What is a Customer Data Platform?

If you’ve landed on this page, we’ll hazard a guess that you’re interested in developing a deeper understanding of what Customer Data Platforms (CDPs) are. It’s no wonder you are intrigued by CDPs - after all, more and more of the world’s top companies are using them, and they have continued to generate buzz since their debut in the marketing world.

The good news is that once you wrap your head around the essentials, CDPs aren’t nearly as complex to understand and implement as they first appear to be. In fact, as you’ll read below, CDPs offer a means to more efficiently and effectively manage your customer data.

So if you’ve ever wondered what a Customer Data Platform is, why you should consider using one, and what companies are already using them, this is the article for you.

The reason why you may be searching for some clarification of what exactly a CDP is, may be because the definition is not so clear-cut. CDPs can differ greatly from each other, so trying to narrow down a definition for a broad tool can be difficult. For example, some CDPs offer more sophisticated processes and features than others.

However, put simply, a CDP can be thought of as a system which records and organizes your customers’ data in a useful and intuitive way. CDPs, according to NGDATA, gather data from:

This is then used by the company to prepare offers, promotions and customize emails. The CDP can also be used to create customized web content that the customer views when logged into the website.

CDPs unify the customer data that they extract from numerous online and offline sources, and use customer analytics and machine learning to offer more pointed insights about customers.

So, what type of customer data do CDPs draw on? CDPs use first-party customer data, which is data that is gathered from actual customers that have interacted with a company’s website, app, or other data source like a newsletter. This is notable as Data Management Platforms (DMPs) - which CDPs are often compared to - use third-party customer data.

An important thing to consider about CDPs is that they are designed to be used by marketers without technical backgrounds So if the only thing standing in your way of trying a CDP is your hesitation about how to use one, don’t worry - CDPs are designed to be user-friendly, and are only becoming more so with the increasing demand for simple-to-use CDPs.

There are numerous reasons why CDPs are worth using. Below, we will outline three of the major reasons an increasing amount of companies are using them.

Firstly, unless you have the time, patience, and technical expertise to sift through and organize your customer data into meaningful categories, a CDP will likely prove useful in promoting greater efficiency.

As mentioned above, CDPs unify customer data in one place, so they do away with the need to extract customer data from different sources of information manually. Less time jumping from one source of information to another means more time spent actually strategizing how to best use that data to further your company’s bottom line.

Another key reason to consider using a CDP is that they are inherently customer-centric. As CDPs do not rely on guesswork - but instead, collate data based on real insights about your customers - CDPs provide marketers with a unique opportunity to engage with their customers on a more substantial level.

That is, by providing marketers with a means to view numerous data-based insights about their customers’ preferences and behaviors, CDPs give marketers the information needed to run more targeted marketing campaigns.

The ease of integrating CDPs is said to be another reason CDPs are worth looking into. As marketer Scott Brinker points out, there are now many CDPs that simplify the process of accommodating new data sources. These CDPs achieve this through their ability to “ingest” new data without the need to build a detailed data model or set up complex integrations. Brinkler points out that this is partly thanks to the growing use of AI to aid the process of assessing and integrating new data sources.

Why is all of this important? As Brinker highlights, “Easier integration is what lets CDPs build databases without the technical effort that slowed deployment and increased the cost of traditional customer database projects.”

Sometimes, in the process of coming around to a new tool, it helps to hear about other companies that are already using it. So, which well-known companies use CDPs to manage their customer data?

Here is a list of some of some industry-leaders who use CDPs:

• Warner Brothers
• LG
• Subaru
• PayPal
• Gap
• TIME
• Airbnb

It’s clear that CDPs can help out companies in any industry, whether in the clothing, electronics, or automobile industry, to name a few.

It isn’t just multinational companies that can reap the rewards of CDPs, however. Small- and medium-sized companies can also benefit from using a CDP, so if your business is on the smaller size, simply find a CDP that matches your particular company’s customer data needs.

It’s no wonder why many well-known companies are turning to customer data platforms to advance their marketing efforts. As explored above, customer data platforms offer marketers significant insights into their customers’ behaviors, which they can draw on to better connect with their customers.

Fortunately, CDPs are relatively easy to integrate and use, and are getting more sophisticated by the day, so if you’ve ever thought about whether it’s worth investing in one, perhaps now is the time to give a CDP a try.