Marketers / Data Cloud / Marketing Cloud / Marketing Ops

Your Guide to Customer Data Platforms (and Salesforce CDP)

By Philip Schweizer

Customer Data Platforms (CDPs) allow marketing organizations to have a single and complete source of truth around their customer data. 

In May 2021, Salesforce launched their own Customer Data Platform (CDP), an enhancement of the product formerly known as Customer Audience 360 (CA360). A little over a year later, Salesforce Genie was revealed at Dreamforce ‘22 – this takes Salesforce CDP’s capabilities, and extends the benefits right across the “Customer 360” (i.e. Salesforce’s product portfolio).

CDP is a marketing buzzword that has caught on like wildfire. Read on to discover how CDPs work, their benefits, and the impact Salesforce CDP could have in your organization.

Note: Salesforce’s CDP offering was has been renamed a few times: Customer 360 Audiences → Salesforce CDP → Marketing Cloud Customer Data Platform → Salesforce Data Cloud.

Customer Data Platform (CDP) Use Case

CDPs bring data from disparate sources together so that the teams within the organization can gain a complete understanding of the customers’ potential – across the entire business.

Let’s start with a real-life use case illustrating where CDPs come into use for a marketing team.

Paul, an AT&T private customer, is looking for a new mobile phone. He has several touchpoints with AT&T in his search for a phone that would serve his purposes. He searched on Google, arrived at the AT&T site from a review site, asked for recommendations on social media, and visited an AT&T physical store. Finally, he sees a Google retargeting ad from AT&T and buys an iPhone 12 Pro in the AT&T online shop.

Success – or not yet?

Well, what AT&T has missed, is that Paul also happens to be the head of IT procurement at a mid-market financial services firm, a company with 120 sales reps that all need mobile devices and contracts.

While the AT&T B2C marketing team had a narrow view on Paul being an existing private client and could attract him to buy his phone via a Google Ad, AT&T failed to alert their B2B business sales team to reach out to Paul to engage in an even bigger corporate sales deal.

That is where customer data platforms (CDPs) come in.

As I mentioned already – CDPs bring data from disparate data sources together so that the company and its marketing teams have a complete understanding of the customers’ potential, across the entire business.

A variety of data is kept in different silos by businesses like AT&T, which they acquire over time. For instance they have CRM data about Paul from where they may have acquired B2B data from the likes of DiscoverOrg that provided demographic information such as job title and Paul’s company. 

Customer journey tracking solutions such as the SalesWings for Marketing Cloud could have unveiled Paul’s engagement on the AT&T corporate business website section, after purchasing a personal phone. Purchase history from the ERP could have shown past purchases from Paul’s company into business phone subscriptions.

By combining such valuable data sources, the CDP could have provided a holistic view of Paul’s customer journey and potential to make the most out of this lead.

Salesforce CDP: What Are the Benefits?

CDP’s gather all customer data in one place, thereby making organizations smarter and customer-data-centric when it comes to engaging their customers and the next best actions to be taken. This has wide-ranging, positive impacts.

  • CDP’s enable an organization to empower marketing teams to promote and sell to the right people, the right offer, at the right time.
  • This typically leads to better marketing KPI’s such as higher conversion rates, better ROI from marketing spending, and an increase in revenue from untapped marketing and sales opportunities.
  • Beside enhancing existing marketing campaigns, it also enables organizations to discover new, profitable audience segments, to broaden their reach with targeted actions.
  • Greater segmentation capabilities also allow companies to gain campaign performance insights and how to optimize for better results, as it is the base for purposeful reporting.
  • Last but not least, there are a range of further benefits and applications, for instance centralizing customer data to manage consent and comply with important regulations such as Europe’s GDPR.

How Does the Salesforce CDP Work?

In short, CDP’s capture first-party customer data (transactional, behavioral, demographic, historical, etc.) from offline and online data sources to build a complete customer profile.

Depending on how you look at it, today’s CDP industry was born in 2016 when marketers recognized the limitations of software like Data Management Platforms (DMPs) and data lakes that leverage anonymized data for advertising.

These marketers also wanted to have known data around people, leads, and customers.

CDPs have the advantage that they mostly focus on first-party data, which is owned by the companies themselves. With anonymized data (often third-party data) receiving increasing scrutiny from both regulators and consumers, the legislation changes around collecting such data (read more about third-party cookies here). Now what are the common features of a customer data platform?

