Why Customer Data Platforms are the Kings of Data


AUGUST, 2022

Customer Data Platforms guide businesses who require a marketing database with user-level data. There has been a surge of underlying challenges in marketing that has resulted in the software's rise in popularity. Let's explore exactly who, and how, customer data platforms can serve you business, whether it's B2B or B2C.

Customer Data Platforms were born out of necessity since customer data has become an essential cog of business operations and markets in modern retail.

CDPs aid companies in obtaining unified and accessible customer data, providing a solid foundation that a business would need in order to react to the dynamic changes in consumer expectations and deliver better-personalised experiences.

What is a Customer Data Platform?

A CDP is a software that accumulates and organises customer data across a variety of touchpoints. It is used by other software, systems, and marketing tools. CDPs collect and structure real-time data into individual, centralised customer profiles.

The CDP Institute define it as “a packaged software that creates a persistent, unified customer database that's accessible to other systems.”

CDPs build customer profiles by integrating data from a variety of first, second, and third-party sources. This includes both CRMs & DMPs, transactional systems, web-forms, email & social media activity and ecommerce behavioural data.

Whichever CDP you choose for your business, it will greatly help in acquiring and optimising a marketing database with user-level data. There has been a growth of underlying challenges in marketing that has resulted in the software's rise in popularity.

93% of the marketers anticipate that employment of customer data while running campaigns and making business decisions will help in meeting their challenges effectively.


Why do businesses use CDPs? What exactly can they do for, say, B2B and B2C retailers? Here's a few customer data platform examples:

How does a Customer Data Platform work?

Personalisation: Say in one instance, a consumer enters your website, views a product and then subsequently departs. Imagine now being able to collate everything you’ve learned about the customer in that brief moment, to then send a personalised offer via email or push notification? CDPs make the unified profile available to all addressable channels, tailoring personalisation and relevancy. Customers who see content tailored to their interests are five times as likely to engage with a brand.

Insights: The majority of analytics systems operate in data silos. If a phygital retailer possessed the knowledge of a customer’s marketing interactions combined with ecommerce data (say, purchase history) and website interaction data (products viewed, time spent on page, etc) — and divulged that information to a service rep in the call centre? This type of personalisation can evolve your customer service reps into incredibly valuable sales assets.

Suppression: Sometimes the best use of data in marketing isn’t to better target consumers — but to not target them at all. A unified profile that connects marketing and purchase data enables marketers to optimise their addressable spend by suppressing consumers that have already made a purchase, and redirecting those pennies toward new customers.

Benefits of a Customer Data Platform

CDPs improve your organisation, enhance your existing customer relationships, and will complement existing software and marketing tools. Here's some key benefits of utilising a CDP.

CDPs avoid the pitfalls of Data Silos

Data silos apply to data that is available to one department but separated entirely from the rest of an organisation. Silos emerge when businesses scale too quickly to adequately share data or if technology can’t keep up. Silos are a big red flag — they effectively hinder collaboration and productivity in organisations, and at their most harmful, endanger the accuracy of customer profile data.

CDPs can help your organisation avoid data silos. By unifying your customer data and your employees, you can be confident your data is accurate and accessible by all.

CDPs collect data straight from the source

Collecting accurate customer data is harder than you think. Concentrate on collecting first-party data, i.e. directly from your customers, site visitors, social media followers, and subscribers. This is the most valuable and accurate data to collect and utilise to make informed marketing decisions because it comes straight from your loyal audience.

CDPs are primarily focused on collecting first-party data through pixels and other tracking tools, so businesses are afforded the luxury of confidence that the CDP reflects the most accurate audience information.

CDPs are primarily focused on collecting first-party data through pixels and other tracking tools. In this way, you can always be confident your CDP reflects the most accurate audience information.

CDPs help brands understand their customers

In order to enact customer-centred marketing, you must know your customers. CDP software will shape customer profiles in a way help businesses get acquainted with each individual; helping to conduct customer behavioural analysis and construct identity graphs.

With a CDP, it's far easier to manage customer relationships and tailor marketing efforts with your audience in mind, both accurately and effectively.

Unify your cross-channel marketing strategies

Perhaps your organisation has multiple marketing efforts performing simultaneously. Valuable time and energy can be wasted trying to convey the data you use for and collect across several departments. That’s where CDPs excel; unifying multi & cross-channel marketing endeavours by yielding consolidated, accurate data.

They also collect and organise new data that may serve as inspiration to other marketing strategies, such as if you're considering implementing an omnichannel retail strategy.

That's a Wrap

Ultimately, CDPs are tasked with the following primary functions:

  • Data Collection

  • Data Unification

  • Data Activation

  • Data Insights

Justifying the investment in a CDP is about bringing together these elements to justify and represent the replacement, resolution and aspiration of marketers and the requirement to turn retail marketing budget into attributable revenue.