Customer data platforms (CDP) provide a 360-degree view of a customer’s journeys and accurately capture customers’ interactions with brands so that they can be used for future marketing campaigns. Essentially, a CDP is a customer database that automatically updates as new data becomes available from a multitude of sources, predominantly first-party data and sometimes third-party data. CDPs can then structure this gathered data into centralized customer profiles to enable organizations to identify and easily engage with their customers, which can lead to a high lifetime value with them.
CDPs are not customer relationship management (CRM) systems, data warehouses, or data management platforms (DMP). CDPs, unlike CRMs, gather numerous types of data from varying sources that don’t require manual maintenance. CDPs focus on identifying segmented audience profiles to optimize marketing strategies. CRMs are typically managed by salespeople and mostly house customer transaction data that is manually entered (i.e., completing a form on a website) and then used to analyze the sales pipeline. Additionally, CDPs can capture both online and offline data, while CRMs can only capture online data and report on known or potential customers.
CDPs are also quite different from data warehouses and DMPs. Traditional data warehouses are typically created and managed by IT professionals, whereas CDPs are managed by marketers and don’t require much ongoing technical support. Consequently, marketers can take complete control over their marketing databases and gather real-time data to create and optimize actionable insights for all of their customer data. DMPs mainly aggregate third-party data based on cookies, while CDPs predominantly analyze first-party data based on real consumer identities. CDPs are specifically focused on all aspects of marketing, which is why it’s considered a marketing technology tool, whereas DMPs are considered more of an advertising technology platform because they specifically focus on improving display ad targeting. Marketers continue to have an excessive amount of data available to them, which is why CDPs are especially beneficial. They can produce a unified data platform for marketers to enhance customer journeys by combining data across sources like web behavior, mobile apps, social conversations, campaign activity, etc.
Identity and profile data: CDPs enable marketers to not only glean customer data but also allow them to create customer profiles so that complete customer data is located in one central location. This type of data includes basic contact data like name, age, gender, location, social channel profiles, account information, and job title. Some of this data is often included in a company’s CRM, however, CDPs don’t require manual entry and takes that data a step further by also including data points about a customer’s lifestyle, personality, hobbies, and family information.
Behavioral data: This type of data helps marketers analyze how customers are interacting with their company. You can gather data like the product categories they are browsing, click-through rate (CTR) on emails, number of webpages visited, purchased products or solutions, and social media engagement. All of this data will help make sense of the customer’s preferences and better serve personalized experiences throughout their customer journey. Motivational factors that could influence a customer’s purchasing decision, like why they selected a product, and what they don’t like about it, can also be identified.
What Does CDP Stand For?
CDP stands for customer data platform. CDPs create a unified, comprehensive view of each customer by gathering data from multiple sources and tracking this data over time.
What Types of Customer Data Platform (CDP) Exist?
The CDP market has evolved over the years, and different types of CDPs have emerged that offer varying capabilities for distinct use cases.
Solely data CDPs
These kinds of CDP, often referred to as standalone CDPs, only have the necessary core components a CDP must possess. Solely data CDPs enable companies to collect data across multiple sources, provide a 360-degree view of the customer, segment that data to improve targeting for marketing campaigns, and connect to other systems marketers already have in place to leverage any collected data. These CDPs are great for marketers who want a single view of their customers but also have multiple marketing technology software solutions. This will allow data to be collected quickly and exist outside of silos. With this type of CDP, marketers will still be able to gather data automatically from offline and online sources without any manual entry. Solely data, or standalone CDPs, can retain all ingested customer data for as long as marketers specify. Additionally, with these types of CDPs, marketers can create data selection parameters that can include or extract any data from customer profiles.
Data and analytics CDPs
CDPs that include more advanced analytics take the data-only CDP one step further. Data and analytics CDPs offer more robust data visualization features as well as pre-built reports to help further analyze all data and better understand customer patterns and behaviors. Advanced data visualization will also help marketers communicate insights across departments within their company, including sales, customer success, and product. These departments will then also be able to leverage customer data and profiles to help within their job roles. These CDPs will also offer predictive features to alert marketers of any problems with customers, as well as automatically monitor any changes in customer’s input data and preferences. Finally, another capability with these CDPs involves some type of machine learning component to enable marketers to process behavioral data in real time to better optimize customer journeys.
Data, analytics, and engagement CDPs
Within this type of CDP, there are all the features listed in the previous two kinds as well as various other advanced features to optimize and execute marketing campaigns. This CDP can execute cross-channel marketing campaigns. Users can automate their marketing campaigns and deliver tailored messaging through channels that are appropriate for each customer, as well as respond to changes in customer preferences in real time. These CDPs combine analytics, customer experience optimization, and marketing automation to assist marketers in personalizing campaigns for each customer based on previous interactions and predicted behaviors. For example, this type of CDP enables users to personalize their display ads with predictive product recommendations. Marketers will also be able to generate real-time messages to align customer behaviors across their entire journey and detect real-time activities to influence purchase intent.
