What is a Customer Data Platform (CDP) & Why It Matters for Marketing

Marketing teams use several marketing technologies to wrangle ever-increasing volumes of customer data from a myriad of channels, including mobile apps, desktop applications, website browsers, email, and SMS. 

In the past, to create a unified customer profile, marketers had to request the help of IT and data teams to consolidate the data from all these disparate data sources. But now, this data can be easily managed in a customer data platform (CDP).

A customer data platform is marketing technology that unifies customer data from disconnected data sources to create a single profile of each customer that can be used to create more targeted, personalized marketing campaigns. 

Why are customer data platforms important today?

CDPs break down data silos, unifying customer data from all your user touchpoints into a single place and making it easier to create a 360-degree view of each customer. 

This unification of data is important for several reasons:

Improved personalization

Cookie-cutter marketing messages sent to every customer and prospect are no longer acceptable. A first-time customer and a repeat customer expect different messaging based on which stage of the customer journey they are in. 

With a CDP, marketers can associate user interactions with specific users to see who is making purchases, the frequency of those purchases, the channels they use, and how campaigns have led to those purchases. With this information, you can customize your marketing campaigns based on actual customer behavior.

Better omnichannel engagement

More and more companies are interacting with their customers through a variety of channels, including websites, social media, email, and ads. If a customer is having disjointed experiences across channels, they may fail to connect with your brand or make a purchase. 

Statistics show that 94% of customers who give a brand a “very good” rating for customer experience are more likely to continue purchasing from that brand in the future. 

Using a CDP with dynamic identity resolution capabilities, you can combine data from disparate sources to create a consistent experience, no matter how customers interact with your brand.

Moving away from third-party data

In the past, marketers have relied on third-party data collected from website cookies and trackers. But with ever-changing privacy regulations, third-party cookies are becoming obsolete. The focus has shifted to zero-party and first-party data—information which is collected directly from customers. 

By unifying data from customer interactions, preferences, purchases, quizzes, and surveys into a CDP, you’ll be able to offer personalized messaging and interactive customer experiences without violating customer privacy. 

Remaining compliant

GDPR, CCPA, and other data privacy laws give consumers the right to access any personal data a company has stored and to have that data erased (the right to be forgotten). To comply with these regulations, organizations need to ensure that customers have access to every platform where their data is stored and that data can be erased from each platform when requested. 

CDPs make customer data management simple since all the data is stored and accessed from one place. They also help improve compliance by only collecting the data that is essential to your marketing efforts.

 


What are the different kinds of CDP?

Depending on the size and goals of your business, different CDP platforms will offer different benefits. Let’s look at the different types of CDP to help you decide which one is right for you:

Data streaming 

Also called data integration CDPs, data streaming CDPs sit on top of existing databases and focus on the fundamentals of customer data management, such as gathering, organizing, ingesting, and centralizing customer data. 

Their strengths lie in data manipulation, governance, tag management, and data streaming collection. However, data streaming CDPs can be complex to implement and maintain, and they often lack the automation and visualization features that marketers need. 

Orchestration 

Orchestration CDPs, also referred to as campaign CDPs or smart hubs, focus on campaign orchestration and personalization. These CDPs specialize in building unified customer profiles and segments. They also offer capabilities for timing and targeting responses based on user behavior and events.

Orchestration CDPs can ingest real-time data from a data streaming CDP for immediate integration into a campaign. Some also come with their own streaming data functions, such as data ingestion and centralization, and may even include some of the marketing convenience features found in automation CDPs. 

Automation 

Automation CDPs, also known as delivery CDPs, offer a high level of marketing automation for developing and executing campaigns faster. They provide features such as data assembly, enhanced segmentation, and analytics for better message delivery via channels such as email, mobile apps, and websites.

Automation CDPs are great if you’re looking for “set it and forget it” functionality to launch preset campaigns automatically. But they may not be the best choice if you want to use real-time data to adjust messaging.

