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The Ultimate Guide on Customer Data Platform (CDP)

December 6, 2021 | 0 comments | Ecommerce Solution | Updated: March 10, 2022
  • ecommerce sales
  • ecommerce solution
The Ultimate Guide on Customer Data Platform (CDP)

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Organizations have been using analytics to influence many marketing decisions in their ecosystem. But, very often, the data they use is unreliable and doesn't give a holistic picture of the buyer. There's not much you can do with the incomplete data. As a result, the marketing campaign fails to take off, and you get measly returns. 

Other times, the collected data gets corrupted or misplaced. Else, the data stays confined to a single channel. Businesses fail to identify the unique needs and interests of their buyer demographic. The systems and solutions in place don't give a 360° understanding of their target audience. 

That is why you need a Customer Data Platform or CDP. CDP helps to deliver a unique and unified view into your customers' minds and needs. This helps to gain a comprehensive understanding of your target audience. Thus, CDP helps brands create a more personalized campaign that is more suited to the buyer's expectations. 

Not only that, organizations can create a unified profile of their customers and target them on any channel. CDP helps merchants utilize zero, first, and third party data. This helps them comprehend their customers,  personalize their offerings, and improve buyer relationships. Let's look at all this in more detail.

CDP - CTA 3
What is a Customer Data Platform (CDP)?

What is a Customer Data Platform (CDP)?

Customer Data Platform is a system that helps an organization create a persistent, unified, and holistic customer database. It aggregates and organizes buyer data from a range of touchpoints. CDPs compile and arrange real-time data into individual customer profiles. The profiles are accessible from a central interface. 

CDP builds and integrates data from first, second, and third-party sources. CDP mainly uses three types of data about its buyers, and these are:

  • Behavioral data
  • Demographic data
  • Transactional data

The use of all this data empowers you with the relevant and actionable customer insights your business needs to create better and longer-lasting relationships with the customers. The Artificial Intelligence in CDPs help the company reap more benefits or higher returns in their investment. They do this by acquiring a better understanding of a customer - a 360-degree understanding.

  • Structured, sorted, and clean data
  • Deliver personalization
  • Build buyer demographics
  • Campaign optimization and learning
  • Unify zero and first-party data
  • Real-time data processing
  • AI-driven automated processes
  • Demographic, psychographic data with behavioral identifiers
  • Ready-made workflows
Top Highlights of Customer Data Platform

Top Highlights of Customer Data Platform

1. Omnichannel

Businesses get to collect data from all touchpoints - offline channels and Digital Channels. The true omnichannel capability of CDP helps brands collect, clean, and access customer data from any channel. Plus, businesses get to deliver personalized communication on any channel to improve buyer relationships and the results of their marketing campaigns. 

2. Holistic 360° Data

CDP visualizes and collects data through individual user profiles, thereby creating a 360° view of the customer. CDP helps to collect Behavioral Data, Transactional Data, and Demographic Data. The focus on every aspect helps to derive a complete picture of the consumer. 

3. Unified Customer Database

Eliminates inconsistent data that gets pulled from multiple online and offline touchpoints. Customer Data Platform helps to create a reliable and unified single view of the customer. No more collecting data from various internal systems. The centralisation helps to compile data for easy access on one single platform. 

Create a Unified customer profile of the data obtained from every Customer Touchpoint. A Single Customer Profile that holds data of Customer Interactions from a Variety Of Sources. 

4. Proper Data

Data in dated softwares and systems can often get misplaced and corrupted. Relying on unreliable data leads to wrong decisions that drain money, time and effort. Plus the marketing campaign goes for a toss. With Customer Data Platform, all the data gets correctly sorted, cleaned, and stored. Businesses access and use the best data for decision making. 

Customer Data Platform has the ability to create an Accurate Customer Profile and store granular first-party and third-party data. CDP collects information from existing systems and databases. It will then structure, standardize, and normalize the data into sensible information. 

