Outside of conferences where people are inundated with sales garbage, there’s not a lot of conversation happening between leaders. But that doesn’t mean there aren’t...
Not too long ago, I sat down on the Corporate Data Show to discuss CRMs and CDPs with Alex Yoder of Leadspace. While CRMs are very familiar to anyone who has worked in the B2B data and sales or outbound marketing world, CDPs are a somewhat new concept, only showing up on a noticeable scale about 8 years ago in 2013.
With both of these platforms serving similar purposes, and even more out there that could be thrown in as well, it can be difficult to keep track of which does which and how. We’re going to go over the basics of a CDP, how it differs from similar platforms, and why you might want to invest in a good one yourself.
So what’s a CDP?
The acronym CDP stands for “customer data platform,” and marks just another thing that we marketers didn’t have time to say in full. The purpose of a CDP is to pull all possible data, starting with info from a B2B database or B2C database, and compile it in a way that it’s useful for marketers and salespeople.
In more specific terms, MarTech analyst David Raab describes CDPs as “a marketer-managed system that creates a persistent, unified customer database that is accessible to other systems.” That last part, “accessible to other systems,” is a key point with CDPs. If done well, they’re useful for much more than just marketing and sales; they also help out with functions like product development, supply chain management, planning, and much more.
While CDPs might be fairly new, the idea of a platform that creates a holistic view of your customer profiles isn’t. Many platforms have claimed to do so, but none have been as effective as needed in pulling in B2B data from every possible source until the CDP. That’s why it’s so important to understand and utilize this technology.
Wait a minute… isn’t that just a CRM?
I don’t blame you for thinking so, since I even had to put in a little research here myself, but no. CRMs are very similar to CDPs in that they create persistent customer profiles based on interactions with customers, but they lack CDPs’ ability to aggregate massive amounts of data.
After you buy an email list, some CRM platforms have the ability to pull in some basic info in addition to the email database, such as position, job description, social media profiles, etc. And there are, of course, tools you can integrate to pull in even more. However, CDPs do all of this and more on their own. They pull all sorts of data, such as ecommerce, mobile usage, web history, behavioral, product, and profile data, just to name a few. Basically, if the info you’re looking for on a customer exists and is legal to access, the CDP will find it. And on top of that, it still does everything a CRM does, and is fully customizable in the same ways, maximizing the advantage you gain when you buy data.
Okay, so it’s a DMP?
Again, close but no cigar. While DMPs, or Data Management Platforms, do pull mass amounts of data from many sources, they don’t create customer profiles. DMPs are more geared towards anonymous groups within a market, which are used to target ads.
This is the main distinction; CDPs and DMPs pull data from many similar sources, but CDPs utilize this data by connecting it with an identified customer to include in their profile, while DMPs use it to contribute to anonymous data.
What about custom integrations and data warehouses?
Wow, you don’t really realize how many different kinds of databases there are until you talk about a bunch of them in one article, huh? At any rate, custom integrations and data warehouses are two more systems that one might confuse with a CDP.
Once again, it makes sense. Many companies do, in fact, try to create their own customized platforms to mimic what CDPs do. The main problem with this is that it’s time-consuming, expensive, and hard to pull off even for the savviest of us. What you’ll probably end up with is a slightly better and more customizable CRM, but it still won’t do everything a CDP can do.
Data warehouses, on the other hand, are similar in that they have the ability to pull and store mass amounts of data, just like a CDP, but they make it much less accessible. Most companies that utilize data warehouses have their IT teams oversee them, meaning that marketers have much less input and have to use the IT team as a middle man far too often. This means crucial losses of time in an industry where time truly is money.
De-duplication done right
The benefits of CDPs extend past what your day-to-day needs might suggest. One of these benefits, which Rick and Alex covered in the podcast episode, is in the practice of de-duplication of data. You might not have to de-duplicate data often, and maybe you never have at all, but trust us: it’s a pain.
The main scenario in which you’d find yourself needing some good old de-duplication is in the event of a merger or acquisition. In these scenarios, the companies involved have often dealt with many of the same businesses and customers. As a result, their email databases have tons of duplicate info for B2B data, and maybe a few unique pieces that could benefit the other sets of data.
In most instances, you would have to manually search for these repeats when merging all the data post-merging or post-acquisition, but not when you have an efficient CDP. Using a CDP, you can automatically eliminate duplications, as well as combine any profiles that have slightly different info for a certain customer into one bigger, better profile. At the end of the day, it’s just another very valuable way of saving time and sanity, especially during a process as stressful as making two companies mesh as one.
Your customers are living; their profiles should be, too
We’ve touched on this once or twice, but one of the most important things about any B2B database is that it has the ability to create living profiles for customers. Sometimes this is called a persistent profile, as in Raab’s CDP definition I mentioned earlier. Regardless of the nomenclature, it’s crucial that your email database and customer profiles are constantly evolving along with them.
As Alex pointed out on the Corporate Data Show, business customers deserve the same level of personalization as individuals. You can’t just gather some background info once and expect it to be good enough forever. Just as people change, so do businesses. You need to have records of every purchase, every piece of feedback, and even every change within that company. Did they get a new COO who might be changing things up? Did they acquire another company, meaning they now have different or even greater purchasing needs? Did your usual contact retire or quit? You get the picture.
It’s this level of personalization that keeps customers coming back. That’s why a DMP or data warehouse won’t cut it in our world. A CRM is designed to evolve as well, but they require much more human input than a CDP, which, of course, comes with human error. And nobody wants human error to lose them a sale. Plus, that’s just a lot of time spent preparing to make sales rather than making them. As we always say here at EMM: automate everything that can be automated, so you have time to be human when it matters most.
What’s the best solution for you?
If you’ve read any of our past blogs or listened to past episodes of the Corporate Data Show, you know that I love a good CRM. No matter what, it’s still a very solid way of organizing your customers’ data. However, I’d be lying to you if I said I weren’t becoming bigger and bigger fans of CDPs every day.
If you work in the B2B sales space (which, let’s be honest: you do or you wouldn’t have read this far), it might be worth looking into hopping on the CDP bandwagon. Unless you’ve created some beautiful custom integration with your CRM that is working wonders for you, there really isn’t much chance that a good CDP won’t benefit you. It will save you time, bring in better data, and ultimately, help you make more sales.
If you’ve got any questions about CDPS or CRMs or DMPs or any other acronyms, we’d be happy to chat. Just go on over to our contact page, shoot us an email, and we’re in business. In the meantime, be sure to check out our other blogs, the Corporate Data Show, and our LinkedIn for more hard-hitting tips on how to improve your workflow and make more sales.
The Corporate Data Show is a podcast dedicated to helping marketing and data professionals leverage data to generate revenue for their company. To listen to all of our episodes, visit our website or your favorite podcast player.