Ever wondered why is it that CDPs are gaining momentum? What makes CDPs different from others? The Customer Data Platforms exist because customer data has become so important in the operations of business and markets today. Customer data helps in boosting income derived from data through data monetization strategies.
CDPs help companies in getting unified and accessible customer data. So a CDP can provide the foundation your company needs in the coming years to meet the dynamic changes in customer expectations and delivering better-personalized experiences.
Primarily we’ll also talk about the difference between CDP and DMP. Let’s get to the core of Customer Data Platforms below by trying to look into the various facts that guide its way.
1) So, firstly what is customer data?
Customer data is the information that the consumers leave behind while they use the internet and connect to various companies in the online or offline mode.
Let us talk about some of the types of customer data that a CDP can collect and manage:
Identity Data- With this data, you can identify a customer uniquely. Identity customer data includes a customer’s name, demography, location, contact, social media identity, professional information, account information etc.
Descriptive Data- Descriptive data is an expansion to the identity data and gives a fuller picture of the same. For, e.g. if an identity data tells about a customer’s career, then the descriptive data would talk about the company name, industry, income, job level, previous employer etc.
Quantitative Data- Quantitative data includes information related to the transactions done by the customers. These include the number of products purchased and returned, the frequency of leaving the carts, the date of ordering products etc.
Qualitative Data- Qualitative data provides information regarding the personality of a customer. This includes opinions, motivations or attitudes that a customer expresses in a purchase or interaction.
For eg., how the customer comes across a product? Their favourite colour for a textile, how do they rate the product etc.
So, we can see that CDPs can collect and organize a wide variety of data. Now, what exactly is a Customer data platform?
2) What is a Customer Data Platform?
A Customer Data Platform (CDP) is a software that can combine and regulate customer data across several touchpoints. You can further use this CDP data for putting up marketing efforts.
A Customer Data Platform can gather and structure the real-time data into individual, centralized customer profiles and come up as CDP data.
Customer Data Platforms builds customer profiles by combining data from the first-party, second-party, and third-party data sources. This shall include your CRM and Data Management Platform, web forms, website data, transactional systems, email and social media activity etc.
There are often discussions on finding them similar, but there’s definitely some vital difference between CDP and DMP which we shall talk a little later in this article.
3) Now, what are the main benefits of a CDP?
Know Your Customers better
CDPs build customer profiles in such a way that it helps your organization to get acquainted with every individual. As a result, CDPs can equip you to manage your customer relationships and market with your audience in mind, accurately and effectively.
Collect accurate data from the audience
How can you be confident that a collected data is correct? You can do so by collecting first-party data, i.e., the data directly from your customers, subscribers, site visitors and social media followers.
This data comes straight from the audience, so it is the best type of data you can collect and use for marketing decisions.
Get a Single Customer View with a customer data platform
Customer Data Platforms are built to gather data from a wide variety of sources. And then, unify it together to form a complete view of the customer across various devices and channels. As a result, they make that data available to other systems.
Promotes alertness in businesses
A CDP focusses on data foundation and enables businesses to gather data from all sources and then use it to promote better customer experience.
Practices democratization of Data
A CDP platform practices ‘democratization of data‘ as CDP data. That is to say that it provides access to even the non-specialists in leveraging customer data across various touchpoints and departments without any outside help.
Avoid data silos with Customer Data Platform
Data silos lead to a less collaborative environment. It slows the pace and productivity of an organization, and also threatens the accuracy of customer data.
But with a CDP, you can unify the customer data and employees and be sure about the accuracy of your CDP data. As a result, CDP platforms help in avoiding data silos.
Derive more Effective Marketing and Customer Experience
Customers have been active for purchases across all devices and expect consistent experiences always. So, with a Customer Data Platform, businesses can get a complete view of the customer’s behaviour to drive the most pleasant customer experience.
Establishes efficiency in operations
CDPs can centralize customer data with maintained turnkey integrations that save many hours that could otherwise take you in integrating.
Also, a CDP platform helps in setting up the audiences and business rules in one place while enabling to use across various tools. This saves duplicated efforts too.
Monetize your customer data
Customer Data Platform collects and organizes customer data which is used to enhance customer experiences. It also improves service quality, targets marketing efforts and increases upsell opportunities.
As a result, you can add insights to the CDP data and make it more useful for your company and earn revenues.
Audience play is one great platform to use data from your audiences to maximize revenues.
4) But, are DMPs and CDPs similar?
A DMP fosters to a wide variety of data needs. It has often been quite a discussion that they are similar, and also there is a difference between CDP and DMP.
Another point here is that which among the two are used more and if the two can together be used or not. Let’s get a detailed plot below:
First, let’s see how are DMPs and CDPs similar?
- A CDP and DMP both leverages the existing customer data.
- Both of them help in creating a single view of the customer.
- DMP and CDP platforms use your data for Audience activation
- And they are both used in purposes of reporting, analysis and optimization.
5) Can you use a DMP and CDP together?
Yes, they are complementary.
However, there are differences between DMPs and CDPs; it is not necessary to treat them as competing technologies. So, they can complement each other as well. You can let your DMP platform data absorb into a CDP platform.
As a result, this will improve segmentation and then optimize your user experience. You can also push your CDP into DMP and thereby enhance the accuracy of lookalike audiences.
Once you attract the desired customer to your site, it’s time for your CDP to take control of the personalization and more.
6) How are CDPs and DMPs different from each other?
Customer Data Platform (CDP) works with both known and anonymous and individuals. It can store the ‘personally identifiable information’ including names, phone numbers, postal addresses and email addresses. On the contrary, DMP can work with anonymous entities like cookies, IP addresses and several devices.”
So, what is the difference between CDP and DMP? Let’s read below:
Customer Data Platform can influence all forms of marketing, whereas DMPs primarily can influence advertising to bring about better targeting and audience reaches.
CDPs mostly collect the first-party data, directly from the sources. But, a major difference between CDP and DMP is that a DMP can collect first-party, second-party and third-party audience data.
Customer Data Platform reflects personalized and specific customer identifiers such as name, email address and customer ID, while Data Management Platform reflects the anonymous customer identifiers such as cookies etc.
A CDP platform can retain data over a long period to build in-depth, accurate customer profiles and nurture relationships, whereas DMPs maintain data for a short period to target ads and create lookalike audiences.
Let’s talk about some of the Customer data platforms below:
1) Exponea – Exponea’s Customer Data Platform adds powerful marketing execution capabilities on top of a core CDP platform. It enables unparalleled personalized experiences and allows for extremely accurate segmentations.
2) Optimove – Optimove’s CDP platform leverages fostering emotionally intelligent relationships that maximize the value of every customer through managing CDP data.
3) Tealium – The Tealium Universal Data Hub is a reliable approach to collect CDP data, unify and keep the entire stack of customer data connected.
4) Segment – Segment Customer data platform makes customer data simple. It can collect, clean, and control the customer data with Segment and integrate all in one.
5) Listrak – Listrak manages CDP data through cross-Device identification, anonymous user tracking, customer response tracking and delivers great results.
Customer data platform lays the base to your company needs in the coming years and helps you to tackle the dynamic changes in customer expectations and delivering better-personalized experiences.
The success of a customer data platform depends upon how you accommodate it across your organization. It is important to have good first-party data to use a CDP platform.
Now that you understand the points of difference between CDP and DMP, you can watch out which is good for your data requirements. However, they can be used together as well and align towards a better customer journey.
Let us know if this fits into your MarTech stack and help us know what do you feel about the two data platforms.