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7 Benefits of Customer Data Platform for Customer Insights & Personalization

CDPs are one of the most important pieces of tech companies should have in their MarTech stack.

How important is it? In our podcast, “The Digital Disruption Podcast”, CDPs came to light in episode two when we were talking about building an amazing customer experience.

From giving a personalized experience to building a centralized space to having all data in to make sure it’s well maintained and protected according to the latest privacy regulations.

In this blog, we wanted to highlight seven benefits customer data platforms, or CDPs, give your business that help you stay ahead of the curve.

We’ll start with the most important and obvious one why you would want to use a CDP, which is:

1- Unified Customer Profile

One of the most important things you need to know now is that your customer is not in just one place. They’re on multiple platforms, so you can’t rely on siloed and fragmented data to know your customers.

UCP is designed to help you have a 360-degree  customer view of their demographic information, contact details, transaction history, browsing behavior, purchase preferences, and support interactions. Here’s an example:

Unified Customer View Example for John Doe

  • Personal Information
    • Name: John Doe
    • Age: 35
    • Gender: Male
    • Location: San Francisco, CA
  • Contact Details
    • Email:
    • Phone: 555-1234
    • Preferred Contact Method: Email
  • Account Information
    • Customer ID: 001234567
    • Loyalty Program Number: 987654321
    • Account Created: January 5, 2018
  • Behavioral Data
    • Website Visits: 50 times in the last month
    • Average Session Duration: 7 minutes
    • Most Viewed Category: Outdoor Equipment
  • Transaction History
    • Number of Orders: 12 in the last year
    • Last Purchase Date: November 18, 2023
    • Last Purchase Items: Camping tent, hiking boots
    • Total Spend in the Last Year: $1,200
  • Interaction History
    • Customer Support Calls: 3 in the last year
    • Average Call Duration: 10 minutes
    • Last Issue Reported: Defective product (resolved)
  • Marketing Engagement
    • Email Newsletter: Subscribed
    • Campaign Click-Through Rate: 15%
    • Redemption of Promo Codes: 3 times in the last year
  • Preferences & Feedback
    • Preferred Brands: OutdoorMaster, NatureGear
    • Product Reviews Submitted: 4 (average rating of 4.5 stars)
    • Feedback: Requests more eco-friendly product options

These data points are crucial to help you improve and personalize your customer’s experience and could help you a lot when building a robust customer experience

2- Enhanced Personalization

One thing that makes CDPs important is their ability to help you personalize your customers’ experience simply because you already have the data and a UCV available in your CPD.

Customers now expect their experience to be personalized. Let me give you an example that was mentioned in our podcast:

Netflix, we all know and love the entertainment streaming giant. I’m sure you’ve seen a show or two on their platform in the past couple of years, but if you’re binging shows, you’d have noticed their personalization in action by now.

After you’ve finished a show, you see another show that catches your attention, so you plan to see that one on the weekend, and once you’re finished with that one, you get another one, and the loop goes on.

Did you notice it? They managed to keep you around, watching show after show because they knew your taste and managed to train their algorithms on your data that they have to keep you engaged.

Netflix isn’t the only one doing it. Do you use Spotify? They have a bunch of lists personalized to your taste in music here. You can mine.

image 1 7 Benefits of Customer Data Platform for Customer Insights & Personalization

3- Improved Customer Segmentation

CDPs give you an overview of your customer profiles, which helps you easily segment your users to better serve them according to their purchase behavior or interactions.

There’s no shortage of examples we could give here, as every company, regardless of their industry, as long as they sell something, they’d be doing customer segmentation in their backend system either automatically if they’re a big corporation or manually if they’re SMB.

The thing about segmentation is that it is a versatile tool that helps you reach customers with tailored experiences on any platform. Let me give you an example:

If you have a segment of customers who buy from your website, and they’re pretty frequent, and according to the data you’ve collected in your CDP, they open emails pretty frequently, what would be the best way to reach them?

And so you keep those customers who share similar characteristics in your email marketing campaigns that go frequently.

On the other hand, you might have customers who only buy in-store, people who prefer the offline experience but have a loyalty program installed on their phones to collect points every time they buy.

What would be the best way to reach those customers? SMS seems like a perfect choice as they probably got accustomed to your offers being sent to them on their phones via SMS.

The list of examples goes on, so the best practice is to analyze your data and make data-driven decisions.

4- Improve data privacy and ensure compliance

CDPs are essential to any business’s MarTech stack because they offer convenience when dealing with data regulations and privacy.

CDPs are data hubs, not just for you but for thousands and thousands of customers all over the world, and they know they need to be compliant to avoid fines or being banned from operating in specific regions or countries.

To prove my point, let me ask you: “How many privacy regulations do you know so far, and do you trust that you’d be following them down to a T?”

5- Seamless omnichannel customer experiences

What is it about CDPs that makes them beneficial? They’re excellent at customer data management. They collect data from different sources to give you a unified customer database.

The significant benefit is that it allows you to get actionable insights that drive a seamless omnichannel experience for your customers.

In a blog we published recently about customer journey experience, we concluded that you should have the whole journey in front of you before you improve every stage.

You should approach that improvement by having an unfiltered view of the customer, knowing what they want, what they hate, and how to serve them better.

CDPs allow you to offer great experiences for your customers, not just on the web or mobile, but on any channel they prefer, and you’ll be able to track it easily!

6- Improved Efficiency 

CDPs excel at making marketers’ and anyone on the business side life more manageable and easier to handle without feeling like you’re trying to piece together a puzzle piece. 

All departments could easily have a window from it they could look at a customer’s life-cycle, from the moment he visits the website to the moment he becomes a loyal customer, that is, if you manage to win him as a long-life customer.

But if you’ve been following along, you already know what to do and how to keep up with all stages of a customer experience, from awareness to loyalty.

7- Mitigate any 3rd-party data turbulence

If you’ve been following our blog and digital marketing news in general, you’d have seen the supposed killing of the 3rd-party cookies on Google Chrome, and I say supposed because they’ve given us a couple of deadlines before all of which got pushed.

But this time, it looks like the axe is going down for sure, and 3rd-party cookies will be phased out by the end of 2024.

No one and I mean no one, could say that a similar thing won’t happen to 3rd-party data. Yes, it’s more complicated to completely phase it, but look at any privacy law or regulation launched recently.

They all try to make sure 3rd-party data isn’t going to be misused or abused by companies, which urges businesses to have their own first-party data hubs.

Final thoughts 

CDPs are versatile pieces that need to exist in any company’s MarTech stack. They don’t just pay for themselves in the long run. They also generate revenue by doing what they’re designed for: consolidating data.

In this blog, we explored the top seven benefits that came to mind when discussing CDPs, but there is much more that a business could utilize by purpose-fitting your needs to the CDP you use.

If you need help setting up a CDP and getting the most out of your MarTech setup, we could help you do just that.

Let’s have a chat to see which solutions fit your needs and how to get the most out of your MarTech stack.

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