4 Questions to Help You Choose Between a CDP or a Personalization & Testing Engine (The Better Choice!)
In either case, delivering optimal personalized experiences requires the right technology. Figuring out what thIn an earlier post, we outlined how you can secure budget for a personalization solution that will help you achieve your goals, please stakeholders, and show demonstrable ROI. But how do you know where to invest that budget? Mainly, how do you decide whether a CDP (Customer Data Platform) or Personalization & Testing Engine is the right tool for your business?
The difference between a CDP and a Personalization Engine
Customer Data Platforms aggregate large amounts of customer data and help companies create personalization experiences. But collecting and centralizing data is only the first step in creating personalized experiences.
Personalization & Testing Engines really shine by unifying your data to create one single view of the customer — which is then used to deliver hyper-personalized experiences.
There are a million testing and personalization tools on the market, but the following questions can help you determine how to invest your technology budget in a testing solution that works.
How quickly you need to demonstrate ROI should be the most important factor in choosing your personalization technology
How fast you need to show ROI is often, but not always, the most important factor in choosing where you should allocate your technology budget.
If there’s not a need to rapidly realize a positive ROI, then a CDP could be right for you. The typical implementation time for a CDP is about six months, and CDPs require a sizable up-front investment.
But if you need to demonstrate ROI quickly, then you should avoid a CDP and instead focus on the quick execution the deployment of a testing and personalization engine provides.
4 Questions to Help Your Choose between a CDP and a Testing and Personalization Engine
CDPs are good at aligning and aggregating data, but they’re not built for executing compelling experiences that deliver results. To start moving the needle on KPIs like conversion, AOV, RPS, and revenue, you need an automated personalization solution and testing engine.
Some CDPs will have personalization capabilities but only basic testing and segmentation capabilities (see minimum criteria above). To quickly deliver demonstrable ROI, you need a solution that allows for the easy delivery of holistic personalization.
Consider the following questions as you weigh your options between a CDP and Personalization Engine:
#1: How quickly do you need to start delivering revenue-generating experiences?
Data-readiness should be your next determining factor. If you have access to all your customer data ready to plug into a CDP, then you should explore this as an investment. If you’re 6 months to a year away, you’re better off partnering with a Personalization & Testing engine with core CDP capabilities.
This enables you to deliver revenue-generating experiences within two to three months while simultaneously chipping away at migrating your data. A Personalization & Testing engine will also provide immediate insights that can be used to refine and optimize various initiatives.
If you’re starting from scratch versus working on cleaning existing data, you’ll need to focus on creating fresh customer insights. In this scenario, the ideal solution is a Personalization & Testing engine with core CDP capabilities such as audience management and cross-device targeting.
#2: What resources do you have (or need) to support each solution?
Customer Data Platforms and Personalization & Testing engines require different skill sets and resources to operate. CDPs can have a steep learning curve that requires a team of analysts and (ideally) data scientists. You’ll also need resources to act on the data (e.g., CRO manager, marketing team, eCommerce technology, etc).
Team structure is another consideration from a resource perspective. A full omni-personalization strategy requires a unified team who can access and act on the data. If your team structure is siloed, then a Personalization & Testing engine can help unify the teams, ensuring that all team members are working with the same technology and on the same goals. For example, the optimization team, merchandisers, search, personalization, sales leaders, analysts, and other relevant teams can all gain access to the same data in real time.
One other consideration regarding resources is, of course, your overall technology budget. If budget constraints are an issue, then a Personalization & Testing engine is likely the better option. A Personalization & Testing engine can quickly generate revenue, proving the value of personalization. This helps make the case for allocating additional budget for a CDP.
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