A customer data platform: what is it? An explanation of CDPs

A Customer Data Platform (CDP) is a software application designed to aggregate information from many technologies into a unified customer database. This database includes details on all customer interactions and touchpoints with your product or service. Then, using almost infinite segments, that database may be used to construct more specialized marketing campaigns.

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Knowing what a CDP performs

Giving an example is the greatest method to convey this. Assume a business is attempting to learn more about its clients. Data from contact points such as Facebook, the corporate website, email, and any other location a client may engage with the business would be gathered via their CDP. All of those data points will be gathered by the CDP, which will then combine them into a single consumer profile that is simple to comprehend and accessible to other systems that may require it, such as the Facebook advertising platform.

Through this procedure, the business may employ segmentation to develop more individualized marketing efforts and gain a deeper understanding of their target demographic. With the help of their live chat function and everyone who has visited a certain page on their website, the business could simply build an advertising audience. Alternatively, data on site visitors who have abandoned their carts might be swiftly segmented and viewed.

That’s one of the methods via which Drift develops customized marketing strategies. They employ Personas from Segment to assist with three tasks:

Identity resolution creates a single customer perspective for every user by combining their past use across all platforms and channels.

Building traits and audiences: This process aggregates data to create audiences and attributes for every client, taking into consideration who has expressed intent and how it ties into overall account activity.

Activation – Coordinates tailored, real-time outbound communications by pushing their user- and account-level audiences to various technologies inside their stack.

What’s the difference between CDP, DMP, and CRM, and which do you need?

It is imperative to comprehend that while CDPs manage client data, they are distinct software applications from Data Management Platforms (DMPs). DMPs are only useful for advertising; they cannot assist you in customizing your own marketing.

Instead of gathering behavioral data on how customers engage with your product or service, Customer Relationship Management (CRM) providers assist firms in organizing and managing customer-facing interactions (that’s where CDPs come in).

The information included in a CDP

For CDPs to work, consumer data is required. This customer data is typically provided by CDPs as first-party data, which is information gathered by a business and utilized only for that business’s marketing.

Third-party data is user information that corporations buy and/or share with other companies, as opposed to first-party data, which is information obtained directly from the client.

The most common uses of third-party data are for advertising targeting, website personalization for new users, and app monetization without the need for additional income streams. It’s challenging to ascertain whether third-party data was gathered with consent given how frequently it changes hands.

That is less likely to happen with first-party data as you will be fully aware of the how, when, where, and why behind the data collection. While assessing the accuracy of the data, they are crucial questions to have the answers to.

A process known as customer data integration is how CDPs take your first-party data and turn it into something you can utilize. With this kind of data integration, data and identifiers from several databases are combined into a form that may be used for more in-depth research.

You must comprehend consumer data and how CDPs use it if you want to use one. You’ll be able to maximize the value of your consumer data in this way. To assist you in learning more about best practices for customer data, we have compiled a list of resources.

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