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

Customer data is precious, but data silos and fragmentation can prevent you from using it effectively, costing businesses $1.8 trillion each year (HubSpot). 

Customer Data Platforms (CDPs) offer a solution if you’re facing these challenges. These platforms systematically consolidate and organize data from multiple sources, giving you a complete view of each customer. This helps you create personalized experiences and boost engagement. 

In this comprehensive guide, we’ll delve into the world of CDPs, exploring their key benefits, and how they can impact a business’s customer engagement strategies. We’ll also shed light on some of the leading CDPs and the factors to consider when choosing the right one for your business.

So let’s get started!

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 acts as a centralized hub for customer data. It starts by gathering information from various sources, such as website interactions, mobile apps, CRM systems, or even social media platforms. This data can range from basic demographics (gender and age) to detailed purchase history and online reception behavior. Keeping track of your customer’s overall journey.

2. Data Unification and Enrichment:

Once the data is collected, the CDP works to unify it into a single, comprehensive customer profile. It also ensures any data discrepancies are addressed, such as duplicate records or conflicting information, for utmost accuracy. Furthermore, the  CDPs enrich/ harmonize customer data by combining it with external sources, like third-party data providers, to have access to better valuable insights.

3. Data Activation and Targeting:

Once the data is unified, Customer Data Platforms (CDPs) can utilize their expertise to activate this unified data for targeting specific audiences. By analyzing customer segments and preferences, CDPs enable the delivery of personalized messages and offers through various channels such as email, SMS, social media, and display advertising.

4. Real-Time Personalization:

Customer Data Platforms can process data in real-time, enabling personalized customer experiences. For example, if customers abandon their shopping cart, a CDP can send a targeted email or push notification to motivate them to complete their purchase. A personalized experience like this opens doors for stronger customer relationships.

Key Benefits of CDPs

Here’s a list of key benefits of using a customer data platform.

1. Improved Customer Experience

A CDP allows you to provide customized experiences that resonate with every customer. By understanding their preferences, behaviors, and purchase history, you can tailor your marketing messages and offers to meet their individual needs. This eventually leads to boosted customer satisfaction and loyalty, 

2. Better decision making

By utilizing CDPs, you can make informed decisions based on insights rather than guesswork. Through analyzing customer behavior and trends, you can discover opportunities to improve marketing strategies, enhance product offerings, and elevate customer service.

3. Increased Efficiency and Productivity

CDPs do many tasks automatically, like collecting data, organizing people into groups, and running campaigns. This saves time for your marketing team so they can focus on important plans and creative content. Also, CDPs can help you avoid doing the same work twice and make sure your marketing is the same across all your channels. For example, a CDP can sort your email list based on what your customers do and send them specific campaigns.

4. Better Return on Investment (ROI)

By improving customer experience, enhancing decision-making, and increasing overall organizational efficiency, CDPs can significantly boost your ROI. Through personalized campaigns and data-driven insights, you can optimize your spend and achieve better results.

Let us now take a look at some best-in-class customer data platforms.

4 Best Customer Data Platforms in the Industry

1. Salesforce Data Cloud

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.

Key Features:

• Unifies customer, product, and account data across all Salesforce clouds
• Provides real-time data access and analytics
• Offers AI-powered data management and integration through the capabilities of Tableau
• Supports integrations with external data sources and third-party apps

Pros:

• Tight integration with the Salesforce ecosystem
• Scalable and flexible architecture
• Advanced AI-powered data management capabilities
• Real-time data access and analytics

Cons:

• Limited customization options for non-Salesforce users
• The steeper learning curve for users without Salesforce experience
• Can be expensive for large-scale implementations

Pricing: The pricing for Salesforce Data Cloud is not publicly disclosed, however,  it’s typically based on the number of users, data storage, and features required. 

2. Segment by Twilio

Segment is a customer data platform that helps companies collect, unify, and organize customer data from various sources.

Key Features:

• Collects data from multiple sources (websites, mobile apps, CRM, etc.)
• Unifies customer data into a single customer profile
• Provides real-time data access and analytics
• Supports over 200 integrations with popular tools and platforms
• Users can send customer data to more than 450 destinations

Pros:

• Highly customizable and flexible architecture
• Large library of integrations with popular tools and platforms
• Scalable and reliable infrastructure
• Real-time data access and analytics

Cons:

• Can be complex to set up and implement
• Limited AI-powered data management capabilities compared to other platforms
• Pricing can add up quickly with large-scale implementations

Pricing: Segment provides customized pricing plans based on different tiers, including Unify, Unify Plus, and Engage, to cater to various business needs and requirements.

3. Bloomreach

Bloomreach is a customer data platform that helps businesses create a unified customer view by integrating data from various sources.

