91: David Chan: How dual-zone approach and journey orchestration are reshaping CDPs

What’s up folks, today we’re extremely privileged to be joined by David Chan, Managing Director at Deloitte Digital.

Summary: Keep a keen eye on the modular evolution of CDPs. Know that reverse ETL tools are tactical additions, not replacements. Expect to reevaluate the roles of older platforms in your martech stack as CDPs get smarter. And if your organization’s data strategy resembles more of a herding cats scenario than a well-oiled machine, maybe it’s time to look into that dual-zone approach. It’s a way to make sure everyone from your IT folks to your marketing creatives are playing from the same strategic playbook.

Jump to a section

About David

  • David started his journey with PepsiCo as a Data Strategy Analyst and progressed to a Senior Associate role at Accenture Interactive
  • He then joined Deloitte Digital as a Senior Consultant where he worked his way up to Managing Director, leading their CDP practice and focusing on Marketing Transformation and Operations
  • He possesses extensive knowledge in crafting real-time personalization strategies, blending Identity Resolution, Customer Data Platforms (CDP), AI/Machine Learning, Dynamic Content, and their interplay within the broader martech ecosystem
  • At Deloitte, David also works with product engineering teams to develop assets using tech platforms like AWS, Snowflake, Adobe, Salesforce and many others.

Entering the Gates of Customer Data: David’s Shift from Web Analytics to CDPs

When asked about his journey into the world of Customer Data Platforms (CDPs) and martech, David candidly revealed that CDPs were nowhere on his radar back in 2010. Those were the days when conversations in the marketing tech space revolved around web analytics, content management, and commerce systems. No one was losing sleep over data management; instead, the questions on everyone’s lips were about the promise of mobile apps. Is mobile going to be a big deal? Will people actually shop on a tiny screen? 

David noted that his professional background was solidly rooted in digital marketing, with a focus on areas like web analytics and content management. He didn’t venture into the data-centric world of CDPs until about five years ago. The pivot happened when Deloitte, where David was employed, made a strategic acquisition. For the first time, they brought a company into the fold that specialized in data and analytics, a capability entirely new to Deloitte’s existing services. It was this event that nudged David to start integrating this newfound expertise into Deloitte’s broader service portfolio. 

He shared that this acquisition was a sort of aha moment for him, leading him to delve deeper into the CDP arena. Before this, the martech issues that were top of mind for him and the industry were focused elsewhere. Now, with this new role, David began to consider how to marry data and analytics capabilities with existing digital marketing services. His career took a turn, opening up new avenues and challenges.

At this point, David’s journey becomes a testament to how quickly martech can pivot and evolve, but also a case study on the necessity of adaptability in one’s career. David’s path shows that sometimes, the most significant career shifts happen when you’re willing to integrate new, emerging components into your existing skill set. 

Key Takeaway: David’s shift from web analytics to CDPs didn’t happen overnight but was catalyzed by a crucial acquisition at Deloitte. His career trajectory illustrates that being open to new opportunities, especially those that are tangential to your existing expertise, can make all the difference.

Far From Dead, CDPs Docked and Prepping for Open Seas

When asked about his unique take on the future of CDPs, particularly as articulated in his article responding to claims that “CDPs are dead,” David drew parallels to his earlier experiences in the world of commerce. According to him, before one could even talk about a composable CDP, it’s crucial to understand headless commerce. Back around 2013-2015, headless commerce decoupled web content management from the more intricate logic of commerce tools. In simpler terms, the pretty face of the website was one tool; the behind-the-scenes grunt work of product listings and checkouts was another. 

David noted that this breaking apart into components wasn’t just a neat trick—it was an evolution seen in various technologies, especially commerce. Fast-forward to CDPs today, and there’s a glaring issue. While commerce tools have achieved a kind of “modular maturity,” CDPs lag behind. The tools exist, but how they should integrate is still a murky question. There’s no established standard or framework yet that guides how these diverse tools and features should come together in a seamless, unified way. 

He went on to clarify that this lack of standardization in the CDP landscape is what makes an unbundled approach impractical, for now. In contrast, the commerce space went through a period of consolidation and standardization that made headless systems not just possible but effective. The CDP space is in its infancy when it comes to this level of system integration. 

It’s like trying to assemble a puzzle when half the pieces aren’t just missing; they haven’t even been made yet. David’s outlook? We’re not there yet, and no, his stance hasn’t changed. There’s a future where CDPs are as composable as lego sets, but the industry needs more time to harden its thoughts, develop standards, and agree on frameworks.

