How To Choose a CDP: Customer Data Platform Types and Tips

Upon waking up on a typical morning, you might scroll through Instagram, open your laptop to check your email, and browse a few websites—all before brushing your teeth. Each tap, like, and click leaves a trail of data across multiple devices.

For ecommerce businesses, connecting these data points is key to delivering relevant, personalized marketing. Effective cross-channel tracking helps you understand user behavior and target customers based on real interests. A customer data platform (CDP) collects and organizes this crucial data, giving you the complete picture you need to succeed.

Here’s how CDPs can enhance your multichannel marketing efforts.

What is a customer data platform?

A customer data platform (CDP) is a software tool that consolidates user information from multiple data sources. It gathers first-party data by tracking customer interactions across brand websites, apps, social media platforms, and other channels, organizing these data points into unique customer profiles that provide a complete view of user behavior.

CDPs help marketing teams deliver a consistent customer experience across platforms. For example, you could use a CDP to create a personalized retargeting campaign that serves social media ads to users who interact with products in your email campaign, highlighting previously viewed items to boost conversion rates.

Core components of CDPs

CDPs focus on collecting and organizing customer data. Individual platforms may have different focuses and functions. Common CDP capabilities include:

• Data collection. CDPs collect first-party data whenever customers interact with your brand content. Sources include website and app interactions, social media likes, email engagement, and transactional data.

• Data unification. CDPs aggregate data from different channels into a centralized platform to give you a holistic view.

• Profile creation. CDPs create unique profiles for each user. With identity resolution, a CDP can combine customer interactions from multiple sources and devices into a single customer profile. 

• User segmentation. CDPs simplify customer segmentation, allowing you to group users based on behavioral data.

• Activation tools. Activation tools let you take specific actions for each customer segment. Some CDPs can be programmed to automatically execute emails or other marketing actions in response to certain customer behaviors (like abandoned cart emails).

CDP vs. CRM: What’s the difference?

Customer data platforms are often used alongside customer relationship management (CRM) tools. Both systems collect and store customer data, but CRMs are focused primarily on transactional history and customer service records. CDPs have a broader scope, also capturing behavioral data from off-platform sources like social media. Sales and service teams rely on CRMs to manage relationships, while marketing and analytics teams use CDPs to gain insight into customer behavior.

Packaged vs. composable CDPs: What’s the difference?

Customer data platforms vary in complexity and focus, from user-friendly tools with no-code implementation to complex, customizable software solutions. Some offer an all-in-one marketing solution with built-in activation tools (packaged), and others are designed to complement your existing infrastructure (composable). Here’s how the two broad categories differ: 

Packaged

Packaged CDPs, like Tealium, are all-in-one tools that collect, store, and analyze data. They come with powerful native tools, including analytics, customer scoring, and marketing activation. Designed for easy implementation and management, packaged CDPs are well-suited for small businesses.

However, as standalone platforms, they may not integrate smoothly with your existing website infrastructure. Instead of syncing with your data warehouse, these platforms operate from their own separate data sets, potentially making it harder to resolve data inconsistencies. Packaged CDPs may also include unnecessary or redundant features—if your website already uses an analytics platform, for example, the CDP’s version may be unnecessary.

Composable 

Composable CDPs, like Hightouch, are modular and highly customizable. Each platform function is a separate module, so you can select the tools you need to create a tailored CDP solution. Composable CDPs aren’t all-in-one platforms—they’re designed to work alongside your existing marketing tech stack. These tools minimize redundancies by pulling data directly from your existing warehouse. 

However, implementing a composable CDP can be complex and requires a strong understanding of your business needs. 

4 types of CDPs

1. Data streaming
2. Automation
3. Campaign
4. Marketing cloud

CDPs can be challenging to classify—the marketing technology industry uses various terms, and many platforms incorporate functions from multiple types. Here are the four main categories CDP tools typically fall into:

1. Data streaming 

Data streaming CDPs, like Confluent, collect customer data in real time. With near-instantaneous data ingestion, customer profiles always reflect customers’ most recent interactions. These tools are often custom-built and work alongside existing marketing and analytics tools. They’re primarily focused on high-speed data collection to transfer information to other platforms quickly for further analysis and marketing decisions. 