Key Features:

• Collects and unifies customer data from multiple sources (CRM, marketing automation, etc.)
• Provides real-time customer insights and analytics
• Offers AI-powered customer segmentation and profiling
• Supports integrations with popular marketing and sales tools

Pros:

• Advanced AI-powered customer segmentation and profiling capabilities
• Highly customizable and flexible architecture
• Real-time customer insights and analytics
• Supports integrations with popular marketing and sales tools

Cons:

• Limited scalability compared to other platforms
• Can be expensive for large-scale implementations
• Limited library of integrations compared to other platforms

Pricing: Bloomreach utilizes a subscription-based pricing model that consists of two components: a module fee and a usage fee. Users can request a customized quote based on their specific needs and usage requirements.

4. Adobe Real-time CDP

Adobe Real-time CDP is a platform that helps companies create a unified customer profile by integrating data from various sources.

Key Features:

• Collects and unifies customer data from multiple sources (web, mobile, CRM, etc.)
• Provides real-time customer insights and analytics
• Offers AI-powered customer segmentation and profiling
• Supports integrations with Adobe Experience Cloud and other popular marketing tools

Pros:

• Tight integration with Adobe Experience Cloud
• Advanced AI-powered customer segmentation and profiling capabilities
• Real-time customer insights and analytics
• Highly customizable and flexible architecture

Cons:

• Limited scalability compared to other platforms
• Can be expensive for large-scale implementations
• The steeper learning curve for users without Adobe experience

Pricing: Adobe Real-time CDP offers custom pricing based on the number of users. Adobe provides three editions of Real-Time CDP for businesses looking to enhance their customer experience management strategy with unified marketing data: B2C Edition, B2B Edition, and B2P Edition.

Having seen some of the outstanding and industry-leading customer data platform examples here are a few tips for considering the most suitable CDP.

Robust Tips For Choosing The Right Customer Data Platform

1. Specify Your Business Objectives:

Before selecting a CDP, clearly outline your specific business goals. Are you looking to improve customer retention, increase sales, or enhance personalization?  This will ensure that all the necessary tools and functionalities assist to achieve your desired outcomes.

2. Examine Data Integration Capabilities:

Make sure to evaluate how well the CDP can work with your current marketing technology stack, CRM, email marketing tools, analytics platforms, and other relevant systems. This will help avoid data silos and give you a unified view of your customers. Also, when assessing integration capabilities, consider factors such as how easy it is to set up, the speed of data transfer, and the availability of pre-built connectors.

3. Consider Scalability and Flexibility:

When your organization grows, your CDP should have the ability to scale accordingly. So it is advisable to choose a CDP that offers flexible pricing models and can easily adapt to your changing needs. Here don’t forget to assess the pricing structure, contracts, and future scope of the CDP.

4. Prioritize Data Security and Privacy:

See a customer’s data is highly sensitive, and it’s essential to choose a CDP that prioritizes data security and privacy without fail. Look for a CDP that complies with relevant data protection regulations (e.g., GDPR, CCPA)  and follows security practices such as data encryption, access controls, and audits at regular intervals.

5. Customer Support and Training:

Lastly, look for user-friendly support and training assistance tools/ assets provided by the platform. This is because CDP is a complex tool, and one will require adequate support to maximize its benefits. Also, don’t hesitate to ask for customer support including documentation and tutorials.

Let’s Draw The Line: CDP vs. CRM 

People often get confused between CRM and CDP which one should they opt for and when and will their integration be fruitful? So to clear some fog around customer data platform vs CRM let us understand the two platforms and their specific utilities. 

If we have to draw a comparison between the two platforms, we can say that a CRM is like a hand that requires commands from the brain to function properly, with the brain representing the CDP. Thus, when CRM and CDP are integrated, organizations can effectively manage customer relationships and use comprehensive data to improve marketing and sales strategies. This collaboration allows users to deliver more personalized experiences and stay competitive in the market. To know more about the integration and implementation of CRM platforms you can consult some leading IT consulting companies.

Demystifying The Notions Around The CPDs

Some misconceptions are floating around in the technological market regarding CDPs, let us debunk these myths one by one;

Myth 1: CDP is Only Favorable For CRM Integrations

This myth is false. While CDPs integrate effectively with CRM systems, their integration capabilities extend beyond CRM, multiple data sources, and touchpoints. 

Myth 2: The Platform Puts the User’s Security at Risk

This is a very big misconception that people have regarding the CDPs. Contrary to myth these platforms implement strong security measures such as having proper compliance regulations and data encryption. 

Myth 3: The Platform is Yet Another Overhyped Tool

This perception is quite faulty as it ignores the proven value of platforms that enhance efficiency and data management. Countless organizations have successfully utilized these tools, showcasing real, measurable benefits. 

Myth 4: Only Big and Established Businesses Use CDPs

This statement is not accurate. Customer Data Platforms (CDPs) are now being utilized by businesses of all sizes. The platform even allows companies of smaller scales to leverage the power of smart real-time data-driven insights for their growth.

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.

End Note

In recent times Customer data platforms (CDPs) have emerged as essential tools for businesses seeking to unify their customer data, gain deeper insights, and deliver personalized experiences so that the right teams get adequate information at the right time.

Therefore when choosing a CDP, it’s important to consider factors like data integration capabilities, data quality management, analytics and reporting features, and scalability. Remember, the right CDP helps you effectively use your customer data.