Customer Data Platforms Explained: A Look at the Best in the Industry

In today’s ever-changing business dynamics, understanding your customers is more essential than ever. Knowing what customers want is crucial whether you are a marketing manager, business owner, or data analyst. It will help leverage customer data to build stronger relationships, and customer loyalty, and eventually drive growth.

However, most organizations fail to use this data effectively which costs them significantly. This is where CDPs or Customer Data Platforms are effective.

If you do not know the technicalities of CDP, this blog will deep dive into what is a CDP, how it works, its benefits, and so on. Also, we will shed some light on the best CDP companies to help you get started. 

Hence, without any due, let’s start.

What Is a Customer Data Platform (CDP)?

CDP, or Customer Data Platform, is software or a central hub that collects data from various sources, such as website analytics, mobile app analytics, CRM, point of sale systems, social media platforms, and email marketing, to provide businesses with a unified view of customers. 

For example, imagine CDP as a personal assistant that helps organize and understand customer data. It tracks customers’ past purchases, social media interactions, and website visits to analyze their behavior. This will help your business suggest items the audience is interested in and more likely to buy based on past purchases. Also, a business can offer targeted discounts based on each customer’s preferences and improve their experience.

Understanding How a Customer Data Platform Works?

While CDPs provide a comprehensive solution for managing and analyzing customer data. They also help organizations understand their customer journeys, predict their lifetime value, and gain real-time insights. Here’s a simple breakdown to help you know how a CDP works:

1. Data Collection

As we discussed earlier, CDP combines structured, semi-structured, and unstructured data, it starts by gathering information from multiple touch points. This data can range from basic demographics (gender and age) to detailed purchase history and online behavior. Also, it keeps track of your customer’s overall journey.

2. Data Unification 

The CDP works to gather data from various sources into a single view of customer identities. It identifies data discrepancies, such as duplicate records or conflicting information, for utmost accuracy. Furthermore, the CDPs enrich/ harmonize customer data by combining it with anonymous data (customers shared before such as mobile device ID) and external sources, like third-party data providers. It will provide you with a complete customer profile and valuable insights.

3. Data Analysis

Once the data is unified, Customer Data Platforms utilize capabilities to extract valuable insights from customer segmentation. It makes customer groups based on the same behavior and preferences. CDP then understands customer interactions to forecast behavior. It then enables the delivery of personalized messages and offers through various channels.

4. Data Activation and Real-Time Personalization

CDPs then enable businesses to use these valuable insights to take action such as personalized marketing (targeted messages and offers). It can process data in real-time, enabling them to improve and provide more personalized customer experiences. Also, this platform analyzes real-time user’s intent, preferences, and interests and can make predictions about the behavior and help understand their changing needs quickly. However, this process is different from the CRM’s real-time insights, where CRMs only focus on analyzing the interaction between brands and their customers.

CDPs and CRMs are quite different, even though many of you often get confused between CRM and CDP, let’s help you understand the difference.

What is the Difference Between CDP and CRM?

Knowing the difference between the Customer Data Platform vs CRM is crucial to make the decision which is better for your business. Here’s the major difference between both tools. 

• As you know CDP unifies data from multiple sources, on the other hand, CRM (Customer Relationship Management) tools collect data from direct interaction with customers. 

• CDPs can create personalized marketing campaigns, while CRM can help with sales and customer interactions. 

These are the key differences between CDP vs CRM. If you are still wondering about how CDPs can help your business to increase revenue growth, understand the potential benefits of CDP.

How Does CDP Help Businesses with Collected Data? Benefits of CDP

Customer Data Platforms offer a wide range of benefits, helping businesses improve operational efficiency by providing a better customer experience. Here are some key benefits of a CDP:

1. Provide 360 Degree Customer View

Businesses often have scattered data across different systems, making it challenging to utilize customer data. CDP offers organizations a “360-degree view” by collecting and organizing customer data by analyzing customer behavior, preferences, engagement, and disengagement points. This allows businesses to do more personalized marketing campaigns, supporting sales, marketing, and customer services teams in decision-making.

