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Writer's pictureEleven Digital

What Exactly Is A CDP?

Updated: Oct 10, 2022

The ever-changing customer behaviour coupled with the rapid development of digitalisation has led to an exponential growth in customer data. This constant transformation has left many organisations scrambling to catch up. While those who immediately deployed a unified customer database are able to truly maximise their data and offer their customers a truly unique and personalised experience.

The rise of “click and mortar” businesses and the ever-increasing access to information has dramatically changed how customers interact with brands. Today’s path to purchase is also significantly different. The point of sales from traditional brick and mortar stores has multiplied to include other channels such as social media and ecommerce.

The acceleration of consumer trends and the creation of multiple customer touchpoints also meant an overwhelming increase in the amount of customer data. And as many of us know, data alone is not enough. We need to be able to properly manage and process our data to get actionable insights that will help drive business growth.

So how can you transform your legacy data into meaningful data that's kept up to date and can be utilised across all your business channels?

Answer: By creating a single source of truth for your customer data through a Customer Data Platform (CDP).

What Exactly Is A CDP?

To fully unlock the benefits of a CDP and make the most out of our customer data, we first need to understand how a CDP works and its role in our business.

A CDP is a type of software that utilises a customer database. It pulls in data from first, second and third-party sources and cleans the data before outputting it into a unified omnichannel view.

Unlike data management platforms, CDPs work with both known and anonymous individual data - collecting and organising customer data such as demographics, online behaviour, engagement, transaction history and device data into a single trusted repository.

By using complex matching algorithms CDPs then unify identifiers across different data sets to create a single customer view. Giving marketing, product and leadership teams the ability to activate their customer data for real-time customer engagement and CX improvement. Below is an infographic showing how a CDP consolidates and integrates data from multiple sources and supplies accurate customer data for marketing purposes.



What a CDP is NOT - The difference between a CDP and a CRM

A CDP is often mistaken for a Customer Relationship Management (CRM) platform. While there is some overlap, the two technologies have different functions.

Like CDPs, CRMs also have the capability to collect customer data and provide significant value to your organisation. As their name suggests, however, CRMs exist primarily to engage with customers.

To compare, CRMs are used for the traditional management of customer information. They report on known customers and prospects, capturing data as they engage with a company throughout the sales pipeline. Sales, marketing, customer service and digital commerce teams use CRMs to help them streamline their processes and stay on top of customer communication to build lasting relationships with their existing and potential customers.

They can track customers’ intentional interactions with a company and provide a certain level of analytical insight to its users, CRMs are unable to provide a complete view of the customer beyond the sales cycle. CDP on the other hand is now considered the primary data source of every detail known about a user from lead to prospect through to customer.

In summary, CRMs are designed to help you manage your entire sales and marketing funnels - from lead qualification through to purchase or deal closure. And when operated simultaneously with a CDP, CRMs can further boost the efficiency and effectiveness of your customer-facing teams.

How CDPs will shape the future of CRMs

As mentioned above, CRMs and CDPs aren’t competitors. In fact, when they work hand-in-hand they can deliver the information that will empower your sales and marketing teams to boost business performance.

Below are some of the key benefits of a CDP.

Eliminates data silos

Customer data today is mostly still very fragmented resulting in duplicated and outdated information. For instance, a customer’s basic data may reside in a CRM platform while their purchase data lives in a point of sale system, and so on. Some marketing teams enlist the help of IT teams to extract this data from these systems while others import all this data into their digital marketing platforms for segmentation.

However, these approaches are fundamentally flawed as they require complex segmentation and SQL modelling. It also lacks flexibility and calls for considerable upskilling in coding languages that marketers might not have the desire or time to learn. CDP is designed with these exact problems in mind. Built to handle complex processes, a CDP allows companies to seamlessly sync their customer data from different databases and channels - all of which can be owned and used by their various teams.

A better understanding of customers and optimised segmentation

A CDP collects both online and offline data giving a full 360-degree view of a customer. For product and marketing teams, this means a better understanding of how a customer interacts with their company and engages with their products and services. For the leadership, this means a clearer view of a customer’s lifetime value.

A CDP also breaks down the barriers of traditional segmentation by offering tools that enable marketers to build sophisticated segmentation without coding. The CDP system then provides insights like audience size after segmentation. This capability is essential to show how audiences overlap in order to provide actionable reporting and ensure individuals in an audience can immediately receive the correct communication.

The same capability also allows marketing teams to adjust their efforts based on the current context of their customers - injecting a customer into a specific journey or suppressing a group from a certain campaign.

Connects data strategies and unify cross-channel marketing efforts

The CDP acts as a conduit between your marketing channels and your marketing platform helping you deliver a consistent and connected experience for every individual customer. Through a unified historical and real-time data of each customer, you’re able to get a full picture of where your customers are in their specific journeys and ensure that all your channels (offline and online) including your CRM are in sync, reinforcing the work done by the other.

CDPs are not exclusive to marketing teams alone either. By improving customer data management and democratising data, CDPs help ensure the success of your data strategy and that your various departments work in alignment with each other to achieve your business goals.

Personalised customer experience

As discussed earlier, CDPs can track customer behaviour across all channels. What's more, is it can also surface interactions between data normally kept in isolation. It is this ability that enables marketing teams to access, measure and analyse more details about consumers than ever before. Giving them the advanced intelligence and insights they need to provide hyper-personalised customer experiences at scale.

When a CDP is designed with a personalisation engine, it can aggregate deep behavioural data and activate them at a moment’s notice. Guiding the delivery of relevant content, offers and emails that match an individual customers’ interest and customer-journey triggers like an “in-the-moment” intent.

Maximises the power of predictive analytics

Predictive analytics help you answer questions about the likelihood of certain events occurring. And with the availability of a CDP helping with deep-dive analysis or post communication reporting on engagement data, AI-powered predictive analytics is more powerful than ever.

  • When will the second purchase happen?

  • Who among the existing customers is likely to churn?

  • How much will new customers spend with my brand within a year?

These are questions predictive analytics can help you answer so you can better analyse your sales pipelines and conduct a more effective demand forecasting.


Maximise the value of your customer data

CDPs work best as layers for your other marketing technologies, augmenting current data management and customer relationship management systems. They deliver a holistic view of your customer - their needs, preferences and how they progress throughout their customer journey.

At Eleven Digital, we help clients gain commercial advantage and enable great customer experiences at scale by pairing customer data, technology and augmenting operational processes.

Want to learn more about how you can integrate a CDP to leverage the power of your existing Martech platforms? Connect with our marketing technology experts today.

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