Demystifying CDPs: An Easy Guide to Customer Data Platforms

September 26, 2024

By: Michael Blumenfeld

Why Did I Write This?

Many people perceive Customer Data Platforms (CDPs) as overly complex and challenging to understand. This confusion often stems from the technical jargon and intricate functionalities associated with CDPs. Despite their growing importance in the business and data analytics landscape, there is a significant gap in understanding what CDPs actually do. Essentially, CDPs are designed to unify customer data from various sources, providing a comprehensive view of customer interactions and behaviors. However, the perceived complexity can deter businesses from leveraging their full potential. Simplifying the concept and clearly communicating the benefits of CDPs can help demystify these powerful tools and encourage broader adoption.

CDP Value Add: Broken Down

As a marketer with years of CDP experience under my belt, I want to take an opportunity to illuminate the core steps of a CDP to help you realize it is not overwhelming.  During my time implementing, leveraging, and creating value with CDPs for businesses, and speaking at conferences about this MarTech, I have simplified a CDP into 4 easily digestible steps.

Step 1: Data Ingestion

Step 2: Unified Profile Creation

Step 3: Data Shaping and Targeting

Step 4: Value Add Activation

Step 1: Data Ingestion

Data is king! It’s the heart in your body, the engine in your car, the ingredients to your cake recipe, the bourbon to your Old Fashioned, you get the idea.  It is what makes this MarTech platform worth it.   Step 1 focuses on understanding the landscape of your data, the number of data sources you have, the type of data you have, and most importantly, what data the business finds valuable.  We then strategically identify, map, and ingest the data sources to the CDP.   What if you don’t have any data?  That is ok, we can leverage many different types of signals to make this engine roar.

Step 2: Unified Profile Creation

Assuming your business has consumer data, there is a strong chance that it is silo’d.  As an example, you may have payment data in one data warehouse, call center data in another, and email activity in a third. If a consumer calls in, I would be willing to bet that their profile is not updated in the other warehouses.  This is a common problem that many businesses face.  The CDP takes the different data sources and creates a 360-degree view of your consumer, allowing the business to see how they engage with the brand wholistically.

Step 3: Data Shaping and Targeting

This is where the fun comes in.  Let’s take your data and create personas, segments, and targeted lists of consumers that are of high value to the business.  Then what?  Leverage AI and ML algorithms to shape the data automagically!  Yes, it is magic.  The days of spending hours and yes, even days mining your data manually for segments is over.  The CDP handles it for you with OOTB algorithms.  

How is this fun, you may be asking?  This is where your business strategy goes from ideation to tangible asset.  We will leverage these enhanced personas, segments, and targeted lists to execute and meet the goals of the business (i.e. grow revenue, reduce churn, upsell, cross sell, acquisition, and generate actionable insight to name a few).  Everything done should be quantifiable and related back to the business.

Step 4: Value Add Activation

It’s time to engage with your consumer.  Let’s send signals (in real time) containing profiles and segments to different activation points.  Emails, text messages, in app pop ups, browser push notifications, and snail mail are just a few.  Each medium will have a message/creative that will resonate with your consumers on a 1:1 level.  The business has successfully created an optimized user experience, which should result in lift in KPIs.

When executed properly leveraging best in class technology a business can A) Parallel path these efforts, B) Quantify results, and C) Create a truly optimized experience for its consumer base.    

One (Maybe Two) Last Things

Before I get off my soap box, I want to highlight two additional items for you.

First, many people think that CDPs are only for marketing efforts in the retail industry.  FALSE! Data is data.  The data is what allows the CDP to run.

B2B use cases are on the rise and just as common as B2C ones.  Think about leveraging activation and segmentation internally for financial reporting or supply chain forecasting.  These use cases are not geared for your consumer, they are aligned with your internal stakeholders.

Throughout this blog, I used the phrase “consumer” for a reason.  Does a hospital system have customers? In a way, they do, but they cater to patients.  A hotel chain has guests.  An HVAC manufacturer has homeowners and contractors.  My hope is that you can start to think how a CDP can work across numerous verticals and industries.

Second, there are many types of CDPs in the marketplace.  A true CDP allows a business to create the unified profile.  Any piece of technology that does not allow you to do this is not a CDP, it is what I like to call “CDP Light”.  Many of these light CDPs can still bring a ton of value.  

An example of a true CDP is Oracle’s Unity.  This platform, built from the ground up, is a leader in the space and a pillar of Oracle’s CX portfolio.  

An example of a CDP Light is SAP’s Emarsys platform.  This omni channel tool, gives you the same level of insight as a true CDP, just without the profile unification.

Interested in learning more about these platforms and which one is best for your business, please reach out. We are more than happy to give you an objective opinion and recommendation. #ShamelessPlug

Thanks for reading!

‍About the Author

Michael is the founder and CEO of DEVGRU. With over 15 years of optimization experience, Michael has successfully created and managed optimization programs for a number of Fortune 100 and 500 companies within numerous industries and verticals. Michael attended Bentley University in Waltham MA, where he earned a BS in marketing and an MBA in marketing and international business. In his free time, Michael tries to fix his golf swing and enjoys spending time with his adorable 5 year old niece.

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About DEVGRU

DEVGRU is an agency specializing in customer experience optimization (CXO).  At our core, we ensure your user experience is fully optimized so your customers convert on KPIs most important to your business.  From marketing automation and SEO to email marketing and customer data platforms, DEVGRU’s work is proudly done here in the United States.

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