Throughout the history of marketing, companies faced challenges in effectively reaching their target audience. 

Collecting demographic information proved to be a difficult task, preferences constantly changed, and the overwhelming volume of data became too cumbersome for many companies to handle.

In response to these challenges, marketing technology has undergone significant refinement in recent years. 

What is a Customer Data Platform (CDP)?

Customer data platforms are a type of software that collects customer data from a variety of sources and stores it in a common place. 

CDPs collect data from both online and offline sources, including internet purchases, social media, and many other points, which allows companies to create profiles on customers that cover the entire range of their potential interests.

And it is not only data collection alone that makes this type of software impressive. Thanks to sophisticated analytics techniques and the inclusion of AI and machine learning techniques, data is not only stored, but deduplicated, sorted, and analyzed to make the job of marketers even easier.

Indeed, CDPs are truly revolutionizing the world of data analytics for marketing. Let's now take a closer look at exactly how this is happening, and how your company can benefit from them.

The data that makes up a CDP

Customer Data Platforms (CDPs) rely on customer data for their operations. In the case of most CDPs, this data is primarily first-party data, indicating information collected by a company exclusively for its own marketing purposes.

In contrast to first-party data, which is obtained directly from customers, third-party data refers to user data that companies acquire through purchase or sharing arrangements with other businesses. Typically, third-party data is employed to target potential new users for advertising, customize websites for new visitors, and generate revenue from apps lacking alternative income sources. Due to the frequent exchange of third-party data, determining whether it was collected with proper consent can be challenging.

First-party data, on the other hand, is less likely to raise consent issues because companies are aware of how, when, where, and why the data was collected. Addressing these questions is crucial when assessing data accuracy.

CDPs enhance the utility of your first-party data through a process known as customer data integration. This integration entails amalgamating information and identifiers from disparate databases to create a format suitable for more precise analysis.

To maximize the benefits of using a CDP, it is essential to comprehend customer data and the methods employed by CDPs in utilizing it. This understanding enables you to derive the maximum value from your customer data. We have compiled several resources to assist you in learning more about best practices for handling customer data. 

How exactly do marketing teams benefit from customer data platforms? 

As can be seen, CDPs are changing the way marketing – and indeed business in general – works in major ways. But what are some of the specific benefits that it offers? 

Let's now take a look at some of the specific ways that marketing teams benefit from the use of these platforms.

Increased personalization ​

It is a well-known fact that the greater the personalization of marketing campaigns, the more successful they are. 

There is a lot of data involved in any given customer's history, including demographics, changes in preferences over time, increased or decreased frequency of orders, etc. CDPs even get to the level of detail of how long people wait to buy something when it is put into a cart. All this data can be used when creating personalized campaigns.

Just as important are the channels through which people communicate. If you're sending out email campaigns to someone who primarily gets his information from Instagram, you're likely wasting your efforts. 

CDPs help to store all of this information and assists teams in reaching customers the right way through the right media. 

Cross-sourced information

Another major advantage of CDPs is their ability to draw out information from multiple different kinds of sources simultaneously in a very short amount of time. It used to be the case that marketing teams would have to pull together information manually if they wanted to cross-reference sources, and their efforts would be prone to a potentially high degree of human error.

CDPs address all of these concerns with their ability to gather, store, and analyze huge volumes of data. And the risk of human error is eliminated because everything is automated. 

Improved privacy and security

Another important feature of CDPs is improved privacy. CDPs are able to collect large amounts of data in real time and keep it secure within their own systems without having to go through intermediary channels along the way.

And because of the speed with which they operate, CDPs are able to keep customers' profiles up-to-date and accurate. This is a major improvement over old-style systems where teams had to spend large amounts of time making updates, and they were often unable to access accurate information.

Along with greater accuracy,CDPs are created to be in compliance with laws related to marketing, and they receive regular updates as these laws change. Therefore, the risk of accidentally compromising or misusing data is also minimized. 

CDPs help businesses grow

Of course, the main point of any marketing campaign is to help businesses grow. When customer platforms are streamlined and updated regularly, marketers are able to not only create better campaigns, but reap the rewards of them as well.

Furthermore, data analytics is much improved because teams can go back and see the degree of change between campaigns on many different levels – within individuals, different demographics of people, different regions, etc. 

And being able to refine these efforts can make a big difference in companies' ultimate success. 

CDPs will soon become standard

It is only a matter of time before CDPs become standardized among serious businesses. Anyone hoping to stay on top in the marketing game – and in terms of business growth in general – will need to start using one of these platforms in order to keep pace with their competitors.

Again, the benefits to be gained from the use of CDPs are many – you will make your customers happier by increasing the personalization of interactions; you will keep your data better organized for both general usage and analytics; you will save your staff valuable time and effort in not having to search for information manually; and you will ultimately see your business grow much faster than before.

To get a CDP that is tailored to your unique business case, leverage Martech Software Development from trusted vendors. 

Wrapping up

Implementing Customer Data Platforms (CDPs) involves navigating through sophisticated software systems. When harnessed effectively, these platforms offer profound insights into your customer base. 

The depth of understanding gained can subsequently be leveraged to enhance various aspects of your business, including marketing strategies, sales approaches, and even product development.

By utilizing a CDP correctly, you gain the ability to uncover nuanced patterns, preferences, and behaviors exhibited by your customers.