Definition
A Customer Data Platform (CDP) is software that collects and unifies first-party customer data—from multiple sources—to build a single, coherent, complete view of each customer [1].
A Customer Data Platform, or CDP, is your customer data system of record. One of the greatest values of good data is that it can provide an objective source of truth. With multiple databases, customer records, and methods of gathering data from different parts of the customer journey, how can an organization know what to rely on as that one source of accurate intelligence?
Because of the diverse amount of information that CDPs collect and how they can take both structured and unstructured data to form a unified view of a customer, you can think of a Customer Data Platform as your source of truth about an individual. CRMs can benefit from this data through integrations and pulling select pieces of information into a record. Still, the holistic view that a CDP creates puts it in a unique position in your data ecosystem. Likewise, CDPs benefit from integration with CRMs, other systems like Data Management Platforms (DMPs), and many more.
Watch the Video
Components of a Customer Data Platform
There are 4 primary components of a CDP, as described below:
Acquiring Customers
The first category of requirements of a CDP includes things like enabling advertisement targeting or reaching anonymous customers by matching first-party cookies with email addresses where content is read, forms are submitted, or products and services are purchased. It also includes adding new audiences from second-party data sources to existing first-party data.
All of this adds up to acquiring new customers and better understanding previously unknown users across multiple touch points.
Engaging Customers
Next, we have the category of requirements related to customer and business growth. This includes the definition and refinement of customer segments based on a multitude of criteria: spending level, types of products purchased, estimated lifetime value, browsing and searching behavior, and many other types of data.
Using this information, we can then personalize content across any channel desired and drive customers towards the next best action that fits their needs and that of the brand.
Retaining Customers
Next, let’s talk about customer retention. As we all know, it’s much less expensive to keep existing customers than to acquire new ones. In fact, second only to “higher revenue” (58% of respondents), the second highest expectation of a CDP from respondents from Forrester’s April 2022 report said improved customer satisfaction (57%) was the expected business result from having a modern, effective CDP solution.
A Customer Data Platform allows us to retarget customers across channels, provide better customer service through data and content sharing, and perform many other functions related to a strong customer retention strategy.
Optimizing Customer Relationships
Finally, a Customer Data Platform should optimize your marketing and sales efforts, as well as your customer relationships and the experience you provide. This consists of tying marketing, sales, and customer analytics together to provide offers, incentives, and the next best actions by using a comprehensive set of data. This also supports ongoing optimization and continuous improvement over time.
Now that we’ve reviewed what a CDP should do for us, let’s explore the components of a Customer Data Platform. Remember, this may be a single SaaS service that you subscribe to, or it may be several components you integrate.
Related
Platforms
- Customer Relationship Management (CRM)
- Data Management Platform (DMP)
- Consent Management Platform (CMP)
- Customer Journey Orchestration Platform (CJO)
Resources
- Course: Introduction to Customer Data Platforms (CDPs) – The Agile Brand Academy
- Book: House of the Customer (2023) – by Greg Kihlström
- Book: The Agile Brand Guide to Customer Data Platforms (2022) – by Greg Kihlström
Related Content on CDPs
-
The Business Value of First-Party Data Strategies
Understanding and utilizing customer data effectively is crucial for marketers to create personalized and engaging experiences. One of the key components of this strategy is leveraging first-party data.
-
Is a Customer Data Hub (CDH) The Same As A Customer Data Platform (CDP)?
The simple response is NO. While these terms are frequently interchanged, distinct nuances differentiate them. This article delves into these disparities, aiding in the identification of the right solution for your business requirements.
-
Realizing the Benefits of First and Zero Party Data for Marketers
In today’s digital world, data is king. As marketers, we are constantly looking for ways to harness the power of data in order to better understand our customers and target …
-
Composable Customer Data Platforms with Florian Delval, ActionIQ
The following was transcribed from a recent interview on The Agile Brand with Greg Kihlström podcast. Listen to the Episode Prefer to listen? Click play on the video below …
-
CMSWire: 3 Things to Consider Before Buying a Customer Data Platform
This article was originally published on CMSWire. Read the full article here. Are you ready to take the CDP journey? The Customer Data Platform category includes a lot of …
Products
SAP CDP
Our business analytics solutions close the gap between transactions data preparation analysis and action so you can make more informed decisions.
SAP Sales Cloud
SAP CRM provides marketing solutions for big data analytics social media marketing segmentation multichannel campaigns loyalty and resource management.
Zeta Marketing Platform
The Zeta Marketing Platform (ZMP) delivers what matters most to your organization—real growth. Powered by an industry leading combination of proprietary data and AI ZMP enables marketers to create individualized omnichannel experiences that drive acquisition revenue growth and retention along…
Zeotap CDP
Zeotap CDP empowers brands to integrate unify segment and orchestrate customer data now and in the cookieless future all while putting consumer privacy and compliance front-and-centre.