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What Are Customer Data Platforms & How Can They Be Used By Businesses?

Hubspot defines a customer data platform as:

“Software that aggregates and organizes customer data across a variety of touchpoints and is used by other software, systems, and marketing efforts. CDPs collect and structure real-time data into individual, centralized customer profiles.”

These customer profiles utilise a host of data from multiple mediums such as, social media activity, email activity and buying habits. This then allows for marketers to gain a deeper understanding of various customer profiles and behavior, as in the past this information would often be kept separate.

Examples of Typical Information Collected (as provided by eConsultancy):

  1. Transactional and order data: Ecommerce, administration and sales information such as purchases, orders and renewal dates
  2. Behavioural, web and mobile data: Products and categories browsed, clicks & interaction data
  3. Product Data: Contact data and opt-in along with potential psychographic data points such as lifestyle and personal preferences
  4. CRM & offline data sources: Not customer data, but crucial to overall engagement with customers, for example, stock levels & pricing.



CDPs are often confused with Customer Relation Management Platforms (CRM) and Data Management Platforms (DMPs) as all of them overlap in terms of the services they provide.



Both CDPs and CRM platforms in essence are utilised to help manage customers. However, CRM platforms focus more on known customers within a business, whereas CDPs look at both prospective customers and current customers. This means that information provided to CRM systems are mainly intentional interactions with a company via manual entry. Some examples of this include email addresses, phone numbers, survey responses or even firmographics.

On top of this CRM platforms are not able to deal with the high amount of information taken in and organised by CDP systems. Most CRM systems focus more on the sales aspect of the business looking at forecasts and sales pipelines as opposed to CDPs, which are primarily marketing systems.



Both CDPs and DMPs use anonymous data such as cookies, IP addresses and mobile device IDs, which is why many people often confuse the two systems. However as highlighted by Marketing Magazine, there are a host of explicit differences:

  1. CDP gains data from a number of different sources including data warehouses, data lakes and other enterprise data sources (first-, second- or third-party data, unstructured, semi structured or structured data to name a few) whereas DMPs usually gain data exclusively from digital channels and advertising networks.
  2. CDP’s customer profiles are far more intricate using matching algorithms bringing together customer data from multiple sources, whereas DMPs anonymous data collation on individual users is more simplistic, going off specific determining factors.
  3. Updating customer profiles is continuous with the CDP system, whereas updating of customer profiles within a DMP system usually takes one to two days. On top of this while CDPs profiles are maintained for long periods of time, DMP customer profiles can only be kept short-term.


Benefits of Customer Data Platforms for Businesses

With the increased amount of data being produced by customers, the benefits of implementing a CDP system for a business’s marketing effort is obvious in terms of collation of data; it means avoiding data silos and having in-depth customer information readily available to all. But what does this mean for businesses marketing efforts?


1. Tailored Marketing Efforts

Data collected by CDPs includes first-party information from users, which in today’s environment is extremely valuable. This first-party data allows for highly tailored marketing strategies to be implemented that effectively resonate with end users, as compared to purely utilising second or third party data that will be less accurate.


2. Greater Segmentation

The customer profiles created by CDP systems are extremely thorough, bringing in information from a wide range of different sources. This allows for greater segmentation of audiences based on behaviour patterns that could have been previously missed when looking at customer data individually.


3. Unification of Cross-Marketing Efforts

A CDP system is easily accessible to staff across the marketing team. Regardless of the different marketing strategies being implemented (social, PPC campaigns, email campaigns etc), all results and data can be brought together to allow for highly effective future customer orientated campaigns to be launched.


4. Utilised to create memorable “moments”

Many supporters of CDPs have also highlighted the idea that it can be utilised to create memorable ‘moments’ for customers. One example of this in practice has been with German railway company Deutsche Bahn who managed to use a CDP system to send push notifications for commuters on packed trains offering them discounted first-class tickets to give them more space and providing a positive and memorable moment during their everyday commute.

To learn more about Customer Data Platforms and how they can benefit your business, contact the team at Redline Digital today.

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