In the past few years, I have written about CDPs, what they are and what their value is – or rather can be. My definition of a CDP that I laid out in one of my column articles on CustomerThink is:

A Customer Data Platform is a software that creates persistent, unified customer records that enable business processes
that have the customers’ interests and objectives in mind.

It is a good thing that CDPs evolved from its origins of being a packaged software owned by marketers, serving marketers.

Having looked at CDP’s as a band aid that fixes the proliferation of data silos that emerged for a number of reasons, I have ultimately come to the conclusion and am here to say that the customer data platform as an entity is increasingly becoming irrelevant – or in the typical marketing hyperbole – dead.

Why is that?

There are mainly four reasons for it.

For one, many an application has its own CDP variant already embedded as part of enabling its core functionality. Any engagement solution that is worth a grain of salt needs the analytical capabilities that a CDP offers, and hence offers them itself. Why do the additional investment of buying things that one already has once more? This only increases cost and IT landscape complexity while acquiring capabilities that partially are already available.

In addition, there is no real and concise definition anymore, with even the CDP Institute differentiating use types and/or scopes of CDPs. If you are looking at what other vendors (Salesforce, Oracle) or analysts (here: Gartner) are saying, the water becomes even more muddy.

The third reason is that focusing solely on customer data simply falls short of requirements. Yes, there needs to be a consolidated and enriched customer record that informs about customer preferences and about their current priorities and behaviors. But this is jumping too short. Good engagements need more than this, but also need to leverage other business data, starting with products, etc. Secondly, “current” is the operative keyword here. Good engagements are in-moment. Interests can change a lot in short periods. This means that older behavioral data is likely to be too old and hence no more really required, let alone helpful. It might outright lead into the wrong direction. There are also GDPR implications: Collecting data for possible later use, even under the pretense of legitimate interest, affects the customers’ data sovereignty. There is the right to be forgotten, and the obligation to collect and use of data for a stated purpose. The purpose has probably become invalid a long time ago. And “legitimate interest” is not covering the storage of data “just in case”, either.

But most importantly, the benefit of a customer data platform lies in advanced analytics applied to consolidated data. And, apart from above mentioned engagement solutions, almost every company has the foundation for both in place already, by means of its analytics platform, a data lake, or a lake house solution. Of course, the necessary machine learning and/or the corresponding queries to fully take advantage of this treasure trove might not be set up yet. But this is not necessarily a reason to go out and buy YAC – yet another CDP.

The future of the CDP

The purpose of a CDP is the activation of data to enable effective customer engagement across departments. This can happen more effectively, if not parts of relevant, necessary data are left aside.

Driven by, and heavily invested into AI, major vendors like Microsoft, Salesforce, or SAP and others have understood this. They are building and providing data platforms and data graphs that help not only in the ingestion, consolidation (and understanding) of customer data but all business data. They support this with a zero-copy approach and are underpinning this with the development or acquisition of sophisticated data management capabilities. After all, it is unreasonable to assume that all business data lies in one single database, with the possible exception of a data lake. At the same time, their applications themselves offer CDP capabilities, especially when looking at modern CRM suites, or marketing systems like personalization engines or (multi-/omnichannel) marketing automation or even customer journey optimization systems. The increased availability of AI strengthens their approach as AI heavily relies on good and complete data.

Vendors like Snowflake or Databricks, again amongst others, are doing something similar, but come from the data lake house angle. They largely rely on their partner ecosystem to complement their capabilities and to consume or leverage the activation capabilities that they offer.

What all these vendors are building is essentially a superset of a customer data platform that I would call a consolidated data platform to repurpose the acronym.

Still, for these vendors as well as all the other ones that the CDP Institute lists, composability and integration are key for success. The reason for this is that in the foreseeable future vendors need to be able to interact across different ecosystems. They need to be able to deliver their capabilities in a modular fashion and/or with a pricing model that supports the modularity that their customers need. Many of them will already have some CDP capabilities and as stated above, they will not want to acquire and pay for capabilities that they already have.

What does this mean for buyers?

Buyers need to follow a think big – act small approach, as the CDP game will increasingly become a platform game. This is a necessity that is mostly driven by AI, which needs data. They need to collaborate, evaluate and iterate.

Collaborate: Buyers need to consider what they already have and what they want to achieve. This sounds easier than it is, as the awareness of what is already available is often missing, especially on the business side. Hence, it is paramount to work with IT.

