market from that single perspective. So that is kind of where the different buckets are at.

Core Components of a Smart Hub CDP

We're going to talk a little bit now about the Smart Hub CDP. We've got about 10 minutes or so. We'll all talk in depth about this and a little follow-up, and then we're going to have about 15 to 20 minutes of Q&A. So we'd love to talk to people. I do. I know Josh will be as well. Please get some – you can put in Q&A stuff anytime while we're talking. We'll talk about it later. And then you can always follow up with us online, Twitter, whatever. And I'd love to talk to people about this stuff.

So let's talk a little bit about the Smart Hub. I'm not going to overdo too much of what Josh did. But, you know, let me tell you. Basically, look, you want to look at it, simply. It's a Customer Data Platform and Marketing Automation Platform into one system. I think that is the best way to visualize it simply. It's going to help you gather and unite all your data, and it's going to use AI and machine learning to deliver personalized experiences at scale.

That Smart Hub CDP really connects applications, like we said, around a single unified customer profile. And that's the beauty of the CDP. It's that single customer unified profile. And you use that unified profile to direct your interactions in real time. And that's going to enable you as a brand or an organization to deliver those relevant connected experiences throughout the full omnichannel journey, wherever customers may be.

Unlike traditional CDPs or marketing automation platforms, which are separate, that Smart Hub CDP is going to do it all. It's going to integrate data unification with that intelligent automation, as well as intelligent, actionable recommendations for marketers and other people in the organization, which I'm going to mention in a minute, too, which I think is super interesting, as well as that journey orchestration. So that's knowing at what point in the journey that single user is at. Have they already bought something? Am I doing follow-ups? Am I trying to help them with research? You know, that's really important to know where people are at so you're giving them valuable stuff along the way.

And so really, it's made to fit within your existing tech ecosystem. It's intended to be that hub. And unite the stack around that single view. That's going to inform all the other stuff.

Let's talk a little bit about some of the core components. And we're going to talk about some of the functionality as well that helps produce a lot of what we're talking about here.

Smart Hub CDP Functionality

First of all, that Smart Hub CDP Foundation, it's really made up of a core kind of enterprise-grade CDP, meaning scalable for the business to be using on the channel capacity. And then built ground up with APIs. Typically, CDPs are built through RESTful APIs, but, you know, APIs in general.

Here's one point I want to make, too. It really, CDPs create a persistent unified customer profile of every anonymous and known customer by combining all that customer data. So that can be real-time behaviors, predictive future actions as well, which is your AI is going to help you with, from all channels, devices, and systems in real time.

What do I mean by persistent? And I think that's one of the key differentiators of CDPs over DMP systems. You can hear a lot of talk online. I actually did an article on this. Check it out on CMS Wire about the difference between DMPs and CDPs. DMPs are really relying on cookies, focused on that kind of third-party data. These are all going to be issues with GDPR and CCPA. DMPs are not focused on those mandates. They're really more for servicing advertising systems. They're going to struggle with the right to be forgotten. They're going to struggle with these type of compliance and consent mandates. And they're going to struggle with the reliance on cookies and third-party data.

CDPs are built from the ground up to manage compliance, manage these types of issues, and are uniquely positioned to handle persistence over time. So that when you're looking at a snapshot in time over a DMP and you're saying, "Boom, here's a snapshot in time," CDPs are showing you an actual user over time persistently, and here's their behavior over time. And that gives you that ability to orchestrate that whole journey, not just lock into that user at one point in time. I think that's really important. I'm not sure if Josh feels that that's as important, but, you know, I'm super into the idea of that of persistent profile.

So, obviously that hub, the Smart Hub CDP is an essential hub. That's going to be a hub for all your company's MarTech solutions. So it's that connecting point, you know, it's infrastructure. Think of it that way. Like a CMS platform is infrastructure, you know, a CDP is infrastructure, and it's infrastructure for data management. So that's connecting all those channels and apps, allowing you to guide those interactions through the omnichannel customer journey. And using essentially it becomes that single platform for you to craft all those experiences at scale.

