The Modular CDP: Simplifying the Path to Better Customer Experiences

In today’s challenging economic climate, businesses are increasingly focused on creating better, more cost-effective customer experience. As a result, many are turning to customer data platforms (CDPs) as a way to aggregate data for more effective targeting and, in turn, better engagement. However, in recent years the CDP industry has become increasingly fragmented, making it difficult for marketers to understand which solution best meets their needs.

Composable and Packaged CDPs are now well established terms in the marketing lexicon. Composable CDPs offer customization and flexibility, but they require significant technical resources to build and maintain. In contrast, Packaged CDPs offer a more user-friendly approach without incurring any surprise costs, plus a shorter time to value.

As a new entrant to the market, the Modular CDP aims to simplify the buying decision for marketers by combining the best qualities of both incumbents. Consider it the best of both worlds.

In this post, we’ll explore the components of a CDP, the key differences between Packaged, Composable, and Modular CDPs, and why the hybrid, modular approach is the best choice for enterprises looking to elevate their marketing efforts.

The Building Blocks of a CDP

To understand the nuances between the different types of CDPs, it’s important to first have a grasp on the core CDP components. Essentially, a CDP is a system that collects, integrates, and organizes customer data from multiple sources, such as CRM systems, websites, apps, marketing automation platforms, and Point-of-Sale (POS) systems. Modern CDPs can be tailored to the specific needs of a business, but there are a variety of different functions that can be implemented [3] depending on your specific use cases.

Data Ingestion and Storage

Data ingestion and storage is critical to the CDP, which uses out-of-the-box integrations to gather real-time and batch customer data from your entire tech and marketing stack including, websites, mobile apps, customer service interactions, emails, and offline transactions. New integrations with additional data sources should be quick and easy to build, so that marketers can keep pace with rapidly shifting customer preferences. Both structured and unstructured data is stored in a scalable, secure, compliant central repository where it can then be processed by AI to unlock new layers of intelligence.

Data Cleansing and Enrichment

Data cleansing and enrichment functions play a critical role in ensuring the accuracy and consistency of incoming data. By cleansing and normalizing the data, these applications eliminate errors and inconsistencies that may arise during data collection. Additionally, these applications append data with valuable information such as demographic, behavioral, or transactional data, which offer you a deeper understanding of your customers and their behavior.

Data Analysis and Segmentation

Once the data has been cleansed, the CDP uses out-of-the-box data models to gain insight into customer behavior, preferences, and needs providing a comprehensive understanding of patterns and trends. Data can then be segmented based on demographics, buying intent, purchase history, and lifetime value, just to name a few. There’s also the option to create custom data models that leverage machine learning to accelerate processing and activation. This unprecedented level of enrichment and analysis enables proprietary intelligence to create hyper-individualized marketing campaigns and uniquely tailored customer experiences.

Identity and Profile Consolidation

Identity is the bedrock of successful marketing. It’s critical to be able to identify and trace both anonymous and known traffic back to your digital properties. By matching anonymous users with a known pool of consumers, you can retarget those unidentified users via other channels such as Facebook, Display, and CTV. The CDP then comes in to consolidate disparate profiles into a single view of each customer and enrich first-party data with interests, behaviors, and demographic data to create one unified, comprehensive view that can be leveraged on and offline.

Data Activation and Analytics

The activation layer draws on millions of touchpoints to create targeted messaging and individual experiences for each customer. By leveraging real-time data from your entire tech stack, you can understand customer behavior and preferences at scale. For example, you can analyze a customer’s purchasing history, social media activity, and website browsing behavior to create customized product recommendations, promotions, and content.

Composable CDPs: Custom Solutions that Require More Technical Resources

Composable CDPs offer businesses the ability to create highly customized solutions by selecting and combining the components that best meet their needs. This is made possible through a microservices architecture, which breaks down software applications into smaller, modular components that can be combined and reused as needed.

If this sounds too good to be true, that’s because it is. While Composable CDPs offer a great deal of flexibility, they also come with a host of technical barriers. Building and maintaining a Composable CDP requires significant technical resources to select and integrate the right components which, in some cases, can be both complicated and fraught, especially for businesses with many stakeholders.

Moreover, Composable CDPs require you to integrate various components from third-party point solutions. This means managing multiple vendor relationships and ensuring that all the different components work together seamlessly. Not only is this time-consuming and resource-intensive, it can also cause data latency which is a big problem when delivering personalized experiences in real time.

