In recent years, the use of Customer Data Platforms (CDPs) has become increasingly popular, with many companies adopting them as an essential tool for better targeting customers with personalized offerings.
For many years, companies have tried to leverage data to engage better with their customers and target them with personalized offerings. However, customer data traditionally came from different sources, such as transaction records, volunteered personal information, and credit scores. These sources were used differently by various parts of a company, leading to data silos. To address this issue, CDPs were invented over ten years ago to combine all data sources and create a single customer profile that is available to everyone in the company.
The prospect of creating an all-knowing, unified customer profile or a “360-degree view” of each customer has generated a lot of buzz about CDPs in recent years. The market for CDP applications is growing faster every year, with a vast number of providers, including large players such as SAP, Oracle, and Salesforce, as well as specialized players like Tealium, Bloomreach, and CrossEngage.
3 Reasons why every company wants a Customer Data Platform?
CDP solutions have a distinct competitive advantage as they provide secure data connections and allow convenient and reliable management of privacy, consent, and cookies. The impending end of third-party cookies will make it much harder for companies to track customers’ internet habits, increasing the complexity of using data in marketing and increasing interest in CDPs.
CDP software usually sits between the various data sources and the IT-system’s business functions that use the customer profiles and audience segments it generates. Companies can buy off-the-shelf solutions from business software suites or specialized suppliers. Alternatively, they can break down internal data silos themselves and create CDP tools in-house if their IT-system architecture allows this.It’s also important to understand the differences between CDPs, Customer Relationship Management (CRM), and Marketing Automation (MA) tools. Many software makers offer larger “customer experience platforms” that combine some CDP functionalities with those of CRM and MA tools. However, with these features side by side or as part of separate products on the platform, the combinations can be as confusing as they can be helpful.
Key takeaways from the CDP white paper
In conclusion, Customer Data Platforms have become an essential tool for companies looking to better understand and engage with their customers. By collecting and unifying customer data from various sources, CDPs create a single, comprehensive view of each customer that can be shared across departments. Additionally, CDPs help companies comply with data privacy regulations by managing data use consent and protecting customer privacy.
Companies need to carefully evaluate different CDP solutions and determine which type of CDP would be most beneficial for their specific needs which is why we are pleased to publish our white paper on CDPs.