The marketing technology landscape is vast and ever-changing. It seems like there's a new tool being announced every day, each one more confusing than the last. One of the most recent additions to this fray is the customer data platform, or CDP. Even though CDPs have been around for a few years now, they're still relatively new, which means there's a lot of confusion about what they are and how to buy one. In this blog, we’ll go over how a CDP compares to other key parts of your tech stack, why buy a CDP, and what to consider when evaluating CDPs.
A CDP, or "customer data platform," is defined by the CDP Institute as ‘a packaged software that creates a persistent, unified customer database that is accessible to other systems.’ The CDP Institute has also categorized the many CDPs on the market as Data CDPs, Analytics CDPs, Campaign CDPs, and Delivery CDPs. Since most CDPs on the market have evolved from other technologies, they can vary in their overall capabilities, but at their core, they all centralize and unify customer data from across an organization to be usable by marketers.
CRMs, or "customer relationship management" systems, are focused on managing the relationships between a company and its customers. This includes tasks such as recording interactions and sales activity, managing leads, and tracking service inquiries. The main purpose of a CRM is to improve customer satisfaction and retention.
BI tools, or "business intelligence" tools, offer analysis and reporting capabilities for businesses to make informed decisions about their operations. They can gather data from multiple sources including CDPs and CRMs, allowing for a comprehensive view of the business performance. These tools also often include visualization features like charts and graphs to help present the information in an easily digestible format.
In summary, CDPs focus on customer data analysis and activation — mainly used by marketers, CRMs focus on managing customer relationships — mainly used by sales and customer support, and BI tools offer overall business analysis capabilities — mainly used by executives, IT, and analysts. While each of these tools provide value to stakeholders across the organization, each comes with their own features and functions specific to their primary users’ needs.
Many businesses struggle with customer engagement and data silos, resulting in a lack of efficiency and slow decision-making processes. That's where the Customer Data Platform comes in. A CDP allows for the unification of customer data from different sources and channels into a single platform. This not only helps streamline communication between departments, but it also helps create a holistic understanding of customer behavior and preferences. By utilizing a CDP, businesses can make more informed decisions and improve their customer engagement strategies. It's no wonder that industry experts predict that CDPs will continue to grow in popularity as companies strive for customer-centric practices. Simply put, investing in a CDP can have a significant impact on improving overall business success.
The first step in buying a CDP is to compile a list of must-have features. This will vary depending on your specific needs, but some common features to look for include the ability to collect data from multiple sources, real-time integration, built-in segmentation capabilities, and support for multiple channels (including email, web, mobile, etc.). Once you have your list of requirements, you can start evaluating different CDPs against those criteria.
When evaluating CDPs, it's also important to consider things like ease-of-use and price. After all, there's no point in investing in a platform that's so complex and confusing that nobody knows how to use it! And even though price shouldn't be the only consideration, it's still an important factor — especially for small businesses who have limited budgets.
Once you've narrowed down your options, it's time for a trial run! Most CDP vendors offer free trials so that potential customers can test out the platform before making a commitment. This is an essential step in the process because it will allow you to see firsthand whether or not a particular CDP is right for your business.
A customer data platform (CDP) is a system that collects data from multiple sources and organizes it into a single customer profile — ultimately helping marketers drive better customer engagement through personalization and smarter targeting. If you're thinking about buying a CDP, the first step is to compile a list of must-have features. Once you have your list of requirements, you can start evaluating different CDPs against those criteria. When evaluating CDPs, it's also important to consider things like ease of use and price, along with how well they meet the needs of your organization.
CDPs are becoming an essential part of a marketing technology stack — helping marketers knock down data silos and activate data to create better customer experiences.