The shift from CRM to CDP

While CRM systems have long been the operational heart of sales and service teams, they were never designed to track customer behaviour across multiple touchpoints. CDPs have, by design, emerged to fill that gap.

“A CRM system would be like a data source for a CDP. It serves a different purpose,” says Joe Stanhope, vice-president and principal analyst at Forrester. “The CDP’s job is really to create a centralised view of the customer that is resolved at the customer level, contains a complete profile of that customer, and makes it accessible and actionable in a timely manner.”

Many organisations underestimate the complexity of integration, identity resolution and governance. If your CDP can’t connect to your existing systems or act on data in real time, it becomes just another silo.

It is this ability to activate data across marketing, sales, service and beyond that defines the new generation of CDPs. Suppliers such as SAP and Oracle are positioning CDPs as intelligent systems that not only unify data, but also apply AI to personalise experiences and drive customer growth at scale. For enterprise software providers rooted in enterprise resource planning (ERP) and transactional systems, adding a CDP layer is part of a broader strategy to connect back-office stability with front-office agility.

But it’s not all plain sailing. There’s a lot of hype around CDPs – and a fair amount of confusion. Salesforce is among those that promote CDPs as real-time engines for harmonising and activating customer data, going beyond traditional CRMs to enable smarter, context-aware engagement. Yet many organisations are still underestimating the complexity of CDP integration and activation, something that Paul O’Sullivan, chief technology officer for the UK and Ireland at Salesforce, at least notes. He says the biggest gap he is seeing among customers is readiness.

“Many organisations underestimate the complexity of integration, identity resolution and governance,” he says. “If your CDP can’t connect to your existing systems or act on data in real time, it becomes just another silo.”

Despite the overall promise of CDPs, this remains a real concern. Many organisations invest before truly understanding what they need.

“You don’t want to shoot first and then aim,” says Forrester’s Stanhope. “CDPs are too expensive and take too many resources to make it up as you go along. My first question to every client I talk to is, ‘What are your use cases?’”

Stanhope adds that organisations need to be sure how they are going to use it before even thinking of talking to any suppliers.

“If this thing dropped out of the sky right now for free, and it worked perfectly, what would you do?” asks Stanhope. Organisations are littered with software applications and features that have promised much but not really helped the business or organisation do what it had hoped in the first place. This lack of clarity often stems from the myth that a CDP is a plug-and-play solution.

“It’s a garbage in, garbage out situation,” warns Stanhope, adding that even with an off-the-shelf platform, organisations must tackle deep integration, ongoing data hygiene and internal collaboration.

Suvish Viswanathan, head of marketing at Zoho Europe, agrees. “A key misconception is that digitisation tools alone will solve all challenges,” he says. “In reality, successful unification and activation of customer data require strategic planning, continuous improvement and alignment across the entire organisation, from executives to frontline teams.”

He adds: “Organisations often struggle due to poor data quality, complex integrations between legacy and modern systems, and internal silos that prevent a complete customer view.”

A key misconception is that digitisation tools alone will solve all challenges. In reality, successful unification and activation of customer data require strategic planning, continuous improvement and alignment across the entire organisation

There is a sense of déjà vu here. How many times have we heard that organisations buy a software platform to do X without really sorting out their underlying data management first?

Challenges and opportunities of CDPs

Even for those that do invest the time and energy into data readiness, success with CDPs isn’t just about technical plumbing. It’s about governance, consent and trust, especially in regulated markets like the UK and Europe.

“Our customers are increasingly prioritising their data strategy in Europe,” says Zoho’s Viswanathan. “With GDPR [Europe’s General Data Protection Regulation] firmly in place, and AI usage continuing to develop rapidly, consumer expectations around privacy and trust are continuing to rise. Whether sending emails to customers, creating content, or using AI tools, they cannot ignore GDPR.”

CDPs are often sold on the promise of real-time personalisation, but if that engagement isn’t transparent, consensual and compliant, the risks are reputational as well as regulatory.

Stanhope makes the point: “CDPs do need to carry those consent and preference management and privacy signals, so that when we’re building audiences and campaigns in the CDP, we know who is truly opted in.”

In other words, real time only works if it’s also trustworthy. And trust isn’t something you can bolt on later.

While many organisations are still grappling with readiness, others have gone all-in, and to a certain extent, are demonstrating the value of CDPs in the real world. Interest in the technology is often driven by the need to unify fragmented customer interactions, improve the timeliness and relevance of communications, and unlock more predictive, insight-led engagement. Better pictures of customers, better decisions.

There are some big examples of this in action. Zoho customer Fred. Olsen Cruise Lines uses a combination of CRM and analytics tools to integrate marketing activities, reporting and customer feedback into one connected ecosystem. According to the company, customer segmentation has now been made possible on a deeply granular level, with a 360-degree view of each customer and their associated bookings. Real-time insights from onboard logs are also helping improve service, and data from post-cruise feedback is being used to shape more targeted and personalised future marketing.

Similarly, SAP points to US confectionery brand Ferrara as another example. Tarek Ayoub, head of data science and analytics at Ferrara, says the business was looking for “a future-ready solution to help us deliver value to our consumers in a privacy-safe way”. He adds that using the SAP Customer Data Platform has helped the business improve personalisation. Consensual data has ultimately been fed to the marketing team, helping the business “build a persistent customer profile to support our marketing”.

At Salesforce customer Heathrow Airport, CDPs are being explored as part of a wider push to improve customer experience at scale. The aim is to create a unified view of the passenger journey, combining travel context and behavioural data with in-terminal and digital touchpoints to enable more relevant, predictive engagement. As part of a broader digital transformation strategy, Heathrow offers a glimpse of how CDPs may underpin the next generation of customer-led infrastructure.

The point in all three examples is that there is a desire to break down silos, better understand behaviour, and deliver experiences that feel timely and connected. CDPs offer a pathway to achieving this, but only when the right data, processes and culture are in place to support them. That vision of CDPs as intelligent, AI-driven systems is certainly one that many enterprise suppliers share.

But as Stanhope notes, the market is increasingly divided between standalone CDP providers and those embedding CDP capabilities within broader platforms.

“You’ve certainly seen the rise of a class of what I would call embedded customer data platform solutions,” he says. “There has been, and will always be, a standalone set of providers. All they do is sell a CDP. There’s a market for that. There always will be. But we have seen a rise of this embedded CDP, which basically slots the CDP capability as a data layer into a broader solution.”

This shift matters, he adds, because proximity to the point of execution often determines success. “With any technology, the closer you can get to the actual endpoint, the easier it is to make the business case work and justify the spend,” adds Stanhope.

In other words, the success of a CDP isn’t just about the features it offers or the scale of data it can ingest – it’s about how effectively it connects with the systems that drive customer interactions. This is horses for courses, but ultimately, it’s the difference between a promising concept and a platform that genuinely helps a business understand and serve its customers better. Single customer view? Just maybe.