That hub also allows you to automatically trigger things. So you're going to see those automatic triggered interactions in response to real-time customer behaviors. And so, again, we talked about the fact that the AI and ML is going to enable real-time experiences, and that's going to allow incorporating a customer's complete history with your brand, current context, predictive behaviors. AI is really going to continuously optimize the person that's being targeted with the content, on what channel they're at, the time, all that kind of stuff. And you're really building a one-to-one personalization engine.

I think that's the most exciting thing about CDPs that's unique as well is that ability to do that one-to-one communication with a user. And kind of giving marketers all that assistance and helping to do that kind of targeting.

And look, it's not just about doing smart things with AI. It's about AI alleviating mundane tasks. I think that's an important part to me, too. If you're in a marketing, digital marketing department, and I've been in them, I know what you guys are going through. You are being overwhelmed with work. You're being asked to do a lot of work. You're not with very little resources. You're being given a lot of technology that may not make your lives easier. But with AI supporting you and supporting mundane tasks, like, I don't know, image tagging or whatever, there's a lot of mundane stuff that marketers spend a lot of time doing, reporting, whatever. AI powering is going to help automate a lot of time-consuming processes in a variety of different ways. So I think that's a pretty important point to make.

One other comment on AI, Brian, is, you know, AI is objective in nature, where marketers and business owners and stuff are not objective. If you're a channel marketer, you want your channel to do well. And if you're a business owner, you want your product line to do well. And because of those things, you can actually skew results by pushing heavily in one channel or heavily in one product line and get the results you're looking for. But the opportunity cost you're giving up is you're actually alienating a lot of your users. So AI allows you to have an objective voice in the room that says, "Actually, Brian really wants this product." So I know that, you know, Jim down the hall wants us to push his product, but Brian's not going to get that. And when you do that over time, in fact, the whole company rises, not just one product, not just one channel. And that's where I think the real value of AI can come in is really being able to be that objective voice and cut through some of the noise that happens in a lot of companies around, you know, their perception of what they need to drive at the moment.

Josh Francia: I mean, that's a great idea. I could almost summarize and say AI enables customer centricity. I mean, I love it, right? Yeah, I think it's a great point. It allows that objectivity. And, you know, those kind of battles that happen within digital marketing departments working across different departments, you know. So like you said, you're in a company that has a lot of different business units and business leaders, you know, have their own issues they need to deal with and goals and all that kind of stuff. And, you know, here's a way for you to bring in kind of a neutral party, right, to come in and tell you the actual data. And this is going to result in real value for your company. I think that's a wonderful point. Thanks, man.

Okay. So let's talk a little bit about the CDP functionality that smart hubs may have. They don't all have the same stuff, obviously, but I think these are all kind of general things that most of them do have. I'll overlap a little on some of the things I talked about, but not too much.

• Privacy management and compliance for GDPR and CCPA. It's just a must. If you are going to be in compliant with these regulations, especially GDPR, you need to provide the right to be forgotten. You need to provide consent management as well. You're not going to do that with a DMP system. It is built into CDPs, the idea that compliance and privacy management and right management and consent is built into these things. So, I think a CDP, the ability to centralize data is critical. You need to centralize your data. You're not going to get in compliance if it's all over the place. It's got to be unified and it's got to be structured. And it's got to be structured in a similar way so that it can be usable. And so, I think that is just like if you're going to need a CDP for the most basic of things, that's where you start. You've got to get in compliance if you have Omni Channel around the world.
• Consent and preference management. So the right to be forgotten, enabling users to manage their own data, enabling users to decide how and when and knowing what you're doing with their data. These things are happening. And this type of management is inherent in a lot of CDPs and is wonderful functionality. It's going to allow you to kind of wrangle all that.
• Master data management. This is interesting. These are features that may be given IT greater control over data. So, it just allows them to kind of more structure, more ability to manage the structure of data, back-end stuff. It just depends on the CDP, again. So, maybe one that came out of a little bit more of a data management foundation that we were talking about before, but maybe has moved into being more of a smart hub with other stuff. They may have more robust data management capabilities. That will be more for your IT teams. It's just going to be where does this vendor and where does the company kind of fall down on the fence? Are we more activation focused? Are we more data management focused? Are we more kind of all-in-one, right? I think it's just going to be where they come out of and what type of functionality.
• Next best action recommendations. I think, are really cool. In the most basic sense, sure, there's next best actions for marketers and for users and stuff, but what they're really talking about here is the idea of using that single unified profile that the CDP generates to help inform other parts of your organization outside of your marketing department to give them intelligence to help deal with customers.