Key Takeaway: The future of CDPs isn’t about scrapping the concept, but refining it. The industry needs time to mature and adopt standards for how disparate CDP components should integrate seamlessly, much like what has happened in the commerce space. Until then, declaring CDPs dead is a bit premature.

The Tool-Rich Workshop of CDPs: Composability Unlocks Choice

When asked about the top benefit of choosing a composable route for CDPs, David cut to the chase: it’s all about choice. Imagine subscribing to a cable package with hundreds of channels when you only watch a handful. You get stuck with a bunch of extras you don’t really need. David likens this to package CDPs, which come pre-bundled with an array of features that may not align with individual business needs. Sure, the package deal may look appealing on the surface, but dig deeper and you find yourself with components that are more noise than signal. 

The compelling thing about composability is it allows companies to choose only what they actually need. This isn’t just about being picky; it’s about optimizing performance and cutting down on excess baggage. Yet, David also added a word of caution: composability isn’t some magic elixir. As the industry is still in the early stages of this journey, composability can offer either the “best of both worlds” or the “worst of both worlds.” In other words, you can cherry-pick the best elements, but if you’re not cautious, you might end up with a mishmash of incompatible parts. 

Companies should keep in mind that the CDP landscape is still maturing. For now, the fully composable CDP is like a chef’s tasting menu that’s still in development. Sure, some dishes are ready to serve, but others need more time to cook to perfection. 

So where does this leave us? David’s take is clear: the path to fully composable CDPs is an ongoing journey, one that requires both caution and a bit of adventurous spirit. And, crucially, more time.

Key Takeaway: Composability in CDPs offers the critical advantage of choice. Yet, with the industry still in its infancy, that choice comes with a responsibility to be cautious. Your tech stack can be a well-curated collection of best-in-class tools or a disorganized jumble. The next few years will be key in shaping how this unfolds.

Who’s the Ideal Fit for Composable CDPs? The Tale of Two Extremes

When David was asked about the ideal type of company for implementing a composable Customer Data Platform (CDP), his answer highlighted two extreme cases: large enterprises and small digital-native startups. David emphasized that the real crux of any CDP project lies in how a company constructs identity. In the U.S., for example, identity often hinges on where you live. In China, a WhatsApp ID can serve as a robust identifier for all kinds of transactions.

Large enterprises have often sunk years and millions into getting their data in order. They’ve typically built up a wealth of data in different domains, from customer and product to financial and supply chain. They’ve got data for days, but the problem? Making it easily accessible for the business user without relying on a constant back-and-forth with IT. In this case, the last 5%—making data accessible and actionable—is where they’re most likely to stumble.

Contrast that with small, digital-native startups. These companies usually don’t have the historical tech debt that can bog down larger organizations. They have fewer requirements and a more straightforward path to achieving a composable CDP. They don’t have to unify data across multiple physical and digital channels, making their overall project complexity much lower.

When does a Composable approach to CDP make sense for a company?

David also offered insights into which industries might find composable CDPs most beneficial. Companies that are less omni-channel—think streaming services like Netflix or Hulu—have it easier. These platforms require user login and payment details upfront, practically solving the identity question from the get-go. They don’t need to unify data across various channels, simplifying the process.

Key Takeaway: Large enterprises and small startups occupy opposite ends of the spectrum but both can effectively leverage composable CDPs. The secret sauce lies in mastering the intricacies of identity data, whether you’re a big fish in a big pond or a small fish in a fast stream. Know your advantages and tackle that ‘last mile’ with eyes wide open.

The Rocks and Pebbles of CDP Complexity

When asked about the new wave of unbundling Customer Data Platforms (CDPs) and the role of resources in both small and large companies, David brings up an interesting analogy. Think of your martech stack as a collection of rocks and pebbles. The bigger the company, the more rocks and pebbles you’ll have to manage. In this world, rocks symbolize the larger, more complex tasks and pebbles are the smaller, nimbler operations.

The scale isn’t just about data; it’s also about the entire ecosystem. Larger companies have to wade through the labyrinth of vendor management, procurement, and InfoSec reviews for each tool they add to their stack. Smaller shops, while nimble, are often resource-starved. They may find it challenging to handle even five to eight additional tools, which could be the entry-level requirement for a low-end, unbundled CDP.

What’s worth noting is the rise of specialized data teams in both small and large organizations. Unlike a decade ago, engineers focusing on product development are now complemented by a whole squad of data-focused folks. This shift isn’t just a passing fad; it’s a fundamental change. Organizations that embrace this development are more likely to effectively manage their CDPs and, by extension, their customer data.