2. Robust Data Security 

CDPs offer robust data security to businesses as CDP centralize customer data and provide tools to protect and manage it. With CDP’s data encryption and access controls, businesses can ensure their sensitive data security. As meeting data regulations can be challenging with large data, this platform even offers compliance with industry-standard data regulations like GDPR. 

3. Improve Cross-Channel Marketing

Businesses can improve cross-channel marketing by understanding which platform (email, social media, website, and messages) is attracting more customers. It will ensure teams increase marketing efforts on the specific channels to increase ROI. Also, CDPs enable organizations to know what types of content engage more customers so marketers can improve their cross-channel strategies. 

4. Accelerate Time-to-Market 

Launching a new product or service in the market is only valuable when your product is ready and fulfills the current demands of the audience. Here, Customer Data Platforms help to understand customer needs according to their purchasing behavior and what they actually need. They then help create a marketing strategy that aligns with customer requirements and accelerates the time to market the product.

5. Optimize Marketing Performance

Businesses’ marketing performance depends on various factors, such as customer retention, campaign effectiveness, and how customers engage with products or services. With CDPs, you can analyze customer journeys to identify areas where customers become disengaged and optimize marketing campaigns to increase engagement. 

In addition, businesses can track customer lifelong spending with CDPs to understand users’ spending patterns, helping to optimize marketing efforts on specific segments to increase profitability.

These are the key benefits of a CDP that businesses can achieve through the right implementation.

How Many Types of CDP Are There?

There are various types of CDP available but here is a brief description of the 4 main types of Customer Data Platforms:

Data Consolidation and Unification

This type of CDP focuses on collecting and organizing data together from different sources such as websites, applications, social media, and CRM platforms into a single platform. This is the most basic type of CDP complete de-duplication of duplicate details and create a unified profile. Businesses can use this to organize customer data and get a unified view of their customers. 

Identity and Engagement

This type of CDP focuses on identifying customers across different channels. It uses AI capabilities to ensure data is not duplicated, creating unique customer profiles based on their behavior and journey. This helps marketing or analytic teams to analyze customer behavior patterns and provide more personalized targeted marketing campaigns. 

Analytics and Insights

This type of Customer Data Platform enables businesses to gain deeper insights with the help of advanced analytics capabilities including segmentation, predictive modeling, and cohort analysis. Analytics CDPs support organizations to make more informed decisions by delivering valuable insights. This CDP helps personalize the web content, optimize customer journeys, and create effective marketing campaigns. 

Automated Actions

Automated actions CDP type automates data analysis, data collection, identity organization, and actionable insights. It triggers automated workflows and provides real-time personalizing recommendations based on customer activity and behavior. For example, e-commerce businesses use automated action CDPs to provide personalized suggestions based on users’ recent browsing and purchase history.

These are the main types of CDPs. It will help you choose which type of CDPs are valuable for your business. 

Best Customer Data Platforms Platforms (CDPs)

Here is the list of the top 5 best Customer Data Platforms (CDPs). 

1. Salesforce Data Cloud 

Gartner Magic Quadrant 2024 for Customer Data Platforms highlights Salesforce Data Cloud as the leading platform among 18 different and top CDP vendors. 

The Salesforce Data Cloud is a high-scale data platform integrated directly into Salesforce. It enables users to consolidate all their company and customer data in one place. Also, organizations can unify non-CRM or third-party data without physically moving by using two-way data access. It reduces the acquisition cost through advanced segmentation and more targeted campaigns.

Its capabilities include real-time data access, analytics, AI-powered data management, AI-powered recommendations, and integration through Tableau AI. It creates operational customer profiles from any source across the business to provide customer insight.

It offers native integration with Salesforce apps (Sales, Marketing, and Service), reducing the need for customer integration.

