What is a CDP? Customer data platform use cases, tips, and more
A customer data platform (CDP) allows you to centralize customer information and create a unified view of the customer. Learn how to use a CDP to align your customer service, marketing, and sales teams for a better customer experience.
By David Galic, Contributing Writer
Last updated March 28, 2023
With 76 percent of U.S. adults using their phones to shop online, connecting with customers should be easier than ever. But only 42 percent of businesses offer two or more support channels, meaning more than half of brands don’t have a platform that connects customer conversations across all channels. If they don’t have the tools to collect and process customer data, how can companies accurately view the customer journey?
In today’s evolving business environment, a customer data platform (CDP) is a crucial investment for customer service teams. Follow along to learn how a CDP can help your business gather and track key customer information—like consumer behavior and purchase history—to create consumer profiles and tailor offerings to customer needs.
Table of contents:
- What is a customer data platform (CDP)?
- What does a CDP do?
- CDP vs. DMP vs. CRM: What’s the difference?
- What types of customer data do CDPs collect?
- Benefits of a consumer data platform
- CDP use cases
- Customer data platform FAQs
- CDP best practices
What is a customer data platform (CDP)?
A customer data platform allows a business to combine customer information from multiple apps, tools, and business systems in one place for a unified view of the customer’s profile.
What does a CDP do?
A CDP collects the information consumers leave behind when they interact with your company. While the CDP meaning may slightly vary by industry in terms of which data is most useful, your website, mobile app, customer surveys, customer support tickets, social media channels, and marketing campaigns are common valuable sources of customer data for your CDP.
Here are a few CDP examples of how the tool gathers and uses data:
- Captures data to better understand customers: If a customer places an order for shoes, the company’s CDP collects the customer’s shoe size and style of shoe they prefer. Marketing, sales, and support teams can use this data for future marketing efforts, personalized recommendations, and upselling and cross-selling opportunities.
- Integrates your systems: A CDP can unify a customer’s information across systems with details like their order history, loyalty status, and web activity to give teams a single view of all their data.
- Puts your data to work to automate workflows and personalize CX: A CDP can create reports for your team to draw insights from. With this information, you can build new workflows, streamline processes, and personalize the customer journey.
CDP vs. DMP vs. CRM: What’s the difference?
Two systems that are commonly confused with CDPs are customer relationship management (CRM) solutions and data management platforms (DMPs).
- CRMs compile and organize customer data in one place.
- DMPs process and analyze large volumes of third-party user data for targeted advertising campaign management.
Combining all three can set the foundation for highly successful sales and marketing programs.
CDP vs. DMP
While similar to a DMP, a CDP collects and uses customer data differently. CDPs mostly use first-party data, while DMPs usually use second- and third-party data.
DMPs capture and organize large, anonymized data sets purchased from a data seller. A common example of this is a social media platform like Facebook or Twitter, which can access user data, anonymize it, and sell it to advertisers—who can then use that data to target users within the platform.
It’s not uncommon for companies to use both platforms together. For instance, you could use your CDP to track and gather information on your website visitors and then feed that data into your DMP to craft targeted advertising campaigns for new audiences.
CDP vs. CRM
Companies use customer relationship management platforms to track and support sales activities. CDPs can manage a much wider array of processes, from customer interactions to business transactions. CDPs offer more advanced capabilities and flexibility, so they can analyze every touchpoint in the customer journey and create a 360 customer view.
CRMs work along with CDPs to centralize and act on key customer data. CDPs fill the gaps by offering:
- Single customer data records: Customer records are consistent across all systems and include a robust range of data, such as location, IP address, phone, and email.
- Broader data collection touchpoints: Data collection goes beyond the typical transactional data to include farther-reaching sources like social media.
- Data analysis: The breadth of customer data that CDPs analyze is significantly greater. CRMs mostly deal with first-party customer data that comes from your sales and marketing teams. CDPs create richer customer views by analyzing activities and behavior throughout the entire buyer’s journey, allowing you to understand consumer preferences and intent.
- CDP marketing channel integration: You can easily connect to all other marketing technologies, including email, social, website, and advertising platforms.
CDP technology can deliver a comprehensive view of the customer and serve as the foundation of the omnichannel marketing and support stack.
What types of customer data do CDPs collect?