So, the question isn’t whether CDPs are dead or not. It’s about understanding the resources, both human and technological, that you need to manage them effectively. The complexity of managing these platforms should be considered from a total cost of ownership (TCO) standpoint. After all, implementing a CDP isn’t a one-off project; it’s an ongoing, living, breathing initiative.

Key Takeaway: Whether you’re a startup or a large enterprise, unbundling a CDP requires you to weigh resources against complexity. Before jumping into any CDP project, consider the TCO, not just the upfront costs. It’s an ongoing commitment, not a one-time task.

Fishbowl Inside an Aquarium: Reverse ETL’s Role in the CDP Ecosystem

When asked about the heated debate between Census and Hightouch over whether reverse ETL tools could replace traditional Customer Data Platforms (CDPs), David had a unique perspective. While Census believes in complementing existing CDPs and focuses on seamless integration, Hightouch claims it can completely replace legacy CDPs. David’s articles generally align more with Census’ viewpoint and he’s actually moderated a panel discussion sponsored by Census and had the opportunity to connect with Boris, Census’ founder. In David’s view, Boris was not aiming to overthrow CDPs but focused on building solid technology that empowers data teams.

David expressed skepticism about Tejas’s bold claims that Hightouch could fully replace legacy CDPs. For David, such statements are a bit of a red herring. “What exactly does Tejas think a CDP is?” David questioned. Reverse ETL tools, he argued, represent just one component of a CDP. The notion that they could replace CDPs in totality is misleading, especially when these tools aren’t responsible for a host of crucial functionalities like customer data infrastructure, data ingestion in real-time or batch and data transformations.

David makes it clear that reverse ETL tools can integrate well with an existing data infrastructure, but they shouldn’t claim to replace an entire CDP. He points out that even if Tejas would accept this line of reasoning, Hightouch’s primary function is to plug into enterprise data warehouses. Their purpose is to simplify data queries for front-end users and facilitate connections to downstream martech, ad tech, and CRM systems, but that’s far from a complete CDP solution.

But to give credit where credit is due, David admits that Tejas was the impetus and played a main role in making him start to write on the topic of data, AI and CDPs after he read his article on the CDP is dead. He felt like he had to respond.

Key Takeaway: David debunks the notion that reverse ETL tools can fully replace CDPs. These tools might be powerful in what they do, but they’re not an all-in-one solution for customer data management. Calling them a CDP replacement is not just an oversimplification; it’s misleading.

📫 Never miss an episode or key takeaway 💡

By subscribing to our newsletter we’ll only send you an email when we drop a new episode, usually on Tuesday mornings ☕️ and we’ll give you a summary and key takeaways.

Success! You're on the list.

Adaptability of Reverse ETL Tools: The Chameleon in the Data Warehouse

In our interview with Tejas, we asked him about how Hightouch compares to traditional CDPs, focusing on its functionalities and whether it could eventually take on the role of a full-fledged CDP. Tejas agreed that Hightouch doesn’t currently offer all these features but didn’t rule out adding them in the future. He mentioned that they’ve already started incorporating features like ID resolution and have a partnership for first-party data tracking with Snowplow and hinted at data ingestion features coming soon (which has since been released). While Hightouch is primarily a reverse ETL tool, Tejas argued that some enterprises have ditched their packaged CDPs in favor of Hightouch.

David acknowledged that for enterprises that have already sorted their data collection and ETL needs, a reverse ETL tool like Hightouch could easily take on the role of a CDP in their minds. However, he stressed that Hightouch explicitly outlines on their website where they fit into the CDP landscape, making it clear they’re not trying to play in every space.

Diving deeper into the evolving CDP market, David reflected on how different tools are considering expansions into adjacent areas. For example, tag management systems have begun to offer data storage solutions, while others are contemplating adding web SDKs. According to David, this trend is likely to continue as companies strive to increase the value proposition of their solutions. Product teams are left with the strategic question of where to invest their time and resources for maximum impact.

What caught David’s attention was the concept of journey orchestration, an area still not fully grasped or well-executed in the industry. David argued that reverse ETL vendors, already proficient in data segmentation, could logically advance into the journey orchestration space, thereby increasing their value and utility.

Key Takeaway: David believes the role of reverse ETL tools like Hightouch in the CDP ecosystem isn’t set in stone. While they can serve as a CDP for some businesses, their real strength lies in the opportunity to expand into adjacent, high-impact functionalities, like journey orchestration. This ability to adapt and grow may well shape the future of CDPs and reverse ETL tools alike.

