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Want to Understand Your Customers Better and Boost Your Marketing? Here's a Tool That Helps



In the last two days, I have ferreted through a lot of blogs, ecommerce sites, social media platforms and offline stores for a gift to a friend. Not just me, today, most of the product searches happen this way. They are nonlinear in nature. And sometimes, even without a goal. So how on earth should businesses understand the customer patterns and behaviors when there are multiple touch points. Customer Data Platforms (CDP) should be your go to solution to combat this challenge. Are you new to CDP? Do you often confuse between CDP and other customer management tools like CRM? Or do you just wish to refresh everything you know about CDP? Here’s a comprehensive guide to Customer Data Platforms (CDPs) for you.


What is Customer Data Platform?

A Customer Data Platform (CDP) is a software that aggregates and organizes customer data across a variety of touchpoints and is used by other software, systems, and marketing efforts. CDPs collect and structure real-time data into individual, centralized customer profiles. CDPs build customer profiles by integrating data from a variety of first-, second-, and third-party sources. This includes your CRM and DMP, transactional systems, web forms, email and social media activity, website and e-commerce behavioral data, and more. CDP can become a vital tool in the digital transformation efforts of your business. It strengthens the customer centric marketing approach.


What is Customer Data Anyway?

The information customers leave behind on the internet through the interactions with the companies’ blogs, websites, ecommerce portals, and offline stores can be called as customer data. This data is very crucial for the companies especially in the view of the digital transformation efforts.

Note: The recent laws and regulations such as Data Protection Act 2021 in India and GDPR in EU change the way organizations use the customer data.



There are four main kinds of customer data that CDPs collect and organize.


1. Identity Data

Identity data builds the foundation of each customer profile in a CDP. This type of data allows businesses to uniquely identify each customer and prevent costly replications. Identity data includes:

  • Name information, such as first and last name

  • Demographic information, such as age and gender

  • Location information, such as address, city, and zip code

  • Contact information, such as phone number and email address

  • Social information, such as Twitter handle and LinkedIn address

  • Professional information, such as job title and company

  • Account information, such as company-specific user IDs and account numbers


2. Descriptive Data

Descriptive data expands on identity data and gives you a fuller picture of your customer. The categories of descriptive data will vary based on the type of company.

For example, a car dealership may collect lifestyle details about their customers’ cars, whereas a diaper company would collect details about the number of children in customers’ families. Descriptive data includes:

  • Career information, such as previous employers, industry, income, and job level

  • Lifestyle information, such as the type of home, vehicle, and pet

  • Family information, such as the number of children and marital status

  • Hobby information, such as magazine subscriptions and gym memberships


3. Quantitative or Behavioral Data

Quantitative data allows businesses to understand how each customer has engaged with their organization, whether through certain actions, reactions, or transactions. Quantitative data includes,

  • Transaction information, such as the number and type of purchased or returned products, the number of abandoned carts, and order dates

  • This information also includes RFM analysis — recency (How recently did this customer make a purchase?), frequency (how often does this customer make a purchase?), and monetary value (how much does this customer spend on a purchase?)

  • Email communication information, such as email opens, email click-throughs, email responses, and dates.

  • Online activity information, such as website visits, website click-throughs, product views, and social media engagement.

  • Customer service information, such as communication dates, query details, and service representative details.


4. Qualitative Data

Qualitative data provides context for customer profiles; it gives customer data personality. This type of data collects any motivations, opinions, or attitudes expressed by a business’s customers — whether relevant to the company or not. Qualitative data includes:

  • Motivation information, such as How did you hear about us? Why did you purchase this? What made you choose this product over others?

  • Opinion information, such as How would you rate this product?, How would you rate our customer service?, or How likely are you to recommend us?

  • Attitude information, such as favorite color, animal, textile, or food

As you can see, CDPs collect and organize a wide variety of data. It’s important to note that much of the specific data and data categories will vary based on your business and industry.



CDP vs CRM

Customer relationship management (CRM) software is used to manage your company’s interactions with existing and potential customers to build and nurture relationships. It centralizes contact information and interactions, so teams can easily access all of a customer’s data from one place.


Though both CRM and CDP collect data from the customers, there ends the similarities between both of them. The main difference between CDPs and CRMs is that CDPs provide a big picture of how all customers and platforms interact with your brand, while CRMs note interactions between a specific account and your brand. CDPs track overall customer behavior to show how audiences and audience segments interact with your brand and give you an idea of the entire customer journey. They automatically collect, clean, and consolidate user behavior data using integrations and code snippets embedded in different touchpoints — such as desktop, mobile devices, and even CRMs. On the other hand, CRMs manage individual customer interactions by manually collecting information during one-on-one transactions between customers and the brand.


CRM data is highly specific because it references details unique to your customers — like their names, contact information, and past interactions with the company. Compared to the data provided by CDP, CRM data is limited because it only accounts for your one-on-one interactions. Unlike CDP data, which you can use to determine general strategies, you can only retrieve CRM data when you need to record or examine a specific scenario.



Benefits of Implementing CDP into the Business

The one question which stays on top of all for business leaders is ‘how does this help our business grow?’ CDP implementation benefits businesses in more than one ways. Here are the top benefits of Customer Data Platforms for you to take a look at,

  • 360 degree view of the customers

  • Unlocking AI-powered personalization

  • Eliminating Data Siloes

  • Seamless integration with existing tech stacks.

  • Better customer r