What is a Customer Data Platform (CDP)?

It’s a question that we often hear as companies search for a more innovative, scalable way to collect and utilize their customer data. We sat down with Pankaj Tibrewal, Treasure Data’s new VP of Product, to outline what a CDP is, what it does, and how it helps companies address the crucial need to better understand and engage with customers.

Q. What exactly is a Customer Data Platform?

A. A customer data platform lets you bring together your customer data from all different silos to create a unified 360-degree view of your customer. As we all know, that challenge today is tougher than ever with the incredible growth of marketing channels, applications, devices and data itself.

Q. How does a CDP differ from technologies that companies use today, like marketing automation, web analytics, CRM or even a database?

A. Indeed — there is no shortage of technology out there that has promised a single view of the customer! The reality is that there’s not been one platform out there that can bring all that data together in a single place to enable analysis, insight and action. A CRM doesn’t store event-level data (i.e what users, customers, and consumers do and when they do it) and typically most data management platforms delete data after a certain number of days — 90 days typically. Today’s modern marketers need that granular level of data to personalize web content, do multichannel marketing, target advertising to specific demographics and so on. The days are long gone that you can rely on a sample of data, just from one or two channels, and hope to stay relevant to your customer. A CDP is designed to stitch together a single customer view across a growing number of touchpoints, both online and offline.

Q. What’s changed that makes a CDP so important?

A. When you think about the landscape today, businesses interact with customers through websites, mobile apps and point-of-sale systems in physical stores. They have call centers, multiple email campaigns, a social media presence and a network of partners. Data is captured in devices when consumers interact, and then additional data is stored in transactional histories or maybe a CRM system, and the company might be bringing additional data from business partners, affiliates and third-party data sources from data aggregators.

It’s just an unmanageable knot of data that isn’t being put to use to deliver a better customer experience. Most companies are literally paralyzed by this challenge and simply have no ability to make sense of this customer data — let alone use it to drive customer value. A CDP zeroes in on that problem by integrating and standardizing data, making it ready for segmentation and personalized actions that can execute in real time. And it can do that in tremendous scale that matches today’s complex environments.

Q. What sort of customer engagement issues is a customer data platform meant to solve?

A. Let me share a story. A few months back, I was shopping for a new SUV. I visited the auto company website, selected a model, entered my information, and soon enough started receiving emails from seven or eight local dealers. I visited a couple of them, but their systems didn’t get any smarter because of my visits. All the emails were generic. No one ever contacted me to say, “Thanks for your visit, we just received two new models, in these colors.”

After I bought the car, I continued to receive generic sales emails from all the local dealers — even from the very salesperson from which I purchased the car. Their systems didn’t recognize that I bought the car, and in fact, if they had stitched the data together, they could have been upselling me upcoming service promotions, or add-ons. But they were still trying to sell me a car I had already bought! That sort of uninformed marketing is unacceptable to me, and to most consumers today. I end up trusting the dealership and company less, because I know they are not managing my data in a holistic, customer-first manner, and it makes me think, what else will they do with my data across their fragmented teams?

Those missteps don’t happen with the right CDP solution. A CDP is designed so that companies can orchestrate interactions in real-time, taking into consideration the history of interactions and up-to-the-minute behaviors across all channels.

Q. As your story suggests, it sounds like the need for a CDP is even greater because of how customers want to interact with companies.

A. Absolutely. Customer expectations are much higher today. They no longer buy based just on price and selection. Customers value relationships with their favorite brands and they expect companies to be smarter and respond intelligently. For instance, the whole retail and CPG sector is struggling to reinvent themselves in the face of threat from Amazon. The media and entertainment sector is trying to compete with Netflix.

What’s common across all companies like Amazon and Netflix is that they have a much better understanding of their consumers based on data. They serve their customers very well across all touchpoints — for instance, with recommendations based on a customer’s real-time activity on a website.

Q. Do organizations generally recognize what a CDP is and how it differs from traditional approaches?

A. A marketing executive once asked me, “We have Salesforce, so we have a Customer Data Platform, right?” The answer is no — they have an application that contains some, but not all, customer data. Salesforce and other applications are the problem silos that a CDP solves.

The term Customer Data Platform is relatively new, but the problem it solves is certainly not new, and mindshare around the need is growing rapidly. The Customer Data Platform Institute is instrumental in that. The CDP Institute was founded in late 2016 in part to educate marketers around CDPs and help them take advantage of CDP capabilities. They recently issued an industry update showing that the number of CDP vendors globally more than doubled in 2017, from 24 to 52.

Treasure Data is one of the founding sponsors of the CDP Institute. One metric that jumped out at me in CDP Institute’s industry update is that employment at the original 24 vendors has risen 27 percent year over year, clearly indicating a fast-growing industry. That’s certainly the case at Treasure Data.

Q. What’s the underlying technology of the Treasure Data CDP?

A. We are convinced that there is a need for an Enterprise-grade Customer Data Platform, and that is our primary focus. Our platform consists of modern technologies for data integration and ingestion, stream processing, data warehousing and activation. We pride ourselves in our ability to deal with any type of data, in any format, across any time period. When we speak of any type of data — we sometimes refer to it as schemaless, which means organizations can ingest both structured and unstructured data and evolve their data models on an ongoing basis. Bring it all in first, in any format, and then deal with it later. That is a huge benefit for customers in this new world of exploding data sources. We also have a large number of integrations for various data sources and activation applications.

We’ve also been a big proponent of open source technology from our founding in 2011. Our technologies like Fluentd, for streaming data collection, is used by more than two million users at marquee companies.

We are the second-largest committer for Presto after Facebook. Our data warehouse is based on Hadoop and built for cloud, with separation of compute and storage.

Learn More.  Find out how businesses are putting Treasure Data to work to solve the customer data challenge. Read our case studies on how Subaru and the global beauty brand Shiseido are transforming customer experiences with Treasure Data, or learn more at www.treasuredata.com.