CDP for Beginners: 5 Things You Should Know

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Are you a newbie in the world of Customer Data Platforms? Here are five things you need to know.

Organizations are sitting on a goldmine of data but are unable to use it effectively, as the data is scattered across multiple avenues. A Customer Data Platform (CDP) Opens a new window unifies this data and gives marketers a comprehensive picture of the customer’s data.

In this article, we will look at five fundamental things you should know about CDPs.

1. What Is a CDP and What Does It Do?

WikipediaOpens a new window defines a CDP as,

A Customer Data Platform (CDP) is a type of packaged software which creates a persistent, unified customer database that is accessible to other systems.

Anthony Botibol (Marketing Director, BlueVenn)Opens a new window provides us with a more straightforward explanation as follows:

**A CDP is a marketing database purpose-built for the API-driven world and ‘pick and mix’ marketing technology stacks in mind, while also allowing for the integration of offline sources and legacy database and infrastructure.**

Anthony further explains three primary functions of CDP, viz:

  1. They pull in customer data from the disparate data systems of your choice
  2. They match, merge and cleanse this data into a unified record for each customer
  3. They make these records visible to your other marketing tools to ensure the consistent treatment of customers

Also Read: 5 Baby Steps to Building Your Customer Data Management StrategyOpens a new window

2. Do You Need a CDP In Your MarTech Stack?

The next question you might have on your mind is whether you need a CDP in your MarTech stack? The answer is, well, that depends on many factors.

It basically starts with — What is your purpose for collecting customer data? How complicated is your MarTech stack and the omnichannel ecosystem? What are the available resources?

While elaborating on the factors mentioned above, Chitra Iyer (Editor-in-chief, Ziff Davis B2B)Opens a new window explains, “If you want customers to have a consistent brand experience irrespective of the marketing channel or data source; and you truly want to join the dots between customer data from multiple internal and external, structured and unstructured, identifiable and anonymous data points, you need a CDP.”

3. How Is a CDP Different From a DMP?

A Data Management Platform (DMP) collects data from first, second and third-party data sources to enhance the ad experience.

Although CDPs and DMPs share certain similar characteristics, they have some specific differences that fundamentally change how marketers use them.

Two of the main differences are — DMPs can’t store Personally Identifiable Information (PII), and they are primarily used for ad targeting.

In this article of the CDP Explainer SeriesOpens a new window , Chitra Iyer lists the following key differences between a CDP and a DMP:

Also Read: How to Differentiate Between CDP and DMP in the Age of PII?Opens a new window

4. How Do CDPs and CRM Work Together?

The Customer Relationship Management (CRM) software helps salespeople and marketers maintain communications with their customers effectively. When clubbed together with a CDP, it can reap immense benefits for an organization.

Rob Maille, Head of Strategy and Customer Experience, CommerceCXOpens a new window , comments, “Essentially, **CDP is the paint and CRM the brush for creating this full picture.** With the changes we continue to see in how customers interact with the businesses they buy from, a combination of the two is becoming a necessity for businesses today. It’s important not to shoehorn a CDP into a CRM – when a company reaches the point where it needs to see outside the walls of its CRM, its own organization, to continue building better customer experiences, then it’s time to implement a CDP.”

5. Are CDPs Exclusively for Marketers?

Short answer, no.

Long answer — **A CDP can assist departments such as Finance, IT, Retail Operations, Merchandising, etc. but C-level executives can derive the biggest benefit.**

Paul Mandeville (Chief Product Officer, QuickPivot)Opens a new window opines, “Every successful C-Suite makes decisions based on data. However, that’s really hard to do if the data about your most important asset – your customers – isn’t accessible in real-time or organized in a way that allows for easy analysis and trend identification. If it takes more than five minutes to answer a question about customers, then you’ve already exceeded the attention span of the most patient CEO. The battle is lost if data is not immediately available. CDPs to the rescue – they provide real-time data for ad-hoc analysis and in-the-moment market adjustments.”

Also Read: How Can a Customer Data Platform Enhance Your Account-Based Marketing StrategyOpens a new window

Conclusion

To summarize, CDPs collect data from varied sources and provide a unified view of your customers that can help you deliver effective customer experience while optimizing the customer journey. As a beginner, these five fundamentals will help you get started.

Do you have any plans to implement a CDP in your marketing? Do let us know on TwitterOpens a new window or LinkedInOpens a new window or FacebookOpens a new window !