Evaluate: The CDP game will become more of a platform game. This means that businesses need to think long term as the best results for them likely cause some lock in. Therefore, it is necessary to sit down with at least the main ecosystem partners to identify which of their platforms shows the best – and affordable – fit as a consolidated data platform. Their offerings need to fit now and, more importantly, later. Key criteria in this evaluation are the own inventory of capabilities, the own planned capabilities, and the vendor’s and their ecosystem’s strategy. Also, it is necessary to check for flexibility with a what-if analysis, as the own, as well as the vendor’s strategy, is likely to change over time.

Iterate: Once there is a decision. Implement. Stay agile. Implement in small iterations that deliver value fast. Don’t boil the ocean. And continue to work with your trusted partner to maintain a strategic alignment.

The CDP is dead.

Long live the CDP.

Happy New Year to everyone!

Apart from all the political suff that I do not want to dive into, the year 2022 has seen a lot of exciting events and topics, from the rise and fall of the Metaverse, to lots of defaulting crypto companies. Towards the end of the year, chatGPt stirred up quite some waves.

Not to forget the long story of Elon Musk taking over and handling Twitter ...

In more conventional areas, we have seen more of a renewed interest in affordable CX suites. Earlier in the year, also CDPs have been a big topic. Tips for good engagement to achieve customers having a positive experience is also always a topic.

(Nearly) all of this is reflected in the 2022 top ten of my blog, which has seen a good number of visits. 

A big and heartfelt thank you to all my readers!

Here are your top ten articles of 2022.

#10 How to engage for customer experience and success

#9 How to create value with a CDP

#8 The impact of the supply chain on the customer experience

#7 A great human - bot conversation with lots to learn

#6 How (and why) a marine consultancy made Zoho core of their business

#5 The almighty Metaverse - its Rise and Fate

#4 How to make Zoho a business's operating system

#3 How to Zoho'matize a business

#2 Don't mess with Zoho - A Zohoday 2022 recap

#1  Metaverse - the return of the Undead

All of these are well worth revisiting.

Thank you again for your readership. I wish you all the best for 2023.

Exciting times are lying ahead of us.

These days, Customer Data Platforms, or in brief CDPs, are one of the most discussed topics in the CX industry. Last time I looked, the CDP Institute counted more than 150 CDPs of different flavors that target different business challenges.

This raises a lot of questions, chiefly: What is a CDP? Which business challenges do companies solve with a CDP and how do they approach the solution, i.e. how do they proceed implementing one?

Let’s start at the beginning. According to the CDP Institute, a CDP is “packaged software that creates a persistent, unified customer database that is accessible to other systems”.

Figure 1: A simple model of CDP functionalities

Functionalities offered by CDPs reach from simple data gathering and unification to the activation and even active usage of information derived from customer data. This already shows the different business challenges that can be addressed with a CDP. It also shows, that the business challenges can be addressed in a way that provides increasing value to the business.

As an aside: A good CDP always bases on a solid foundation of customer identities and the consents that customers have given.

The second important question is how a CDP can or should be implemented. What is a viable approach?

To learn more about these questions, we spoke with Mario Kurmann, Senior Product Manager CRM at Migros Fachmarkt AG in Switzerland. Mario was responsible for the initial CDP implementation and now for its continuous improvement. Migros is one of Switzerland’s biggest retailers. Fachmarkt, as part of Migros, basically operates five independent brands in the areas of sports, electronics, home improvement, furniture with online shops and brick and mortar presences. All these brands, and the Migros group overall, have separate data silos. One more silo is the Migros loyalty program, Cumulus. 

All these data silos were aggregated in different buckets, e.g. data warehouses, then serving different purposes. The basic question that arose from this was: Ho can we work with this treasure trove of data that also includes transactional, surf patterns and behavioral data. 

The objectives

Consequently, the first main objective of the implementation was to bust the silos and to harmonize customer data across these different brands and the loyalty program. The second goal was to then be able to activate the data and to use it operationally, always looking at it with a CRM perspective.

Long term objectives of the implementation are, of course, increased loyalty, more revenue and more precise customer engagement. However, according to Mario, the first implementation had another strategic goal altogether: Learning the capabilities of a CDP by exploring! After all, a CDP is rather a technical than a business component.

As trivial as it sounds, maintains Mario, Migros started with two simple use cases: re-engaging with customers in case of an abandoned shopping cart and personally welcoming new in-store customers to the brands. This with the background of Migros not having a clear customer database with clear and unique customer IDs. Cumulus, for example, works on household level and not with individual customers. How to deal with this is one of the questions that still needs some thought.

