Customer Data Platforms (CDP): What You Need To Know

If you’ve recently heard a lot of talk about a customer data platforms (CDPs) and they can help companies better understand and act on data, you’re not alone. Google Searches for "customer data platform" have spiked in the past several years, and interest in the topic has steadily increased (and shows no signs of slowing down!).

customer data platform google trends

But what really is a CDP? Why does it exist, who is it for and how might you use it? Here’s what you need to know.

Table of Contents

  1. What is a customer data platform?
  2. Why do customer data platforms exist?
  3. What are the main benefits?
  4. What kinds of data do they aggregate?
  5. What are the key features of a CDP?
  6. Who are the primary users of a CDP?
  7. Is a customer data platform right for your company?

What is a customer data platform?

A customer data platform is a marketer-managed technology that unifies disparate online and offline data sources to create a single customer view.

The formal definition of a CDP from the CDP Institute is: “a Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.” This definition has three critical elements:

  • Packaged software: A CDP is a prebuilt system that is configured to meet the needs of each organization. While setting up and maintaining a CDP does require some technical resources, it does not require the level of technical skill associated with a typical data warehouse project. This difference reduces the time, cost and risk associated with introducing a CDP and gives business users more control over the system, even though they may still need some technical assistance.
  • Creates a persistent, unified customer database: A CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information from those systems related to the same customer and storing the information to track behavior over time. In doing so, a CDP houses personal identifiers used to target marketing messages and track individual-level marketing results.
  • Accessible to other systems: Other systems can use data stored in a CDP for analysis and to manage customer interactions.

Now that we’ve defined what a CDP is, it’s equally as important to understand what a CDP is not. While CDPs share functionality with similar types of data management software and tools, the nuances are important to know. CDPs are often confused with:

For a deeper analysis on the differences, you can read our blog "CDPs, DMPs and CRM… Oh My! Which Data Solution is Right for Your Business?"

Why do customer data platforms exist?

The proliferation of data in everything we do has created a need for companies to rethink their customer data management strategy. Going deeper, CDPs exist for two key reasons.

  1. CDPs break down data silos. Organizations now have more technology than ever, and while these solutions deliver many benefits, they also create volumes of data housed in disparate data silos. Furthermore, because teams own tools and tools own data, this setup can hurt organizational alignment. Removing these silos and creating a single customer view improves alignment and makes it easier for teams that interact with customer data (including marketing, sales, support, customer success, product and operations) to navigate the growing landscape of technology. Traditionally, breaking down data silos called for direct, point-to-point integrations between two tools. With ever-changing and growing tech stacks, one-to-one integrations have proven difficult to manage and scale, paving the way for CDPs to emerge as the solution.

  1. CDPs help go-to-market teams create better, more personalized customer experiences. The data silos that often exist can also lead to disjointed customer experiences because different teams work with different data. CDPs remedy this situation by creating a unified customer profile that each team can view, access, and work off of. CDPs serve as a central point to manage data and interactions across the entire lifecycle of an account, from acquisition through retention and growth.

What are some benefits and use cases of a CDP?

The possibilities are limitless for how organizations can deploy CDPs to meet their objectives. Since every company is different in their goals, business model, and mission, their utilization of a CDP may also vary. For a more thorough compilation of specific CDP "jobs to be done", visit our CDP Use Cases section.

Despite the plethora of different setups, CDPs can help in a few major areas:

Improve personalization & customer experiences

By combining multiple data sources, CDPs reveal a holistic, 360 degree view of each customer, including their behavior and interactions. By understanding customer behavior, marketers can create more personalized campaigns and experiences. For example, a CDP can enable the creation of incredibly granular, real-time segments using data across multiple tools instead of just one tool (Think: "Generate a segment of marketing operations managers that work for US-based retail companies, visited the pricing page in the past month, and have not scheduled a demo yet"). These segments can be used in email and ad campaigns with messaging that resonates specifically with that particular audience.

Granular segmentation, made possible by a CDP, is the foundation for personalized marketing at scale, enabling use cases like:

  • Real-time web personalization
  • Automated email follow-up based on web activity
  • Timely notifications to sales to reach out

Related: Privateaser Increases Revenue Through Smarter Segmentation.

Privateaser Benjamin Malartic Quote

Achieve operational efficiencies

Centralizing data in a CDP eliminates the operational overhead associated with connecting and syncing tools on a one-to-one basis. When integrations between two or more tools don't exist, organizations resort to building the integrations themselves in-house (which can be time-consuming and expensive) or manually uploading CSV files (which can be error-prone) to get the data aligned.