Josh Francia: So, for example, you've got some online customer who's irate about some issue, and you're dealing with them digitally. Your CDP has done that. You can then deliver from that CDP to your call center, or maybe live chat agents so that when that person comes on and they're all upset and it's been however long and now they're engaging with a live chat agent, guess what? The system has automatically delivered a recommendation to that. "Hey, this person has this history. Here's the way you should go about addressing it." Now you're really using that central unified profile to help affect your ability around the organization, to benefit your customers and show that you understand them and you respect them. And guess what? Just because we brought you in a different channel or in a different way, it doesn't mean we don't know who you are. We do. I think that's super exciting.

Brian Carlson: And something to add to that, Josh, I mean, this is such a huge point that as consumers, we have this violated all the time. We all can rattle off several experiences where our expectations were not met or not even remotely met in some sort of experience with the brand. And one example I'll bring up is imagine, I came from the FinTech world before joining Blueshift, and we did a lot of loans and recommendations for loans. And a lot of times we would send out these messages, these emails, and sometimes customers didn't understand the difference between certain loans. Sometimes there's some education that happens.

And so they would call our call center to speak to someone and say, "Hey, can you help me understand the difference between this mortgage rate A and B is." And, before we had the Smart Hub CDP, they had no idea. The customer would have to essentially educate the person on the phone. "I got this email from you guys like 30 minutes ago and it has all these offers in there. Can you help me understand offer number two?" And they're like, "Oh, sure. Can you forward me that email or something?" It was just completely disconnected.

But now, with the Smart Hub CDP, it's that same person calls. And when they call, before the agent picks up the phone, the phone number is looked up against the Smart Hub CDP. They're able to present what emails they received, what they clicked on. And so now you're having an informed conversation because that agent who is having this interaction with this customer is up to speed on what the customer has experienced up to that very moment. And then it goes on, right? As they talk with them, they say, "You know what? Are you ready to speak to a loan officer in this example?" And they say yes. And they click this and all of a sudden it goes back to the CDP that says, "Hey, this person's ready." And a whole new workflow kicks off. That's the kind of connectedness that our customers expect. And so many brands fail on this. We talk about next best action. It's next best relevant interaction is a great way of thinking about it. Because the more relevant you are, the more brands are going to, more customers are going to be loyal and active to your brand.

Josh Francia: You know, that's a great example. I can think of one example online, right, that would just benefit so much from this, which is, you know, you just went and purchased something that was very expensive for full price. And then after the fact, you got a discount offering from the same company saying, "Oh, buy this same thing at 10% off." That needs to come at the right time or else you just use personalization to upset somebody and create a bad experience for that person. So, making sure they got that offer before they wanted to purchase and making sure you know where they're at the journey and targeting them at the right time, I think is just critical.

Brian Carlson: Awesome. Thank you so much, Josh. And finally, you know, I think this is really a lesson that's important to mention too, which is the ability to do account level aggregations for ABM campaigns. When I was doing digital and I was doing the content marketing stuff, we struggled a lot trying to do ABM campaigns and create content. But, you know, these things allow you to do identity resolution across accounts, organizational aggregation of contacts who are associated with a specific enterprise. So basically, it gives you the ability to manage ABM accounts as well as B2B lead management programs as well.

Conclusion and Farewell

Brian Carlson: All right, let me just do a quick looking forward and let's get everybody on with a Q&A session as well. So just as a summary, the ability to activate customers and orchestrate their journey in a CDP allows you to provide value to your customers. And for me coming in as, you know, maybe the more customer-centric guy, looking at that and saying, "Wow, you know, I, as a customer, I want value." You've got a unified profile that's going to feed the whole digital experience, the content, the offers, the look and the feel can all be tailored to deliver things to that customer when they want it, how they want it, where they want it. So, you know, they're not going to see, hopefully not to see that stuff as invasive, but as value because you're delivering information, things that they want.

