What is a Customer Data Platform (CDP)?


Businesses today are awash in more data than ever before. There’s transactional data, demographic data, and virtually infinite amounts of behavioral data. Add it all up and you’ve got data from anonymous ad impressions to known customer purchases, all the way through to product usage and customer service.  Customer data is a superset of all this data together.

Typically this data is stored in silos, whether organizational or technological, making it very difficult for companies to provide consistent customer experiences across various channels and consumer devices.


The CDP Institute defines a Customer Data Platform as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” Basically it’s a prebuilt system that centralizes customer data from all sources and then makes this data available to other systems for marketing campaigns, customer service and all customer experience initiatives.


While some CDPs may include overlapping functionality, a CDP…

Is Not a CRM system
CRMs mostly store customer transaction data. They do not have insight into anonymous user behavior (often requiring a form fill or purchase), typically are focused on sales data and only have limited integrations to other systems.

Is Not a DMP
DMPs are cookie-based, do not create a persistent customer profile and integrations tend to be limited to advertising (not the full customer journey). DMPs are focused on 3rd-party data, with some limited ability to integrate 1st-party data, whereas CDPs have a much heavier focus on 1st-party data.

Is Not a Personalization tool
While some CDPs have built native execution tools such as website personalization, this is not a core functionality for the category. This takes focus away from solving the underlying data fragmentation problem that companies in the market are experiencing today.

The Perfect Storm of Martech Growth

“Customer Data Platforms are packaged software that helps companies solve a huge and growing problem: the need for unified, accessible customer data. Like most packaged software, a CDP reduces risk, deploys faster, costs less, and delivers a more powerful solution than custom-built alternatives…With careful planning, a CDP will provide the foundation your company needs in the years ahead to meet customer expectations for exceptional personalized experiences.”

— David Raab, Customer Data Platform Institute

Customer Data Platforms Extend Beyond the Website

A single view of the customer is only as effective as it is comprehensive and actionable. This means that, #1, the number of data sources available to a CDP is critical, and, #2, the number of execution integrations are critical to unlock the value of that data.  You want to have the broadest possible base of data, along with the broadest eco-system to put that data to work.

If a CDP merely has access to website data, there are crucial visibility gaps around that customer’s behavior…for example, in your mobile app, customer service system or in-store behavior from beacons or IoT devices. This leads to uneven customer experiences and low customer loyalty.

If a CDP can only activate data to personalize a customer’s website experience, there are crucial gaps in customer experience delivery…for example, during customer service exchanges, during in-store shopping and in web channels outside of your website (social, search, etc). This leads to missed opportunities to drive more revenue and generic experiences that could be better tailored.

The availability of data from all sources and the availability of integrations to activate this data to all channels is the linch-pin for the value of a single view of the customer.

5 Key Benefits of Customer Data Platforms

1. Single View of the Customer – CDPs are purpose-built to collect data from a wide range of sources, unify it together to form a comprehensive view of the customer across devices and channels, and then make that data available to other systems. That view of the customer can move with your business and customers to wherever it needs to be.

2. Agility – A CDP provides organizations a tool to build and connect a flexible technology stack that adapts to ever-changing consumer behavior and changing technology trends. By focusing on the data foundation, CDPs gives businesses to tools to collect data from everywhere and use it anywhere to drive better customer experiences.

3. Democratization of Data – The value of customer data extends throughout any business. Marketing, business intelligence, customer service and beyond all depend on the availability of data to drive the business forward. A CDP democratizes access to and the ability to leverage customer data across organizational departments and customer touchpoints.

4. More Effective Customer Experience and Marketing – Customers are using more channels and devices than ever and have high expectations for being delivered a consistent customer experience. Customers do not like when they are advertised a product online that they’ve purchased in-store. With a CDP in place, organizations gain a complete view of customer behavior that can be used to drive the most comprehensive customer experience possible without blind spots.

5. Operational Efficiency – The task of integrating point solutions and setting up new technologies and tools used to be resource-intensive, while also not being very reliable as custom solutions can be hard to maintain. CDPs centralize customer data with maintained turnkey integrations saving hours of integration work. Also, audiences and business rules are set up centrally in one place and can be applied across various tools saving huge amounts of duplicated effort between.