What is a customer data platform and why you need one?

A customer data platform (CDP) combines data from multiple sources and creates a single database that you can leverage to boost your CX. Deep dive into this blog to know what is a CDP and how you can use it.

Content Marketing Team Lead

Zoha Tapia

Content Marketing Team Lead

Picture this: you’re running a business, and you want to provide your customers with the best possible experience. You want to understand their needs, preferences, and behaviors, so you can tailor your products and services to meet what they’re looking for. But how can you do that without data? Yes, data – one of the most valuable currencies you get from your customers, besides their business of course.

This is where customer data platforms (CDPs) come in.

CDP is an innovative technology that unlocks the power of customer data by creating a single source of truth. A CDP provides a central repository for all customer data, allowing businesses to analyze and understand their customers better.

By collecting, analyzing, and connecting customer data from every touchpoint, CDPs give businesses unprecedented insights into their customers’ behaviors and preferences. This helps them create more targeted, personalized experiences for their customers, resulting in happier customers and increased loyalty.

CDPs offer a powerful solution for businesses looking to unlock the full potential of their customer data, and deliver a personalized, seamless experience to their customers.

Still wondering if you need one? That’s exactly why we have written this blog, give you the ins and outs to help you understand what a cdp is and why you need one.

What is a customer data platform?

A CDP is a powerful tool that allows you to collect, store, activate and analyze customer data from a variety of sources, such as website visits, social media interactions, and omnichannel campaigns. By bringing all of this data (and more) together in one place, you can gain a comprehensive understanding of your customers and their behavior. This can help you personalize your marketing campaigns, improve your customer service, and ultimately grow your business.

But CDPs are not just about collecting data. They also help you use that data in meaningful ways. With the right analytics tools, you can gain insights into customer behavior, such as when do customers like to receive messages, and which marketing channels are most effective. Armed with this knowledge, you can make smarter business decisions and stay ahead of the competition.

what is a customer data platform

CDPs are different from CRMs or DMPs because they focus on understanding the customer rather than just tracking transactions or managing campaigns. But we will get to that part later in the blog.

Additionally, since they may not rely on third-party applications, they provide greater control over customer data while ensuring compliance with privacy regulations like GDPR.

Giving that coveted 360-degree view of a customer

A 360-degree view of the customer is invaluable for companies looking to understand their audience better. It allows businesses to get a holistic understanding of their customers by aggregating data from multiple sources such as online behavior, purchase history, and interactions with customer service.

With a 360-degree view of the customer, businesses can better understand their customers’ needs and preferences, helping them anticipate changes in demand and build stronger relationships. And by giving companies access to accurate and up-to-date customer data, a CDP provides that 360 view and helps stay competitive in an ever-changing market.

What is the difference between a CDP vs CRM vs DMP

Now you would’ve heard a lot about CRM, DMPs, and CDPs, and they all have one thing in common –data. But that is where the commonality ends. While a CRM and DMP do help manage data, their use is limited when it comes to customer communications, personalization and segmentation. Hence, it’s important to know the difference.

Customer Relationship Management (CRM) systems are great for managing customer data and tracking interactions with customers. CRMs allow you to store customer information in one place, so you can easily access it when you need it. They also allow you to track sales activities, such as purchases, upsells, and support inquiries. Finally, they provide insights into customer behavior, which can help inform future marketing strategies.

However, a point to note: While CRMs are great for managing customer relationships (especially with sales teams), CDPs go a step further by unifying and activating customer data, allowing for more personalized and effective marketing campaigns.


A Customer Data Platform (CDP) is similar to a CRM but covers a much wider range of data sources. A CDP collects data from multiple sources including digital and messaging channels, contact centers, forms, web analytics, and offline sources such as brick-and-mortar stores to predict future behaviour. This allows for more comprehensive insights into customer behavior and preferences across channels. A CDP also allows for better segmentation of customers based on their attributes and interests.

That brings us to the last of the data management tools that exist – a data management platform aka DMP.

A Data Management Platform (DMP) focuses specifically on aggregating third-party data from external sources such as websites and mobile devices. This allows marketers to gain insights into the interests of their target audiences, which can be used to create more effective campaigns and deliver personalized experiences to the right people at the right time.

So, as a conclusion in the battle of the best data platform: having a CDP is essential for companies looking to gain a comprehensive understanding of their customers and provide a truly personalized experience. While DMPs and CRMs are great for collecting and managing data, a CDP combines the best of both worlds by unifying and activating customer data, allowing businesses to build long-lasting relationships with their customers and drive growth.