Salesforce CDP (formerly CA360) is Salesforce’s CDP. Following Salesforce’s core message, it unites the data from marketing, sales, commerce, service, and IT into one integrated platform.

READ MORE: How Salesforce Uses Salesforce CDP (“Genie”)

The main data sources for Salesforce CDP are the Salesforce “Cloud” products, such as the Marketing Cloud, where valuable data is stored in its data extensions, such as SalesWings lead scoring and lead website activity data. Sales Cloud and Service Cloud will contain a wealth of key first party data. Furthermore, CA360 can connect to Amazon AWS and will announce additional data sources very soon.

Let’s look at the different features that make up Salesforce CDP (applicable to any good CDP on the market), and that is required from your organization in order to achieve the CDP’s goals.

1. Data ingestion

Firstly CDPs bring data together so they can be connected to a person and single record. CDPs gather data from multiple sources through the CDP’s integration library.

This can include Salesforce CRM data, marketing automation platforms such as the Salesforce Marketing Cloud, business intelligence (BI) tools, data platforms, lead scoring from tools like SalesWings, accounting systems, and many more.

2. Identity resolution

Next, a key challenge is to connect all these data sources. In the past, remember if you tried to synchronize contacts from your PDA (personal device assistant) to your Outlook address book you ended up with a bunch of duplicates? Now imagine combining 40 data sources together…

CDPs resolve the many different ‘versions’ of a prospect or customer to create a single customer view – they ‘stitch’ these identities to one.

For example, in an accounting system you may only have name and address, while in other systems you may have email or additional ID’s serving as the identifier. Basically they merge everything into one.

3. Data processing

CDPs convert, purify and improve data through their user interface or with the help of code. Imagine that in one system you use area codes for the ‘location’ or a lead, and in others you write the entire name of the country – or in one you have first name and in the others, last name, but you want to have them all in one.

These are basic examples but just think how complex this can become for, say, Nike, that has data about a person’s outdoor runs from its mobile app in one system and the purchase history of this person in another one.

4. Audience segmentation

A core strength is the possibility to identify audiences. CDPs allow organizations to get extremely specific with their audiences, if they have the complete range of the data and can see various profiles that can make up an audience.

The goal is to identify profitable audiences to market to, upsell or cross-sell. At the same time, you can create case-specific audiences and exclude people from an audience. For example, if you knew that a client was chatting on one of your customer support chats and was unhappy with a service, you wouldn’t want to send them a marketing email the next week which asks them for an online review.

5. Data syndication and synchronization

Then you need to get this data to work. CDPs allow organizations to send out data to other applications, which is also called “data activation”. An audience, typically, would get activated in a marketing automation system, like Salesforce Marketing Cloud, and then nurtured on the most relevant channels to increase sales and prosperity for a business.

Isn’t This What a CRM Does?

No. A CDP is primarily used for marketing segmentation and to create a powerful source of data for marketing campaigns, reporting and analytics. It will leverage CRM data as a key data source.

CRMs such as Sales Cloud, as most of us know, are used for managing customer relationships and sales engagements, pipelines, customer interactions, business transactions, and facilitate internal sales and service processes.

READ MORE: Navigating the CDP Landscape: Data Cloud and Marketing Cloud Personalization

What’s the Difference Between a DMP and a CDP?

CDPs primarily use first-party data that is owned and collected by the company, and a bit of second-party data. DMPs mostly use third-party data which it acquires from third party data platforms and which are anonymized. Given the regulatory environment, DMP’s will lose importance as third party data is becoming less acceptable to be used for companies because of its privacy concerns.

So CDPs will process almost any type of personally identifiable information (PII) while DMPs collect and focus on anonymized data.

Final Thoughts

A customer data platform (CDP) is an application that gathers, organizes and enriches data from multiple sources, while being marketer-centric, versus sales/service-centric like a CRM. It is a key enabler to organizations that want to maximize return on all the data they have collected and own around their customers. 

Today, CDPs are mostly reserved to larger organizations, but like most visionary technologies and applications, its variations are also available for smaller companies and will continue to be increasingly available in future.

I truly hope this article helped better understand what a CDP is and why they exist. If there is a single takeaway that I hope we could learn today, it is that knowing and understanding what your customer is all about, is the key to true customer success and experiences.

READ MORE: Salesforce Genie vs. Marketing Cloud Customer Data Platform

The Author

Philip Schweizer

Philip Schweizer is Co-founder and CEO at SalesWings, a lead website tracking and lead scoring add-on for Salesforce & Marketing Cloud

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