Forrester Consulting Opportunity Snapshot: CDPs Must Transcend Data Aggregation

Customer Data Platforms: What You Need to Know About CDPs

What is a CDP? 

In simplest terms, a customer data platform or CDP is software that centralizes and unifies an organization’s first-party data collected and aggregated from multiple sources. The goal is a single, comprehensive view of every customer and his or her relationship with your brand. 

Of course, there are many purposes to a CDP that have made a single definition of what a CDP is difficult to nail down. But essentially it creates a comprehensive customer database accessible to and from other systems to store, analyze, and orchestrate customer interactions. 

Why implement a CDP? 

There are several business reasons an organization may choose to implement a customer data platform. Following are a few of the top as well as the most common business drivers. 

  • Centralize an organization’s first-party customer data. Many of the systems that marketers use operate in siloes without the ability to share data back and forth. By centralizing that data in a CDP environment, marketers gain a complete view of the customer relationship and the ability to analyze behavior and transaction trends for better decision making. Essentially the CDP becomes a marketer’s easily accessible, single source of truth for first-party customer data. 
  • Manage the integrity of first-party customer data. Customer data platforms give marketers the ability to control data flow between systems and automate processes designed to integrate and cleanse data making it more operational. CDPs can operationalize many of the steps necessary to manage consent and compliance.  
  • Activate first-party customer data in market. Once first-party data is centralized in a customer data platform and organized into customer profiles, it is available and optimized for activation in marketing programs and across channels. 
  • Gain insight into audiences and customer behavior. Analyzing first-party data in a customer data platform can provide marketers with a better understanding of audiences and segments and enable them to create more personalized offers. Marketers can use the insight from a CDP to target customers who searched a specific product or visitors who abandoned a cart, for example. 

What type of data comprises a CDP? 

Customer data platforms manage first-party data—that is data collected by a brand or organization over the course of customer engagement and interactions. As a rule, organizations should know exactly where, when, and how first-party customer data is collected. 

Examples of first-party customer data include demographics, website activity, online and social behavior, transactions, email engagement, customer service and sales interactions, customer feedback programs, purchase history and inferred interests. 

By contrast, third-party data is purchased data or data that is shared from other businesses. Zeta’s CDP offering is unique in that it provides seamless integration with the Zeta Data Cloud, a proprietary third-party solution comprising 225M+ consumer profiles and billions of purchase and transaction signals. From improving personalization with additional customer insights to targeting prospect audiences for new customer acquisition, the Zeta Data Cloud can exponentially increase the usefulness of your first-party data for marketing. 

Can a CDP help with data security and compliance? 

Customer data platforms can help facilitate efforts to protect data and manage compliance with data privacy laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Some ways a CDP can assist with data protection: 

  • Limit data collection to only what’s necessary to your marketing efforts 
  • Automate data collection and management in accordance with legislation 
  • Regulate the amount of personally identifiable information you collect 
  • Control data flow between different systems and manage consent 

How is a CDP different from a DMP? 

It’s not unusual for people to confuse CDPs and DMPs since both are used to identify audiences to target for marketing purposes. The difference is in the kind of data each one uses and how each one empowers marketers to use that data. 

A customer data platform is used to collect data from your organization’s owned media and systems where customers interact directly with your business. This could be your website, an email campaign, mobile app, in a store or via a customer service portal. A CDP can share this data with other systems in your mar-tech stack for more relevant, targeted marketing to customers. 

Conversely a data management platform manages large volumes of anonymized data. That data may be purchased from a data seller or anonymized from the DMP’s own sources of data. In either case the anonymized data is sold to advertisers as audiences for targeting. Transactional customer data is normally also missing within a DMP to avoid privacy issues.  

Can a CDP replace the need for a CRM? 

A customer data platform should not be thought of as a replacement or an alternative to a customer relationship management solution. Rather they benefit significantly from one another. 

A CDP collects, unifies, and centralizes first-party customer data from multiple sources and creates a single source of truth that is made available to marketing systems in real time. CRM solutions enable businesses to manage customer relationships and interactions with prospects and consumers and supports a rather rigid predefined data structure. Ideally because a CRM is part of the mar-tech stack, the CDP and CRM should work in concert with each other within the same marketing ecosystem.  

At Zeta we see the relationship between the CDP and CRM solution as critical. That’s why our Zeta Marketing Platform features an embedded CDP at its core, ensuring that accurate and enriched customer data is available in real time for activation via the ZMP’s customer relationship management capabilities—orchestrated, personalized campaigns and offers across channels. 

How is a CDP different from a data warehouse? 

A data warehouse  is very much like the name says—a place where data can be collected and stored. However, data warehouses lack the ability to process the data in any meaningful way. Data warehouses do not have the identity resolution capabilities that CDPs feature to make data more effective at driving customer interactions.  

Data warehouses are helpful in supporting data analysis but are usually limited to storing data in the same form as the system from which it was sourced.  Data warehouses are also updated less frequently, and some are not able to ingest data in real time and struggle storing unstructured data making them unsuitable for the rapidly changing nature of customer information.  

What are the advantages of having a CDP? 

Following is a summary of the key advantages of a customer data platform. 

  • Unifying all types of data (structured, unstructured, online, offline, PII and non-PII) from disparate systems into a centralized view  
  • Collecting data from every customer touchpoint and making it available to all your marketing systems and programs in real time 
  • Creating consistent customer interactions across channels and systems all driven by the CDP as a single source of truth 
  • Delivering highly personalized messages and offers using customer knowledge derived from third-party customer data as well as integrated third-party insight  
  • Leveraging a better approach to identity resolution that powers a single, actionable customer view and eliminates bad data via automated cleansing processes 
  • Better understand behavior and intent throughout the customer journey and make better marketing decisions based on real-time, predictive insights 

How do marketers use CDPs today? 

Some examples of customer data platform use cases include: 

  • Data unification and enrichment for a true golden record and smarter segmentation 
  • Real-time personalization and offer selection at each customer lifecycle stage 
  • Cross-channel orchestration for a coordinated, impactful customer experience 
  • Customer activation across channels that drives engagement and growth 

What’s unique about Zeta’s CDP offering? 

Zeta’s CDP+ solution offers three distinct advantages over other CDP offerings. 

  • Identity and data: Zeta offers embedded data enrichment capabilities with proprietary signals from our own Data Cloud. Our Zeta Identity Graph Services enable marketers to identify more people earlier (including anonymous users) and drive better upfront experiences. Zeta’s CDP offers the scale of walled gardens while remaining agnostic and usable everywhere. 
  • Modern, all-in-one platform: Zeta offers ease of setup and integration thanks to a schema-less database supporting structured and unstructured data. Easy integration accelerates speed to value and reduces complexity. Zeta’s platform also bridges the gap between a system of insight and a system of engagement (including native execution channels such as email), leading to a lower total cost of ownership. 
  • Service: Zeta services what we sell, and we know our product better than anyone. From implementation to account management our services are never outsourced, and our flexible service model (self, hybrid, or managed) is delivered by a tenured account team backed by in-house services expertise for end-to-end marketing support. 

Want to discuss what Zeta can do for you? Request a demo to see Zeta’s CDP in action. 

In The Know

Get Fresh Marketing Insights Delivered Right To Your Inbox.

SUBSCRIBE TO OUR NEWSLETTER