Transform your customer data strategy

What is a customer data platform (CDP)?

A Customer Data Platform (CDP) is a solution that enables you to collect, store, model, and activate customer data. The purpose of a CDP is to provide a centralized platform to create unified customer profiles and build personalized experiences.

These platforms help consolidate first-party data into a central database, bridging data and marketing teams to solve two key functions:

• Helping your data teams collect, unify, and move data between systems more efficiently
• Enabling your marketing teams to build self-serve audiences for marketing campaigns

What are the core components of a CDP?

At a high level, CDPs provide a central platform or interface where you can easily connect behavioral events, bring in data from other sources, and then route that data to other marketing applications. Architecturally, every CDP has five basic components:

Event collection

Event collection is the backbone of any CDP. All CDPs provide out-of-the-box software development kits (SDKs) or code snippets you can implement on your website or mobile app to track user actions and traits. Once you’ve deployed an SDK, whenever a user takes an action (e.g., add-to-cart), that behavioral data is stored in your CDP or forwarded to a destination of your choice.

Identity resolution

Identity resolution is essential for unifying customer datasets and touchpoints across data sources. It links all customer interactions, both offline and online, to understand the entire customer journey. CDPs solve this by merging and de-duplicating customer data into rich identity graphs and stitching sessions and identifiers back to specific profiles. For example, if a user visits your website and purchases a product later, identity resolution connects those sessions in one profile.

Audience management

CDPs include a visual user interface and audience builder to create customer segments and personas without SQL. Using filters and boolean logic, you can aggregate records based on defined criteria (e.g., users who abandoned their cart in the last seven days). This capability empowers marketing teams to create specific audience segments for campaigns.

Data activation

CDPs integrate with various operational tools for data activation, such as ad platforms, lifecycle marketing tools, or CRMs. They automatically connect with third-party APIs, eliminating the need for data teams to build and maintain pipelines. You define the data points or attributes you want to sync, and the CDP handles the rest.

AI capabilities

Modern CDPs are increasingly integrating artificial intelligence (AI) and machine learning to use existing customer data to maximize your business outcomes, like driving cross-sells or boosting retention, by learning the optimal experience for each customer and delivering it on a one-to-one basis. AI also unlocked the power of scale, which can automate tasks at a scale impossible with human invention.

How are other companies using CDPs?

If you want to know how valuable CDPs are and what they can do, various companies use them in action.

• PetSmart is personalizing their marketing campaigns at a scale of 65M members, leading them to deliver double-digit growth year over year.
• bol.com powers their retail media with a CDP, leading to an increase in audience reach of 109% and raising click-through rates for all brand ads by 33%
• Morning Brew powers their entire multi-million dollar media empire with a CDP.
• Collectors is increasing their customer engagement by 125% to drive incremental revenue.

How to choose the right CDP for you?

To select a CDP, create a CDP use case roadmap and identify:

1. Use cases: What is the key problem you’re trying to solve?
2. Existing Technologies: What technology do you currently have in place?
3. Stakeholders: Who will use the CDP?
4. Existing data assets: What customer data do you already have access to, and what customer data do you need available in your CDP?
5. Marketing applications: What marketing applications will your CDP power (e.g., where do you need to send data to?)
6. KPIs: How will you be measuring the success of your CDP deployment?

Ultimately, choosing a CDP should depend on your specific use case. You should never buy technology just for the sake of technology.

For the most basic version of a CDP, you can expect to pay between $50,000 and $150,000 annually. For larger companies with more data, this can quickly get into hundreds of thousands or millions of dollars per year. The overall cost is directly linked to two factors:

• Features: the number of features you need/want within your CDP (e.g., event tracking, identity resolution, audiences, journeys, analytics, etc.)
• Data Volume: the number of monthly tracked users (MTUs) stored in your CDP and the number of destinations you send that data to.

You can also use a CDP RFP to have a greater understanding which CDP is right for you.