A customer data platform (CDP) is a system that collects, unifies, and stores customer data from multiple sources at scale and makes it available for manipulation and distribution to systems of insight and activation channels.
“Customer data” may include behavioral data, such as information about actions someone has taken on your website or app; transactional data, such as information about someone’s past purchases or returns; and demographic data, such as someone’s name, location, and age.
“Systems of insight” may include tech like your data warehouse, ecommerce platform, and analytics solution, while “activation channels” may include tech like your marketing automation platform, advertising platform, and customer service solution.
Depending on the CDP, these systems of insight and activation channels may be native or external (bonus points when they’re native). Either way, a CDP ties it all together, eliminating data silos in the all-important layer of your tech stack that powers customer engagement.
What does a CDP actually do?
According to the CDP Institute, a vendor-neutral organization dedicated to helping companies manage customer data, a CDP is “a packaged software that creates a persistent, unified customer database that is accessible to other systems.”
Let’s break down each of those components:
- A packaged software: A CDP is a software that’s purchased from a vendor or agency and controlled by business users, frequently in marketing.
- Unified customer database: A CDP captures data from multiple systems, both internal and external. Through a process called identity resolution, it attributes customer information to a unique profile, or single customer view, and stores this information so that a business can track customer behavior over time.
- Accessible to other systems: A CDP is not a closed system. The data in a CDP is accessible to other platforms for analysis and/or to help manage customer interactions. Think of it as a data pipeline where different types of data can flow in and out. You can access the data through APIs, database queries, and file extracts.
Essentially, a CDP collects data from a variety of sources and then merges that information into a single customer view or profile. The CDP consolidates, and de-duplicates where necessary, customer information—ideally, without an IT team intervening and doing it for you.
What are the 4 main types of CDPs?
To help orient you to the nuances of the CDP landscape, here’s an overview of the 4 main types of CDPs:
1. Embedded CDPs
Embedded CDPs are built directly into another platform, such as a B2C CRM or marketing automation platform. These CDPs provide native data collection and activation within the platform, reducing the need for complex integrations.
Who they’re for: businesses looking for a streamlined, turn-key solution that integrates directly into their existing marketing or commerce stack
What works well:
- Faster implementation with minimal technical effort
- Native activation within host platform’s channels speeds up data to action
- Lower total cost of ownership, with highest potential ROI compared to other CDPs
What to watch out for:
- Optimization is primarily for the host platform’s ecosystem
- Limited outbound integrations to third-party marketing and analytics tools
- Potential lack of advanced customization options for complex use cases
Examples of embedded CDPs:
- Klaviyo Data Platform
- Amplitude CDP
- Customer.io
2. Packaged CDPs
Packaged CDPs are the original standalone CDPs. Designed as structured, opinionated databases, they centralize customer data and integrate across a broad ecosystem of marketing and analytics tools. Typically vendor-neutral, they provide flexibility in connecting with various platforms.
Who they’re for: businesses that want an independent data platform to support a “best-of-breed” approach, connecting with a wide range of tools and services
What works well:
- Flexible vendor-neutral design, which prevents reliance on a single provider
- Broad support for outbound integrations with marketing and analytics tools
- Typically, the most sophisticated identity resolution capabilities
What to watch out for:
- Another tool to manage within the tech stack
- Potential for redundant data storage, increasing costs
- Requirement to sync data externally before it becomes actionable, which can create inefficiencies if managed by different teams
Examples of packaged CDPs:
- Twilio Segment
- Tealium
- BlueConic
3. Composable CDPs
Composable CDPs provide a modular approach, allowing businesses to build a custom CDP on top of their existing data warehouse. These are ideal for companies with deep data expertise that need full control over their data infrastructure.
Who they’re for: enterprises with skilled data engineering teams looking for complete flexibility
What works well:
- Data warehouse which acts as the single source of truth for all teams
- Maximum flexibility over data schema
- Ability to use existing data investments (e.g., Snowflake, BigQuery)
What to watch out for:
- Significant technical expertise necessary for set-up and ongoing management
- Data access difficulty for non-technical users
- Typically, basic identity resolution with simple deterministic matching logic
Examples of embedded CDPs:
- Hightouch
- Rudderstack
- Census
4. Marketing cloud CDPs
Offered by large marketing cloud vendors, these CDPs integrate closely with the vendor’s broader ecosystem, making them ideal for businesses already committed to that suite of products.
