Customer data is the information that any potential consumer offers up in their exploration and interaction with digital entities. This could be as simple as demographic data such as names, emails, and age, transactional data when they shopped online or in-store, or as complicated as behavioral data which covers what they browse online, like and share on social media and over other digital channels.
Knowing and collecting data on customers as they use the internet and interact with a business online through websites, blogs, e-commerce portals, and in-store interactions can bring together a valuable picture of the customer's intent.
A Customer Data Platform (CDP) is a pre-built system that brings together and organizes customer data from various sources. The objective is to create a unified customer database, by pulling in and aggregating raw data on the customer from various touchpoints and making this information available to other systems and departments including marketing, customer service, and customer relationship. This centralized data can be used to integrate applications and analyze data.
In most Customer Data Platforms, data is pulled in a raw form and structured, cleaned and combined to create a more coherent customer picture. The platform then empowers businesses with the ability to search and micro-target with a defined set of audience parameters. And some CDPs are powerful enough to offer this capability in real-time.
This means that as customers continue to interact with brands and browse the internet, more data on their activities are being added and updated every second.
Types of Data Collected by CDPs
There are four main kinds of customer data that Customer Data Platforms can collect and work with.
A unique identity number plus data such as name, demographics, location and contact information, social handles and professional details come under identity data.
Descriptive data gives a fuller picture of the customer background and interests, and the data collected depends on the type of company/industry that the business is in. Descriptive data can include career and lifestyle information, family size and marital status, and hobby or activity interests that are relevant to the business.
Behavioral data allows businesses to understand how a customer engages with their organization and can include transaction information, recency, frequency, monetary value, email usage data, online activity information, product views, and social media engagement.
Attitudinal Data is driven by customers’ feelings and emotions. This is also referred to as qualitative and it helps provide context for customer profiles. This includes things like motivations, opinions, preferences, sentiments, product desirability and customer satisfaction.
Source: MarTech Advisor
CDP vs DMP
A commonly asked question is what is the difference between CDP and DMP as they both seem to have very similar underlying technology components. The key difference lies in their usage.
CDP is primarily focused on managing company owned data i.e first party data. DMP focuses on 3rd party data. Very often they integrate with each other. One of the main differences between a CDP and DMP is a CDP is all about managing an individual customer with a single profile, while a DMP is about managing segments of customers with anonymous profiles. DMP can not store Personally Identifiable Information as they are more about sharing audiences.
DMP is primarily used for ad targeting and its primary users include advertisers and marketing agencies. CDP is used by marketers for various marketing activities including campaigns, customer communication, and smarter engagement.