CDPs come with pre-built, native integrations to popular SaaS tools and data warehouses. When the data resides in a central location, teams can streamline data operations, work more efficiently, and reduce internal team friction.

Related: Criteria Corp Saves 34 Hours Per Week Manually Copy and Pasting Data.

Simplify reporting & attribution

One of the most time-consuming and difficult tasks for any data analytics team is data collection. With a CDP, customer behavior data is already unified and tracked chronologically, meaning marketing teams can get a head start on reporting and attribution.

Related: Pusher's Top 5 CDP Use Cases.

Quote Pusher Mario Moscatiello

Data Privacy Regulations

One of the core tenets of recent data privacy regulations like GDPR and CCPA is the ability to quicky recall and delete certain data if requested. Data teams can rest assured that not only is the data in question in a secure location, but also easily accessible if needed.

What kinds of data do they aggregate?

To create a “persistent, unified customer database,” CDPs aggregate customer data from online and offline channels that span the entire prospect and customer lifecycle, including:

Identity & Attribute Data (Who they are)

  • Name
  • Company name
  • Job title
  • Phone number
  • Email address

Behavioral Data (What actions they took)

  • Website visits
  • Email opens, clicks, replies
  • Social media interactions
  • Mobile app engagement

unified customer profile

What are the key features of a CDP?

While CDP functionality may vary across different vendors, several core features include:

Data ingestion

CDPs ingest data from online and offline sources, like web tracking tools, marketing automation, CRMs, and data warehouses, typically through APIs. Data ingestion is typically managed through the CDP's integration library.

Hull Connectors

Because a CDP is marketer-managed, configuration of these integrations usually does not require technical resources.

Identity resolution

CDPs build unified customer profiles around the concept of a digital "identity". Customer identities can be represented in many different ways, across different lifecycle stages (e.g. anonymous web visitor cookie values vs. identified email addresses) and tools. CDPs may vary in their strategies for reconciling the many different “versions” of a prospect or customer, but the overall goal is the same: to create a single customer view.

Related: Identity Resolution Strategies for B2B

Data processing

CDPs are designed to be an organization's operational data layer. Data processing tasks like transforming, cleansing, and enriching data can be be performed either through a CDP's user interface or with code. Common actions include standardizing attributes, eliminating duplicates, calculations, and roll-ups.

Related: Read more about Hull's Processor

Real-time segmentation

CDPs allow you to create and save dynamic segments. Because CDPs connect to all of your tools and data sources, you can generate lists on nearly any attribute or event -- meaning, you can get extremely specific with your audiences.

Hull Segments

Data syndication and synchronization

CDPs should have the ability to not only ingest, but also send data out to other applications. Furthermore, CDPs allow you to fully control data flows by putting guardrails on what gets synced and what does not. Having full control of your data flows can prevent "overcrowding" your destination tools and allows you to save on data storage costs and API calls, in some cases.

Who are the primary users of a CDP?

While sales, demand generation, and other go-to-market teams will ultimately reap the benefits of a CDP, we notice the following job roles are often the ones getting it off the ground and managing it post-implementation:

  • Marketing operations
  • Sales operations
  • Growth operations
  • Growth marketing
  • Data operations
  • Data engineer

As CDP technology matures and hits the mass market, we may begin to see the userbase expand towards less technical roles.

Is a customer data platform right for your company?

For all the benefits that a CDP can deliver, how do you know if introducing one is the right move for your company? We find that organizations that fit certain criteria may be good candidates for CDP technology:

  1. Your organization has a complex, multi-tool technology stack. Furthermore, these tools do not have native integrations with one another.
  2. Your organization has a fairly advanced and mature data management strategy, perhaps having already invested in an analytics layer.
  3. Your organization has gained executive team buy-in.

However, that's not to say your organization won't see value if you don't quite look like the ideal candidate. Perhaps more important than what an organization looks like prior to purchasing a CDP is what processes and procedures have been put in place to ensure the investment is successful in the long-term. Two key actions come to mind:

  1. The organization has a designated team or individual owner to manage and maintain their CDP
  2. The organization has at least one use case in mind prior to implementation

Related: Listen to Hull CEO Romain Dardour talk about the "Jobs To Be Done" Framework

With the onset of CDP technology, organizations are able to orient themselves entirely around the customer using their own data. By achieving the elusive "360 degree customer view", customer data platforms offer sales and marketing teams the operational agility to drive more effective campaigns and win more business.

Curious? Watch Our Platform Demo

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Angela Sun

Angela brings over a decade of B2B technology marketing experience to her role as the Director of Marketing at Hull. Prior to Hull, she spent 5 years at utility data aggregator, Urjanet, where she held various roles in demand generation, marketing operations, and product marketing.