  • Transactional data - order history

  • Behavioral data - website or app usage or responses to messages

  • User data - age, gender or contact data

  • Psychographic data - emotions, attitudes or beliefs

5. Extensive Analysis

Customer Data Platform helps to breakdown and analyze the customer data in real-time. CDPs help to gain insights, identify gaps, tap into high‑value territories, and use high-quality data to predict a customer’s future steps. The evolved algorithm within the CDP collects more accurate and actionable insights than any other data extraction and storage tool. CDP helps to understand customer behavior better. 

CDP - CTA 1


6. Usability

Customer Data Platforms organize and store data more effectively. As such, any immediate use is more likely, than when corporations end up using a CRM. Crm requires more effort to set things up. Plus, setting-up and maintaining a CDP doesn’t require technical expertise. The in-built tools are more than capable of handling the data, thereby minimizing the human effort. 

7. Data Compliance

Customer data platforms support data insight requests and data portability. Merchants can easily demonstrate the responsible use of customer data. They can show an extensive breakdown of how they collect and use data. Thus, merchants don't need to concern themselves with General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and other regulations. Plus, you can easily erase any personally identifiable information.  

8. Sharing

Customer Data Platform can easily interconnect with any existing systems in your ecosystem. CDP can forward and share data with any system that needs it. The way the platform stores and structures the data makes it easy for anyone to pass the information further, without any corruption or data loss. Share data with the Marketing Teams without any friction. 

9. Automated Procedures

The automated workflow within the CDP helps to extract and collect second-party and third-party data along with first-party data. This minimizes human intervention and speeds up backend processes, improves productivity, and helps businesses utilize their resources more efficiently.

Top Benefits for eCommerce Businesses

Top Benefits for eCommerce Businesses

1. Better Decisions

With CDP, business owners get improved, impactful, and data-driven decision making. Instead of following a random and misleading approach that relies on ambiguous data, business owners will now use rich, informative, and cleaner data to make their decisions. Useful data leads to better decisions and profitable campaigns, than generic data.   

2. Hyper Personalization

Intuitive data collected from the Customer Data Platform helps to deliver communication, offers, and promotions in sync with buyer interests. Otherwise, business owners would have had to rely on weak data that heavily compromises their buyer communication. Plus, they aren't able to provide personalized experiences. 

With CDP, merchants get a granular understanding of every buyer, which helps to create more personalized campaigns. Merchants can easily persuade and tempt customers to click, view, engage, stay, and complete a purchase. Buyers spend more time due to finding information that connects with their unique preferences. 

3. Remove Data Silos

With Customer Data Platform, merchants get to consolidate all their customer data on one hub. Plus, all the departments and officials within the company can  easily exchange and forward information. You can exchange info between various personnels in your company, without the need for manual intervention.  

All key people within the company will be in the loop. They'll have complete know-how about customers from anywhere in the world. The ability to access data situated on a single platform, makes it easier to coordinate and collaborate internally. Get fast and seamless access from a single interface from anywhere.

Buyer Relationships in Customer Data Platform

4. Buyer Relationships

Sending more relevant communication to the right buyer at the right time and right place, creates more interest, and improves the likelihood of them interacting with the store. Whereas, sending generic promotional offers and messages, not aligned with their interests widens the gap. 

They'd much rather associate with businesses that understand and embrace their problems, budget, interests, and other needs, than work with a company that is not in the same headspace. Buyers are more likely to revisit, if they find products and solutions more tailor-made for their profile. 

5. New Territories

The ability to tap into data about buyers can help businesses enter new territories. Merchants can utilize the collected data to get deeper insights into a community from a particular geography. The next buyer from that zone will give you even more data, and so on. 

An umbrella buyer from a region that records high rainfall, tells the brand that similar buyers in the region may have the same set of needs. Brands can recommend umbrellas, raincoats, boots, and other accessories, either through offline or online channels. The point being, even a small amount of valuable data helps businesses capture more customers from territories that were otherwise alien to them. 

6. Campaign Optimization

Real-time learning from a marketing campaign, helps to modify and adjust the campaign midway. View how users interact and respond to the campaign. Study the efficiency and outcome daily. CDP helps to offer insights for solving problems such as high advertising spendings or content mismatch for the targeted audience. Businesses can learn and improve their efforts midway. 

