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    Everything You Need to Know about Customer Data Platform (CDP)

    What is Customer Data Platform

    Across sectors, Customer Data Platform (CDP) has emerged as the ultimate solution for personalized customer experience. According to a report by Forrester, 35% of surveyed companies are planning to invest in CDP in the next 12 months⁠—for many good reasons. The most obvious one is to build a unified profile of customers across all channels (to which 83% of respondents in the report agreed). Two-third of them also appreciated CDP’s ability to personalize experience for both known and unknown customers.

    Whether you want to centralize customer data from all channels into one source, to make every bit of data accessible company-wide, or track customer interactions across channels in real-time, CDP can help.

    Still, due to the variety of data solutions out there, the term is sometimes mistaken for Customer Relationship Management (CRM) or Data Management Platform (DMP). Before purchasing one, you should understand what CDP is (and what it’s not), as well as how CDP can support your business.

    Table of Contents

    1. What is a Customer Data Platform (CDP)?

    2. How does a Customer Data Platform (CDP) work?

    3. What kinds of data does a Customer Data Platform (CDP) store?

    4. Who use Customer Data Platform (CDP)?

    5. Key features of Customer Data Platform (CDP)

    6. The differences between Customer Relationship Management (CRM) and Customer Data Platform (CDP)

    7. The differences between Data Management Platform (DMP) and Customer Data Platform (CDP)

    What is a Customer Data Platform (CDP)?

    As a packaged data analytics solution, a Customer Data Platform (CDP) offers a centralized customer database that is easily accessed by other systems, with the goal to facilitate the analysis, tracking, and management of customer interactions. 

    The keys here are “packaged”, “centralized”, and “integrated”. 

    • “Packaged” means it’s a product that you can only buy, rather than one that you can build or have an external agency build for you. 
    • “Centralized” means it collects data of customers’ interactions with every source you have, whether it’s first-, second-, or third-party sources: your CRM and DMP, web forms, social media activity, 
    • “Accessed” means CDP’s data can be used by and shared with any other systems you have thanks to built-in APIs.

    Thus, CDP helps you build a personalized and unified profile of each customer⁠—the starting point to a true personalized customer experience.

    With Customer Data Platform

    Due to the growing variety of channels, different customers interact with your business in very different ways. In other words, each of them has a unique journey. To personalize customers’ experience with your business, you need to watch and track everything they do throughout that journey. Luckily, a CDP can help you do that seemingly impossible task.

    How does a Customer Data Platform (CDP) function?

    As customers travel through their unique journey, they leave behind footsteps, which are valuable bits of first-party data that you wish to capture. A CDP’s job is to collect this first-party data. To standardize this data, the CDP matches specific customer identifiers from all channels and centralizes them into a unified customer profile. 

    The CDP also allows you to transform this profile data into the format you want to support your jobs and other processes in analytics, marketing, sales, A/B testing, personalization, etc.


    And CDP is not just a tool for one-off personalization. It constantly maintains and updates data about individual customers for as long as you want (unless you delete this data) so that you can maintain and update the evolving profile of those customers.

    What categories of data does a Customer Data Platform (CDP) work with?

    As customers interact with your business through channels such as websites, e-commerce sites, call centers, or social media, accordingly they leave behind different categories of data. A CDP should be able to collect four main types as below.

    Identity Data (Who the customers are):

    Identity Data (or Attributes) are very unique to each customer. It is the foundation of customer profiles in CDP and helps to avoid data duplication.

    • Name: first and last name
    • Demographics: age and gender
    • Locations: address, city, and zip code
    • Contact information: email address and phone number
    • Professions: job title and company

    Descriptive Data

    Descriptive data is a more detailed extension to identity data. It gives a deeper understanding of customers. Different industries use different descriptive data as it varies based on the product/service you sell. A bank may look at an individual customer’s credit risk as descriptive data, while an IT company may be interested more in the client’s current and future IT investments. Having said that, most companies have in common some types of descriptive data.

    • Career information: past companies and titles, industry, and seniority
    • Area of Interest: types of products/services.

    Quantitative or Behavioral Data

    Behavioral data documents how each customer interacts with your company in the forms of specific actions, reactions, or transactions.

    • Transaction data: the category and number of purchased or returned products, the number of abandoned carts, and order dates. Transaction data also concerns RFM - recency (how recently does a specific customer interacts with or purchases from the company), frequency (how frequently does that customer interact with or purchase from the company?), and money (how much does that customer pay on a purchase?).
    • Email interactions, email opens, email click-throughs, email responses, and dates
    • Online interactions, website visits, website click-throughs, product views, and social media engagement.
    • Customer service interactions, communication dates, query details, and service representative details.

    Who uses the Customer Data Platform (CDP)?

    It’s clear that salespeople and digital marketers are the primary users of CDP, where customer data is centralized and analyzed to support decision-making and communications. Moreover, other roles and departments can reap the benefits of CDP to improve their performance and outcomes.

    • Marketing operators: using CDP to better manage and report on marketing programs, campaigns, and planning.
    • Sales operators: using CDP to provide frontline salespeople with strategic directions to approach customers and sell more effectively.
    • Growth hackicking: using CDP to support conversion optimization, data & testing, and coding.
    • Data engineers: using CDP to support data connection, cleansing, transformation, etc.

    Key features of a CDP

    Data ingestion: the CDP collects data from both online and offline channels: CRM, ERP, data warehouse, marketing automation, and social media, thanks to APIs. A CDP usually goes with an integration listing the channels from which data is ingested. As CDP is self-service and designed for non-technicals, these integrations do not require technical knowledge to configure.

    Data Processing: A CDP provides your business with an operational data layer. Users can perform data processing tasks such as transforming, cleansing, and enriching data, either through the CDP’s user interface or with codes.

