How Segment Makes Data More Useful: A Q&A with CEO Peter Reinhardt
Peter Reinhardt is co-founder and CEO of Segment, a company that lays claim to developing the first customer data platform. That platform, says Reinhardt, allows leaders in all department’s functional areas of a company to access the data they need within the tools they’re already using, without having to perform multiple integrations with a central data source. Reinhardt says more than 10,000 companies currently send data through the Segment platform, and the company boasts thousands of paying customers including IBM, Crate & Barrel, Time, and Gap.
We recently caught up with Reinhardt for this Q&A covering the changing role of first-party data, how to use CDPs, how the best companies are leveraging it, the state of the “single customer view” and more. Check it out!
SAILTHRU: You say that Segment accidentally discovered a new category: the customer data platform. What is that, exactly?
PETER REINHARDT: It turns out that almost every single person in a company needs access to customer data in in some form. The marketing team needs customer data to do analytics, attribution, email and push notifications. The support teams need customer data to assess who the customer is and what actions she was taking that caused her to send in a help ticket. The sales team needs customer data in a CRM to close deals faster. Finance and operations teams need customer data to understand payment patterns and buying behavior. Analytics, product, engineering, and executive teams all need views into that same data too.
Five years ago, the most advanced companies were trying to get data to everyone with a giant data lake, with Hadoop on top. Theoretically, everyone would access this combined data lake using Hadoop. The reality, though, is that people needed access to this data in the existing tools they were already using. The “last mile” of delivering customer data to those tools (from a data lake or anywhere) is an integration nightmare. That’s the problem Segment solves. The customer data platform is the key piece of infrastructure that makes it possible to actually collect and use customer data consistently across all teams and tools.
How do organizations use a customer data platform (CDP), and why is this important? How does the value proposition differ from a CRM or DMP?
A customer data platform is used to collect customer data, and then de-silo that data out to all the different tools that a company needs to use to grow its business. Without a CDP, most companies end up gridlocked with demands on the software engineering team. It’s extraordinarily common for the marketing or analytics team to ask: “We just signed a contract with X tool, and we need it integrated next week,” only to hear the refrain, “We have a core product roadmap and won’t be able to integrate this until next quarter.”
It’s frustrating for both teams, and it stems from a broken integration model. Without a CDP, an engineering team is forced to do the same boring integration work again and again, sending the same data to a slightly different API for each new vendor. With a CDP, the engineering team gets a single API to collect all their customer data–once. Then business teams are empowered to connect that customer data the “last mile” through to whatever tool they need, by activating the integration that’s pre-built into the CDP.
As for the other types of platforms, A CRM is a fundamentally sales-focused tool, designed for recording in-person interactions. A DMP is fundamentally focused on sharing data between businesses. A CDP takes a very different perspective: We’re all about helping a single business collect and unify all their first-party data, for their own internal use.
What impact do companies such as Segment have on the continued growth of APIs?
APIs are all about machines working with machines. You can think of Segment as an API of APIs, as we make it easier to connect existing APIs together. So we certainly accelerate the growth of APIs, in that we make it easier to use them.
Retailers have been talking about creating a single customer view for a very long time, but many still face challenges in doing so. Why are retailers stuck, and which emerging solutions might help them move more quickly?
Historically, most “single view of the customer” products have evolved from a single marketing channel. These products start as a simple tool representing a single channel for interacting with the customer, and the the product attempts to spread sideways to cover all channels. The result is supposed to be a fully-integrated suite of tools that supposedly provide everything under one tightly-integrated roof. The reality is pretty disappointing. Salesforce, Oracle and Adobe have all acquired their way to becoming a suite. As is common with acquisitions, under the common brand the technology stacks and integrations can be a mess. So these suites fail to deliver on the single view of the customer.
Sailthru’s methodology for collecting, storing, and using data to power personalized multi-channel marketing campaigns is fundamentally different than the legacy technologies in the marketplace. That’s just one of the reasons we’re excited about our Sailthru integration. Sailthru’s customers have a strong use case for Segment, but the nature of what they do and the success they have within retail and media for marketing demonstrates just how important a modern approach to customer data is for an entire organization.
Can you give an example of a specific challenge one of your customers faced that would have been extremely difficult, if not impossible, to solve without Segment?
One of my favorites shows how Segment has helped e-commerce company Trunk Club deliver personal style. Trunk Club enables people to share clothing preferences via a mobile app or its website, and then connects those shoppers to a personal stylist. The company was using a small number of software applications to review its data, but it didn’t have a consistent strategy to take advantage of the enormous trove of data generated by shopping and purchase behaviors, which could contribute insight for building personal clothing catalogues.
Segment made it easy for Trunk Club to access data, answer questions, and make faster changes by tracking customer behavior data from their iOS and Android apps, website, and servers. Routing that data to multiple tools that different teams rely on, Trunk Club turns that data into recommendations stylists use to select the right items for each individual customer. Segment has enabled Trunk Club to access data, answer questions, and make faster changes than ever before.