Customer data platforms

What is customer data platform?

Customer data platform is a centralized database that combines customer data from multiple sources, online, offline, cloud systems, and on-premises sources, into a unified view. Unlike CRM, ERP, and other customer data portals, CDP (Customer Data Platform) creates unified customer profiles, helping with analytics, segmentation, personalization, and omnichannel marketing.

An example of customer data platform would be a retail customer data portal that aggregates every customer interaction, clicks, purchases, customer support chats, and any other digital and physical touchpoints, which could be accessed through queries, dashboards, and AI interfaces. The teams that must use customer data platform are marketing, customer support, and data teams. Many popular retailers like Nike and Sephora are already using CDP to track customers across web, app, and stores to personalize product drops and loyalty experiences.

Industries and teams that benefit from CDP

1 - Retail & eCommerce – to combine in-store and offline customer data. 2 - Travel & hospitality – to easily allow customers to do cross-device booking, research, and reservations. 3 - Healthcare – combine patient data from multiple sources 4 - Banking & financial services – to deliver suitable content recommendations across channels and devices. 5 - OTT & Media

CDP vs CRM

CDP and CRM looks similar, but is totally different, as the data type CRM deals with is contact and transactional data, whereas CDP deals with first party and real-time behavioral data. The purpose of a CRM tool is to do sales tracking alone, while a CDP can have more comprehensive purpose, which is customer profiling.

CDP vs DMP

DMP is data management platform and CDP is customer data platform, both may look the same, but differs by actionability and data type they handle. CDP, as we know is to manage unified, first-party customer data, but DMP manages third-party data only, best for short-term campaigns.

Why do companies use customer data platform?

Customer Data Platform (CDP) solves many problems for businesses, from fixing siloes between tools and channels to resolving identity matching and thereby improving quality of cx personalization. Here are the other CDP benefits for retail, eCommerce, and BFSI businesses.

Campaign efficiency – can target the right person and right customer groups and improve the ROI of campaigns, which is much better than running generic campaigns.

Hyper-personalization– to send personalized offers, emails, and assistance, which would resonate well with the customer.

Real-time segmentation – to have dynamic customer segments beyond basic demographics, age, gender, and to update it on the fly based on customer behavior.

Omnichannel consistency – To provide consistent experiences to customers across different channels, web, app, and offline. CDP is crucial to run smooth and seamless omnichannel marketing campaigns, where every activity is aligned to user preferences, be it push notifications, in-store offers, or sales emails.

More effective ways to measure – ability to measure what’s working for different channels and customer groups using dashboards, unified KPIs, and automated reports.

How to build a customer data platform?

Whether you are considering an in-house tool or a custom-built CDP for your organization, here are the steps you should follow to build a Customer Data Platform.

1 - Identify and amass your data sources: find out data sources: POS, eCommerce, app, CRM, etc.
2 - Use data ingestion tools to fet data from the above applications. Can use ETL tools like Fivetran, Stitch, or custom APIs, depending on data sources type. 3 - Define the schema: identify the characteristics needed to be included in customer profile: name, contact details, loyalty ID, location, device, and more. 4 - Build storage layer with the help of data mart and data warehousing tools and ensure compliance with GDPR, CCPA, opt-outs. 5 - Check if the data is free from quality issues, duplication, or any other inconsistencies. 6 - Visualize everything with the help of dashboards and BI tools for easy monitoring.

You can integrate CDP with marketing stack use cases to empower personalized email campaigns, ads, and trigger messages.

1 - Connect CDP with email platform to trigger segment-based email offers and newsletters. 2 - Connect CDP with Google ads or Meta ad to sync audience automatically and bring in any new engagement into the CDP. 3 - Integrate CDP with POS systems to sync and update CDP automatically and make users eligible for new promotional activities. 4 - Connect CDP with marketing analytics dashboard to monitor customer engagement, CLV, churn, and campaign ROI in one place.

The price to set up CDP varies anywhere from $2k to $60k a month, depending on the size of the enterprise, data types and volume, chosen vendor, chosen features, and whether it is custom-built or a plug-and-play solution.

Achieve personalization with CDP

A Customer Data Platform is important for any company that wants to do accurate content personalization, behavioral-triggered messages, and multi-channel co-ordination. With such set up, their teams can track, segment, and activate customer data in real time, especially when connected to analytics dashboards that automatically update any new changes in data.

Whether you’re starting from scratch or modernizing your stack, the right CDP can give your marketing and analytics teams the 360° customer view they need to win—online and in-store.