Customer data platform

What it means

A CDP, customer data platform, is software that collects customer data from various sources, such as the website, online shop, CRM, email, mobile app or stores, and merges it into a single profile for each customer.

Unlike a CRM, which serves mainly salespeople in managing relationships, a CDP is built for marketing and analytics. It allows behaviour-based segments to be created and pushed to advertising and email tools.

CDPs rely on first-party data collected directly from customers. As third-party cookies fade, the CDP is becoming the main tool for marketing personalisation.

How it works in practice

An online shop with a CDP can, for example, target customers who viewed a product but did not buy, offer accessories for their last purchase or exclude existing buyers from ads. Data are often collected through server-side tracking.

Before introducing a CDP, clarify which data are needed and for what purpose, and unify customer identification across systems. Without good data a CDP just spreads errors faster.

The CDP provider is a data processor, so the contract must meet GDPR requirements and state where data are stored. Licence fees are ordinary operating costs.

What to watch out for

Combining data into profiles is profiling and needs a lawful basis. Marketing cookies and tracking require consent, and customers must know what is collected about them.

A CDP is expensive and demanding. Smaller firms often do fine with a well-configured CRM and an email tool linked to the shop until data volumes and channels justify a separate platform.