CRM Basics

What is a Customer Data Platform?

If you’ve landed on this page, we’ll hazard a guess that you’re interested in developing a deeper understanding of what Customer Data Platforms (CDPs) are. It’s no wonder you are intrigued by CDPs - after all, more and more of the world’s top companies are using them, and they have continued to generate buzz since their debut in the marketing world. The good news is that once you wrap your head around the essentials, CDPs aren’t nearly as complex to understand and implement as they first appear to be. In fact, as you’ll read below, CDPs offer a means to more efficiently and effectively manage your customer data. So if you’ve ever wondered what a Customer Data Platform is, why you should consider using one, and what companies are already using them, this is the article for you.

What is a Customer Data Platform?

The reason why you may be searching for some clarification of what exactly a CDP is, may be because the definition is not so clear-cut. CDPs can differ greatly from each other, so trying to narrow down a definition for a broad tool can be difficult. For example, some CDPs offer more sophisticated processes and features than others. However, put simply, a CDP can be thought of as a system which records and organizes your customers’ data in a useful and intuitive way. CDPs, according to NGDATA, gather data from:

...The company database, CRM, websites, apps, or transactional systems. This is then used by the company to prepare offers, promotions and customize emails. The CDP can also be used to create customized web content that the customer views when logged into the website.

This is then used by the company to prepare offers, promotions and customize emails. The CDP can also be used to create customized web content that the customer views when logged into the website. CDPs unify the customer data that they extract from numerous online and offline sources, and use customer analytics and machine learning to offer more pointed insights about customers. So, what type of customer data do CDPs draw on? CDPs use first-party customer data, which is data that is gathered from actual customers that have interacted with a company’s website, app, or other data source like a newsletter. This is notable as Data Management Platforms (DMPs) - which CDPs are often compared to - use third-party customer data. An important thing to consider about CDPs is that they are designed to be used by marketers without technical backgrounds So if the only thing standing in your way of trying a CDP is your hesitation about how to use one, don’t worry - CDPs are designed to be user-friendly, and are only becoming more so with the increasing demand for simple-to-use CDPs.

Why Should I Use a CDP?

There are numerous reasons why CDPs are worth using. Below, we will outline three of the major reasons an increasing amount of companies are using them.