What is a Customer Data Platform?

A Customer Data Platform (CDP) is a type of software that marketers use to manage customer data. CDPs unify customer data from all touchpoints and channels, including POS (Point of Sale) systems, websites, email, and social media, into a single database. This database is then made accessible to other systems like CRMs, analytics software, and email marketing and marketing automation platforms, which can leverage the data to help marketers enhance customer experiences. 

 What are the different types of data in a CDP?

Customer data platforms store customer data from a wide variety of sources, and this data can be broken down into several main types: 

1. 1. First-party data: First-party data is information that is gathered from customers directly by a company. This is most commonly done through website interactions, app usage, in-store transactions, and email forms. Some typical examples of first-party data include demographic information and purchase history. This data provides direct data into a company’s immediate customer base.
   2. Second-party data: Second-party data essentially encompasses the same types of information that are collected for first-party data. However, second-party data is collected differently. Rather than being gathered directly from customers, second-party data is collected by a trusted partner and subsequently shared. This data offers insight into shared audiences.
   3. Third-party data: Third-party data, as with second-party data, comprises the same information types as first-party data, but is again obtained via another method. Rather than collecting the information directly from customers or receiving it from a trusted partner, companies typically purchase third-party data from other organizations with whom they have no pre-existing relationship. This data can be useful for identifying for establishing customer groups and identifying new potential audiences.
   4. Behavioral data: Behavioral data is information about customer activity and behavior. This information is often collected across multiple channels and can include data such as site visits, page and product views, and social media and email engagement data. This data helps give companies an understanding of consumer behavior patterns and engagement trends. 
   5. Transaction data: Transaction data relates to the purchases customers make. This includes a wide range of information types, including order details and value, dates and times of purchases, payment information, return frequency, and shipping and billing addresses. This data can give companies an indication of the value of individual customers, as well as insight into their habits, preferences, and purchasing trends.

What are CDPs used for?

The information collected in CDPs can be leveraged in a wide variety of ways. The following are some of the most common applications for CDPs:

• Segmentation: Companies can use the data collected in CDPS to categorize customers into groups. These groups could be based on specific characteristics or activities, such as those making frequent purchases or regularly abandoning carts without completing a transaction. This enables marketers to reach these customers with relevant messages that can boost engagement most effectively.
• Personalization: Marketers use information about customers’ identities and behaviors to tailor their experiences. This means including individuals’ names in marketing emails, sending specific types of marketing content to fit their interests, and sending marketing content at particular times and with a frequency that aligns with their engagement level.
• Omnichannel experiences: Marketers used data from CDPs to build seamless omnichannel experiences. This means that customers are identified, recognized, and treated consistently across all channels.
• Strategic decision-making: Companies can use CDP data to draw insights about product, marketing, and customer strategies. This can help them to create customer experiences that align with the needs and preferences of their target audiences.

What is the difference between a Customer Data Platform and a Data Management Platform?

CDPs and DMPs both have applications in marketing and advertising. However, there are some important distinctions to be drawn between them, primarily in terms of the functions they serve and the types of data that they use. 

CDPs utilize all data sources relating to customers, with the primary focus being the creation of detailed customer profiles for targeted, personalized marketing. DMPs, on the other hand, primarily deal with third-party data which is anonymized. This data is generally used to draw broader insights for wider ad campaigns rather than focusing on customers at the individual level.