The approach

Migros looked at the CDP implementation as a business project, albeit the tool is of rather technical nature. As said above, the team started the implementation with simple use cases that target at improving the customer experience at important touch points via defined use cases.

Talking of the team: The team was deliberately kept slim, too. In alignment with Fachmarkt AG and Migros itself, this team was empowered to approach the topic using ecommerce data, also together with an implementation partner that already implemented the online shops. 

The team maintained close ties with the business units, also educating them what the CDP can help with and where its limitations lie.

The Learnings

Communication, communication, communication

It is very important to have and maintain an alignment with the various stakeholders. The degrees of freedom and the timelines that the project team has as well as any limitations need to be clear to the project team as well as to the management.

Data governance is an important topic, as a CDP is privacy relevant. The availability and usability of the used data needs to be clarified with the legal departments.

It is similarly important to stay in constant conversations with the customers, managing expectations and educating them about capabilities of the CDP and the scope of the implementation while learning about the requirements to fulfil.

Actionable data is not equal to engagement

One of the big early learnings is that a CDP is not an engagement tool. It is essentially a database which helps activating the data. The actual engagement needs an engagement tool. It proved helpful to work with a separate engagement tool that didn’t conflict with other tools that were already in production use for the two use cases. The team chose e-mail as the communication channel. In doing this, the team staid independent of the daily operations, which sped up the project considerably.

Don’t boil the ocean

Starting with small, well defined use cases helped as well. These use cases worked with a small number of upstream and downstream systems. This kept the complexity under control and led to having consistent data coming into the system. This helped in delivering results fast. It also helped in gaining more understanding of the CDP as such.

Know your infrastructure

The ability to work with internal as well as with external partners was another point that increased the ability to deliver and the delivery speed. This way, there is no need to re-engineer the infrastructure and, even more importantly, a trustful relationship is already established.

One little downside

The one thing that was not established early is the harmonization of data, as the ingested data was already quite clean, because of the selection of upstream systems. This is something that will be resolved in later project stages.

The result

In consequence, there was a win for all participants. The use of commercial use cases kept the project effort low while quickly showing results. The project showed good opening rates of the sent mails resulting in increased revenue via an increased conversion rate. This raised the appetite for more.

Based upon the established success and value, the next steps will now tackle more sophisticated use cases including campaign automation and helping customer service. 

This text is based upon the CXChangersTalk with Mario Kurman, If you are interested in the original, you can watch it here

It is time to talk about customer journeys and customer journey orchestration.

Again.

The theme of two of my recent articles has been about customer data. First, in my article Why you don’t want a 360-degree on the customer I rubbed the coveted 360-degree view on the customer, which is utterly meaningless as a contextually relevant view on the customer is required to take any decision or action.

Then I followed up with the view that a customer data platform (CDP) is not an end in itself but a means to an end.

Actually, two ends.

They are engagement and experience.

Back in the day when no one talked about CDPs I wrote in a guest post There is no customer experience without customer engagement to Paul Greenberg’s ZDNet column that a well-orchestrated CRM system sets the foundation “for every meaningful and relevant engagement, proactive (company initiated) as well as reactive (customer initiated), which covers all communication/engagement channels, and an increasing number of possible touch points. The CRM system, at its core, is channel- and touch point agnostic. But it supports and serves all of them, every single one – including those that we do not yet know of.

The customer engagement, as an ongoing process, itself happens via any number of interactions, the touch points chosen by the customer, but offered by the company”.

This is, of course, based on Paul’s definition that “customer engagement is the ongoing interaction between company and customer, offered by the company and chosen by the customer”.

Nowadays one could replace the term CRM with CDP, but how we call it doesn’t really matter. The point is that there is a system that collects and analyses data on customer interactions and offers it as actionable information. All this within the limits of what is legal, legitimate, as well as offered and consented to by the customer.

What is important is that what called touch points then and will call contact points going forward, form a customer journey when a customer interacts with them.

A little detour – why “contact point” instead of touch point?

Customers usually interact with a company to solve a need. This might be information or the desire to exercise or the need for a mobile communication, or whatever else. Take your pick.

To fulfill this need, customers interact with a lot of different assets, including the product and/or service itself. Looking at the mobile communication example, this is typically solved by interacting with a smart phone. This happens well post purchase and until the phone breaks or gets retired for good.

Touch point is a term that is marketing laden. This means that its scope ends at the point of the customer purchase, at the latest. Therefore, I prefer using another one, like contact point, which is not perfect either. Happy to get suggestions for a better term.