Who they’re for: enterprises that are “all in” on their marketing cloud solution and need a system to centralize and manage customer data within that ecosystem
What works well:
- Integration with the marketing cloud’s suite of products
- Robust, enterprise-level capabilities for large organizations
- Backing from large software providers with extensive support resources
What to watch out for:
- Typically, highest-cost CDPs on the market
- Often built from a series of acquisitions, leading to poorly integrated systems
- Can be cumbersome to use, with outdated or clunky user interfaces
Examples of marketing cloud CDPs:
- Adobe Real-Time CDP
- Data Cloud for Marketing by Salesforce
- Oracle Unity CDP
What are the benefits of a CDP?
Despite the common misconception that only large companies benefit from a CDP, businesses of all sizes should consider integrating this technology into their marketing efforts. Here’s why:
- It enhances the user experience. A CDP provides accurate and up-to-date information about each customer to everyone on your team. This ensures all team members have a unified view of the customer, so your customers receive a consistent, personalized experience regardless of the channel they use to interact with your business.
- It improves the efficiency of your marketing efforts. Since a CDP continually provides insights into your customers’ pain points and preferences, it empowers you to anticipate customers’ needs. You’re then able to use this data to proactively tailor your marketing strategies to resonate with all customer segments, eliminating guesswork and saving you time on planning your initiatives.
- It supports your growth. As your business grows and you get more subscribers, managing the increasing volume of customer data becomes difficult. A CDP scales alongside your business, effortlessly accommodating growing data volume.
How to use the data provided by a CDP?
To use CDP data in your marketing strategy and provide personalized customer experiences, follow these steps:
1. Create customer segments
As your CDP generates customer profiles and keeps them updated in real time, you’ll observe that certain customers exhibit similarities, such as sharing a hometown or an interest in the same hobby. These similarities help you identify the customers who are more likely to respond to different types of marketing efforts across channels like email and text messaging, and plan how to approach them.
A CDP empowers you to segment customers based on common traits, behaviors, and even predictions, then tailor your marketing efforts accordingly. This way, you send more relevant messages to the right target audience, helping you drive conversions and keeping your customers engaged and satisfied.
You might, for example, send different content to newcomers than you would to repeat customers. And you might adopt a different sending cadence for more engaged segments than those who interact less frequently with your brand.
2. Trigger marketing automations based on subscriber behavior
Not all CDPs handle outreach and engagement, but the good ones incorporate marketing orchestration so you don’t have to go to a separate system to manage marketing automation.
For example, if your CDP identifies people who are abandoning high-value carts, it can trigger automated emails that offer to connect them with a customer service rep if they have any questions. People who abandon low-value carts, by contrast, might get a simple reminder notification to return and complete their purchase.
3. Leverage customer data to enhance service interactions
A CDP constantly updates customer data, providing insights into how customers engage across all touchpoints. That includes customer service channels.
This allows you to refine strategies not just for marketing, but also for customer service. For example, if a customer has a negative customer service experience, the data in your CDP can automatically trigger a targeted incentive designed to rebuild customer trust.
Similarly, customer service agents can use real-time data to make customers feel seen and valued, like personally thanking someone for a recent review. These kinds of insights can enhance the service experience and foster stronger customer relationships.
How to choose the right CDP?
Any CDP can, in theory, help you make sense of your customer data and use it to inform personalized, omnichannel marketing.
But to truly shorten the distance between data, insight, and action, you need to choose a user-friendly CDP like the one embedded within Klaviyo: Klaviyo Data Platform.
Built natively into Klaviyo B2C CRM, Klaviyo Data Platform empowers marketers and customer service teams to seamlessly segment customer data and deliver personalized experiences all within a single interface, enabling unified engagement across marketing and service channels.
With Klaviyo Data Platform, you can draw on zero- and first-party customer data for smarter decision-making, create differentiated experiences faster, and improve marketing ROI. Klaviyo Data Platform’s powerful data management tools make it easy to transform raw data into actionable insights and:
- Unlock immediate value from your data. Connect your data faster with 350+ pre-built integrations and simple set-up, minimizing technical resources to quickly drive value.
- See the full customer picture. Give marketing and customer service teams a shared, real-time customer view with lifetime access for personalized engagement.
- Enrich your data with AI-powered insights. Predict churn, lifetime value, and future purchases to take proactive, impactful action.
- Trust your data for relevant personalization. Keep data clean, structured, and accurate so every customer interaction is based on reliable insights
- Take immediate action. Take action on your data instantly within existing marketing and service workflows—no syncing or extra tools required.
Ready to draw on zero- and first-party customer data and unify it for better marketing results? Sign up for Klaviyo today and experience data-driven success.