What is customer data?

You’re a business that is partially or entirely functioning online, right? You are processing orders, you have people subscribing to your mailing lists or replying to your surveys, you have fans on social media, and so on. And people are sharing information with you across all these channels. This is customer data. Every piece of information provided by your customers while interacting with your business across all touchpoints (website, mobile applications, surveys, social media, marketing campaigns, offline venues, etc.).

People share with you a tremendous amount of information about them so you can personalize your services and offers while providing them with a perfectly tailored experience. According to Toolbox, the information provided by users and customers can be divided into two categories:

  • personally identifiable information:
  • linked: full name, physical address, e-mail address, credit card details, driver’s license number, social security number, date of birth, phone number; 
  • linkable: first or last name, location, race/ethnicity, age group, job details)
  • non-personally identifiable information:
  • IP address, cookies, device IDs 
  • engagement data: website & mobile app interactions, social media engagement, customer service information, interaction with online ads; 
  • behavioral data: transactional data, product usage, qualitative data; 
  • attitudinal data: customer satisfaction, sentiments, preferences, motivations & challenges, purchase criteria.

We’re living in the era of big data, and data-driven companies are the most profitable and agile ones on the market. In fact, data-savvy businesses are 162% more likely to have significantly surpassed their revenue goals when compared to their “laggard” counterparts, according to CIO Dive. Comprehensive data means competitive advantage, as well as a road map leading straight to your consumers’ hearts. Leveraging it in the correct way can mean a boost in consumer trust but can also represent an advantage in efficiently complying with the ever-changing regulations. 

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What is a customer data platform?

But these results are not just a by-product of customer data. You need to make sense of it in a smart and efficient way. And for this, you need a customer data platform. 

Customer data platform is a piece of software that gathers all the data you get from your customers (no matter the channels and touchpoints), brings it together, and builds unified customer profiles.

These profiles are further collected in a unified customer database, for easy acces.

This database with its unique profiles are used by marketers in an easy and seamless way so that customers don’t get irrelevant product recommendations and e-mails or ads urging you to purchase the product they just bought.

CDPs are different from CRMs (customer relationship management platforms). While they both collect customer data for your organization, CDPs create unified customer profiles on their own, using data gathered from a variety of online and offline channels. CRMs only track a customer’s intentional interactions with the company and you need to keep track of these interactions manually.

CRM systems are built to engage with customers and drive customer loyalty and retention, not to process huge volumes of data from other different sources. Moreover, CRMs are primarily designed for sales teams, whereas CDPs are data hubs created for marketers so they can make in-depth analyses of customer behavior and gather business intelligence that helps the company better engage with customers.

CDPs are not synonymous with DMPs (customer data management platforms) either. Hubspot cites David Raab, founder of the CDP Institute, who explains the difference between the two types of platforms in the following way:

CDPs work with both anonymous and known individuals, storing ‘personally identifiable information’ such as names, postal addresses, email addresses, and phone numbers, while DMPs work with almost exclusively with anonymous entities such as cookies, devices, and IP addresses.

The main difference between CDPs and DMPs is that the first influences all types of marketing decisions, while the latter mainly influence advertising in terms of better targeting for a broader reach. Plus, CDPs collect mostly first-party data, while DMPs collect mostly third-party data so we’re also talking about the quality of the data.

But perhaps the greatest advantage of customer data platforms is that they can correlate data from a myriad of sources, including historical background and behavior, and turn it into a 360° view of the customer, which is particularly useful when you design personalized experiences. 

Taking all this into account, then it comes as no surprise that the CDP industry has seen substantial growth over the last 4 years and is now worth more than $2.4 billion. And it will only keep on growing.

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Benefits of a customer data platform

  • The data they work with comes directly from your audience

This means they are trustworthy and only provide you with accurate information and insights.

Third-party data has a nasty habit of not always being reliable and fully spot-on.

CDPs collect first-party data through pixels and other tracking tools, thus only providing you with relevant information about your audience.

