The News: Segment recently released its second annual Customer Data Platform Report, taking a close look at how companies have been using customer data platforms (CDP). The report shows that despite some major challenges in 2020, the use of CDPs has grown, largely due to more businesses being pushed to make most or even all interactions digital in the last year or so. You can read the full report on Segment’s website.
Analyst Take: Segment continues its productivity from 2020 heading straight into 2021 with its new deeper dive into CDP usage. A solid indicator of the continued momentum since it was acquired by Twilio in November. This new research provides a plethora of data that should serve marketing, tech, and business leaders with important information on the state of customer data platforms in the last year. All of that information was compiled into Segments new Customer Data Platform Report for 2021—giving us an inside look at how CDPs have done in recent months.
CDPs Saw Acceleration in 2020
CDPs did surprisingly well in 2020, in spite of the pandemic and budget cuts at many companies. In fact, it seems like the main reason more companies are using CDPs may be the pandemic itself, as being forced to go virtual means jumping headfirst into digital acceleration—which some businesses were on this trend well ahead of the pandemic, but many have been slow to do this until now. This aligns fairly well with Futurum’s Laggard to Leader Scale from our 2020-21 Digital Transformation Index.
What has become increasingly visible is the volume of data in the market is making the CDP and the opportunity to gain 360 insights of customer activity and requirements more accessible. From virtual doctor appointments to online workout classes, many companies now have more customer data than ever at their fingertips, and they’ve turned to CDPs to organize, enrich, and manage it all.
Segment Sees Strong Adoption and Use of its Platform
More specifically, the report stated that by the end of 2020, Segment had processed more than 1 trillion API calls every month. So it’s no surprise that 73% of businesses reported that a CDP would be very important on their journey to improving the customer experience.
Segment also stated the following findings in its report:
- The average number of apps a company uses went from 8 during 2019 to 11 in 2020.
- Digital advertising apps are doing especially well, reaching #2 in popularity on Segment’s platform.
- 47% of respondents said they’d increase their CDP budget by at least 25% in the next 5 years.
- 60% of customers have higher expectations of the digital experience than they did before 2020.
Overall, Segment’s report makes it clear that there is now much more available customer data than ever before—and a bigger variety of it—being tracked across companies. And that’s important because customers now expect a better digital experience, which companies can give them by carefully collecting and monitoring their data.
The important objective for CDPs is to make the customer lifecycle and engagement easier to manage, which in turn can improve customer relationships, helping businesses stand out from competitors. I found the report in line with our current views on CDP showing both the growth and trajectory for this category, which continues to gain momentum as data prevalence grows and becomes core to delivering best of class customer experience.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
The original version of this article was first published on Futurum Research.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.