What type of data does a CDP store?

As mentioned earlier, customer data is the most valuable form of currency a business can have. But to leverage a CDP, it’s important to know the different types of data that exist.

CDPs collect everything from basic customer data such as name, address, and email address to more detailed information such as purchase history, online behavior and any interaction with the brand. This data helps companies create personalized experiences for their customers by providing insights into their preferences, needs, and interests.

By collecting this data in one central hub, CDPs enable businesses to create a single source of truth about their customers that can be used across different teams and departments. Companies can use the insights gained from this collected data to improve their marketing strategies and create more targeted campaigns that are tailored specifically to each individual customer. With the help of CDPs, businesses can make better decisions that will ultimately lead to increased customer satisfaction and loyalty.

Zero-party: data a customer provides

Zero-Party Data is data that customers actively provide to businesses. This type of data is typically given voluntarily by customers when they fill out forms or surveys on a company’s website, sign up for newsletters, or register for loyalty programs.

Zero-Party Data differs from other types of customer data because it does not need to be inferred from other sources such as web browsing history or purchase records. Instead, this data is provided directly by the customer and gives businesses an accurate and up-to-date view into their preferences, interests, and needs.

Companies can use Zero-Party Data to create more personalized experiences for their customers, which will lead to increased satisfaction and loyalty in the long run. Furthermore, since this information is given willingly by the customer, companies can be sure that they are respecting customer privacy by only using data that was explicitly given by them.

First-party: data collected based on customer behavior

First-party data is collected directly from a customer’s interactions with a company’s website or mobile app. This type of data includes login information, click-through rates, purchase history, and other usage patterns.

Companies can use this data to better understand their customers’ behaviors and interests to create targeted marketing campaigns and personalized experiences. First-party data is particularly useful for online retailers because it allows them to track how customers interact with their site from start to finish, including what products they are viewing and when they are making purchases.

Through this data, companies can gain valuable insights into customer behavior that will help them optimize their websites for greater engagement and sales.

Second-party: data provided by an external compliant data source

Second-party data is data that is gathered from a source separate from the company itself. This could be anything from a third-party website or app to a partner company with whom you’ve set up an agreement.

Second-party data can provide invaluable insights into customer behavior, as it often provides more detailed information than first-party data. For example, if you have access to a partner’s user engagement data, you can get an in-depth look at how customers are interacting with their products and services. You can also gain insights into customer demographics and geo locations, allowing you to create more targeted marketing campaigns and personalize experiences for users.

In order to ensure compliance with privacy laws, it’s important to use only trusted sources when gathering second-party data.

Third-party: data gathered from external sources

Third-party data is data gathered from external sources that are not your own. This data is usually collected through cookies placed on websites and apps, or through other tracking technologies like pixels.

This type of data can provide valuable insights into user behavior, such as what sites they visited, what content they interacted with, and how often they returned to a specific page. Third-party data can also give you an understanding of user demographics, including age range and geographic location.

While this type of data can be incredibly useful for marketing purposes, it’s important to ensure compliance with privacy laws when gathering third-party data. This means only using trusted sources and adhering to cookie policies when tracking users online. Also, with Apple and Google looking to ban cookies, this type of data will get tougher to track.

Now that we have covered the basic types of data, when it comes to the actual customer profiles stored in your CDP, the data can be divided into the below.

What are the benefits of a CDP?

The benefits of using a CDP are numerous. With a CDP, businesses can gain a more holistic view of their customers, enabling them to create tailored experiences that meet their needs. Additionally, they can use the insights gathered from analyzing customer data to personalize marketing campaigns and drive engagement with targeted audiences. Finally, businesses can use CDPs to improve internal operations by automating processes.

All data in one centralized place

Having a centralized view of your customer data is a must for any business. A CDP easily collects and stores data from multiple sources in one place, giving you a comprehensive view of customers across all channels. Having this information at your fingertips allows you to segment customers based on their interests and attributes, helping you create tailored experiences that meet their needs.

Additionally, analyzing customer data can help you personalize marketing campaigns and drive engagement with targeted audiences. By having all of your customer data in one place, businesses are able to reduce manual tasks and streamline workflow processes – making it easier than ever to get the most out of the customer.