Despite the technical challenges, Composable CDPs remain a popular choice for businesses that require highly tailored solutions. When implemented and maintained properly they can be very effective, but if you choose a Composable CDP, go in with open eyes, knowing that it may be a heavy lift.

Packaged CDPs: Turn-Key Solutions with Limited Flexibility

Packaged CDPs, on the other hand, offer a ready-made solution that’s optimized for specific use cases. Unlike their composable counterparts, which require development and technical expertise, Packaged CDPs come with pre-defined features, tools, and integrations that make implementation fast and straightforward, helping you get up and running quickly with minimal development effort.

One significant drawback of Packaged CDPs however is their inherent rigidity. While they offer user-friendly interfaces and simplified data management, their pre-defined structures and limited customization can create frustrating constraints. Marketers often find themselves restricted by predetermined data models and functionality, which may not align perfectly with their unique business needs and specific strategies. Additionally, Packaged CDPs cannot be deconstructed, or unbundled, forcing companies to pay for features they might not want or use. This can increase costs and lengthen the window for meaningful ROI.

For companies with straightforward use cases and a relatively simple technology environment, a packaged CDP might be the best way to go. But if you have lots of data sources and a more complex infrastructure, a packaged CDP will likely create more problems than it solves.

Modular CDPs: A Hybrid Approach That Offers the Best of Both Worlds

Modular CDPs bridge the gap between Packaged and Composable by blending the best elements of both solutions. They provide marketers with the freedom to customize their CDP infrastructure by offering a wide range of capabilities, allowing them to tailor it to their unique requirements, while also providing a user-friendly interface that streamlines data management and marketing operations. [4] This hybrid solution not only offers the flexibility needed to adapt to evolving business needs and strategies, but also ensures ease of use for marketers across various skill levels.

The benefits of Modular[5] CDPs include:

1. Implement only the capabilities you need: Unlike Packaged CDPs that come with a fixed set of features, Modular CDPs offer businesses the freedom to selectively activate components that are essential to their specific requirements.
2. Faster Implementation and time to value: Built to enable quick and streamlined [6] implementation with minimal technical resources, which translates to faster setup with minimal time and effort so you can start seeing the benefits of your investment sooner.
3. Pre-built integrations: Include out-of-the-box integrations with popular marketing and sales tools without the need for custom development, which reduces the risk of errors and data inconsistencies.
4. Flexible data models: Create and modify custom data models that wrap around your existing technology, ensuring a flexible framework that can accommodate changing customer data structures and marketing strategies.
5. Dedicated support: Implementation and issue support, as well as value-added strategic services are included, meaning businesses have access to dedicated resources that can help them get the most out of their CDP solution.

The Right Choice for the Resource-Conscious Enterprise

Choosing the right CDP is essential to achieving your marketing objectives and driving growth. As we’ve discussed, both Packaged and Composable CDPs have pros and cons, but why pick one when you can have the best of both?

For the resource-conscious enterprise, Modular CDPs offer a range of benefits, including inherent flexibility, pre-built integrations, user-friendly interfaces, and faster implementation times. This adaptability empowers businesses to effectively respond to changing market dynamics and customer demands, ensuring that the CDP remains a valuable asset in the marketing toolbox.

Ultimately, the decision between a Packaged, Composable, and Modular CDP depends on the unique needs and use cases of your business. It is crucial to thoroughly evaluate all your options, considering factors such as customization requirements, scalability, ease of use, integration capabilities, and implementation timelines so you can make an informed decision that aligns with your business goals.

“Marketers must choose a CDP path that aligns directly to their core business needs while prioritizing the adaptability and flexibility needed to navigate today’s ever-changing landscape. While both the Composable and Packaged CDP options built on the Data Cloud offer clear advantages to marketers, combining benefits from both is an exciting proposition for modern marketers. Zeta Global and Snowflake together deliver the modern CDP built on a robust, secure and performant data foundation that empowers marketers to deliver differentiated customer experiences.”

– Lourenco Mello, Product Marketing Lead, Snowflake[7]

Zeta’s Modular CDP: A Flexible and Scalable Solution for Managing and Activating Customer Data

Zeta’s Modular CDP is a game-changer for businesses that need a fast, effective, user-friendly platform to manage and activate their customer data. Our flexible data model built on Snowflake can wrap around your existing technology stack, enabling you to maximize the value of your current investments and ensuring that you can make the most of your data, channels, and touchpoints, without the need for a complete technology overhaul. Our flexible approach allows you to choose the modules and features that best suit your needs, tailoring the platform to your unique business requirements.