Zigzag paths mark a customer’s purchasing journey. From Google Searches to Facebook reviews, they stop at multiple points (platforms) before buying a product. Each of these platforms has its way of storing customers’ preferences, weak points, and spending dates. A Customer Data Platform (CDP) software performs the aggregation of this data from different channels.
Technically, CDP is software managed by marketers for collecting and subsequently organizing customer data from multiple touchpoints. Therefore, it is a one-stop destination for getting every customer interaction with your product for generating insights.
Marketers use CDP in combination with other software and systems for generating highly personalized marketing campaigns. However, the most significant advantage of using this software is that it creates an individual profile of the buyers based on the unified data collected from various sources. This single view profile of the buyer is undoubtedly the most usable benefit of a CDP.
Despite this, Google Analytics is more popular than CDPs. Companies of all sizes use such analytics platforms for getting reports and analysis. However, these platforms deliver analysis using online data only. On the contrary, CDPs leverage online and offline data for delivering actionable insights.
The fact that you’ve chosen to read this article states your commitment to perfection. This article will help you get a 360°overview of CDPs and their difference with analytics platforms. You’ll learn more about CDP, its benefits, limitations, and comparisons with DMP and CRM. This comprehensive content will push you in the right direction of aggregating and using customer data for generating actionable insights.
Let’s get to business!
Page Contents
Difference between Analytics Platforms and CDPs
The key distinguishing points of CDPs and analytics platforms are tabulated below.
| Sr. No. | Factors | Analytics Platforms | CDPs |
| 1 | Definition | An analytics platform is a unified ecosystem that uses the current data record for generating general analytical information. | Data captured from online and offline sources in a Customer Data Platform (CDP) is stored in the form of individual customer profiles. |
| 2 | Technology | They can be cloud-based software provided as SaaS (Software as a Service) for companies or software-based applications. | CDPs allow you to operate data on the go as they come as SaaS (Software as a Service) subscriptions. |
| 3 | Features | It is a read-only software that helps users analyze data through visual cues like charts and graphs. | CDPs are read and write software where you can insert data automatically and manually, in real-time, to generate individual profiles of your customers. |
| 4 | Operational convenience | As analytics platforms like Google Analysis provide aggregate-level data, they are easy to manage and operate. | CDPs capture data from disparate platforms and sources like adtech, data warehouse, offline data, CRMs, etc., to generate individual customer profiles for businesses. That’s why they might need some time to get used to it. |
Customer Data Platform Use Cases
Statistics corroborate the growing demand for CDP Marketing. Investments in the CDP markets are increasing by the year. Data estimates that the market will be evaluated at around USD 10.3 billion by 2025. Like the investors, marketing professionals understand the USPs of this versatile software.
Let’s take a look at some of its use cases.
- Raw Data Accumulation: The importance of collecting original customer data is underlined and marked in bold marketing. With the help of such data, it becomes possible to create unique marketing strategies that drive lucrative results.
Many tools and software collect demographic and behavioral data from millions of customers. Unfortunately, the collected data is modified or processed several times before rendering it understandable for the marketer. This processing blurs the exactness of the data and makes it difficult to locate its origins.
A Customer Data Platform strengthens your campaign strategies by providing different data formats. You will find three kinds of data on this software:
- Structured: Data that is viewable in an organized form. Structured data is stored in records, following a defined sequence. Example: names and geolocation of people.
- Unstructured: Maintaining the originality of data, an unstructured format collects raw information in various formats and stores them for your use. Example: social media comments and text data.
- Semi-structured: This type of data is not precisely organized, but it has a structure that separates different elements from one another. Example: emails.
With a CDP, marketers have control over the data formats. They can unify and modify this data to process it further.
- Supporting Systems & Processes: You cannot label a CDP as standalone software. It coordinates with many processes and systems to generate a highly impactful marketing campaign. These systems and processes can access the data gathered and organized in the storage of a CDP through a database query. Like a CPU is the Central Processing Unit of a computer, a CDP can be the central point of information for any number of processes or systems.
- Single View: One of the best qualities of a CDP is its ability to create a single view of customers. After collecting data from various sources in different formats clubs, the collected information is based on different factors. This clubbed information represents a buyer persona (or the realistic characteristics of your target audience). With this information, you can create highly customizable advertisements that will attract new customers to your brand while engaging your existing base of loyal customers.
With the newly acquired comprehensive view of your customer, you can practice segmented targeting to increase your sales.