To understand where customer data comes from and how to use it, companies often place their first-party data into the following four categories:
Identity data is sometimes known as “basic data,” and it’s what most businesses consider to be a customer’s personal details. Examples of identity data include:
- Phone number
- Email address
- Social media profile
- Demographic information (like age, gender, profession, location, and income)
Often called “engagement data,” interaction data shows how customers interact with your brand. Examples include:
- Open and click-through rates on emails
- Likes and shares on social media
- Call-to-action responses
- Asset downloads
Behavioral data reveals how customers interact with your product or service. Examples include:
- Shopping cart abandonment
- Purchase history
- Service signups
Attitudinal data indicates what customers think about your company through things like:
- Support tickets
- Interactions with your customer service team
Why do you need a CDP? 5 benefits of a consumer data platform
A customer data platform aggregates data from various sources so you can know your customers better and learn what they want from you. With help from a CDP, you can offer a more personalized customer experience and target customer segments with marketing campaigns to boost sales and increase customer loyalty.
1. Break down data silos to improve collaboration (sales, support, and marketing teams can work better together)
Collaboration between teams is crucial in providing a great experience throughout the customer journey. Most business leaders understand the importance of breaking down silos and combining customer service data with data from other departments.
The Zendesk Customer Experience Trends Report 2023 shows that:
- 82% of leaders want to combine service data with customer feedback data
- 79% want to merge service data with product data
- 78% seek to combine service data with sales data
- 77% hope to integrate service data with marketing data
A customer data experience platform helps unify the data to provide customer context to agents from any department touching the account, allowing for more personalized experiences.
2. Reduce system switching and automate workflows to improve efficiency
CDPs significantly reduce the manual work that marketing, sales, and customer service teams must do when interacting with customers. With all data aggregated into a unified view, agents no longer have to toggle between apps to find the information they need, boosting efficiency and allowing for faster service.
Integrating your CDP with marketing automation platforms allows you to create personalized, predictive events that are automatically triggered and scheduled. After designing and launching automated campaigns, CDPs will continue collecting data on how the initiatives performed. This information helps teams create more targeted future campaigns.
Customer data support platforms can also use artificial intelligence (AI) and machine learning (ML) to automate support tasks by feeding customer data to AI- and ML-equipped tools. Our CX Trends Report shows that customers and companies are becoming more comfortable with AI-powered chatbots:
- 77 percent of customers say AI and chatbots are helpful for simple issues
- 71 percent agree that it helps them receive faster replies
More tickets handled by bots means customers experience faster resolutions, and agents have more time to focus on solving complex issues.
3. Increase customer loyalty and retention by personalizing the customer journey
If businesses want to increase customer retention and boost their bottom line, they must provide tailored experiences—whether that’s in the form of personalized emails, targeted ads, or unique messaging. Our CX Trends Report shows that 77 percent of business leaders recognize that personalization leads to increased customer loyalty and retention.
A CDP can seamlessly integrate with other tools—like marketing automation platforms and customer service software—to deliver custom experiences along the customer journey.
For example, CDPs give support agents a holistic look at customer data. They can see a customer’s order history, preferred channels, previously asked questions, and more. When agents have access to this information, customers don’t need to repeat themselves, and you can resolve their issues quickly.
4. Boost sales by enabling agents to upsell and cross-sell
When customer data is available in one unified workspace, agents from every team can use it to identify upsell and cross-sell opportunities. For instance, sales agents can see previous interactions with the customer service team and offer a new product or service that the customer expressed interest in during a prior conversation. They can follow up with a customer for a potential upsell.
5. Enhance data privacy
Customer data platforms keep your customer data safe by consolidating your tech stack. In a Cisco study, 76 percent of respondents said they wouldn’t buy from a brand they didn’t trust with their data. CDPs help by streamlining data collection processes, keeping data consistent throughout every channel, and establishing clear policies for using the data.
A CDP data platform also makes it easier for you to communicate your privacy policies and empowers you to prioritize customer transparency. This helps your company build trust with consumers and ensures you comply with all the necessary data policies and regulatory standards, like GDPR, CCPA, and so on.
CDP use cases
You can use CDPs in different ways, regardless of industry. Here are some real-life examples of how businesses leverage CDPs to maximize their success.
Build sophisticated customer profiles to create revenue-generating opportunities
By consolidating customer data from various channels into one centralized place and creating complete customer profiles, a customer data management platform allows you to accurately picture your audience and what they need from your company. Team members from across the organization can readily access this information to build deeper connections with customers and deliver better experiences.
