Blog article

What is a CDP: Customer Data Platform?

You probably heard about CDPs. It’s an often-mentioned combination of letters in the marketing scene nowadays. And for a good reason. CDPs are here to stay and will radically change the marketing & ecommerce world as we know it.

Large amounts of customer data flow into your business from an ever-growing number of (digital) channels. However, most companies are still unable to collect, analyze, and use all this data to improve both the experience of your customers and the efficiency and effectiveness of your marketing efforts. CDPs have solved one of the biggest limitations to truly omnichannel and personalized experiences: siloed data, which prevented marketers from utilizing it. This has made the Customer Data Platform market grow from nearly 2 billion EUR in 2020 to an expected 8,5 EUR billion in 2025.

In this long-form article, we will discuss all the information you need to understand what a CDP is and show you why they are designed to help businesses like yours grow in a future-proof way.

Let’s dive in.



  1. The CDP explained
  2. The history of the CDP
  3. Differentiating a CDP from a DMP and CRM
  4. The importance of centralized customer data
  5. CDP features
  6. CDP benefits
  7. Selecting the right CDP for you
  8. About Datatrics

1. The CDP explained

Say you own an ecommerce business. And your business has a webshop, website and physical shops. In order to manage your business, you use a multitude of different software tools and marketing channels. All collecting vast amounts of customer data.

One day you realize the effectiveness of personalized marketing. And decide to start building your personalized marketing campaigns. Unfortunately, you immediately bump into one giant hindrance: All customer data is scattered among different platforms and there is no way to effectively unify this data into one platform. Which simply keeps you from building effective personalized marketing campaigns.

Enter a Customer Data Platform (CDP).

A customer data platform is software that unifies all of your data into one place. Out of these vast amounts of data, a CDP creates individual customer profiles. Meaning that all of the known behavioural patterns, traits and sales information of each individual customer are bundled into a 360-degree profile. This allows you to deeply understand your customer and offer personalized marketing that suits their personal needs.

Not only does a CDP unify your data in an effective way, it also offers the tools to effectively use the data using smart algorithmic software. It allows you to create personalized customer journeys that are designed around your customer’s individual preferences. Combining behavioural, transactional and demographic data, a CDP learns:

  • What each customer’s behaviour and needs are
  • How to reach and persuade them
  • When to reach them
  • Targeting lookalikes and predicting customer behaviour

This uniquely individual data can then be segmented in an infinite number of ways to create personalized marketing campaigns. Or you let the smart algorithm do the work. And let it decide how and when to effectively reach each of your individual customers.

2. The history of the CDP

The revolution of marketing resulted in a number of significant technology solutions over the past 20 years. The transition from handwritten documents to large mainframes and now cloud-based solutions has been extraordinary. The rapid innovations in technology and computing power has given rise to more and more potential tools to allow for better marketing services.

It started with the invention of Customer Relationship Management (CRM) software in 1985, which was released on the DOS user interface by creator Michael McCafferty. This invention made it easier for companies to manage their relationship data and interactions with their customers.

Next-up was the invention of Data Management Platforms (DMP) in the 2000s, which enabled organizations to integrate, organize and activate customer data and build anonymous customer profiles for advertising programs. In addition, DMP’s allowed for planning and executing marketing campaigns which revolutionized the marketing world.

During the 2010s the availability of marketing software became more fragmented as software providers started to focus on specialized solutions. This unfortunately led to organizations sometimes using over 20 different software systems, with each of them storing data and analysing customer data. The boom in mobile use and the swift rise of social media resulted in a new generation of tech-savvy customers. Organizations had to adjust to this revolution by using different platforms for their marketing campaigns. However, this adjustment led to the fragmentation of valuable customer data as these different platforms did not easily communicate with each other.

This was the reason for David Raab to come up with his idea for a new platform in 2013: The Customer Data Platform (CDP). Before the invention of a CDP, marketers weren’t able to effectively use all the data they had access to. The invention of the CDP changed this by solving the problem of data fragmentation. It can communicate with both CRM and CMP systems and is able to send data back and forth between these platforms. And the CDP finally enabled organizations to offer personalized customer experience through all sales channels. Thereby allowing new omni-channel marketing possibilities.

3. Differentiating a CDP from a CRM and DMP

While they may overlap in terms of functionality, a CDP is not comparable to a Customer Relationship Management (CRM) system or a Data Management Platform (DMP). Although different, these different tools can work supplementary to each other. But what are the differences?


A Data management platform is made for advertising. It collects and organizes data from various online, offline and mobile sources. Mostly created for gaining new customers, a DMP gathers data from cookies. But this data is often anonymous and retained for a short amount of time. Whereas the data collected by a CDP is yours and is available whenever you want to access it.


A customer relationship management platform is specifically made for sales. It is a solution for managing all relationships and interactions with customers and prospects. Its goal is to improve business relationships and to grow your business as a result.


