As customers interact with brands, they leave behind bits and pieces of data. A CDP ingests this first-party data and unifies it into a single customer profile. This unified view of the customer is accessible across all teams and systems. This increases the effectiveness of marketing campaigns and customer experience initiatives.
What is a CDP?
A CDP database collects data from multiple sources and brings it into a single system, creating a unified customer profile for marketers. It identifies customers across different techniques using a unique identifier and stores that information in its database, enabling marketers to build targeted audiences for digital advertising campaigns.
It then makes this unified customer profile available to other systems that can utilize it. For example, it may facilitate digital advertising by sending the profile to a DMP or DSP so they can deliver content to that audience. It can also provide predictive analytics capabilities like scoring and propensity modeling, allowing marketing to make more informed decisions with the help of AI and ML recommendations.
Finally, a CDP can help brands stop churn by using customer insights to identify would-be churners and take preventive action. This is done through predictive scoring and identifying patterns of behavior, then activating these insights on all channels to send messages or take actions that increase the lifetime value of each customer.
What are the benefits of a CDP?
A customer data platform software helps marketers increase the effectiveness and efficiency of their data-driven marketing campaigns, boosting ROI and driving customer loyalty. It allows marketers to improve the customer experience across all touchpoints, including online and in-store. It also provides the ability to build targeted and personalized experiences at scale, driving customer acquisition and retention.
CDPs ingest first-party customer data from all sources, unifying the data and matching it to a known individual (also called identity resolution) to create a single, complete profile for each individual. Then the platform reformats the data and makes it available for teams that work on other systems such as CRM, analytics, data warehousing, email, campaign management, A/B testing, content marketing, personalization and more. This process is ongoing, with the CDP ingesting new data and maintaining the profile of each customer.
Finally, a CDP allows marketers to track the performance of their campaigns in real-time, providing insights that help them optimize results and comply with privacy regulations such as GDPR. It also allows them to identify a prospect or customer’s needs in real time, helping sales teams make more relevant and timely offers that boost revenue.
The best CDP software is designed to be a single, integrated solution owned by marketing, eliminating the need for IT or developer intervention and speeding up time to market. A true CDP is scalable and flexible, effortlessly adapting to the business’s growth and easily expanding beyond marketing and into sales and customer service functions.
What are the differences between a CDP and a CRM?
Like CRM systems, CDPs are business-facing tools that enable teams in marketing and product to engage with customers in the ways they want. They collect data from various sources, including display ads, social media, point-of-sale systems and mobile devices like cell phones. But they differ from CRMs in key ways.
They are built for marketers and work with identified customer data, unlike DMPs that, by design, process anonymized customer information. And they are designed to connect, organize and personalize at scale, making them a vital component of omnichannel loyalty-building strategies.
They use sophisticated cleansing and matching algorithms to create high-quality unified customer profiles. The process batch and streaming data to refresh these profiles regularly, eliminating duplicates and inaccuracies. They can handle various data types, including unstructured information from sources like social media and barcodes.
They are faster than traditional data warehouses because they ingest and process data in real time. They allow marketing to act instantly on insights and are critical to omnichannel loyalty-building. This capability is why the industry calls CDPs the next generation of CRMs. While previous technology has focused on specific channels, a CDP is an enterprise solution that enables all teams across sales, commerce, marketing and product to deliver the personalized experiences customers demand. The technology also allows businesses to track and manage the customer journey in an easy-to-use way that’s not possible with CRMs alone.
What are the benefits of a CDP for marketing?
A key benefit of CDPs for marketers is that they allow brands to connect with customers in real time. Previous customer data platforms may take hours to sync up, meaning marketers are working with a fraction of what their audience knows about them. That’s not good enough for today’s customer, who expects every experience to be connected and updated in real time.
Moreover, with a CDP, marketers can eliminate blind spots in their marketing and advertising systems by unifying data from different sources. This allows them to understand their audiences more accurately and deliver a better overall customer experience.
In addition, a CDP can help to foster loyalty by personalizing the experience for each customer (though the tools used to do this are not always part of a CDP). This type of personalized data makes providing an engaging and consistent customer experience across channels possible.
CDPs also offer marketers a more holistic view of their customer relationships, which can lead to improved decision-making and stronger marketing campaigns. This is because they allow you to integrate data from various marketing and sales sources, providing a complete picture of your customer base.
While a CDP has many benefits, it is important to understand that not all vendors are created equal. Some companies offer a broad range of marketing technology capabilities, while others specialize in specific areas such as tag management, digital monitoring products or campaign management. Some even bill themselves as “pure-play CDPs,” promoting standalone customer database capabilities more like a supercharged master data management system.