Coming back to Customer Journey Orchestration

Now, the ability to analyze the interactions that a customer has with a business’s contact points neatly leads to real time interaction management and its big brother, customer journey orchestration.

Customer journey orchestration is currently all about preparing paths to take for the customer. Nearly all vendors that work in the area supply software that helps in assembling these journeys. These journeys are like paved ways that the customer is supposed to take. While this is often meant to be an attempt to reduce process friction for the customer, this is inside-out thinking as opposed to outside-in thinking. It is also more often than not meant to simplify the engagement process for the company, akin of creating a funnel into which customers are guided.

On the other hand, customers cannot be assumed to take a linear journey. They regularly are on several journeys in parallel, change devices and/or communications channels, step back to get additional information, compare different vendors, and many more.

In brief, they follow their own, customer managed, journey instead of a journey that is managed by the company for them. However, the interactions along this journey are (mostly) in a context.

Or in the words of Graham Hill, who looks at this from a service-oriented logic angle: “Customers don’t plan out their journeys in detail, instead, journeys ‘emerge’, one interaction at a time. We should design service experiences to allow interactions to emerge, not around fixed journeys”. He continues that it is our job “to create experience platforms that enable customers to interact with us faster, easier and better. What customers actually do is up to them. The more we constrain customers’ behaviour, particularly through rigid service experience design, the more customers are likely to continue their journey with someone else, or to abandon it entirely”.

This has some serious consequences for the implementation of customer journey orchestration.

The very first of these consequences is a totally different mindset, one that looks at the customer journey out of the eyes of the customer instead of the corporate eyes. Don’t get me wrong, the interests of the business need to be considered, too, but these form boundaries for which contact points can and will be offered to customers.

This creates a need for massive and scalable real time customer journey analytics. Interactions of any given customer at any given contact point need to be analyzed in milliseconds to be able to deliver the best reaction to the customer’s action – the one that answers the immediate demand, anticipating the customer’s real interest. All this requires the customer’s current context. This is why a contextually actionable set of customer data needs to be available, which is the job of a CDP.

The third consequence is a need to design the contact points accordingly. They should be laid out like steppingstones or a menu of options that customers can take according to their own choosing. To do so, they need to be available throughout channels and to deliver information to the customer that is relevant right this moment, in the format that is appropriate for the channel of the customers’ choice. At the same time, they are collecting the data that is necessary to help customers moving forward on their individual journey, and which can be used by downstream contact points.

The requirement to be able to feed contact points independent of the channel also explains why personalization needs to be channel independent.

Don’t manage your customers’ journeys

Customer journeys are as individual as customers. Journeys are non-linear and move across different devices with some steps travelled offline.

Your customers will manage (and orchestrate) their journeys individually for themselves. So, there is no need to design journeys for them. it is even counterproductive. Instead, provide them with the platform and channel independent menu of interconnected contact points that help them to do it. Based upon a strong real-time customer journey analytics, this is the most powerful way to help your customers achieve their objectives their way and at their pace.

Everyone (and their dog) tells you that you need a 360-degree view on your customer, right?

According to Techtarget, the “360-degree customer view is the idea, sometimes considered unattainable, that companies can get a complete view of customers by aggregating data from the various touch points that a customer may use to contact a company to purchase products and receive service and support.”

And you are fully sold to this famed concept and term.

In this case, I am sorry for spoiling your day. You in all likelihood do not have it, you do not need it, and here’s the kicker: You do not want it. The 360-degree view on the customer is just another case of too many people using too many too big words.

You are asking why? Let me explain.

I fully get it. The customer is your North Star, the guiding light, the one reason for your company to exist. Your company is customer centric, you are looking outside-in. Your company’s purpose includes to help your customers fulfilling their needs and desires, thereby making a profit. And you are successful doing this.

No doubt, you are on the right way.

And indeed. What is needed to follow this way in reality involves collecting data about your customers. A lot of data. Master data, transactional data, behavioral data, consent data, structured and unstructured; you name it. Over time, this becomes a veritable treasure trove, if collected and used correctly.

Even if not.

When doing it right, you have already broken down many, ideally all, of the data and organizational silos that prevent you from communicating with your customers effectively and offering them the information and solutions that they want, the way they want it.

Don’t get me wrong: This is commendable, the right thing to do if done with the customers’ interest at heart (apart from being within the limits of what is legal and not creepy, while also keeping own commercial interests in mind), and a precondition for what you really want.

