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Customer Data Platform vs. Marketing Automation

Customer Data Platform vs. Marketing Automation

What is a Customer Data Platform (CDP)? It’s very specialized software for creating and managing a customer base. This base can be utilized by other applications. CDP draws from other sources, processes data and generates the client’s profile in the process. This data is then available for other applications, creating a MarTech stack.

Customer Data Platform in the context of a MarTech stack is a very important topic. CDP tools were based on multichannel campaign management, tag management, and data integration tools.

CDP in the context of a MarTech stack is important because it allows a generation of customer’s profile. It contains basic data like:

· A name

· A surname

· A telephone number

· An email address

· A purchase history

· Behavioral data (time and date of purchase, split time between purchases, cart content, etc.)

Customer Data Platform tools have these features:

· Their structure is unified – a single database contains clients’ profiles and other data, archived from cooperating systems

· They allow categorizing clients into segments. This way you can easily and quickly identify trends, especially megatrends, that are created by and engage a high number of customers

· Data are available for external systems. This way you can easily create and manage campaigns because it’s easier to analyze data and create logical connections between them

· All data about the single client are easily accessible and identified by a special identificator

· Tools are easy to manage, you don’t need an IT department, only a trained marketer

Customer Data Platform tools are mainly created for:

· Analysis of short-term and long-term trends

· Analytical prognosis

· Creation of recommendations and tips for future campaigns; all based on gathered data

This is the difference between CDP tools and marketing automation tools. A Customer Data Platform differs not only in terms of architecture (design) but also in terms of functionality. Yes, CDP solutions offer some functionalities that are native to marketing automation platforms but can’t replace them. The whole idea for a Customer Data Platform is based on a cooperation between a CDP and other systems. A CDP simply holds the data for marketing automation applications.

Thanks to the Customer Data Platform, a marketer can personalize the customer experience. Gathering and processing data is a foundation of modern marketing. Thanks to data you can adjust the marketing communication not only for entire groups (through segmentation) but also reach an individual client. This way your campaign will be more effective.

Customer Data Platform increase their efficiency. According to the Customer Data Platform Institute’s report from July 2019, there are 19 new solutions on the market, and capital gained by their founders reached $317 million. This shows what kind of power this solution holds.

At the same time, it shows how very specialized and therefore limited, these solutions are. Customer Data Platform is a great supplement to marketing automation but you can’t treat it as a stand-alone solution. Not for the market, not for your company.

You should remember about differences in Customer Data Platform solutions. Big companies have different needs than smaller ones, CDP will therefore vary:

· Scalability. Big companies need quick access to a large pool of data. Enterprise solutions are designed to process huge pools of data about the entire product groups and client segments. Smaller companies don’t need such behemoths

· Flexibility. Plug’n’play is never a good choice. Your company needs custom applications that serve your needs. Designed for your industry and business model. It doesn’t matter if it’s for financial services, FMCG, e-commerce or educational purposes – flexibility and modular design of the software is a key element for success

· Data security. Information about your clients is priceless. They help you run and manage your business but also because you can pay enormous fines if they leak. The best CDP systems protect these data, also because of the compliance with a GDPR.

Customer Data Platform solution is only a small portion of software necessary for a marketer. CDP and marketing automation are different but complementary worlds. You can’t compare them but you can and even have to, accept their co-existence.

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