As the number of software tools in use grows, so too does the number of data stores. Rather than having a central repository containing all data, most organisations are likely to have it spread across multiple locations.


The results are inefficiency and frustration. Staff find they need to consult multiple applications and undertake cumbersome manual processes to access the details they need. From the customer perspective, they often receive fragmented and impersonal experiences and believe the business doesn’t understand them as individuals.

To overcome these challenges, growing numbers of businesses are seeking ways to create unified customer records. They want these records to contain all data about a customer and their interactions with the business, drawn from all the tools and data stores being used.

The rise of the CDP

As a result of this demand, interest in customer data platforms (CDPs) is growing rapidly. Indeed, between December 2016 and June 2019, the number of CDP vendors increased from 23 to 96.

Venture capital is also pouring into the CDP category, reaching $2.4 billion in the last half of 2019. At the same time, established companies are buying CDP vendors at a rapid pace. For example, microchip company Arm acquired Treasure Data, Dun & Bradstreet purchased Lattice Engines, and Mastercard bought SessionM.

CDPs can assist businesses in three fundamental ways:
Data collection: A CDP allows the capture of customer data from wherever they interact with a business. This includes websites and mobile apps as well as advertising channels, email, CRM, and payment systems.

Data processing and consolidation: A CDP can join these disparate strands of data into unified customer profiles. The business can then see all customer’s activity, from any channel, online or offline, and in one place.

Data activation and execution: A CDP can also route data to the tools being used by the business. It acts as the plumbing that ties everything together, from the point of data collection to the tools that drive engagement, loyalty and lifetime value.

CDP growth in 2020

As increasing numbers of businesses come to understand the power of CDPs and how they can add significant value to their operations, deployment and usage are tipped to increase strongly during 2020. In the coming months, three things are likely to happen:

CDP usage will become mainstream: Rather than being regarded as a “nice-to-have” tool, CDPs will become must-have” items in 2020 and end up being a clear line item in technology budgets.

As a result of the growing interest, CDP vendors will face new competition from large enterprise software companies. Unfortunately, this could lead to some confusion as the term CDP will be used by different companies to mean different things.

CDPs will need to balance privacy and personalisation: the issue of data privacy is a growing one that needs to be addressed in 2020. Businesses must find a way to balance the desire for data-driven personalisation with customer desire for better data privacy.

While it might appear that CDPs, designed to track customers, could actually contribute to data privacy problems, in reality they are becoming part of the solution by enabling more efficient management of data.

CDPs will shift from adoption to automation: while 2019 saw consolidation around the core competencies of CDPs, 2020 will see new ones added. One is likely to be purpose-built workflows that are built on top of CDPs.

For example, the platform could send a specific email based on a customer’s latest action, such as clicking on an ad. Alternatively, it could work with machine learning models to predict key behaviours such as intent to buy or intent to upgrade.

As CDPs continue to evolve and grow in sophistication, their ability to support business activity will increase rapidly. Take the time now to understand how a CDP could add value to your organisation by enabling more effective customer interactions and creating longer-term relationships.

Data is going to become even more valuable for businesses in 2020, and having a CDP in place will ensure it can be used in the most effective way possible.

Calvin French-Owen, CTO and co-founder, Segment