Customer Data Platforms (CDPs) and Digital Experience Platforms (DXPs) are both crucial elements of the digital experience ecosystem. Let’s look at what differentiates one from the other and find out whether CDPs will be the next DXPs.
Brands continue to rely on CDPs, as they prioritize customer experience to be the key differentiator. A customer data platform and digital experience platform are the two core components of the digital ecosystem that help organizations deliver flawless digital experiences.
Let’s start by understanding what each means and what they can do before we conclude with and answer to your question.
What Is a CDP?
A Customer Data Platform (CDP) is a marketing software that gathers customer data from various sources, unifies them into individual customer profiles and makes this information available to other systems.
What Can You Do With a CDP?
1. Collect Customer Data
CDPs collect first-party data across multiple sources and store them in a central repository. This first-party data includes identifiers such as email IDs, usernames, IP addresses, cookies, etc.
2. Unify Customer Profiles
A CDP collects customer data in real time and stores all identifiers associated with a customer in a database known as an identity graph. To avoid data redundancies, the process of identity resolution analyzes an identity from different data sets and databases to match or merge identities so that no duplicate customer profiles exist.
3. Cross-Device Attribution
Since the ID graph maintains the record of all customer interactions via multiple channels and devices, you can evaluate the effectiveness of your sales and marketing platforms and campaigns.
4. Define Customer Segments
CDPs help marketers create customer segments that can be further implemented for activities such as email marketing, advertising, mobile marketing. Although a CDP helps marketers with segmentation, it doesn’t assist with the execution of marketing campaigns.
Also Read: CDP for Beginners: 5 Things You Should KnowOpens a new window
What Is a DXP?
A Digital Experience Platform (DXP) is the collection of technologies for creating, orchestrating, and managing the digital experience delivered to customers, prospects, employees, and other stakeholders. The platform delivers digital experiences across the life cycle of the customer relationship, from marketing to sales through service.
What Can You Do With a DXP?
1. Content Management
A DXP can help marketers with the content management aspect of their website and other digital properties. The content management aspect deals with creation, management, and tracking of content.
2. Personalization
With a DXP, you can deliver personalized content to your customers and find upselling and cross-selling opportunities in the process.
3. Omnichannel Marketing
A DXP allows you to reach out to your customers on different devices and channels such as mobile, email, social media, IoT devices and provide an omnichannel experience.
4. Manage Additional Components
With the help of DXPs, you can also manage other marketing components such as e-commerce, Digital Asset Management (DAM), Customer Relationship Marketing (CRM), marketing automation, social media, etc.
5. Build Customer Relationships
Along with the above utilities, data integration and the ability to stay connected with customers throughout their journey culminates into building long-term customer relationships.
Also Read: Defining Customer Data Platform Use-Cases and Outcomes for CDP SuccessOpens a new window
Differences Between CDPs and DXPs
Now that we’ve seen what CDPs and DXPs mean, let’s understand the differences between CDPs and DXPs. The primary differentiator between a CDP and a DXP is that of data collection and utilization. CDPs collect and consolidate data from various sources whereas DXPs use the unified customer view to enhance customer experience. Simply put, the use case of CDP is analytical, while that of a DXP is operational.
1. Sources
A CDP collects data from various first-party sources such as social media apps, marketing automation and offline data sources such as contact information, point-of-sale, loyalty card details, subscription details, etc.
On the other hand, data is fed to a DXP through its data hub consisting of CRM, Master Data Management (MDM) platform, CDPs and so on. This helps the DXP to personalize the customer experience using the data and segments.
2. Applications
The availability of Personally Identifiable Information (PII) through a CDP makes it easy for organizations to get a unified 360-degree view of individual customers so that organizations can segment the audience based on various customer characteristics.
A DXP, on the other hand, is a framework that helps organizations to build, deploy and enhance websites, mobile apps, and other digital properties.
3. Decision Makers
The marketing department is the key decision maker in the implementation of a CDP.
Even though DXPs are more geared toward improving the overall marketing effort of an organization, according to a survey by DCG and LyticsOpens a new window , the implementation decisions are primarily led by the C-suite and IT department.
4. Ownership
Although the Marketing department owns the CDP, it also assists Sales, Finance, IT, Merchandising and Retail Operations to make better decisions.
A DXP is also owned by the Marketing department, but apart from Sales, it doesn’t offer much utility to other departments.
Also Read: 5 Baby Steps to Building Your Customer Data Management StrategyOpens a new window
Will CDPs Be the Next DXPs?
A CDP remains at the center of the entire digital ecosystem and helps DXPs and other platforms by providing customer data to enhance customer experience. From the facts above, we conclude that a CDP is an integral part of a DXP. They both complement each other in terms of data collection and utilization to help organizations build long-term relationships with their customers.