How to get started with the right customer data platform for your organization

Today’s customers expect their interactions with brands to feel personal and engaging. But as your organization works to pivot into a personalized customer experience (CX), let’s take a step back and get a better understanding of the kind of technology system that makes scaled personalization possible — the customer data platform (CDP).

CDPs help marketing teams create unified customer profiles to deliver personalized CX. But marketing isn’t the only team that benefits. CDPs also reduce work for IT teams — a win across departments. And your options for a CDP have virtually exploded in recent years. According to the CDP Institute, more than 160 vendors serve the CDP market, which has grown 25% since 2021, to reach its estimated 2022 size of $2 billion.

Let’s look at just what a modern CDP can do for your organization so that when you’re ready to choose one (or upgrade), you get a system that can support your brand’s success.

What is a CDP?

A CDP is a packaged software system that creates an accessible, unified customer database. The system makes customer profiles available to other marketing and sales systems within the organization, while ensuring that the core database remains intact in a central repository.

“Customers’ expectations for a personalized CX are growing, but a lot of companies are stuck using cumbersome, unconnected systems. CDPs are the way forward.”

– Matt Skinner, Group Manager, Product Marketing, Adobe Real-Time CDP and Adobe Audience Manager

What does a CDP do?

A CDP collects, processes, and applies data in three steps:

Collecting data. Customer data points flow in from multiple sources across the organization.
Creating profiles and segmenting audiences. The CDP analyzes those customer data points, identifies individuals, and resolves both distinct and overlapping information into unified customer profiles. Customer profiles flow into audience segments as defined by administrators to correspond to the brand’s content offerings.
Activating customer data. The CDP sends profile and segment information out to the teams and systems that create consistent personalized experiences across channels.

Why does a CDP matter?

When your role is to earn customers’ loyalty, your technology needs to be up to the task. A CDP gathers disconnected data into a central spot so that the data can be applied to create experiences your customers value. You demonstrate that you understand (and can meet) customers’ needs when you offer them respectful, personalized experiences.

How does a CDP collect, analyze, and activate data?

A CDP may use pre-built integrations and APIs to gather source data. It can then resolve identities with a deterministic identity graph and bring the data corresponding to each individual into a unified customer profile. The system sorts those separate profiles into broader audience segments, based on rules defined by the administrator. Finally, the segmented data can be sent to relevant marketing systems through another set of pre-built integrations and APIs.

What type of data does a CDP use?

With the coming third-party cookie deprecation, your CDP should be able to work with first-party data, which is data collected directly by a brand. This can include your cookies to measure page views, analyze browsing paths, and gather checkout information. Additional first-party data may come from offline sources such as customer relationship management (CRM) records, transactional data, and loyalty data gathered by the brand.

Collected data may contain personally identifiable information (PII) or it can be pseudonymized before being sent to the CDP. Pseudonymous data uses device-based identifiers rather than PII. A mature CDP should be able to ingest both PII and pseudonymous data, then link those known and pseudonymous identifiers to resolve identity.

What challenges does a CDP solve?

The key goal of a CDP is achieving a unified view of the customer. This allows for consistent personalization across all channels – and it’s essential to building an excellent customer experience. Brands turn to CDPs to:

Surface insights from owned data
Turn insights into action
Automate real-time personalization
Give customers the experiences they expect

"Customer data platforms play an important role in customer experience by bringing data together from different sources, building unified profiles and audiences, and making those profiles and audiences available to systems of experience delivery."

– Matt Skinner, Group Manager, Product Marketing, Adobe Real-Time CDP and Adobe Audience Manager

How would a CDP complement my DMP or CRM?

A CDP stores known and pseudonymous data in a centralized system, rather than relying on external tools and cookies from third-party systems. If your organization uses a data management platform (DMP) for third-party cookie-based use cases, you may choose to deploy a CDP for known-customer and people-based identifier use cases. In this case, check that the integration between your DMP and the chosen CDP will be seamless, to avoid creating extra work for your teams. Third-party cookie use cases will need to evolve as browsers deprecate third-party cookies over the next two years.

While CRMs store known customer data, acting on that data effectively can be difficult. A CDP can combine known customer attributes from the CRM with behavioral event data and data from other sources to build rich audiences ready for activation across channels.

How to benefit from a CDP — 3 use cases

Most marketing goals that call for deploying a CDP fall into three categories:

Building a unified customer profile. You’re collecting data in multiple channels. Keep it from being siloed — and therefore basically unusable — by unifying customer profiles with all the relevant information you have.
Consistent personalization across channels. Don’t make customers repeat themselves in every interaction. By ensuring personalization across all interaction channels, you treat audience members as known individuals, instead of making them explain their needs from scratch every time.
Audience suppression. While it’s important to filter data to include people in the right audience groups, it’s also important to suppress those that should not be included. For example, if a customer just bought the product, they’ve certainly shown interest — but if you keep targeting them with product ads, you may irritate them. Another customer might be in the middle of a webchat customer service session to resolve a problem with their order, so ads should be paused until the situation is resolved.

"Just storing data isn't enough. The relevant sources and data points for your use cases need to be leveraged for insights and activation. Latencies at any step — from ingestion to audience creation to activation — are the enemy of great customer experiences."

– Matt Skinner, Group Manager, Product Marketing, Adobe Real-Time CDP and Adobe Audience Manager

Moving forward with CDPs

Before you start looking for a CDP partner, make sure you have outlined at least one clear use case. By identifying your organization’s business needs and goals, you can check that the solutions you’re looking at can meet that need. Your marketing, IT, and executive leadership should all be part of that conversation.

Learn more about Adobe Real-Time Customer Data Platform.