But then, what you have implemented until here is something akin to what big data was. A data lake. Yet another concept of earlier days. This is not helpful. What this result resembles is the big box of unsorted Lego blocks that my kids have in their playroom – yours likely, too.

It is an unsorted collection of data, maybe even all data about the customer that there is. Some of it is valuable, some of it is not. Some of it loses value over time. Some of it is valuable only in some situations.

And here we are touching the crux of the matter. This data is valuable only if it is applied to a situation and with a purpose.

Of which there are mainly the following four:

• The customer’s current situation or position in her particular journey
• The customer’s objective: the job she wants to achieve at this very moment, along with her state of mind
• Your current situation and ability to support the customer’s journey
• Your objective: providing the best possible solution for the customer first in this step of her journey, then for her destination

Combined, these four points make up the main part of the context of the interaction. And this context is crucial for meaningful interactions that potentially need to happen in real time or near real time. All the more if the interactions shall happen in an automated way and/or at scale.

What you really want

Let me exemplify this with two analogies.

What you want to achieve is similar to navigation. Just, for the sake of the example, let’s simplify navigation a little as it is quite a science.

The customer is your North Star. The North Star provides you with all the data that you need. The customer’s and your current situations give the current or starting position, your respective objectives provide the destination. In between lies the customer journey. In order to get from the current position to the destination you need to keep the North Star visible, not obscured and at a constant angle. In other words: You need to have a certain view on it.

Another way to explain is an analogy used by Nicole France in a conversation that we recently had: What an ER doctor needs to know about a patient is different to what a GP needs to know. The purposes of the visits and what needs to be done are totally different. Still, to make good decisions, both doctors need to have a good base of customer data.

What you therefore really want and need, is not a 360-degree view, but a contextually relevant and actionable view on the customer. At any given relevant point in time, via any channel, whether the customer initiates an interaction or whether you initiate it. At any given point in the customer journey.

Jon Reed, co-founder of diginomica finds that a 360-degree view is aspirational, we “at best can try to anticipate what they are looking for in a focused moment” and that ”opt-in data, earned over time reduces the need obsess about fully understanding the customer every moment” He continues with the question “Which contexts can we help them with?”

The goal is contributing to the fulfilment of the customer’s job to be done.

This requires having a comprehensive and accurate view on the customer as a precondition. It is therefore also important that the customer voluntarily and explicitly provides information to reduce the guesswork that algorithms need to do and to increase the accuracy of your actions and replies.

You see? You do not want a 360-degree-view on the customer, but something far better.

What do you think? Ask me!

It's that time of year again. And although I'm not really into trend articles, I think it's time this year to start thinking about what's going on in the worlds of customer experience and customer relationship management – and how it's affecting businesses and customers. Especially since I was also asked ...

So here's my list of developments that I think will be relevant in the next few years, in quite random order, and admittedly not entirely without overlap.

Digitization - not Digital Transformation

If there is one theme that has and continues to permeate through the Covid pandemic, it is that of digitalization. The pandemic has painfully brought to light the failure to make necessary investments in consistent processes and technologies in the past. As a result, many companies continue to have processes that are characterized by media disruptions. The need to improve here is also the overarching theme for some of the other developments and trends currently evident.

Companies and their employees, as well as customers, have had to learn to deal with a highly distributed work infrastructure. Companies have responded by building communications infrastructures (zoom fatigue anyone?) and building out or rebuilding their sales and service infrastructures for increased remote capability. This is being done in 3 phases: First, as part of a stop-gap solution, an infrastructure was quickly pulled up that allowed operations to continue somehow. In the second phase, order was brought into the chaos thus produced. Now, in the third phase, more attention is being paid to integration and efficiency.

As a result, we will see more end-to-end digitized processes that address the needs of both customers who want to interact efficiently and effectively with businesses and those of a distributed workforce.

Mind you, I'm talking about digitization here, not digital transformation. The different meanings of these two terms I have described elsewhere

The death of the four P's is accelerating

Product, Price, Promotion, Placement. The four pillars of marketing are becoming increasingly indistinguishable and thus increasingly irrelevant. They will therefore be increasingly replaced by Customer Experience in order to continue to be successful. Companies will create a culture, supported by processes and technology, that enables their employees to consistently deliver positive experiences to customers across all interactions they have with the company. This will happen via companies refocusing on their core function: Helping their customers find solutions to their problems and offering them. To do this, companies will increasingly follow the pyramid of customer expectations.The pyramid essentially states that a company must first and foremost deliver reliably and accurately, be it information or solutions. The second level is about making this as efficient as possible for the customer, and the third level is about being as authentic and human as possible as a company.

