CDP vs. ESP: Which will benefit your business more?

Personalization has a huge impact on your campaigns. Companies (and customers) know this, and there are dozens of products vying for your attention that harness customer data to deliver personal experiences. With all these options, it can be difficult to choose the most effective combination of tools.

Customer data platforms (CDPs) and email service providers (ESPs) both offer valuable features that help businesses manage their customer data and create targeted marketing campaigns. But, as their names suggest, they deliver different benefits.

Which one is right for your business? Keep reading to find out.

What is a CDP?

A customer data platform (CDP) centralizes and unifies customer data from multiple sources to create a single, comprehensive view of each customer. You can use this data to create personalized marketing campaigns, analyze insights, and predict future trends. It’s useful for:

• Data integration: CDPs gather zero- and first-party data from the web, apps, CRMs, email marketing platforms (like ESPs), social media, and so on. This includes both structured and unstructured data from hundreds of integrations
• Customer profiles: CDPs take your data from multiple sources and create a single, coherent profile for each customer based on their behavior
• Real-time data: CDPs can process and update customer data in real time, which means you get to react to this data in real time with triggers for campaigns to ensure the right message gets to the right customer on their preferred channel
• Segmentation: CDPs help you segment customers by demographic and behavior, allowing you to tailor your campaigns for each segment.

CDPs normally work with customer data from a cloud data platform or warehouse like Snowflake to help marketers access and activate real-time customer data for personalized campaigns. Snowflake keeps all of your customer data in one spot by acting as a single source of truth, while also keeping it private, secure, and actionable when combined with a CDP.

What are the benefits of a CDP?

The benefits of a customer data platform go beyond simply providing tools and features to create email marketing campaigns. By pairing key user data with a suite of marketing tools — which can include an ESP — a CDP enables marketing teams to create hyper-personalized marketing campaigns that lead to higher revenue. 

Using a customer data platform for your marketing campaigns can make a difference in whether you reach your KPIs or fall short. Consider the following advantages:

Creating unified customer 360s

A CDP makes sense of all the data it gathers through each touchpoint in the marketing lifecycle, making it easier to create unified customer profiles. These comprehensive customer views offer insight into real pain points, interests, wants, needs, and even firmographic data — often in real time. With unified ICPs on hand, your marketing team can execute new marketing strategies and create segmented, more personalized campaigns.

Saving time and resources through automation

In a data-driven world, automation is your best friend. It takes repetitive yet critical tasks off your to-do list so you’re able to focus on higher ROI initiatives. Automation also makes it possible for marketers to establish evergreen strategies that bring in a consistent and predictable stream of new customers and more data while also building brand awareness. 

In a CDP, you’re orchestrating cross-channel campaigns from one unified platform with all your data. This is an important benefit for marketing teams because the alternative is having to pull data from different sources, which is time consuming. 

Plus, without a centralized source of data, you set yourself up to create disparate campaigns from different channels without any real integrated strategy.  

Personalizing marketing campaigns

Today, marketing is all about personalization. About 76% of consumers get frustrated when they aren’t able to find a personalized experience with a brand. Yet you can’t launch a personalized marketing campaign without first gathering, cleaning, centralizing, and organizing your data to make it usable. Not to mention, your CDP helps you collect and activate first- and zero-party customer data to adhere to new government data regulations. This data also helps you drive more personalized campaigns.

A CDP also makes it easier to run hyper-personalized campaigns because it enables easy access to data from other sources. A CDP performs all these tasks, making it much easier for marketers to draw data-driven insights about what customers want and need by using browser behavior, purchase history, or even email engagement.

Using predictive models in a CDP

Having the ability to predict the wants, needs, and sometimes even actions of customers will take any brand’s marketing efforts to the next level. Though not all CDPs offer this feature, using a CDP with machine learning and genAI predictive analysis capabilities enables brands to gain a competitive advantage by using it to:

• Uncover new marketing opportunities
• Optimize sales strategies
• Improve resource management

Data becomes harder to use when it’s siloed inside different applications. A CDP works to unify zero-, first-, second-, and third-party data from all your data sources to help you improve your messaging and execute proactive marketing campaigns.

CDP example: Simon Data

The Simon Data CDP is a no-code customer data platform designed to help marketing and tech teams deliver results in the form of new customers and better retention. 

With the automation and tools needed to create a true omnichannel experience, Simon Data’s customer data platform enables teams to establish ongoing marketing funnels that are hyper-personalized and built with the customer in mind. 