Broadcasting Intelligence: CDPs as the New Martech Signal Towers

When David was asked about the current transition in martech—where reverse ETL tools are challenging traditional customer engagement platforms on tasks like segmentation and journey orchestration—he framed it as a shift between “dumb hubs and smart spokes” versus “smart hubs and dumb spokes.” According to David, there’s a move toward centralizing the intelligence in the stack. In this scenario, the “hub,” often a Customer Data Platform (CDP), would handle the heavy lifting of segmentation and data management. As a result, the other tools (the “spokes”) would just execute the tasks they’re fed, possibly becoming simpler and more specialized in their functions.

David explained that legacy marketing platforms like Marketo and Braze have limitations when it comes to segmentation and data processing. Often, they run into performance issues due to the sheer volume of data, forcing users to simplify their segmentation logic or even causing timeouts. These older platforms were conceived before the rise of the modern CDP, which can handle complex segmentation and data management tasks more efficiently.

The shift towards smart hubs is leading marketing cloud companies to invest in CDPs as a central nervous system for their various tools. David implies that as CDPs become increasingly capable, the need for complex segmentation logic in secondary tools may diminish. This will alter not just the technology but the entire structure and strategy of martech stacks across industries.

However, this raises questions about the future role of traditional customer engagement platforms. If a lot of the complexity they were designed to handle is now managed earlier in the tech stack, what function will they serve moving forward? David suggests that we could see an industry-wide reevaluation of these platforms’ roles and functionalities.

Key Takeaway: As CDPs potentially evolve to become the “smart hubs” of the martech stack, handling additional features on top of complex segmentation and data management tasks, the importance of other tools like Customer Engagement Platforms may start to diminish. This has implications for the entire industry and could redefine what we expect from our marketing technology.

Addressing the Data Producer and Consumer Gap with a Dual-zone Strategy for CDPs

When asked about his unique “dual zone” concept for CDPs and how it contrasts with the more traditional hybrid approach, David agreed that companies like Acquia and ActionIQ are onto something by offering a range of configurations for their CDP products. The marketplace has shifted towards customization—nobody wants to buy a one-size-fits-all solution. 

While some companies call this a “hybrid” approach, David’s take on dual-zone addresses a deeper, more nuanced issue: the rift between data producers (IT and data teams) and data consumers (marketing, sales, and service ops teams). The fundamental problem, he pointed out, isn’t just about storage or composition. It’s about breaking down the barriers between data producers and data consumers. Marketing, sales, and service teams often work in silos, unaware of the kind of data being generated or how to harness it. This lack of synergy creates a disconnect that the dual zone strategy aims to address.

On the technical front, David stresses that a dual zone approach gives both sides—cloud-native data stores and SaaS platforms—specific roles to play. 

The Dual Zone Manifesto: An approach to CDP that goes beyond “Hybrid”
  1. Zone One focuses on ID resolution, data management, and heavy computational tasks. 
  2. Zone Two, on the other hand, takes care of customer engagement elements like journey orchestration and campaign activation. 

Unlike a mere “hybrid” system, which might evolve into a “Frankenstack” of mismatched parts, dual zone is intentional. Every tool, every piece of tech, has its designated space and function.

What really sets David’s dual zone model apart is its purposefulness. It’s not an amalgamation of technologies thrown together over time. It’s a well-defined, clear-cut strategy that aims to balance workload efficiently between different zones. The end game? To ensure that the right data is available to the right teams at the right time, boosting operational efficiency and customer engagement in one fell swoop.

Unlike the ‘hybrid’ systems that try to do a bit of everything, dual-zone forces you to be deliberate about what you’re doing and why. For instance, identity resolution doesn’t occur in just one zone. Zone one might provide a baseline identity, while zone two enhances it with device IDs, cookies, or IP addresses. This distinction, while subtle, is crucial. It prevents a mishmash of functionalities and ensures that you’re not overbuying or overextending in either zone.

Key Takeaway: David’s dual-zone model is not just a conceptual pivot; it’s a tactical framework designed to align your data strategy with business goals. By dissecting the data journey into two specialized zones, companies can achieve a rare balance—efficiency and effectiveness, without unnecessary complexities.

Championing Asian American Awareness

When asked about his role as an executive sponsor and co-founder of the SES and East Asian Leadership Network, David candidly shared his upbringing and motivations. Born in Brooklyn to immigrant parents, David faced his share of challenges, including racism, while navigating the complexities of life in a metropolitan city. Despite achieving career success, he’s also experienced a changing perception of safety amidst rising hate crimes against Asian Americans—a stark contrast to his previous comfort and confidence in his own city.

