7 Best Practices for Selecting the Right Data Platform

Customer insights are the gold mine of modern business strategies, yet many organisations struggle to unify and analyze this crucial data.

Customer analytics remains a critical missing piece for many organizations. Gartner’s 2023 CMO Spend and Strategy Survey highlights this by revealing that a whopping 46% of CMOs increased investment in customer analytics in 2023.

Source: Gartner’s 2023 CMO Spend and Strategy Survey

Marketers have traditionally juggled a complex ecosystem of applications to manage multichannel marketing campaigns. This fragmented approach made it difficult to gain a unified view of customers.

Customer Data Platforms (CDPs) emerged as a solution, centralizing customer data from various sources like websites, apps, social media, etc. and providing a more holistic customer understanding. These unified profiles could then be segmented and activated across the marketing technology landscape, enabling more effective customer engagement.

The recognition of unified customer data's value across the organisation has pushed CDPs beyond marketing departments. They are now being used to optimize broader customer experience initiatives like sales, customer service, and digital commerce, to:

• Enhance customer engagement through personalized experiences.
• Increase customer lifetime value by building stronger customer relationships.
• Empower data-driven decision making across various departments.

While data analytics platforms offer immense potential to unlock customer insights and drive business growth, choosing the right one can be a complex task. The current landscape presents various challenges:

• An abundance of CDP options: With multiple vendors offering varying functionalities, identifying the solution that aligns perfectly with your needs can be overwhelming.
• Rapidly evolving technologies: The data management landscape is constantly in flux, making it crucial to select a platform that can adapt and integrate with future advancements.
• Shifting customer demands: Customer expectations and behaviors are constantly evolving. The chosen CDP needs to be flexible enough to accommodate these changes and ensure ongoing relevance.

Find out if you should build your own CDP or buy a pre-built CDP.

7 best practices for selecting the right data platform

1. Define your requirements

Customer data platforms offer many features. Without defining your requirements, you risk getting lost in technical specifications and functionalities that might not be relevant to your specific use case. To avoid this, conduct a thorough assessment of your current and future data needs to answer these questions:

• How much data do you generate, and how rapidly does it change?
• What types of data do you work with – structured, semi-structured, or a diverse mix?
• Who will be using the platform – data analysts, data scientists, or business users? The platform's interface and skillset requirements must align with your user base.
• What are your key business goals that the data platform should support- like real-time analytics, predictive modeling, or machine learning capabilities.

Engage stakeholders across the organization to gather input and ensure alignment with business goals.

2. Evaluate scalability and performance

Data is only valuable if you can access and analyze it quickly. A scalable and high performing platform ensures fast data processing and query execution to evolving data analytics needs, enabling you to gain timely insights and make data-driven decisions without delays.

Assess the data intelligence platform's ability to scale horizontally and vertically to accommodate growing data volumes and processing demands. Evaluate performance benchmarks and conduct load testing to ensure that the platform can meet your organization's performance requirements under varying workloads.

Discover what you need to know as a marketing leader about CDPs and what’s possible when data and top decisioning engines come together.

3. Consider data integration and compatibility

Data resides in various sources, including databases, CRM systems, marketing automation tools, and social media platforms. An effective data platform needs to seamlessly integrate with these diverse sources to create a unified view of your data.

So, evaluate the data analytics platform's compatibility with existing data sources, ETL tools, and customer data integration technologies. Consider factors such as data format support, API compatibility, and integration with third-party systems to ensure seamless data integration across the organization.

4. Assess security and compliance

Data security is a fundamental requirement for any data platform entrusted with valuable information. By prioritizing it during platform selection, you prioritize the protection of sensitive data, ensure adherence to regulations, build trust with stakeholders, and safeguard your organization from financial and reputational risks.

Evaluate the platform's security features, including encryption, access controls, and audit logging, to ensure the protection of sensitive data assets. Look for platforms that comply with relevant industry standards and data protection regulations such as GDPR, CCPA, HIPAA.

5. Explore data analytics and insights

Data platforms are not simply storage repositories; their true value lies in extracting valuable insights with data analysis from raw data. Evaluate the platform's analytics capabilities, including support for SQL, machine learning, and advanced analytics. Consider features such as real-time analytics, predictive analytics, and visualization tools to enable data-driven decision-making and derive actionable insights from your data.

The platform should also offer user-friendly dashboards, reporting, and intuitive data visualization tools that enable the team to access and understand key metrics without requiring extensive technical expertise.

Learn how to harness the power of data and analytics to drive actionable insights and maximize your marketing performance.

6. Assess Total Cost of Ownership (TCO)

Data platforms are not one-time purchases. Focusing solely on the upfront licensing fees can lead to underestimating the total expenditure. TCO analysis considers all cost factors associated with the platform throughout its lifecycle, providing a realistic picture of the financial investment involved.

• Evaluate the platform's pricing model to compare:
• Fees for ongoing maintenance, technical support, and software updates.
• Costs associated with additional hardware required to run the platform (relevant for on-premise deployments).
• Expenses for training your staff on how to use the platform effectively.
• Charges associated with storing your data within the platform can vary based on data volume.
• Vendor lock-in

Remember, the cheapest option upfront might not always be the most economical choice in the long run. Evaluating the TCO alongside the platform's capabilities and potential benefits helps assess the overall ROI.

Also consider this- should you build a custom CDP by extending existing systems, or purchase a pre-built solution from a trusted vendor? Download this Ebook to understand the suitable option for your business.

7. Evaluate vendor reputation and support

Selecting a data platform is like entering a long-term partnership. A reputable vendor with a proven track record promises stability, access to technical expertise, and the platform's continued development and maintenance.

Evaluate the vendor's track record, customer references, and industry recognition to assess their credibility and reliability via independent customer reviews and testimonials. Consider factors such as vendor stability, customer satisfaction, and support services availability to ensure a positive vendor relationship and ongoing support for your data platform.

Conclusion

Selecting a data management platform is more than just technology itself, it is about establishing a long-term relationship with a trusted vendor who shares your commitment to data-driven success.

By considering the best practices recommended above, organizations can navigate the data platform landscape effectively and select a platform that meets their unique needs and objectives and align with your current and foreseeable needs will reduce the risk of needing to migrate to a new platform later due to insufficient capabilities.

At Altudo, we are your trusted marketing and technology partner, offering comprehensive data platform consulting services. Our team of experts will help you:

• Define your specific data requirements and goals.
• Evaluate modern data platforms based on your unique needs.
• Develop a comprehensive data platform selection strategy.
• Navigate the implementation process to ensure a successful launch.
• Provide ongoing support to maximize the value of your chosen platform.

Contact Altudo today and schedule a free 1:1 consultation to get customized guidance and unlock the full potential of your data.