Simon’s CDP’s invaluable features provide the functionality to meet all your marketing team’s needs: 

• Audience management
• Email marketing campaigns
• Customer identity
• Predictive modeling
• Data unification
• Cross-channel orchestration
• Multichannel orchestration & experimentation
• Customer data segmentation

Let’s say you’re trying to build a recurring workflow that sends email messages to specific customer segments about special deals or seasonal offers. Simon Data’s dashboard simplifies the automated workflow creation process by enabling you to set your desired frequency, maximum period, date and time, and messaging.

The Simon CDP combines the automation and detailed data you need to execute highly personalized campaigns that won’t fall flat. Plus, it eliminates the need to work with siloed apps by unifying data collection with robust go-to-market tools.

What is an ESP?

An email service provider (ESP) offers tools to send, manage, and track emails. You typically use an ESP with a campaign or subscriber list to send emails en masse.

With an ESP, you can expect these core features:

• Email sending: Obviously, ESPs let you send emails. You can do this on an individual level or in bulk
• Email templates: ESPs usually offer customizable email templates. This is helpful for small businesses without dedicated design teams. Simply choose a template and type
• List management: ESPs offer tools to manage email lists, including segmentation, subscriber management, and data import and export capabilities. That helps you choose the right audience for a specific campaign
• Automation: You can automate certain email sequences off of trigger events like subscribing to your newsletter or visiting a certain webpage
• Analytics and reporting: ESPs help you track key data points on email performance, like open, click-through, bounce, and conversion rates
• Deliverability and compliance: This seems straightforward. But honestly, ensuring your emails are in legal compliance can be tricky, and most ESPs handle the dirty work for you

It might be clear to you already how ESPs shape up in terms of benefits, but let’s go through them.

What are the benefits of an ESP?

An email service provider offers many advantages for businesses that are looking to improve their customer engagement and communication.

Managing campaigns with automation

ESPs enable marketers to manage customer contact lists, automate email campaigns, track customer engagement, and measure the success of their campaigns. The right ESP can save you a significant amount of time and effort, integrating with your data and cutting out much of the manual work with automation.

Testing and improving campaigns

Email service providers offer a lot of features to help you to improve your email campaigns. A/B testing, for example, allows you to test different versions of an email to see which performs better.

ESPs also provide detailed reports on your email campaigns, which can help you understand what is working well and what needs improvement. Overall, an ESP can be a valuable tool for business communication.

ESP example: Mailchimp

Mailchimp is undoubtedly one of the best-known ESPs out there with 11 million users. It has all the features you’d expect, and since it’s been around for a while, it integrates with over 300 apps to help send targeted campaigns.

Mailchimp is used by small and big businesses alike to test and send bulk email campaigns, track performance, and use email templates. It’s relatively simple to get started and has a free academy to train you on the software. Now, Mailchimp is expanding its capabilities to SMS.

CDP vs. ESP: The key difference

A CDP is a platform that helps manage all data-driven marketing efforts, while an ESP is a service that allows marketers to create, automate, and send email campaigns to a list of subscribers.

The key difference between them is that a CDP provides marketers with a 360-degree view of the customer, while an ESP only provides data about the customer's interactions with email. 

A CDP can help marketers segment their audience, track customer behavior, and optimize marketing campaigns. An ESP can help marketers automate their email campaigns and track the performance of those campaigns.

How to choose between a CDP and an ESP

When choosing between a CDP and an ESP, you should consider your needs and objectives. If you're simply looking for a way to automate your email marketing efforts, then an ESP will likely be all you need. 

But if you want to manage and unify all your customer data from various sources, create customer segments, and better target your marketing campaigns, then a CDP with ESP features built in, like Simon Mail, is the way to go. 

Whether you choose to integrate a separate ESP platform with your CDP or opt for one with built-in features will largely depend on how much data you have to work with and how much you lean on marketing campaign efforts. 

Businesses with a smaller list of subscribers can run successful automated email campaigns with just an ESP. Those with a large amount of customer data will benefit from a CDP and ESP combination.

Fuel your data-driven marketing with Simon Data

Simon Data’s powerful CDP gives marketers the ability to collect, clean, and connect data from multiple sources, creating unified customer profiles. With Simon CDP, you can easily manage all your customer data via several functions:

• Use Simon Mail to expertly craft and automate email marketing campaigns based on data
• Collecting data from any source, including first-party, third-party, and social data
• Cleaning and deduplicating data to create a single, unified view of each customer
• Segmenting audiences for more personalized marketing
• Enriching data with insights from customer behavior and interactions
• Activating data in real time across all channels, including email, web, mobile, and social
• Harness the power of machine learning and GenAI to personalize your campaigns more than ever before

The Simon Data CDP is the only product that offers a complete set of data management capabilities all in one platform. This makes it easy for marketers to run data-driven marketing campaigns without the headaches of using multiple-point solutions.

Request a demo today to see how Simon CDP can take your marketing efforts to the next level.

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