A customer data platform is designed for marketing. It collects and unifies first-party customer data to build 360-degree customer profiles for each individual customer. And it offers the tools for marketers to create hyper-personalized marketing campaigns.


4. The importance of centralized customer data

Studies show that most customers are willing to pay extra for a better customer experience. Besides that, it is proven that the number one reason for a customer to stop buying from you is that you’ve been indifferent to their personal needs. Customers nowadays expect personalized experiences. So you better know who they are. And show them what they want to see, when they want it.

Offering personalized customer experiences without customer data is simply impossible. If you do have the data, but it is not easily accessible due to the usage of different marketing sources, it is hard to meet your customer expectations. And if you can’t meet their expectations, they will simply take their business somewhere else. And getting them back will be much more difficult than retaining them. This is why it’s so important to have your customer data unified and easily actionable in one place. A good CDP offers that possibility and helps you:

  • Increase your conversions
  • Increase your revenue
  • Improve marketing ROI
  • Building a loyal customer base
  • Communicate effectively across multiple channels with customers

But all of it starts with customer data and unifying it to create a single source of truth.

5. Customer data platform features

Now that we’ve explained what a CDP is, let’s dive a bit deeper and look at all the different potential features a CDP offers you. According to Gartner, for a Martech tool to be categorized as a CDP it needs to provide at least the following key capabilities below:

  • Customer data unification
  • Creating a single customer view
  • Identity resolution
  • Customer Data Analysis & Activation

Because of the disparate features that different CDP vendors offer, we will dive into some of the key ones in more detail.

1. Insights into customer data & behaviour

As said before, a CDP bundles all data from multiple sources on one platform. But it also sorts and analyses this data in a clear and visible way. So you can interpret it and use it however you want to. Datatrics shows your unique insights dashboard on the landing page of the platform, depicting the most important data in different sections:

  • Acquisition: Shows a visitors funnel that segments website visitors by their customer journey buying phases. You can drill-down into each segment to discover more details.
  • Retention: Shows the retention grid that divides customers by loyalty segmentation and lifecycle analytics.

Lastly, the persuasion type per profile is determined, which indicates the best way to persuade your customer to convert. This insightful data provides an overview of your total customer account and segments them into different groups. You can easily set up targeted marketing campaigns by using these segments.


2. Campaigns

A CDP offers the tools to use your customer data and build targeted marketing campaigns. Datatrics differentiates between three different campaign types, namely:

Smart campaigns: Showing relevant content to specific audiences without targeting the individual buying phase of their customer journey.

Hybrid campaigns: A mixture of your own rules and smart algorithms based on a specific website trigger. Examples of these are abandoned cart campaigns and mailing automations.

Conversational campaigns: These campaigns are used to start a conversation with your website visitors. This type could for example be used for creating a shopping assistant that guides your visitor through their buying journey.

3. Combine internal with external data for 360-degree profiles

By combining external data with your own customer data, you can create even more effective marketing campaigns. The interplay between these two types of data accumulation enables targeted campaigns like, for example, sending an automated email highlighting air conditioners on an exceptionally hot day. Examples of external data that is migrated into a CDP like Datatrics:

  • Real-time local weather information
  • Local traffic intensity
  • Location data
  • Technology

The algorithm that integrates this external data continuously learns from its results, leading to more effective targeting and more complete 360-degree customer views over time.

4. Customer journeys

A core feature of Datatrics’ customer data platform offers is the ability to create personalized customer journeys. A customer journey is divided into different buying phases your customer goes through in the process of purchasing a product or service. In combination with the segments we explained before, every customer is divided into one of the buying phases shown below. And depending on the buying phase, customer profile and persuasion type, you can show them the most relevant content and recommendations via web, email and advertising.


By combining the 360-degree profile feature with that of the customer journey, Datatrics enables you to show specific individual content when your customer wants to see it.

5. Drag & Drop dynamic content

Dynamic personalized content can make all the difference in an individual customer journey. Showcasing recommended products based on past behaviour is one example that could trigger your customer to go through with another purchase. Many CDPs offer tools to show dynamic content in mail campaigns and on your website, although the level of programming skills necessary to use this specific feature is often too advanced for marketers. Datatrics now offers a solution to this problem by offering a drag & drop feature that greatly simplifies this feature. And makes it easily usable for any marketer.

6. CDP Benefits

Now you know what a CDP is, we outline some of the key benefits to understand how a CDP can help your business thrive. A CDP, when used well, offers many benefits:

  • Less dependency on IT or external help

Marketers love what they do, as long as they can focus on growth and creating memorable marketing campaigns. In most cases, utilizing large amounts of customer data from various different data sources requires a high level of programming skills and technical resources. A self-service CDP eliminates this need by bundling all the data and enabling utilize it in an accessible and marketer-friendly way. A quality CDP offers an easy implementation process, an intuitive & user-friendly interface, pre-built best-practice templates, and various options to automate marketing processes so that support from IT or programming skills is not needed. This greatly reduces the dependency on IT, reduces development costs, and a lot of your marketing teams' time and resources.

