What is a Customer Data Platform aka CDP?

Are you still wondering, what all the rave is about when it comes to Customer Data Platforms (CDPs)? Here you will find answers to what a CDP is, what it does, how it differs from other marketing technologies, and what benefits make it such a compelling companion to all your marketing needs.

Customer Data Platform (CDP) - what it is

What the CDP Institute says: “A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.

What Wikipedia says: “A Customer Data Platform (CDP) is a collection of software which creates a persistent, unified customer database that is accessible to other systems.”

What we say: A customer Data Platform (CDP) unifies all customer data into one system. Data is collected from all channels and devices, and then edited or merged into one 360-degree customer profile, in real time. A CDP is not simply a consumer or customer data collection tool, nor is it a place for storage. There are a multitude of features that enable customer data to easily be used in omnichannel, personalised marketing and an exquisite customer experience.

A CDP may or may not have marketing automation and/or Customer Relationship Management (CRM) capabilities. The Custobar CDP does.

Customer Data Platform (CDP)

Customer Data Platform (CDP) - what it does

So, what does a CDP do? A Customer Data Platform collects, classifies, and analyses data in a way that makes customer base understanding and customer segmentation easy for marketers and e-tailors. It is excellently suited for consumer businesses.

Given that customer data is collected so widely (see below), customer segmentation can be done based on a multitude of criteria. You can go as wide or as granular as you like. The more variables you include, the better your marketing is targeted and personalised. Whether your marketing is targeting a specific target group or audience, or you are truly shooting for the Segment of One.

All you need - and get - is (customer) data

With a CDP in place, customer data is gathered from all - and we mean all! - touchpoints: ERPs (Enterprise Resource Planning), webshops, webpages, contact centers, customer service ticketing systems, mobile apps, databases, survey tools, etc. A Customer Data Platform has transactional, demographic and behavioural data on your customer. Customer profiles consist of:

Personal information data

These include name, email, phone number, place of residence and demographic data, such as age, gender, work situation, and such.

Purchase data

The Custobar CDP has both online and offline customer data in real time. Sales in both physical locations and online stores are included in the data.

Behavioural data

  • Clicks on the website / eCommerce site.
  • Newsletter subscriptions.
  • Email and SMS opens and clicks data.
  • Transactional data, such as abandoned shopping carts and product returns.
  • Customer service data, such as shipping & pickup info, customer service tickets and any notes customer service personnel have made.

Qualitative and enriched data

  • Answers to customer surveys.
  • Insight into customer satisfaction.
  • Preferences and favourites.
  • Motivations and challenges.
  • Purchase criteria, such as brand or price range.

Customer Data Platform CDP

Marketing Automation, not a given except with us

Marketing Automation refers to a marketing technology (martech) that allows marketing messages and marketing communication to be automated across various channels. It is used to automate, for example, email, SMS, and Facebook and Instagram campaigns.

A Customer Data Platform and a Marketing Automation system can be two separate systems or a single system. The Custobar CDP has an inbuilt Marketing Automation. Marketing Automation is data-based, meaning that the customer data available in the Custobar CDP’s 360-degree customer view can be utilized for automated, customer segment and channel specific communications.

The benefits of a Marketing Automation system include:

  • Minimizing the time spent on marketing routines.
  • Scaling marketing communications in real time that cannot be achieved manually.
  • Creates a passive revenue by, for instance, automatically reminding customers of discarded shopping carts.
  • Personalized messages, such as welcome sequences and happy birthday wishes, lead to better customer experience, engagement, and loyalty as well as additional sales.

Customer Data Platform (CDP) - what it is not

Customer Data Platforms share features and functionalities with other systems, but there are significant differences, too. A CDP is not an ERP or a DMP, but how about a CRM?

What’s the difference between an ERP and a CDP?

The customer data that Enterprise Resource Planning systems (ERPs) contain has to do with order and delivery processes. Their customer database is limited to name, billing and delivery address. Unlike CDPs, they are not designed to store large amounts of customer touchpoint data or to improve omnichannel customer experience.

What’s the difference between a DMP and a CDP?

A Data Management Platform (DMP) contains first-, second-, and third-party audience data across data sources. However, it does not know who the data belongs to or is about. DMP data consists of anonymous customer profiles. CDP data consists of known and identified data. Also, DMPs are dependent on third-party cookies.

What’s the difference similarity between a CRM and a CDP?

There is one other system that a CDP is not, namely, a CRM (Customer Relationship Management system). However, the Custobar CDP shares several key features with a CRM. Let’s look at two everyday examples. If the salespeople in physical locations do not have access to customer profiles that show valuable and actionable customer data, they cannot turn customer touchpoints into sales opportunities. Also, the customer cannot inquire about the status of their webstore order from salespeople in physical stores or from customer service if they don’t have visibility to the customer’s past orders.


The 6 benefits of a Customer Data Platform aka why do you need a CDP

  1. Customer data is no longer scattered in silos. No more incompatible and costly marketing technology or data storing systems! It is virtually impossible to create the best - and consistent! - omnichannel customer experience if and when your consumer data is scattered across various platforms and systems.
  2. Breaking consumer data platform/storage silos are not the only silos a CDP breaks. With a Consumer Data Platform, marketing, customer service and sales are all responsible for marketing. Marketing is something that can and should be done at every level of a company. If you are curious as to how this is done in practice, take a look at our customer cases Levykauppa X and M Room.
  3. There is no marketing technology available that can beat a CDP in personalised marketing. A personalised, multichannel digital experience is quick and effective in making your customers feel valued and important. Since personalised marketing, also known as one-to-one or individual marketing, is dependent on data collection, data classification, data analysis, data transfer, and data scalability, there needs to be a system in place that is light enough to be agile while being robust enough to maneuver all of the consumer data in one platform.
  4. Overzealous personalisation in marketing can be creepy. Just adding the client’s first name to an email subject line is down right lazy. Personalized marketing, when done right, engages your customers. The Custobar Customer Data Platform has many tools that enable customer engagement: The RFM matrix shows you who to activate and how. SMS messages are a great way to do personalised marketing. And there are many add-ons to increase both customer engagement and customer loyalty.
  5. Better customer understanding and customer service guaranteed. If you can check all relevant information on the customer easily, in one place and in a simple visual form, you can tailor customer service to truly make it a special experience each time. To serve, you need to know and understand. And not only know and understand, but to apply. With the right tools, you can.
  6. Today’s customers do not expect great and personalised customer experience. They expect exceptional customer experience, and they expect it throughout the entire flow of the customer journey and throughout its whole life cycle. Furthermore, they expect it in all the channels that are relevant for them, like social media interactions, automatic emails, product recommendation and much more. Knowing your customer’s job title, area of expertise, topics of interest, their family relations and geographical locations from customer data, consumer data, and enriched data, and then using that data for personalisation, makes all the difference.

We are in the business of customer data, in the business of making hard things easy, and in the business of bringing light at the end of the funnel. Are you ready to make your data work for you and increase your sales? If so, book a free consultation. We are always more than happy to talk about data!

If you would like to read more about Customer Data Platforms, download our CDP whitepaper.