But be careful: It is not about consistently overfulfilling the customer's expectations. On the contrary, it's about being as consistent as possible with your own brand.

Conversational is the new black

Several acquisitions in recent months have confirmed a significant trend toward changing the user interface for applications. Facebook bought Kustomer, Salesforce acquired Slack Technologies. Support applications are becoming more aligned with the conversational flow with customers rather than tickets as the leading entity. The steady and soaring use of Messenger systems has demonstrated this user trend for years. The most natural way for us humans to communicate is through speech - not pointing and clicking.

Now companies are following suit and also increasingly offering their employees and customers initially text-based and later also voice-based interfaces to the systems available. That includes combining them with video.

For efficiency reasons, these communication channels are being integrated directly into the application platforms and the Business Communication Platform is becoming part of the overall platform to increase employee productivity.

Work from Home becomes Work from Anywhere

2020 was the year that companies and their employees realized that it's not that impossible to work effectively even though you're not in the office. This insight was gained out of sheer necessity rather than conviction, as employees had to be enabled to work from home in a hurry. Necessary infrastructures, if not already in place, were hastily put in place. These are now gradually being made more effective first and then trimmed for efficiency so that they can support employees well (see also Conversational is the New Black). Nevertheless, employees will not work from the home office all the time for a wide variety of reasons. Now that infrastructures are set up and companies and employees have found that it works, it is indeed possible to work from a wide variety of locations. This option will increasingly be offered and used. In Germany, SAP, which has already allowed all employees to freely decide where they work from since 2018, is an early example of this trend.

Embedded AI with an explanatory component

Back in early 2017, I predicted a sharp increase in the commoditization of AI as a technology in my column on CustomerThink. AI and machine learning are not an end in themselves, but are there to help users perform tasks in the best possible way. This can be seen very strongly in the fact that AI techniques are already strongly embedded in business applications and offer users direct assistance or solutions, e.g., in evaluating accounts, leads, opportunities, or even in suggesting so-called 'next best actions' in a wide variety of areas.

The problem here is accountability and trust. Users are always responsible for their actions, but want to rely on the predictions and suggestions of the system. However, this is difficult to achieve in a black box that is an AI. Learning from experience simply takes too long in a world where quick wins are necessary.

At the same time, AI technologies are becoming increasingly commoditized by being embedded in business applications. 

Therefore, more and more AI-enabled systems will have an explanation component that allows users to evaluate the system's predictions and suggestions.

The age of the Customer Data Platform and the 360-degree view of the customer - Sigh

One of the buzzwords that has increasingly emerged in 2020 is that of the Customer Data Platform as a vital component of a system landscape. The corresponding systems certainly have their raison d'être in a corporate cloud world increasingly made up of organizational and data silos, to enable companies to respond properly to customer needs in a given situation, or even to take proactive action. However - and hence the sigh in the headline - they are not the "silver bullet" they are often offered as - nor are they a goal in themselves (see also the next point).

Closely related to this is the notion of a 360-degree view of the customer. Nobody wants that. Really not! Just imagine this logically: Actually, one always looks only at a part of the whole.

What is actually desired and necessary is the ability to use (the right, out of the many that the company has accumulated) existing data to offer the customer, ideally in real time, a solution for the current need.

This requires a comprehensive, consistent, time-dependent data set about the customer, from which, covered by the customer's consent, the information that is currently relevant is determined and used for the customer's benefit.

The creation of this comprehensive customer database from many sources and its utilization for all departments is the task of a CDP. Since, as mentioned, too many non-integrated systems exist in companies, another system is needed for the time being to fulfil this task as the core component of a customer experience platform, as shown in the diagram below (with a focus on customer-facing applications).

Which brings me to the next, and more comprehensive, trend.

The boundaries between CDP, personalization, real-time interaction management, and customer journey orchestration are blurring.

A variety of different applications have evolved in the martech stack, but orchestrated to meet a business objective: We have a CDP that divides customers into segments so they can be targeted according to their current interests and consents. The merging of customer profiles created in this way with answers/products/services (content) relevant to the customer takes place using a personalization engine. Providing the determined content at the right time on the right communication channel is the task of Real Time Interaction Management (RTIM) when the customer is moving on digital channels. Each of these interactions is a step in an individual customer journey. A customer can be on several of these journeys with the same company at the same time. Identifying and optimizing these customer journeys is the task of a customer journey orchestration engine. Optimization must be seen through the eyes of the customer - not the company.