  • CDPs make cross-channel and multichannel marketing easier and more accessible than ever

This is because they collect data from all these channels and touchpoints, bringing it together and painting a realistic, more insightful portrait of your customers.

Data from one channel will never be confined to that channel anymore, you can easily work with information from other sources, by unifying it and using it to better inform your marketing decisions.

  • Keep all your data in one place and use it to capture 360° views of your customers

No matter the data types you’re using, it’s important to use it the most effective and relevant way.

CDPs help you better understand your customers, their behavior, motivations, and their buyer’s journey. They are necessary tools for the companies that consider themselves to be customer-centric.

Explore customer behaviors in depth, design spot-on personalized experiences, and increase the customer lifetime value (CLV): this is what you can achieve once you segment customer data in an effective way.

  • Understand your customers better and make better decisions for them

You’ve got a lot on your plate: you need to finetune customer stories across all channels and all touchpoints, speak to everybody as directly and as effectively as possible, and know your people in the smallest detail- all this while also focusing on attracting new customers.

A customer data platform (CDP) will help you build that data collection which will ultimately improve customer loyalty and customer relationships. They will help you uncover behavioral data, better segment customers, and map out the customer journey as accurately as possible.

This, in turn, will result in a better understanding of customer experiences and customer expectations that will help you make better marketing decisions.

  • Find new audience segments and better optimize your campaigns

With all the data collection in one place, it’s easier for you to see the opportunities you might otherwise be missing.

Sure, the CDP doesn’t do the segmentation but it offers you better-organized data that you can leverage both when building the sales funnels and when projecting the buyer’s journey.

And better-organized data = better-optimized campaigns.

  • Coupled with a digital experience platform, CDPs can dramatically improve your relationship with customers

For those undergoing digital transformation, digital experience platforms are a must-have, as they focus on optimizing the relationship between the company and the customers across all digital channels with the main goal of helping you become even more customer-oriented. You can also use them with marketing automation tools, content management systems, or engagement platforms if one of your main goals is to improve the quality of the content and the overall experience you’re offering, and, eventually, customer engagement.

  • CDPs save you the trouble with the legal aspects of advertising

As Crystalloids explains, having all the data in one place helps you better comply with the GDPR and E-Privacy legislation. Plus, customer data platforms allow your company to anonymize your contacts and support data portability. 

  • Become more agile and make better profits

Ultimately, all these advantages translate into a better experience for your customers, therefore more money for you. And because of the way CDPs gather their data and process it, they can help your company become more agile and more competitive.


A customer data platform is a kind of data management platform but it is not the same as a customer management platform. It works with information collected across multiple channels (online and offline) and it offers you a complete view of your customers.

You’ve got plenty of data available within the platforms you use: your customer database, your CRM, the analytics platforms, and all the other management systems. CDPs will help you make sense of all that data.

Using the information you’re given in a productive way is today’s imperative. Customers trade their information for better products, better offers, and, ultimately, better overall experiences. While every company uses a plethora of tools and specialized software, good insights are hard to get.

A customer data platform can help you notice the missed opportunities and become more customer-centric, which is a must if you want to stay relevant and thrive within your industry. 

Customer experience matters most in today’s crowded landscape. If you want to stand out and live up to your customers’ expectations, you need to change the way you’re carrying out data management: you need a customer data platform.

Frequently Asked Questions About CDPs

What does a customer data platform do?

Customer data platforms represents a piece of software that gathers all the data you get from your customers and builds unified customer profiles.

What are the 4 types of customer data?

Identity Data means basic data you have on customers. Engagement Data shows how customers engage with your brand. Behavioural Data measures how consumers interact with your business. Attitudinal Data measures what people think of your brand, product, or service

What is the difference between a CRM and a CDP?

CDPs create unified customer profiles on their own, using data gathered from a variety of online and offline channels. CRMs only track a customer’s intentional interactions with the company and you need to keep track of these interactions manually.

Why are customer data platforms important?

CDPs have plenty applications. You can use them to personalise your marketing strategies, empower your sales team with actionable insights, or improve your customer experiences to reduce churn.