2. Bloomreach

Bloomreach is an AI-powered e-commerce personalization CDP that integrates real-time customer and product data to deliver personalized marketing solutions. It prioritizes KPIs (key performance indicators) to enhance customer lifetime value. 

It offers marketing tools for AI-powered customer segmentation, profile creation, and integration support. Also, Bloomreach empowers highly customizable and flexible architecture and personalized multi-channel campaigns with real-time customer insights. 

For the pricing of Bloomreach, users can request a customized quote based on their specific needs and usage requirements.

3. Insider 

Insider is a flexible, AI-native, secure Customer Data Platform, designed for enterprise marketers. It eliminates data silos, creates unified profiles, and enhances marketing efforts across different channels.

It brings the data to one place from online or offline sources including CRMs, customer support tools, POS devices, and analytics tools. It uses AI-powered algorithms to automatically predict customer likelihood of purchasing and spending from customer data.  

The Insider CDP tool can generate custom reports with AI in seconds for different segments and user interests. Businesses can maximize their campaign performance in real time with AI suggestions. This tool adheres to compliance like GDPR, CCPA, and ISO 27001 certification.

4. Emarsys

Emarsys CDP tool unifies customer, sales, and product data to business intelligence and visualization tools to accelerate campaign efficiency. It offers a composable infrastructure designed to onboard customer data faster and provide predictive insights. 

It can connect to your preferred CRM and CIAM solutions. Also, Emarsys allows businesses to engage customers in time-sensitive moments with real-time event triggering and providing personalized content. It provides access to AI-powered features, allowing enterprises to predict and personalize customer interactions. 

Emarsys provides omnichannel marketing, helping to deliver consistent and relevant messaging across different channels. Businesses can engage old and new customers and build brand loyalty with native loyalty solutions. Organizations can use Emarsys CDP AI to analyze and predict campaign performance to maximize outcomes.

5. Twilio Segment

Twilio Segment enables businesses to collect good data for teams and accelerate growth. It offers meaningful insights from disparate data so organizations can have more personal interactions with customers. 

It boosts data protection and privacy, as it follows regulations laws GDPR, CCPA, etc. It offers attribution models to help determine the most responsible parts of marketing campaigns to bring new customers. Segment’s customer analytic feature will help businesses to make products more useful for customers, reducing churn risks and increasing customer satisfaction. 

These are the best customer data platform companies that help businesses make the most of their marketing efforts.

Tips for Choosing the Right Customer Data Platform (CDP)

Choosing the right CDP is challenging as there is a wide range of tools available. To choose the ideal CDP tool, here are some steps:

1. Specify Your Business Objectives

Before selecting a CDP, clearly outline your specific business goals. Whether you want to improve customer retention, increase sales, personalized marketing campaigns, profile segmentation, or customer journey mapping, the right CDP tool is crucial. When you understand your goals, choosing the right CDP tools is easier that offer capabilities or features to help you achieve your business objectives.   

2. Easy-to-Use and Implement

CDPs require technical knowledge and expertise for implementation. If you do not have the right expert, then it is valuable to find out more accessible customer data platforms. Or if you want expert capabilities, you can choose implementation services as they hold years of experience and help you ease the implementation journey. Also, choosing a CDP like Salesforce Data Cloud with easy-to-navigate, drag-and-drop features can be helpful. 

3. Examine Data Integration Capabilities

Make sure to evaluate how well the chosen CDP can work with your current marketing technology stack, CRM, email marketing tools, analytics platforms, and other relevant systems. It will help avoid data silos and give your teams a unified view of customers. Also, when assessing integration capabilities, consider factors such as the data transfer speed and the availability of pre-built connectors. It will help you to easily bring all the required data from different systems together, whether it requires integration or APIs.

4. Consider Scalability and Flexibility

For small businesses, considering a CDP that enables them to analyze and manage growing customer data volumes can be valuable. It will support them as they scale up and get each customer’s insights even with larger datasets. This will help to create personalized marketing campaigns within a limited budget and help in better decision-making. Also, you can choose a provider offering flexible pricing models. For example, you can consider a composable CDP that allows businesses to use specific components such as data collection and storage, making this tool more affordable.  

