This is part 1 of a 4 part article series on customer experience and CDPs sponsored by Arm Treasure Data.

What is a CDP Exactly? A customer data platform (CDP) is a data management solution that imports customer data from multiple sources, integrates, cleans and organizes it, and creates a unified profile of every single customer. CDPs then take that structured data and push it out to other martech platforms and web systems to enable advanced customer-centric functionality like personalization. CDPs are becoming mission-critical for any organization that is serious about adopting customer-centric business and marketing strategies, and will be a core component in a company’s ability to serve up a holistic, consistent experience to your customers.

What Are the Benefits of a CDP?

CDPs can serve as the hub of your customer experience efforts, collecting and bringing together 360-degree customer data from all the ways people interact with your company: through email, social media, advertising, CRM, loyalty programs, in-store visits, the Internet of Things (IoT) and more. This gives you an understanding of your customer’s behavior far beyond the sale, and helps you understand their motivations, likes/dislikes, and tendencies. With such a deep understanding of your customers, wherever they may be, a CDP with the appropriately connected martech platforms can enable real-time delivery of consistent messaging and experiences to your customers across all channels. It also provides marketers the ability to precisely target buyers and personalize these experiences to improve conversion and acquisition.

With extended knowledge of each customer over time and across many channels, comes the opportunity for your organization to build a lasting relationship with your customers, improve trust and in turn, improve retention rates. According to a study by Invesp Consulting, the cost of acquiring a new customer is 5 times greater than retaining an existing one, so retention should be a top priority for all marketing departments who want to be efficient in their marketing programs.

Related Download: How to Evaluate a CDP: 4 Top Considerations

What Features Does a CDP Have?

CDPs, according to the CDP Institute, need to have certain elements and features just to be called a CDP. First, they need to be marketer-ready and controlled by the marketing organization, meaning an IT department or external vendor is not needed to run it on a day-to-day basis. Second, they need to have a persistent and unified database to grab all that structured and unstructured customer data. And third, they need to be able to connect to other martech platforms and external systems, such as email and web.

A CDP needs to have a friendly user interface (UI), so marketers can manage data and get analytics and reports without tech support. The CDP Institute, along with analyst firms like Gartner and Forrester, says CDPs need to do three basic things to be called a CDP:

  1. As we mentioned before. the most important feature of a CDP is the collection of data from multiple sources.
  2. It must unify customer profiles, combining all available information, from many sources, into a single complete profile. It must segment customers into groups.
  3. Finally, CDPs must be able to activate that data by pushing it out to external systems and platforms.

Beyond the basics, more robust, enterprise-grade CDPs like ARM Treasure Data’s CDP solutions are focused on handling demanding applications, such as those in the retail, consumer packaged goods (CPG), and the publishing/media industries. This type of CDP can be expected to have more advanced features, including: schema-less ingestion to aggregate data from multiple sources without the traditional, time consuming data upload processes.

Learning Opportunities

  1. Dynamic profile segmentation, so marketers can target very specific customers with finely tuned personalized messaging.
  2. Indefinite data persistence over time.
  3. Marketing-enabled machine learning algorithms for predictive outcomes and advanced analytics.
  4. The ability to scale and handle billions of events each day.

The History of the CDP

Back in the 90s, customer relationship management (CRM) platforms were introduced with the goal of managing a company’s interaction with customers and prospects. By using data analysis on a customer’s history, CRMs focus on customer retention and driving sales. But CRMs had limitations, like only focusing on registered customers and dealing with first-party, predefined data. Then in the 2000s, data management platforms (DMPs) gained popularity. These solutions were different from CRMs: DMPs are advertiser-focused and primarily used to help inform and feed media campaigns.But they brought much to the table, like an enriched data profile, the delivery of second- and third-party data, and the ability to unify anonymous IDs.

About three to four years ago, the CDP was introduced as a reaction to the increase in corporate customer experience (CX) and omnichannel marketing initiatives and the fact that fragmented data spread across the enterprise made accomplishing goals for these programs extremely difficult. Businesses needed a foundational enterprise data platform to connect all those siloes together and be able to unify that customer data into a single profile of an individual customer. CDPs not only provide a unified customer view, but can take in data from first-party, second-party, and third-party sources, as well as known PII (personally identifiable information), offline and unstructured data.

The CDP Market

The CDP market is booming and the systems are quickly coming into prominence as a core element of a company’s martech stack. CDP industry employment grew 76% in 2017, while the number of CDPs grew 59% during the same time period, according to the CDP Institutes June 2018 Update. The CDP industry brought in $114 million in new funding in the first half of 2018, a 26 percent increase from 2017, with the total investment now at $1.47 billion. The CDP Institute estimates the CDP market will increase to $1 billion in revenue in 2019.

Want more? Check out the Total Data Management Report to get a unified 360 degree view of your users for more powerful segmentations.


CDPs are the next step in the evolution of data management systems, using data from platforms such as CRMs and DMPs. They are a critical component of your martech stack if you intend to do true data-driven customer-centric marketing campaigns across multiple channels. CDPs can help you get a 360-degree view of your customers, and deliver a unified experience to them at all stages of the buying journey.