CDP - CTA 2

7. Increase Sales, Revenue, and Profits

Data-driven decisions are more likely to succeed, as it is closer to what customers want. The use of specific data gives you more insight into a customer's mind, and that helps to customize information for their exact requirements. When they view info that appeals to them, they're more likely to take action. 

The more this persists, and the more persuasive and personalized your communication gets, the more interested buyers will feel with your brand. After a while, they'll only be invested with you to the extent where no other brand will even seem like an option. This leads to an increase in your Customer lifetime value. Thereby, increasing sales, revenue and profits.

What is Customer Relationship Management (CRM)?

What is Customer Relationship Management (CRM)?

Customer Relationship Management is a cohesive system that collects and stores vital data of your prospects and customers. But, most modern CRM solutions have certain inherent limitations that restrict them from providing ample returns to a business. CRMs are mainly built for customer-facing reps, like salespersons and customer support staff.

CRM data will give you a client’s name, their history of interactions with the customer support team, and tickets they’ve filed (among many other things). On the other hand, CDP will show specific steps taken by the customer since engaging with your company, from where they found you to how they behave with your product.

The absence of AI and predictive capabilities in CRM makes it more dated. Plus, it lacks integral features to collect, clean, and handle pivotal data. It does a terrible job of organizing and sorting data. CDP, on the other hand, with all the built-in features, will responsibly handle the data of every customer across multiple touchpoints. 

Businesses need to utilize the customer’s behavior to outrank the competition. Using customer demographics and other random data from a Customer Relationship Management (CRM) software alone will not win you the eCommerce race. CRM can help you manage buyer relationships but comes up short when it comes to handling buyer data. 

The legacy system features in CRM mean businesses need to rely on multiple systems in the learning curve, alongside all the integration cost, dependency on development, time for implementation, and other drawbacks that can create frictions and failure points - merchants can utilize CDP.

Why is Customer Data Platform Superior to Customer Relationship Management?

1. Data Limitations

CRM is more suitable for storing and preserving limited information about your buyer base. CRM doesn't do a very good job of analyzing, deriving insights, and detecting patterns in huge chunks of data. CRM is incapable of handling a proliferation of data.

2. Creates Silos

The inability to forward information is probably one of the biggest bottlenecks in a CRM system. CRM is mainly closeted data, that stays limited to a section. CRM doesn’t relay data as effectively as CDP does. You can't seamlessly share and transfer information between different departments. As such, information requested by an employee doesn't reach him instantly. 

3. Unstructured

CRM, mislabels and loses data often. The data within the CRM can be spread out over different folders, making it difficult for a user to obtain the info quickly. It also provides a very broad and sometimes inaccurate behavior analysis. CRM fails to get the specifics about customers right, as such, businesses can't draw a correct inference. 

4. Lacks Holistic Analysis 

CRM lacks proper Analytics Capabilities. It doesn't provide a 360-Degree View of buyers and prospects. It fails to give a complete picture and Deep Insights of  customers. CRMs log data about customers interacting with the site, but that itself is not enough to know your customers. Their age, geography, gender, past orders, and other variables don't necessarily define them fully. 

5. More Manual

The lack of automated procedures within CRM means users will have to spend some time entering and recording data. The lack of integrations and an advanced algorithm makes CRM more suitable for salespeople that take notes, while interacting with their customers. CRM lacks the  Marketing Automation needed to create a faster workflow.

6. Security

Although many CRM variants have in-built security protocols and procedures, every now and then, you will come across data breaches and unauthorized access cases that compromise sensitive data, and makes a company liable. Unreliable in-built security and safety standards to safeguard sensitive data can lead to litigations and other legal complexities for a business.

CDP - CTA 4

Wrapping Up

Customer Data Platform is the new-age solution to draw more and better insights about your customers. CDPs help consolidate and manage customer data across all touchpoints to generate a single, unified customer view. Eventually, these "unified views" of many buyers and prospects will reveal the entire customer journey.

With accurate insights, all teams can make more data-informed decisions. You will have a better chance of identifying friction elements or points in the funnel that create higher engagement. You'll know exactly what actions led to a favorable reply or result. That'll help in managing your resources and spending better.

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