5. Prioritize Data Security and Privacy

Data is highly sensitive, and it’s essential to choose a CDP that prioritizes data security and complies with industry regulations. Look for a CDP that complies with relevant data protection regulations (e.g., GDPR, CCPA). Also, a CDP offering data retention from accidental loss, deletion, and corruption can be an ideal choice. They must follow security practices such as data encryption, user and access controls, and audits regularly. As a forward-thinking leader, you can also give security training to employees to report security breaches timely. 

6. Customer Support and Training

Lastly, choosing a CDP that provides customer support and training is a must. It enables your teams to utilize the tool’s capabilities, personalized marketing features, and improve customer experience. As CDP is a complex tool, having customer support service from a provider can help resolve issues that arise during ongoing usage, implementation, and other tasks. 

Top 5 Myths Around Customer Data Platform (CDP)

There are a variety of misconceptions about CDPs that must be addressed, so you can leverage the capabilities of these tools. 

Myth #1: All CDPs Have the Same Capabilities 

All CDPs share the same purpose of collecting and organizing data but they can vary in capabilities. Some CDPs are specifically designed for specific industries and others like Salesforce Data Cloud offer specialization in different industries such as manufacturing, automotive, communications, retail, financial services, healthcare, etc. Also, CDPs have distinct use cases such as audience segmentation, customer loyalty, etc. 

Myth #2: Customer Data Platforms Only Benefit Marketing Teams

CDPs not only benefit marketing teams but this tool is also beneficial for sales teams, customer service teams, product teams, data analysts, and others. It helps sales teams to identify potential opportunities and create a tailored approach for the audience. CDPs provide valuable feedback on product improvement areas and help product teams make data-driven decisions to increase customer satisfaction. 

Myth #3: CDPs Are Overpriced

Customer Data Platforms may seem expensive but it offers a variety of features and benefits that can be worthwhile. Also, there are a few factors that influence CDP costs including the level of customization, large data volume, complex integration, and mode of deployment (on-premises or cloud-based). CDPs provide the flexibility to use its services as per your requirements and get higher ROI, provide better customer experience, and drive growth.   

Myth #4: CDPs Are Sames as DMP and CRM

The only major thing common in CDPs vs CRMs, and DMPs is they are marketing platforms. These platforms deal with customer data but serve different purposes for businesses. CDPs help in personalized marketing, cross-channel engagement, and more. On the other hand, CRMs help in sales to track leads, opportunities, and customer support tickets with features of contact management and customer support ticketing. While DMPs focus on optimizing digital ad campaigns by data unifying and audience segmentation to reach the target audience.  

Myth #5: CDP Are Only Suitable for Large Organizations

CDPs are suitable for businesses of all sizes from small to large enterprises. Also, it helps to make data-driven decisions regardless of business size. There are various cloud-based CDPs available, making them scalable for every company. Additionally, there are various CDP companies available that offer their free plans. 

Scope Of CDPs In The Future

In the next few years, AI, IoT, and augmented reality will become increasingly important for improving CDP capabilities, making it more powerful and sophisticated. These technologies can help automate data analysis, predict customer behavior, and create personalized experiences. However, as they say, as the dependence on AI increases, the risk of security threats also increases. Therefore, in further development, CDPs would have to come up with even stronger security measures that can effectively safeguard customer data.

Conclusion

In recent times, Customer Data Platforms (CDPs) have emerged as an essential tool. It helps businesses to unify their disorganized customer data, create single customer profiles, and deliver personalized customer experiences. This will reduce the marketing time of teams while putting efforts into crucial tasks and maximizing results. 

Thus, when choosing a CDP, considering some factors like data integration capabilities, scalability, data quality management, analytics, and reporting features is crucial. This will lead you to get the most results out of your investment. Even if you are unsure about implementing your own, we at Cyntexa offer you the experts in implementation services.