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The Emergence Of The "Customer Journey Orchestration" Market

MarTech Today recently published an article on the state of the Customer Data Platform (CDP) industry. From that article which covers a report from the CDP institute, this segment of marketing data firms is a fast growing market. Over 50 companies are now providing tools and services in that category, which is double the number from a year ago.

But it’s the movement that the major vendors are taking which is the real highlight of that report. From data assembly providers, they are moving into providing services that makes real-time customer journey orchestration a more accessible reality to online businesses.

What is a Customer Data Platform

But first, what is a CDP? The institute defines it as a “marketer-managed system that creates a persistent, unified customer database that is accessible to other systems.” For example, Segment collects data from multiple platforms (CRM, website, mobile, payment system, etc.), unifies that data underneath a single customer, and pipes the result to multiple destinations (data warehouses, analytical apps, marketing automation tools, etc.). So behaviours that are observed from multiple sources can drive marketing campaigns that are triggered for really specific user segments.

Segment (again) does provide a good visual representation of what this is…

[caption id=“attachment_277” align=“alignnone” width=“2364”]Segment - CDP Architecture Segment - CDP Architecture[/caption]

The Customer Data Platform is actually what happens in the middle of that graph. Data collected from sources are unified under a single individual and become behavioural data that can then be piped to destinations, which can trigger actions (such as a personalized message campaign), or just be the source of information for an agent on a call with that individual.

The CDP Institute And Their Industry Report

Back to the CDP Institute and their report on the state of that industry. They claim that Customer Data Platforms are becoming a fast-growing marketing+technology segment, with more than 50 companies offering products and services in that category.

But what is that institute and who are they representing? From the CDP Institute’s About page, we quickly notice that the advisory board of that institute and all sponsors are actual high-level executives of the vendors they’re covering. So no doubt that they have an incentive to make their market better known and make it seem as big as can be. But that doesn’t mean that the information and analysis they’re sharing is less valuable, quite the opposite.

To start understanding the CDP category, the Institute proposes a framework that segments the market into 3 tiers: data assembly, analytics and customer experience.

Most of the initial vendors started out as data assembly providers, offering the technological infrastructure to capture customer profiles and behavioural data from multiple sources and compile it into a single source of truth. But now that this infrastructural need is well met, most new vendors (including the established ones) are starting to provide value-added products and services on top of that unified view of your customers: analytics to gain insights on who your customers are; and customer experience to orchestrate your customer’s journey.

For example, Segment is mostly known for the library it provides to capture customer data from multiple sources, unify that data and pipe it to multiple destinations. But they’ve also recently announced their Personas service, which is to be used to dynamically define audiences and sync those to your marketing channels. They’re not only providing the data layer, but also the ability to start automating the orchestration of your customer journeys with that new layer of analytics.

The “Customer Journey Orchestration” Market

And that last example is just what might be the most interesting insight out of this CDP Industry report. Vendors are now growing into multi-service providers.

Big vendors such as Segment are recognizing that they are in a unique position to provide an ecosystem of analytical solutions to their users that goes far beyond the data assembly need. And that is partly reflected in their changing nature throughout the years, for example when they dropped the “.io” from their name, to be more than just an API service for developers.

In that regard, Segment is leading the movement, especially considering that considerable funds have been raided (their last round was worth $64 millions) and the sort of investors that have backed them (Y Combinator, Google Ventures amongst others).

As the CDP Industry report states:

Many of these firms (the original CDP vendors) have extended beyond database creation to provide analytics including segmentation, which enables them to support customer experience programs without providing them directly.

With these solutions, companies are getting analytics that are far more granular than the aggregates provided by a Google Analytics for example. And this is key, as a CDP such as Segment can be used to feed marketing channels and improve the personalization of your automated messages to individuals throughout their journeys.

In terms of customer experience program, having that level of sophistication is to become the new norm. And so, the players that are at the forefront of the Customer Data Platform market are in a great position to grab what should become a way larger market.

And whoever wins that race might just be the dominating force of an homogeneous “Customer Journey Orchestration” market.