Marketing cloud

Marketing clouds aren’t technically CDPs. They often begin with a focus other than unifying customer data, such as providing email marketing services. These multi-channel marketing solutions can integrate customer data from various channels, but they don’t provide the features necessary for handling the complexities of modern customer data. 

CDP vs DMP vs CRM

If you’re already using a customer relationship management tool (CRM) or a data management platform (DMP), you might be wondering if you need a CDP. Here’s a quick look at how they are different and how they work together: 

CDP vs DMP

Like CDPs, data management platforms also centralize and organize customer data. But while CDPs focus on first-party data, DMPs collect anonymized third-party data to use with paid digital advertising and marketing platforms. 

DMPs are used only in advertising and don’t collect the customer behavioral data that’s necessary for personalization. 

On the other hand, CDPs push audience data with personally identifiable information (PII) to DMPs, which then pass it on to demand-side partners and advertisers. When customers click on downstream advertisements, the CDP then ingests that data for further analysis and segmentation.

CDP vs CRM

Customer relationship management tools are used to track business interactions such as purchases, emails, logs, and customer support communication with existing customers. They help businesses organize and manage customer-facing interactions—but they don’t collect behavioral data or perform analysis on how customers interact with your products or services.

CDPs can ingest data from CRM tools to draw out this behavioral data for audience segmentation. Segmentation helps you personalize your messaging to improve your marketing ROI. 

What to look for in a customer data platform

A good customer data platform brings together four key capabilities: data collection, profile unification, segmentation, and campaign orchestration. But the choices and variations between platforms can be overwhelming. To help you find the best CDP for your business, here are some key factors to consider:

Business type

Are you a small or mid-sized company or a large enterprise? Is your business mainly B2B or B2C (or both)? Identifying your business type will help you refine your needs.

Integration

Are you already using a CRM? Does your data come from a range of sources like data warehouses, marketing engagement platforms, website activity, social media engagement, customer service tools, call centers, and ecommerce platforms? For seamless data management and analysis, you will want to find a CDP that integrates with all the platforms you are using, now and in the future

Users

Is your data being managed by data engineers or do non-technical users need to be able to access and use the data? Simplicity and ease of use are essential to eliminating inefficient workflows between teams, and ensuring marketers have access to the data they need to create the experiences they want. 

Analysis

The right CDP will help you make sense of your data to turn it into actionable insights. The goal is to maximize the ROI of each customer interaction—so make sure you have access to all the data you need, segmented in a way that makes it easy to analyze and put to work for your particular use case.

Compliance

Depending on what regions you are serving, you may have different privacy measures to adhere to. Any CDP should be GDPR and CCPA compliant. The country or countries you are operating in may also have their own laws regarding customer data, so make sure your CDP will meet all your privacy and security requirements.

Whatever your needs, here are some essential features to look for in a CDP:

  • Ease of use
  • Omnichannel engagement
  • Advanced, real-time customer data analysis
  • Predictive and actionable insights
  • Out-of-the-box integration with your existing CRM, databases, and marketing tools
  • GDPR and CCPA compliance

Unlocking your data with Simon CDP

Simon Data offers an orchestration customer data platform that empowers brands to deliver data-driven, personalized customer experiences anywhere. This powerful CDP unifies all your data and leverages big data and machine learning to drive customer communication across every channel. With Simon CDP, you can run simultaneous experiments to discover the best possible path to conversion for your customers. 

Simon CDP’s key features include the following:

  • Data collection, including zero-, first-, second-, and third-party data, from online and offline sources
  • Customer data unification and centralization to power acquisition and retention marketing
  • Self-serve segmentation to build segments from real-time and historical data
  • Personalization and optimization for one-to-one experiences using any customer data attribute
  • Data integration and governance

Simon’s industry-leading CDP gives you one tool for managing all your customer data. Create unique, personalized experiences with seamless integration of real-time and historical data across several tools and sources, including CRMs and DMPs. 

Get a personalized demo and discover how Simon CDP can unlock your data.

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