While some compare data to currency, we consider it oil. It’s the fuel that ensures that sales engines are durable and productive. In sales and marketing, data also plays a role in steering the wheel. Information you have about your audience sets a direction for targeting, outreach, and the whole lead generation.
But the question is, where do we get the high-quality data and how do you store it? You can buy a lead list (with a risk of getting outdated info) or create a data research department in-house (which is quite expensive and time-consuming). Good research can get you a lot of info from different sources, yet now you have to make it into a unified record.
Although both options may have their benefits, there are new ways to gather data automatically, unify it, and create a personal data profile for each of your customers—the customer data platform (CDP).
If you’re not really familiar with the concept, this guide covers all of the basics about CDP and how to apply it to your business.
What Is a Customer Data Platform?
A customer data platform (CDP) is an interactive database that collects relevant sales and behavioral data of your customers, creating extensive and constantly evolving individual data profiles.
Such software can gather data from channels like websites, apps, digital assistants, and marketing clouds. It collects demographic, psychographic, behavioral, firmographic, transactional data, and more. Most importantly, all of the data is collected in a legal way and can be constantly updated.
A customer data platform provides a better understanding of your existing and potential customers, allows the crafting of hyper-personalized sales and marketing campaigns, ties new data together with the one you already have, and is usually compatible with your existing tools.
How Does a CDP Work?
A CDP data model powers on when a customer interacts with your business. This can be through an email, ad, website, chatbot, landing page, or social media. At that moment, special pixels used in a CDP start gathering information.
Data points can vary from basic contact info to specific customer behavior. The most significant thing about CDP is that all of the data is compliant with data collection rules, is gathered directly from the source, and gets updated if the variables change.
The customer data management platform collects the data (online or offline), creates personal profiles for each customer, and compiles an extensive database for your marketers to use. It is crucial for better a customer experience (CX), better targeting, and better results.
However, since CDP is a relatively new term in the industry, some might get it confused with other related products: data management platform (DMP) or customer relationship management (CRM) software. Let’s dig into their main differences to avoid any confusion between those terms.
CDP vs. DMP
A data management platform (DMP) mainly focuses on anonymous users and third-party data. Its primary source of information is cookies, and it’s mostly used to support web display advertisements.
On the other hand, the customer data platform (CDP) tracks both identifiable and anonymous users and mainly focuses on the first-party data accordingly. Rather than tracking just a few parameters, it finds all available information for creating highly personalized marketing campaigns.
CDP vs. CRM
Although both customer data platform (CDP) and customer relationship management (CRM) software are absolutely vital for any marketer, they perform different functions in the field.
Marketing automation systems or CRMs are used both in sales and marketing for tracking every prospect and customer interaction, automating routine tasks like email send-outs or contact segmentation, or even scheduling social media posts.
CRMs are perfect for storing data, tracking customer relationships, and crafting outreach campaigns across different channels. Nonetheless, CRMs are more like storage rooms that need to be constantly updated with new information, while CDPs constantly evolve like the internet.
Benefits of CDP for Your Business
While we’ve established the difference between CDP, DMP, and CRM, you still might wonder what’s the unique value of a CDP for your business. Here are three benefits of using a CDP:
1. It gets you 1:1 with your audience.
According to Statista, 90% of consumers in the U.S. find the idea of personalization appealing. When you know who your customers are and what each of them wants, it sharpens your targeting and outreach efforts and therefore creates a hyper-personalized customer experience.
CDP collects and aggregates big amounts of data from all over the place, unites it, and makes a picture of your potential customer much clearer. It helps you to relate to them on a deeper, individual level, which will lead to better communication.
2. It’s secure, compliant, and complete.
Most customers are ready to share some of their information to get a personalized experience. But what about the security of that data? If sensitive information goes public, at least 71% of customers say they will walk away from your company.
A CDP only seeks out customer information that is allowed to be gathered (GDPR compliant) and it is only available to you.
Plus, because a CDP is programmed to gather data from every possible resource, it creates a 360-degree view of the customer. And if any of the data components change, the data in the CDP will evolve as well.