And, you know, really, we talked about that ability to engage with customers between transactions. And that's going to lead to, you know, more active customers, which is going to lead to the ability for those customers to be leveraged for business benefits, for growth and revenue, as Josh was saying. And, you know, to me, it's like you're providing, you're getting the best of both worlds, right? It's almost like a win-win. As you're providing value to your customers, they're liking you better, they're developing a relationship, you're reducing churn, you're improving retention. I mean, with the high cost of acquisition right now, everything you can do to improve retention is great. And you're hopefully creating these lifetime advocates.

So, you know, I see this as like, you know, the value for the customer produces value for the business and it goes both ways. And it's just kind of like a win-win solution. If you're not inundating customers with messaging that is not relevant, and giving them relevancy and giving them value, they're going to be less irritated. They're going to like you better. They're going to engage more. And guess what? You having more active customers is going to lead to a more profitable business and a better growth model and all that kind of good stuff. Awesome. Awesome.

All right. Look at that. Pretty much right on time. I went a couple minutes over, but I think we're still in good shape. So, hey, guys, anyone want to contact us? Here's our information. Love to hear from you. Love talking about it. Love CDPs. And now I'm going to pass it back over to Alec to take on the Q&A session. Thanks so much.

Alec: All right, Brian and Josh. Thank you, guys. We are going to get into the Q&A and we have some questions in the queue already. So we have some ready. But if you have a question, please don't hesitate to submit it. Just click on the Ask a Question tab right underneath our webcams and type your question in and click submit. With that, we're going to get into these, though. And the first question, I'm going to start with you on it, Brian. And it comes from an attendee named Chee. I apologize if I mispronounce your name.

Q: How can I help my executives pick the right MarTech tool?

Chee (Audience Member): I'm working on a MarTech project to map out the CRM ecosystem, and I am overwhelmed with all the tools and applications. Everyone wants to use AI, ETL, and automation to max a tool. My question is, how can I help my executives paint a picture and pick and choose the correct tool?

Brian Carlson: This is a struggle that so many people face who have technology responsibilities and are trying to communicate the value of these things to business leaders. First, you need to get executives to define their goals. Their goal is not to use AI; their goal is to grow revenue, grow active users, or something else.

1. Get a list of business goals and needs from the business side.
2. Take those goals and start looking for the right applications that match them.
3. Sell the features and functionality of the right system to the business leaders. You can then say, "Oh, and guess what? It's got this really cool AI stuff."

This way, you're addressing what the business leaders want to hear (AI, automation) but bringing them back to the core business discussion. You're going to evaluate the software and find the right solution for the business's goals, and then you're going to sell them on the features. Hopefully, that gives you a foundation.

Josh Francia: Just to add to that, I would definitely start with the business goals, as Brian mentioned, which are generally measurable outputs. Then, rewind and say, "What are the use cases that you can't solve today that you believe will give you the best chance of hitting those goals?" These use cases are the "how." You should be able to outline several use cases that you believe will drive the biggest impact.

Once you have that set up, you can go to the market and say, "Listen, I have five to ten use cases that we believe will push our company to the next level. Can you guys help us with these?" Then you're very specific. You can weed through a lot of the noise and say, "This partner can do these two, but they can't do this one." And then you find the one that can do most of them, and you go deep with that handful. You don't waste time evaluating 20 or 30 CDPs at that level. That's just too much for anyone to do.

Brian Carlson: Josh makes a good point there. The use cases you should start with are the simpler, easier to implement ones. You can then use those as a pilot to prove to executives that, "Hey, this works." So, take low-hanging fruit for your initial use cases to show internal people the success and value.

Alec: Great. Thank you both for that. Chee sent in a message thanking you for all the wonderful recommendations during that answer.

Q: How is a Smart Hub CDP different from a Marketing Automation Platform?

Josh Francia: A marketing automation platform (MAP) generally comes out of a single-channel marketing automation solution that then adds additional channels. It's all about the orchestration side, but it doesn't really have any of the "smarts" or the CDP side. You think about lists as static flat files. Their ecosystem just exists with whatever channel you're hitting from that automation platform. It's fairly limiting.