David’s work at Deloitte brought to light a glaring issue. Though the firm focuses on underrepresented minorities, Asians had often been left out of that categorization. David’s push for the creation of the SES and East Asian Leadership Network stems from the understanding that Asians, while possibly not underrepresented in certain corporate environments, face unique challenges tied to cultural values and norms. The clash between Western and Eastern cultures, he noted, can sometimes hinder career advancement for Asians, putting them at a disadvantage.

The primary objective of David’s group is not merely representation, but genuine empowerment. He emphasized the importance of mentoring younger professionals in the firm to help them succeed authentically, without losing their true selves in the process. David clarified that success doesn’t just mean climbing the corporate ladder within the company; he celebrates even if they find their path elsewhere.

Key Takeaway: David’s advocacy for Asian American awareness is far from a corporate checkbox; it’s a mission rooted in personal experience and an intimate understanding of the unique struggles faced by Asians in America. His approach redefines the term ‘underrepresented’ to capture not just numbers, but the nuances of cultural collisions and barriers to true equality.

There’s No Magical Formula for Balancing Success and Happiness

When asked about how he balances his busy life—juggling roles as a managing director, executive sponsor, co-founder, and husband—David offered a candid perspective. He doesn’t claim to have found a magical formula for balance. Instead, he talks about making trade-offs. It’s a conscious decision to allocate time and energy, whether it’s toward family, work, or friendships. The trick, according to David, is to make these choices without harboring regret.

A critical element that keeps David motivated is his love for his job, a passion rooted in his early career aspirations and influenced by his parents, who were small business owners. David saw consulting as a learning opportunity, a means to understand the intricacies of running a business before launching his own. Over time, he found that Deloitte offered the kind of autonomy that scratched his entrepreneurial itch. He relished the freedom to build his own teams while aligning with broader corporate mandates.

This enthusiasm for his work isn’t just an isolated experience. David revels in the discussions and dialogues that occur in his professional life, especially the learning aspect. His thirst for knowledge isn’t merely for personal growth; it feeds into his approach with clients. David frequently tells his clients, “My pain is your gain,” underscoring that his own experiences, both successful and otherwise, serve as valuable lessons for others.

Key Takeaway: David’s approach to the often-asked question of work-life balance shatters the illusion of perfection. Instead, he emphasizes the reality of trade-offs and the importance of living without regret. His zest for learning and the job at hand serves as a pillar that helps him navigate through these trade-offs, enriching not just himself but those around him.

Episode Recap

In a rapidly evolving martech landscape, CDPs are shifting from the fringes to become the central nervous system of data strategy. But let’s get one thing straight: CDPs are at a teenage stage. They’re moody, hard to predict, and just like headless commerce a few years ago, they haven’t reached their full potential. It’s a space where caution and choice co-exist. You can choose your own adventure, selecting modules like you’re shopping a la carte, but make no mistake—without standards, that liberty could get messy.

As CDPs step up, reverse ETL tools like Hightouch that claimed to be a “next best thing” need to be put in perspective. They’re good, but not the CDP-killer some might think. They fill gaps but aren’t equipped to manage the panorama of tasks a full-fledged CDP can. While they integrate neatly into an existing architecture, they’re not an architecture unto themselves.

Now, while CDPs are getting sharper and more intelligent, it doesn’t mean every tool in your stack should or will. Platforms like Marketo are being forced to simplify; they’re turning into role players rather than MVPs. The CDP is emerging as the LeBron James on your martech team, orchestrating plays and setting up others to score.

Here’s where David’s concept of a “dual-zone” CDP strategy adds another layer of finesse. It’s not just about intelligent data collection and customer engagement. It’s a targeted approach to breaking down the silos that often keep data producers and consumers in an organization from truly collaborating. This isn’t your average ‘hybrid’ model that clumsily tries to be everything. It’s a fine-tuned system that ensures the right hand knows what the left hand is doing, enhancing operational efficiency and customer engagement in one coherent, strategic sweep.

Keep a keen eye on the modular evolution of CDPs. Know that reverse ETL tools are tactical additions, not replacements. Expect to reevaluate the roles of older platforms in your martech stack as CDPs get smarter. And if your organization’s data strategy resembles more of a herding cats scenario than a well-oiled machine, maybe it’s time to look into that dual-zone approach. It’s a way to make sure everyone from your IT geeks to your marketing creatives are playing from the same strategic playbook. Listen to the full interview 🎧👇

Follow David 👇


Intro music by Wowa via Unminus
Cover art created with Midjourney

See all episodes

📫 Never miss an episode or key takeaway 💡

By subscribing to our newsletter we’ll only send you an email when we drop a new episode, usually on Tuesday mornings ☕️ and we’ll give you a summary and key takeaways.

Success! You're on the list.

Future-proofing the humans behind the tech

Leave a Reply