3. It makes it easier for your teams.
The biggest benefit of a CDP over other solutions is that you get one place for all data. Now, all the teams that usually work separately (IT, sales, marketing, copy, and designers) get to see unified data and integrate it with the tools they already use. This way, no matter what channel a customer uses, a CDP creates a seamless experience across all platforms.
Besides these three biggest benefits, a CDP requires minimal effort to set up, provides real-time data, and is more cost-effective than any lead list you could purchase. If any of these needs are relevant to you, a CDP is on your horizon, but first, you'll have to go through the process of choosing one.
How to Choose the Best Customer Data Platform
To select the best CDP platform for your business, first start by asking the following questions:
Who should be involved in decision-making?
Besides C-level management that greenlights such important decisions, you should also consider who will be using a CDP directly. If you have a CRM, some data is there already, so you’ll need a representative from that side. Plus, you should include stakeholders from sales, customer success, and marketing.
What can I use it for?
We’ve already established that having a CDP is beneficial; however, it’s easy to get caught up and forget the actual tasks you want it to solve. Here are some questions to ask:
- Do you want to create a more personalized experience on your site?
- Do you need better targeting of your audience?
- Would you like to understand your customers better?
- Are you looking to consolidate all of your data into one place?
Whatever the reason is, you should brainstorm ideas and come up with several use cases.
Which factors should I consider?
When you start comparing vendors, there are a few ways you can classify them:
- Time to value. This is the period of time it takes to get a CDP set up and running. Also, note if the vendor is offering assistance with it or if you have to dedicate your own resources.
- Cost. Since developing a customer data platform in-house can be very time-consuming and expensive, CDP vendors have a variety of subscriptions at different price ranges.
- Ease of use. The best CDPs don’t require a lot of groundwork; they may need system adjustments at first, but further updates should only take a couple of clicks to maneuver.
What types of CDP providers are out there?
You should make a list of questions about how their CDP works, the tools it can be integrated with, its compliance with GDPR and CCPA, if it offers analytics, and if it includes any bonus services.
Top Customer Data Platform Companies in 2022
As in any business field, competition between CDP vendors is high, which is good for you because you’ll have plenty to choose from. However, there is also the probability of getting lost in the number of options. To help you out, we’ve created a list of the five most popular customer data platforms.
1. CIENCE GO Data
CIENCE Go Data is a sales intelligence platform that offers over 300 million accurate records applicable for any industry, paired with a custom approach to provide you with a 360-degree view of prospects.
- ICP development
- Comprehensive data plan
- Web pixel (real-time ID of data)
- Reporting and analytics
- Data licensing and validation
- Audience activation
- Custom research
- Data enrichment
- Deep profiling and micro-segmentation
- Outreach support
2. Oracle Marketing
Oracle Marketing is a customer data platform vendor that converts data from multiple channels into a single profile for a better understanding of a customer perspective.
- Data quality management
- A/B testing
- Launch of marketing campaigns
- Real-time data
- Lead nurturing
- Marketing automation
- App integrations
Segment is a CDP software that offers collecting, controlling, and cleansing data for better audience engagement.
- Data collection and integration
- Data centralization
- Audience management
- Omnichannel messaging
Emarsys is an omnichannel CDP provider that streamlines data from multiple platforms for the benefit of your business. It is most suitable for e-commerce, retail, and travel businesses.
- AI-optimized data collection
- Real-time analytics
- A/B testing
- Third-party tools integration
Bloomreach is a CDP software that focuses on delivering extra personalized customer journeys with a thorough data collection.
- AI-driven search
- Customer engagement
- Marketing automation solutions
Make a Customer Data Platform Work for You
Starting something new always feels like a bit of an adventure: Will my business benefit from this? Is it worth pursuing? Will it take some workload off my employees?
A CDP ensures that you can be in touch with each one of your customers from the first interaction, track their activities in a respectful way to provide better customer service, and therefore achieve more meaningful and long-lasting sales relationships.
While we cannot be sure that every business opportunity is a guaranteed success, a customer data platform is definitely a “yes.”