- Multi-device Data Collection: CDP continuously stores new data of your customers. It takes this data from various devices that influence their purchasing journey. However, as this process is time-consuming, it is easy to presume that the process might take long to conclude. However, that’s not the case. Adding new data in CDP is easy. You can also transform and store the collected data in the software before forwarding it for further processing.
- Customer Support: Have you noticed call centers of various companies calling you about your requirements just a few hours after you browsed their website? That’s called customer support integration. CDP integrates the software with customer support to provide data regarding the customer’s online activity to the customer support teams. Similarly, the software also helps feed data from the customer support team to strengthen the existing database in the CDP. It helps in fusing online and offline marketing strategies for better results.
Advantages of Customer Data Platform
As shown in the previous sections, you can use CDP for skyrocketing your online and offline sales numbers. Listed below is a summary of all the advantages of CDP and some unheard benefits.
- Unification of Data: By reading this far, you might have understood the importance of bringing different data types into one platform. Whether you need the first, second, or third party data, the platform brings all of them together to present an overview of your market. But, of course, the biggest perk of having this feature is that your company will get to stand on its commitment to providing customer-focused service in the long run.
- Customer Profile Generation: Getting a profile of your customer has never been easier. By aggregating the personal, transactional, behavioral, and other data types from different sources, the software presents an easy-to-analyze overview of your customer. With this, you will have an unprecedented record of your customer’s purchasing journey that will help you advertise your product just at the right time. Some types of data sources are orders, complaints, and shipping data.
- Segmented Targeting: You can segment your audience based on the data gathered by the CDP. This segmentation helps you target a particular group of audiences interested in purchasing your products or services. In addition, this method helps marketers increase their revenue as they will be showing the effectiveness of their products to a customer that is more likely to purchase.
Disadvantages of CDP
For getting a comprehensive understanding of CDP, you must understand its limitations. The drawbacks of having CDP software are listed below.
- Challenges of regulations: With time, the rules and regulations laid down by local and international communities and governments change to suit the changing requirements of the digital world. These frequently updated changes make it difficult to unify data and monitor it.
- Harder to note the RoI: Like any other technological investment, it is hard to track the returns for the investment made into the accumulation of customer data. You can only keep a note of your RoI if you have well-defined success measures and criteria in place. These measures must be a part of your customer strategy planning.
- Technological complexity: As CDP acts as a centralized source for customer data, connecting it with other processes and systems can technically complicate the software. However, CDP is always designed with user-friendliness in mind. Therefore, it helps in making the usage smooth.
Customer Data Platform Architecture
A customer data platform performs the following tasks:
- Analysis of attribution
- Cohort analysis
- CLTV analysis
- Segmentation
- Targeting
- Predictive modeling
For performing these tasks, a CDP gathers information from various channels like:
- Website
- CRM
- Marketing Automation
- Social Media
- Mobile
- DMP or Advertising
It also collects first-party data from:
- PoS
- Mobile app
- Different countries
- ERP
- eCommerce
- WiFi
- Surveys
- Web Logs
- Social data
- Different Business units
The collection of first-party data helps marketers improvise on their segmented targeting skills. Apart from these, the data from second and third-party sources like weather, income, holidays, occupation, and demographic data are also considered.
CDP Vs. DMP
| CDP | DMP |
| CDPs store personally identifiable information like names, email IDs, and names. They work with known and anonymous individuals. | As DMPs share audiences, they cannot store personally identifiable information. |
| CDP integrates with almost any type of system, and its use cases scope out to the entire marketing field. | They help in targeting advertisements better. But, their use case is specific to advertising. |
| Here, the first-party data is managed with (little) third-party data. | Here, the third-party data is managed with (little) first-party data. |
CDP VS CRM
| CDP | CRM |
| CDP helps get information about every step taken by a customer with your brand. | CRM provides information about the client and the history of their interaction with your sales team. |
| CDPs help with non-customer-facing roles like leadership, product, and marketing. It helps in the decision-making process. | CRMs are primarily used for customer-facing roles like customer support representatives and salespeople. |
| A CDP collects data automatically. | Data must be fed manually into a CRM. |
In Conclusion
Customer Data Platform Companies provide you with the tools required for outperforming your competitors. With an enterprise-level CDP, you will be making many highly lucrative decisions for your company based on accurate data. In addition, it will empower you with the correct information for targeting the right customers at the right time.