Consumer goods company Thrasio partnered with Zendesk to mine support tickets for valuable customer data. Using Zendesk, Thrasio compiled rich data and created sophisticated customer profiles, allowing the company to implement new cross-sell and upsell strategies. Based on purchase history, Thrasio also created automatic triggers that remind customers to restock.
Align customer support and marketing
A CDP puts the entire customer journey in one place, allowing customer support and marketing teams to be on the same page. Using previous conversations, interactions, profile information, and purchase history, marketing and customer support staff can work together to find upsell and cross-sell opportunities, create targeted marketing campaigns, and build strong, profitable customer relationships.
Shapewear fashion brand Honeylove used Zendesk to create a better omnichannel experience for its customers. With help from Zendesk, Honeylove stored customer interactions and data in one place for support and marketing teams to view. The company also launched an SMS option for customer support.
Honeylove seamlessly integrated its marketing tools with Zendesk and used customer data to create successful, personalized automated marketing campaigns—including an innovative SMS marketing campaign—and achieved a 96 percent CSAT score.
Act on customer feedback
Collecting customer feedback is just one part of the loop. Learning what your customers want and implementing changes based on their suggestions, behaviors, and motivations gives them a voice that builds loyalty and increases retention. A CDP can collect and store feedback from customer surveys, community forums, AI or chatbot interactions, agent conversations, social media, and online reviews.
The Lush and Zendesk relationship goes back a long way—the cosmetics retailer is always looking for new and better ways to approach and implement customer feedback. Lush prioritizes empathy and positivity and understands the importance of the voice of the customer. The company uses Zendesk to monitor customer inquiries, allowing teams to keep an open conversation going to collect as much valuable feedback as possible.
Each time a customer leaves feedback, Lush lets the customer know that their thoughts have been passed on to relevant team members to see how they can implement them. This transparency resulted in Lush receiving a 91.8 percent CSAT score—nearly 20 percent higher than competing retailers.
Make data-driven decisions
Without a system that provides you with relevant data in one place, making business decisions can be a guessing game. A CDP consolidates all customer data in a single location, allowing you to fully understand the information and transform it into actionable insights.
Deputy, a cloud-based workforce management solution, helps businesses simplify time-consuming tasks like schedule tracking, wage management, and reporting. Before Deputy brought in Zendesk, the company used several systems and apps that didn’t communicate with each other, leaving pieces of valuable information unused. Zendesk allowed Deputy to consolidate that customer data into one view, empowering employees make data-driven decisions. Deputy’s teams are now better aligned and able to collaborate so they continue making a better product.
Customer data platform FAQs
Here are answers to common questions about CDPs.
What is CDP in marketing?
A CDP in marketing collects customer data from multiple sources and allows you to create targeted, personalized messaging and marketing campaigns.
How do I choose a CDP?
When evaluating a CDP, determine how you will use it, what CDP tools and features you need, your budget, and whether it integrates with your current systems.
What is the best CDP?
The best customer data platform for one company may not be the best fit for another. It all depends on how you want to use it, which features you want, your budget, and how easily it integrates with your existing tech stack.
Best practices to maximize your customer data using a CDP
Want to make the most of your CDP? Follow these five best practices to maximize your customer data.
Define your use cases
How can a CDP help you reach your unique business goals? Before you start collecting and consolidating data, you must first be clear on how you want to use it and how it benefits your business the most.
Decide on features or integrations
Based on what you’d like to achieve with your CDP, choose integrations that sync with it seamlessly and pick the features you need. This includes help desk software, AI and chatbots, or automation.
Identify the right data to collect
Not all data is the best data. Determine which data will be the most beneficial to your business goals, and weed out the unnecessary stuff so you can create targeted messaging and personalized experiences.
Determine how you will measure success
A CDP doesn’t directly earn your business revenue, but it is a common thread that influences the sources that do. Select the metrics and customer analytics you want to follow, like Net Promoter Score®, customer churn, or customer lifetime value.
Choose your channels
Your messaging may change depending on your channels and the customers that prefer those channels. CDPs can gather the data to help you understand how to tweak interactions across channels.
Every time a visitor browses your website or social platforms, it’s a valuable opportunity to learn more about that person.
A customer data platform will help you collect consumer data and communicate that information to all teams, empowering your company to approach customers with a unified front. You’ll be set to pull valuable insights, respond to inquiries quickly, and build deeper, longer-lasting relationships with your customers.
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