Customer Data Platform (CDP): Definition, Types & Workflow

What is CDP?

Customer Data Platform or CDP is a software specifically designed to collect, store, and integrate customer data from various sources.

In general, the purpose of CDP is to build a central database that stores all customer data, ranging from interactions to activities between customers and a brand.

This platform can help marketers collect data from various sources, including websites, mobile applications, web apps, chatbot conversations, and interactions through live broadcasts on various social media platforms.

The obtained data can come from customer interactions through customer service, transaction reports, and responses received from digital campaigns.

Having a Customer Data Platform is a superior strategy for companies seeking to optimize brand interactions with potential customers.

In general, this Customer Data Platform is used to create customer profiles, often referred to as buyer personas.

Types of CDP (Customer Data Platform)

Customer Data Platform not only collects data but also manages it in a sophisticated manner to provide valuable insights and data for businesses.

After understanding “what is CDP”, you need to further explore some of the types that can be utilized for various business purposes. There are 4 types of Customer Data Platform in total, such as:

1. Analytics Customer Data Platform

In the ever-changing business world, this type typically acts as a key player in unlocking the potential contained in customer data.

As the name suggests, this type focuses on using data for comprehensive analytical purposes. 

Therefore, this type of data is frequently used to identify trends, automatically segment customers, and for predictive modeling.

Through in-depth analysis, companies can make smarter decisions and respond to market changes more quickly.

2. Delivery  Customer Data Platform

This type has the ability to send messages to facilitate personalized interactions with each customer.

As a result, companies can achieve higher levels of interaction and provide a user experience that better supports business success.

3. Data CDP

You can say that this type is the main foundation of the four existing types. This is mainly because it is the most basic stage where the platform collects customer data from various sources.

Therefore, the primary task of this type is to consolidate every obtained data into one system to facilitate access by various departments in a company.

4. Campaign Customer Data Platform

This type understands that not all customers have the same customer experience (CX) or customer journey.

Therefore, in addition to analyzing market segments, this type is also capable of managing marketing materials and messages with a much more personal approach.

With this level of capability, companies have a greater opportunity to design marketing campaigns that are not only effective in general but also highly relevant to each individual customer.

Types of Customer Data in CDP

Here are some of the most common types of customer data typically recorded in a Customer Data Platform. 

1. User Identity

Identity is the most crucial data in this data platform as it helps businesses identify and understand customers better. The identity data generally includes information such as:

• Full name
• Demographic information (including age and gender)
• Home address and postal code
• Contact information (such as phone number and email)
• Social media usernames
• Employment-related information (occupation and workplace)
• Account-related information (user ID and company-specific accounts)

2. Descriptive Data

As the name suggests, this type of data in the Customer Data Platform is usually detailed to help businesses get to know customers more deeply. Descriptive data includes:

• Family information (marital status and number of children)
• Customer lifestyle (home type, vehicles, and pets)
• Career-related information (income, industry of employment, workplace)
• Customers’ specific hobbies

3. Quantitative Data (Behavioral)

Quantitative data can be utilized to measure campaign performance and understand customer preferences. This type of data shows how potential customers engage with a brand, including actions, reactions, and transactions. Some of the presented data generally includes:

• Email data informing the percentage of Click-Through Rate (CTR) and conversions
• Online activity information (website visits and customer interactions on social media)
• Transaction-related data covering product purchases or returns

4. Qualitative Data

The advantage of qualitative data is it helps the marketing team understand feedback, responses, opinions, and motivations of customers towards a product or brand. 

Since qualitative data deals with quality, it can include information such as customer opinions, ratings, and recommendations provided by customers.

The Main Objectives of CDP

If the platform is capable of unifying various types of data from various sources, then what is the actual purpose of CDP?

In broad terms, its main function is to assist marketing teams in analyzing new facts about customers to later offer a more personalized experience to each customer. Discover more about it below!

1. Collecting, Organizing, and Managing Customer Data

Managing customer data can become easier and more organized when done on a centralized platform. As for this, CDP is the solution. 

One advantage of utilizing CDP is that you can ensure much more organized customer data management. 

With this data platform, a business can save time and resources in managing extensive databases. 

In the current global communication era, especially, customer data security is a critical aspect that needs to be safeguarded as much as possible to avoid the risk of leaks or misuse.

2. Analyzing Customer Data with Full Insights

This Customer Data Platform supports the analysis of customer data by involving a comprehensive understanding of customer behavior throughout the customer journey. 

With four main components; data collection, sorting, storage, and analysis, it is undeniable that CDP indeed facilitates the entire analysis process.

3. Avoiding Data Silos

With Customer Data Platform, you can overcome data silo issues because this platform works by combining customer and employee data in one medium. 

This data platform can also ensure universal access so that all data can be accessed by any department member to obtain customer information quickly and efficiently.

4. Directly Collecting Data

This data platform enables businesses to collect data directly from customers, including information obtained from website visits and social media activities. This is beneficial to reduce data input errors if done manually.

5. Maintaining Customer Security and Privacy

The Customer Data Platform is also equipped with high-security settings and technology to help businesses protect customer data privacy and security from being misused by irresponsible parties.

6. Assisting in Building Buyer Personas

With the help of this data platform, you can build in-depth customer profiles to better understand the needs and preferences of each individual and customer interacting with the brand.

7. Maximizing Digital Marketing Strategies

A great and well-organized Customer Data Platform can help companies design digital marketing efforts with more effective cross-channel and omnichannel marketing. 

The consolidated accuracy of data on CDP also allows a company to design better and more targeted marketing strategies for future implementation.

Differences Between CDP and DMP

After you understand the concept, you might briefly recall another data storage platform with a similar function, DMP. 

However, it should be noted that these two are almost totally different concepts. To avoid confusion in distinguishing CDP and DMP, you should understand their respective characteristics below:

• Based on Activities Conducted: Customer Data Platform influences all marketing activities and business strategies, while DMP generally focuses more on advertising to achieve better audience targeting.
• Data Sources Obtained: CDP collects first-party data directly from its source to ensure information accuracy. In contrast, DMP tends to collect third-party data through data providers, managers, and other services that include data from various external sources.
• Data Storage Capability: The Customer Data Platform focuses on long-term data storage to build in-depth and accurate customer profiles. DMP stores such data for a short period as it is used to target ads and build similar audiences during specific campaign periods.
• Customer Identification Approach: CDP performs personalized customer identification, such as names, email addresses, and customer IDs. DMP identifies customers anonymously, often through cookies and other tracking technologies.