• You can't do great segmentation.
• You can't get a single customer view.
• You don't have good AI because you're missing the full customer view.

A Smart Hub CDP takes all the benefits of a MAP and adds a lot to it. It really allows you to have that full view of the customer and then allows you to orchestrate anywhere the customer is, not just on a couple of marketing channels. A Smart Hub CDP has a CDP layer and AI, which MAPs generally do not, and it has rich segmentation that allows you to do a lot more.

Q: What new KPIs should we be tracking for active customers?

Luis (Audience Member): Josh mentioned active customers are very important. Are there any comments on what new KPIs that we should be tracking or correlating? NPS in active user time, customer effort score? Which one has been the focus at your company mainly?

Josh Francia: Luis, great question. As you're moving into this activation marketing philosophy, you need KPIs to measure success. I would say the very first thing companies need to do is define what an active customer is for them. Go back and say, "Which customer are we considering active?" That may be based on activity, revenue, or a bunch of different things.

First, define that, and then figure out how to grow that cohort. So, track that cohort over time. The most important thing is then to figure out what interactions led to them becoming an active customer. You want to find ways to influence those interactions because that's how you grow your active customer base. One of the core KPIs I look at is whether the number of active customers is growing. If you're doing that as a company, you're in really good shape because you're aligning everything to driving growth into that cohort.

Q: Is a Smart Hub CDP a DMP replacement?

Brian Carlson: Good question. The answer is probably not. No. A CDP sits over a DMP. A DMP may feed data into a CDP to be centrally managed. A CDP is a broader system in terms of application and use cases than a DMP. A DMP is typically used to inform advertising systems. Like I said, a DMP typically doesn't have persistent customer data and deals with cookies, which are becoming an issue.

The DMP is more traditional, more mature than the CDP. The CDP is a broader, more inclusive type of a platform. DMPs are going to evolve somewhat, either to be complementary to a CDP or they will repackage and try to compete with CDPs. So, right now, I don't think it's a replacement. It depends on your needs, requirements, and business. You may have a CDP with no DMP. You may have a DMP that feeds into a CDP and helps to deliver all that data so that that data can help inform other experiences outside of advertising.

Q: How does a Smart Hub CDP allow me to turn my data into personalized experiences at scale?

Josh Francia: It's a great question. First, you unify your customers. Without a unified view, it's very hard to be personalized. You need to know what they're doing, where they're doing it, and when they did it.

Once you have that, you can use AI to help. It's very hard to do personalization using business rules only; it just doesn't scale. You can do that if you have a couple of thousand customers, but when you get into hundreds of thousands or millions, business rules and workflows fail. AI really soars at that point.

Once you have all the interactions in place, you can run very simple recommendation algorithms. These are point-and-click, marketer-friendly experiences. The data science is behind it, but the user experience for the marketer is just like clicking a few buttons.

Then you can orchestrate it. Once you have all the recommendations built out, you can orchestrate it anywhere that customers interact. The recommendation content (the next best offer, the next best content piece) is not limited to one channel. It can be on your website, sent to your call center, sent through a text message, sent through an email, or through direct mail. That's really powerful because that recommendation is for that customer, not for that channel. And that customer may interact with you on a variety of channels. As they do, the recommendations change, and you can orchestrate it all together when you have a Smart Hub CDP that allows you to break apart those pieces and really connect the entire journey.

Conclusion and Farewell

Alec: We are at the top of the hour. So thank you both, and thank you to all of our attendees for participating. It really makes a webinar more enjoyable when we have an active audience. If you stuck around to the end, you're entered in to win one of the two $50 gift cards. Keep an eye on your inbox, as we'll be emailing you within the next couple of days.

Thanks again to Brian and Josh. We really appreciate you taking the time. A lot of time was spent on today's presentation. We really appreciate that. I want to again thank Blueshift for sponsoring. It's been a pleasure working with them on today's webinar, and we really appreciate their support here at CMS Wire. If your company is interested in sponsoring a webinar like this, just email us at webinars@CMSWire.com. But in the meantime, thanks again to everybody, and we'll see you all next time.