  • Increase revenues and conversions against lower media costs

A CDP offers personalized customer journeys based on centralized customer data and individual 360-degree profiles. Because customers are shown exactly what they need to see at the right time, the chance of them buying your product is significantly increased. This not only leads to increased conversions and revenues, but also to increased customer retention and satisfaction in combination with lower media costs.

  • Finding new business

All customer data in one place makes it easier to create customer segments. Learning from the results these segments generate allows you to create segments that are even more detailed and hyper-targeted. For example: the data reveals it would be valuable to create a segments specifically targeted at male discount shoppers in the ages 18-22 in Berlin. The chance of a higher-than-usual conversion rate with such a specific target group is big, which in turn will improve your marketing-ROI. A CDP allows you to utilize your (first-party) data to setup targeted sales and marketing activities. Which in turn allows you to find new business more easliy.

  • Complying with the GDPR regulations

Governments worldwide are slowly cracking down on gathering third-party data, making it harder and harder to collect and utilize individual customer data. A CDP allows you to collect data from your own, zero- and first-party sources. As you control and own the data, it enables you to become and stay GDPR compliant.

  • Owning your data

The popularity of selling products on big marketplaces like Amazon is skyrocketing, but this strategy also has a big disadvantage: You don’t own your customer data. In today’s world, customer data is one of the most valuable resources. Not owning the data greatly reduces your company value, but also makes you highly dependent on these big marketplaces and their regulations. You want to own your data, so you can utilize it to fulfil your customers' needs and expectations. A CDP empowers you to do so.

  • 360-degree customer profiles

By letting a CDP create unique customer profiles for each individual customer, you gain insights into every part of the customer journey and their individual needs. When a customer reaches out to you, using a CDP ensures you know exactly who you are conversing with and their preferences. Buying behaviour, preferences, purchase orders and other relevant information are instantly shown while communicating with your customer. And naturally, 360-degree profiles enable you to deliver hyper-personalized marketing campaigns.

  • Personalize & optimize marketing campaigns

A CDP enables you to set up personalized marketing campaigns and gain insights into how the different campaigns perform. By understanding the effectiveness of your recent campaigns, it becomes easier to set up your next one more effectively and efficiently. A CDP allows you to learn from the data generated by each individual campaign, which in the short- and long run, improves the return on investment of marketing efforts.

  • Omni-channel and a CDP go hand-in-hand

The future of retail and commerce is digital, personalized and automated. But another important trend is to offer an omnichannel experience by combining offline with online sales for a seamless and consistent brand experience through all of your channels. And due to the 360-degree customer profiles and all the data that is stored on one platform, a CDP makes the omnichannel transition much more accessible and achievable. It enables you to offer a consistent brand experience via all channels, while keeping the customer journeys unique to meet every individual customer's needs.

7. Selecting the right CDP for you

Although many CDPs offer a number of features as mentioned before, there are strong differences between all the vendors. Your unique business needs a CDP that meets your specific needs. Therefore, we advise you to really think through what you expect from a CDP, which goals you want to achieve, what resources you can spend, and which features and capabilities would potentially benefit you before deciding which CDP vendor is suitable.

How are you going to use a CDP? Do you want the CDP to have self-service capabilities? Meaning that you do not have to spend large amounts of resources on IT, external programmers, or consultants to use it effectively? Or do you require a high level of software customization to meet your business needs?

The answers to these questions allow you to match your specific requirements with the offerings of potential vendors. When you have a short list of potential CDP vendors, you could ask them to demonstrate their platform. Maybe you could even ask them how a CDP could help in a specific use case. By being demonstrated a specific scenario to solve your problem, you get a better idea of the company’s CDP potential.

After this, you can make a purchase decision and start taking control of your first-party data for marketing personalization across channels.

8. About Datatrics

Datatrics is a Customer Data Platform for small and medium-sized consumer marketing teams to unify their first-party data from all sources, both online and offline, and enables to deliver hyper-personalized customer experiences that drive conversions and marketing-ROI at competitive pricing plans.

Our platform comes with a self-service solution that ensures marketing teams can effectively use our CDP while minimizing the need for external help. By providing marketers with an intuitive interface and unique drag & drop functionalities for showcasing dynamic personalized content, we simplified the usage of CDPs for marketers without programming knowledge.

We offer the power of advanced marketing technologies in an accessible and user-friendly customer data platform, that any marketer can work with. Without needing programming skills or external consultants. Curious about what we could do for your organization? Try Datatrics for Free or request a demo.