    Identity resolution: a CDP constructs a customer profile in the form of digital identityinformation about customers that exists online. The CDP can represent digital customer identity in a variety of ways and lifecycle stages (anonymous web visits caught from cookies or email addresses submitted on web forms). Different CDP may have different ways of reconciling customer data. But they all have one same goal: to build a personalized profile for each customer. 

    Real-time segmentation: Thanks to a CDP, you can build and save dynamic segments of customers that are updated in real-time. Since the CDP is connected with all of your tools and channels, you can segment customers on a wide range of attributes, interactions, and events. The result is an extremely specific profile of the customer.

    Data syndication and synchronization: The ability of CDP does not stop at ingesting data from other systems, it can also send out data to other systems. Moreover using CDP, you can have a full control of data flows as it allows you to put guardrails on what is synced and what is not. The ability to fully control your data can help avoid “overcrowding” destination tools and save data costs and API calls.

    Customer Data Platform

    How is Customer Data Platform (CDP) different from Customer Relationship Management (CRM)?

    A CDP and CRM software have only one function in common, that is collecting and storing customer data, although the two are oftentimes used incorrectly as one. On the one hand, CRM’s job is to store and track intentional interactions of known prospects and customers through manual entries (performed by salespeople). On the other hand, a CDP automatically builds unified profiles of both known and anonymous customers with data collected from online and offline channels that have been integrated. 

    Other differences between CDP and a CRM are easy to recognize.

    1. CDP reports on all categories of customers and prospects, whether they just pay an anonymous visit to the website or are already known to salespeople; CRM only tracks known customers and prospects.
    2. CDP focuses on individual customer’s behaviors and life stages; CRM only describes sales pipeline and sales forecasting.
    3. CDP reports on both online and offline data of customer interactions; CRM can only store offline data that is manually logged.
    4. CDP helps to avoid data duplication or data loss thanks to its ability to gather data from most types of sources; CRM has a high chance of data errors due to its sole function of tracking manually entered data

    How is a Customer Data Platform (CDP) different from a Data Management Platform (DMP)?

    CDP and DMP can both work with data that comes from first-party (data directly submitted from customers, data from CRM or marketing automation, or transactions), second-party (data provided from entities other than the company, such as its partners or resellers), and third-party (data from sources that have indirect relationship with the company).

    But their centers of focus are different. CDP primarily handles first-party personally identifiable information (PII) that is either structured, semi-structured, or unstructured, whereas DMP focuses on third-party data (cookies or segmented customer IDs).

    CDP and DMP have many other subtle differences.

    • CDP works primarily with first-party data; DMP with third-party data
    • CDP can support all types of marketing as it creates a unified view of individual customers for personalized communications; a DMP is used mostly for advertising for highly targeted advertisements.
    • CDP describes personalized identifiers of specific customers (such as their name, email address, or customer ID); DMP describes identifiers of anonymous customers (cookies).
    • CDP maintains and updates data continuously as its volume evolves; a CDP stores data for just a short time. 

    Distinguish CDP and DMP easily with this article: Customer Data Platform (CDP) vs Data Management Platform (DMP): Let’s Stop the Confusion!

    Benefits of Customer Data Platform (CDP)

    CDP is what you need to keep up with the customer personalization trend. Other than that, it can enhance many other business aspects of yours.

    Support data democratization and break down data silos

    Data democratization is the ability to grant everybody in the business access to the data and information they need to effectively get their jobs done. Quite contrary to data democratization, a data silo is data that is accessible to only one or some apartments and prohibited from others. While data democratization fosters a collaborative and transparent environment and enhances the accuracy of customer profile data, data silos do the opposite.

    Fortunately, CDP can help you enable data democratization and put an end to data silos. As CDP unifies customers’ profile and data and makes them accessible to those who need them, your data remains accurate and transparent.

    Enhance customer experience and personalization

    CDP consolidates and maintains data from multiple sources, thus it can build a continuously updated 360-degree view of each individual customer as they travel through their journey with your business. Thanks to this granular understanding of specific customers, you can build more personalized experiences and communications. 

    Moreover, CDP can segment your customers in a very specific and personalized manner. For example, more than Personally Identifiable Information (PII) such as name, job title, life cycle, email, or phone number, a customer can also be portrayed as “read the product page for 16 minutes 2 days ago”, or “have visited the product demo page 2 hours ago”.

    These granular data can be the basis for your personalized marketing and more. Some use cases are:

    • In-app personalized notifications, discounts, or offerings via your applications(granted that you have a customer-facing application)
    • Automated email follow-ups when triggered by predefined events
    • Real-time notifications to internal salespeople to take actions

    Streamline reporting & attribution

    Without a standardized tool, reporting & attribution not only wastes time of teams such as data, sales, and marketing team, it can also create conflicts between them as the lack of information of who should get the credit for which leads. With a CDP, customer interactions are tracked and unified in a chronicle order. Aside from automating reporting, a CDP can also make clear which employees and teams should have credits for which outcomes.

    Improve data compliance

    Most CDPs are designed to stay compliant with popular data privacy regulations such as EU’s GDPR (General Data Protection Regulation) and CCPA (California’s Consumer Privacy Act). These data security standards stipulate your business to give customers the right to know that their data is tracked and stored, to access those data, and to have it deleted - e.g. the right to be forgotten.


    Leveraging CDP, companies are now able to build a personalized experience that customers demand. They can use it to achieve the so-called “360-degree view of customers”, in turn supporting customer-related departments, such as sales and marketing, to create more targeted campaigns and win more customers.

    If you want to learn more about Customer Data Platform and how it can help you create a truly personalized customer experience, subscribe to our newsletter or contact us at

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