Enhanced customer profiles

Having an accurate customer profile is key to creating personalized experiences and maximizing customer satisfaction. A CDP can help you improve your customer profiles by collecting data from multiple sources in one place. This allows you to analyze your customers’ behavior, preferences, and interests which can be used to create targeted offers and campaigns that are tailored to their individual needs.

Additionally, CDPs allow you to segment customers into different groups based on their behaviors, making it easier for marketers to target the right audiences with the right message on the right channel. By improving customer profiles with a CDP, businesses can make sure that their marketing efforts are always relevant and up to date.

True personalization

True personalization is the key to creating meaningful, lasting relationships with your customers. With a CDP, you can use all the data you have on each customer to gain a better understanding of them and create personalized experiences tailored to their needs.

CDPs provide access to data from multiple sources, allowing you to get a complete picture of each customer and create targeted campaigns that are tailored specifically for them. By leveraging this data, you can provide a truly personalized experience.

true personalization with cdp

Better targeting

Better targeting is one of the most significant advantages of using a CDP. With a CDP, you can quickly and accurately target the right audiences with the right message, at the right time, and on the right channel, leading to higher engagement and increased conversions. Additionally, CDPs allow you to analyze customer interactions in real-time, allowing you to make quick adjustments to ensure maximum effectiveness of your marketing efforts.

send time optimization

Who is a CDP beneficial for?

CDPs are beneficial for businesses of all shapes and sizes! Whether you’re a small startup or a large enterprise, a CDP can help you better understand your customers and provide a more personalized experience.

If you’re a marketer, a CDP can be a game-changer. It can help you better target your campaigns, understand which marketing channels are most effective, and ultimately drive more revenue. By having a complete view of your customers, you can create more relevant and engaging content that resonates with them on a deeper level.

For sales, a CDP can help you identify new opportunities and close deals faster. By understanding your customers’ needs and preferences, you can tailor your pitch to meet their specific needs, leading to higher conversion rates and increased revenue.

And for customer support teams, a CDP can help you provide a better customer experience by giving you a complete view of a customer’s interactions with your company. This can help you resolve issues faster and provide more personalized support.

CDPs are especially beneficial for digital transformation teams, as they play a crucial role in modernizing and streamlining data operations.

One of the biggest challenges of digital transformation is bringing together disparate data sources and systems into a cohesive and unified platform. This is where a CDP shines, as it can bring together data from multiple sources, such as customer profiles, transactional data, and behavioral data, into a single, unified view. This not only makes data management more efficient but also ensures that everyone in the organization is working with the same accurate and up-to-date data.

Additionally, CDPs can help digital transformation teams automate many of the time-consuming and repetitive tasks associated with data management, such as data cleaning and normalization. This allows teams to focus on higher-level tasks, such as analyzing data and driving business value.

In short, CDPs are essential for digital transformation teams looking to modernize their data operations, increase efficiency, and unlock the full potential of their data. By providing a single source of truth for customer data, CDPs can help organizations accelerate their digital transformation and stay ahead of the competition.

All in all, a CDP is beneficial for anyone who wants to better understand their customers and provide a more personalized experience. So, if you’re looking to take your business to the next level, a CDP might just be the tool you need.

What are the functionalities you need to look for when choosing a CDP?

When choosing a CDP, there are a few key functionalities to look for.

First, make sure the CDP can handle a wide range of data types, including both structured and unstructured data. This will ensure that you can collect data from all of your customer touchpoints, including website visits, mobile apps, channels and interactions.

Next, look for a CDP with robust analytics capabilities, such as machine learning and AI. These tools can help you derive insights from your data and make more informed business decisions.

It’s also important to consider the CDP’s integration capabilities. Look for a CDP that can seamlessly integrate with your existing marketing and sales tools, such as your marketing platform or CRM. This will ensure that you can easily activate your customer data and use it to drive more personalized and effective marketing campaigns.

Finally, make sure the CDP has strong security and compliance features, such as data encryption and GDPR compliance. This will ensure that your customer data is protected and that you’re adhering to the latest data privacy regulations.

>>> To know more check out our blog on the 7 must-have customer data platform capabilities.

Now that we have gone through what a CDP is and the benefits it brings along with it, it’s time to test it out for yourself.

Check what you can do with a CDP

Visit the People CDP page
Mar 29th, 2023
14 min read
Content Marketing Team Lead

Zoha Tapia

Content Marketing Team Lead