At the moment, all of this is often implemented by a wide variety of systems, some with overlapping functionality. This will change to the extent that the separation between these individual systems will increasingly dissolve and they will become more and more modules of a whole. This trend is already evident with some manufacturers, also as a reaction to the fact that this is being demanded more and more so that system landscapes do not become excessively complex.

Efficiency becomes more important again

After a long period of uninterrupted growth, we are seeing declining, and in some cases even collapsing, sales at companies for the first time in years as a result of the Corona pandemic. At the same time, the disappearance of traditional communication and sales channels is increasing the need to invest in digital infrastructures. These are investments that have suddenly become urgent; investments whose importance was not so clear to companies before.

However, many companies now lack the financial freedom to invest for the long term. Therefore, every single investment and process in the company needs to be examined even more closely to see how it/they affect the company's ongoing revenues and what the RoI looks like. Actions and investments that have an (almost) direct positive impact on cash flow, revenue and profit are gaining in importance. Companies will invest more where they see the famous easily achievable fruits and where efficiency can be gained quickly. This is a concept that Constellation Research analyst Nicole France very aptly calls "revenue operations."

Marketing and sales merge to become customer engagement

It's the old familiar song: sales complains that no leads are delivered from marketing, while marketing is always surprised that the leads generated are not picked up. One reaction in the B2B environment to this has been to establish an account-based marketing (ABM) approach, which has two effects.

First, potential customers are targeted with information that is directly tailored to their needs and challenges. Second, ABM provides the first dovetailing of marketing and sales. While this approach only scales to a limited extent, it points in the right direction.

The big step is to bring marketing and sales together into a 'Customer Engagement' department, working hand-in-hand with the goal of winning customers by creating value for the customer and a common set of KPIs. This requires an increased outside-in view of companies and processes and ultimately leads to winning more customers by giving them more value early on. This effect can then be amplified by early involvement of deep product or consulting expertise, which a customer engagement team by its very nature does not have.

E-commerce becomes any-commerce

This trend is related to the increasing merging of CDP, personalization, real-time interaction management, and customer journey orchestration that I described above. The path to Any-Commerce is ultimately a logical consequence. The main channels for (B2C) sales to date have been the brick-and-mortar store and the e-commerce presence. In recent years, mobile applications have also been added to a large extent. Messaging and social media as well as external sales platforms are increasingly becoming a part of the channel mix. It will become increasingly irrelevant on which of these channels a customer journey leading to a purchase is started, continued and finally completed.

Of course, this will also have an impact on processes that are not usually associated with customer experience: Warehousing as well as Logistics, as this splitting of channels makes a centralized view of merchandise management more necessary than ever.

All of this, in turn, is a driver for another trend.

Front and back office are merging – finally

More and more companies understand that interacting with customers in a meaningful way requires more than just a front office. As you can also see from the discussion around CDP and the infamous 360-degree view of the customer and the increasing importance of customer experience, this separation tends to be seen as artificial anyway. It is a relic of the days when there were only ERP systems that related to the inner workings of companies. Modern platform architectures and data models harmonized between applications to model business objects ensure a smooth flow of information between departments, applications and between companies and customers.

IoT and Customer Experience

Last but not least, a technology topic that at first seems to have nothing to do with customer experience: Internet of Things, or IoT for short. However, a direct connection can be made via the detour of artificial intelligence. The number of "things" in the network is growing steadily and strongly. Apart from their data collection qualities, many of these devices serve to simplify or improve life for customers, mostly end customers. Be it automatic vacuum cleaners, health applications or sports equipment, even clothing, the Internet of Things is steadily making its way into our lives. One of the goals here is to enable a better experience with the help of the device. I'm sure you're thinking about privacy and data protection now? I'll get to that now.

Bonus Trend: Privacy and increasing compliance with the EU DGSVO

In May, the DGSVO celebrates its second birthday after an incubation and preparation period. Surprisingly, many companies have not yet or not sufficiently taken care to stand on a stable foundation in this area. Even now, we often see attempts to trick consent (marketing consents are active by default) combined with the generation of significant effort on the part of a website visitor to avoid the various tracking cookies that are supposed to be set.

The good news is that more and more companies are actually starting to rethink and change their data collection. It doesn't matter if they're starting because they've seen that the DGSVO isn't a toothless tiger or because they realize that a more customer-centric strategy of using consent and preferences is more purposeful. Negative headlines such as the Bluekai data scandal last June, as well as browser vendor initiatives to prevent cross-site tacking in browsers as well as mobile apps, probably do the trick. 