Data streaming platforms are highly customizable. You can choose the type of data you want to ingest, and you can design custom rules for how the information is stored and classified. With custom event schemas, for example, you can set your own definitions for specific customer segments. A pet store owner, for example, could use this feature to place any user who hovers over two fish-related products into an aquatic pet owners segment.

However, designing these tailored processes can be technically complicated. Data streaming CDP implementation often requires support from engineering teams.

2. Automation 

Automation-centric CDPs, like ExpertSender CDP, are designed to simplify campaign execution. They can automatically perform marketing actions like sending an email, triggering a push notification, or implementing ad retargeting, all based on customer behavior. For example, an automation CDP can be programmed to send abandoned cart reminder emails to users who leave your website before completing a purchase. These user-friendly platforms and apps offer simple implementation but may provide less customization compared to more robust CDPs.

3. Campaign 

Campaign CDPs—also known as orchestration CDPs—focus on marketing strategy development and implementation. These platforms, like Segment, include mapping tools that help marketing teams build specific journeys for different customer segments. This technology helps deliver relevant messages to customer subsets. You could use this technology to send an educational onboarding email to users classified as new customers and target loyal customers with an invitation to your customer loyalty program.

Campaign CDPs are simpler and less flexible than composable platforms, and are sometimes paired with data streaming CDPs to achieve a blend of high-speed data collection and quick marketing implementation. 

4. Marketing cloud

Large software companies like Adobe, Salesforce, and Oracle offer a full suite of marketing tools, sometimes referred to as marketing clouds. A marketing cloud CDP may be a good fit if you already use a comprehensive marketing tool that offers CDP functionality for other business functions. 

Working with one provider for all of your data management needs ensures seamless integration, but these services may be prohibitively expensive for small businesses.

How do you choose a CDP?

• Evaluate your current position
• Assess your business needs
• Identify key features
• Compare platforms

The best CDP depends on your goals and your team’s technical capacity. Finding the right platform involves auditing your current position, defining your marketing objectives, and reviewing platform capabilities. Here’s how to choose the right customer data platform for your business:

Evaluate your current position 

Audit your current platforms and resources. Take note of how you currently work with customer data, where you store information, and which tools your team uses most frequently. 

If certain tools and processes work well, choose a CDP that complements your existing tech stack. If you don’t rely on any specific marketing software, an all-in-one tool like a packaged CDP could provide multiple analytics solutions. 

Consider your engineering resources. This can help you choose between a customizable platform that requires developer implementation and a simpler, no-code solution. A new company aiming for fast, easy implementation may choose a packaged CPD that can support marketing efforts without requiring complex setup. A more mature team looking to optimize their processes might select a composable CPD that can be customized to support their needs.

Assess your business needs

Why do you want a CDP? Are fewer people clicking your ads than expected? Are visitors bouncing from your site quickly? Do you struggle to track which types of customers engage with your most popular product categories? 

Examine your current workflow and identify opportunities for improvement. Connect with relevant stakeholders—such as marketing and analytics team leads—and discuss their priorities. Consider setting goals you hope to accomplish with your new platform. Example goals include improved data management and increased customer segment personalization. 

Identify key features

Review your team priorities and make a list of the key CDP features you need to achieve them. Businesses focused on marketing campaign execution might want a platform with automation capabilities, customer journey mapping, and audience segmentation tools, like Bloomreach or Salesforce Marketing Cloud. Companies looking to improve data-informed decision-making might prioritize real-time information collection with a platform like Segment.

Compare platforms

Research different CDP companies. Compare platform offerings to your feature wish list. Evaluate other factors like scalability, customer support, ease of use, and ease of implementation. Look for a tool that can help you achieve your business goals without exhausting your technical resources. 

Most CDP companies don’t publicly share pricing. After you’ve identified several promising options, connect with CDP vendors to request quotes. Review responses and look for any limitations or policies not mentioned in the marketing materials. Check for data storage limitations, add-on charges, and minimum contract durations.