The good news is that it's happening!

What trends do you see? Let me hear your thoughts, via Twitter or LinkedIn.

This time, we welcomed Michael Fauscette in our virtual, distributed studio. With him we discussed what will become 2021 trends, looked at his views on the best and worst buzzwords on the market, the role of CDPs and rather communications platforms and what an actually usable AI could be.

Michael is a renowned analyst and author, with more than 20 years of experience in and around the CRM industry. He is the Chief Research Officer at G2, an analyst firm that bases that serves companies small to enterprise and that is unique in a sense that its analyses are based on customer feedback.

Given that, our discussion of course touched his upcoming book (which sounds like it will be very readable) and the role of analysts — whether they are serving their purpose well and what could be improved. Us being all about CX, the meaning of CX cannot be forgotten.

Did you always want to know what a business communications platform is and never dared to ask? Well, Michael has a good answer for you.

And then there is photography.

As usual - it is a conversation and might lead different directions. Did it? You find out!

Enjoy!

This episode starred Nicole France. Nicole is VP and Principal Analyst at Constellation Research. She focuses on digital marketing, sales effectiveness and customer experience.

We planned to talk with her about platforms and their role in the ecosystem; eventually we got there after talking shop about the larger challenge of enabling and embracing customer experience. How can a customer have an experience? What does it take for companies? Are they properly set up to deliver? What is the role of culture? We covered lots of questions before even going into technology, which is a good thing, as customer experience first of all is about people with technology only being an enabler. Only then questions like: Why have platforms become important (again)? What is necessary to make them a success? Are there winning players? What is the role of a CDP in this, if any? Is there a difference between a suite and a platform, and which (hint: there is)? become important.

How to make sense of the buzzword bingo between CDP, personalization, Real Time Interaction Management and Customer Journey Orchestration. There are lots of questions, and even more answers, which depend on which vendor one asks.

Also, we asked about her opinions on trends for 2021, how the vendors managed COVID-19 so far and where she saw innovations and "spectacular" things to talk about - with an interesting result.

But watch and listen for yourself!

Ralf Korb and I had a special guest in Jesus Hoyos, long time CRM practitioner and analyst who works from Mexico and Florida. Jesus concentrates on the Latin American and North American markets.

Apart from being a genuinely great person, he had a lot of interesting topics to cover, starting from how different even the various Latin- and South American markets are to how pricing models should be different, not only to accommodate for a pandemic situation but also for the structures of markets that are dominated by small companies, companies that are far smaller that the enterprises that are usually targeted by the bigger vendors.

This also has implications on product development, training schemes and its availability, partner and ecosystem enablement and a lot of of other topics (including kayaking in the Everglades).

This is a conversation mostly in English, with some Spanglish and a few German in between. And it is jam-packed with valuable information. Well worthwhile viewing and listening to.

In this episode Ralf Korb, Marshall Lager and I had two very special guests: Bob Stutz, president of SAP's CX group, who shapes the CRM industry for more than 20 years now and Esteban Kolsky, former analyst, both independently and at Gartner. Esteban has deep roots and a passion for customer service processes and now leads the sales and service products at SAP CX. 

And then there was a special star, perhaps the youngest guest who we will ever have.

Again, and as usual for our CRMKonvos, we did not stick to one hour. Bob and Esteban actually shared their insights for a full 90 minutes, which is something for which we are deeply grateful.

We covered a lot of ground starting with how 22 years of experience in the military services can help in the software industry - and not ending with why it took him and his team that long to publish an SAP CX strategy. 

You are interested in the state of AI and machine learning? Ask Esteban - or listen to his statements in this episode. Same for what we are doing wrong in customer service for five decades now. And he needs to know, having a service centre background and having covered the service arena for 20 years now in various roles.

Did the acquisitions that SAP did in the past years make sense? Why did it take SAP that long to figure out some of the gems in their portfolio? 
How should pricing look like and why would make this pricing vendors build better software? 

Why Emarsys? Where does it fit into the stack - and why?
Ever wondered what the real purpose of a CDP is? Well, let Bob explain it. 
Will SAP go with Thunderhead? 

And why does Esteban think that SAP is actually the only(!) company around that can create CX the right way?

All this made up for a more than fascinating CRMKonvo with two of the most outstanding brains in the industry.

A little spoiler: Not surprisingly, the key success factors that matter in both environments - military as well as software industry - are "focus and execution".

The episode is in English, barring some introductory words in German - and after Esteban switched to his headset his sound quality went up considerably - so do not get disturbed by his first few statements.