Differentiating CDPs from other Customer Data Solutions

Every firm wants to be able to maximize its profitability through informed, data-backed insights – specifically those related to customer data management. While every firm may desire real-time data aggregation, that doesn’t mean they are able to achieve it. Customer data solutions, for example, is a branch of corporate data management that many organizations are still learning to optimize. Failure to properly hone one’s customer data solutions could result in poorly targeted marketing strategies, lower customer acquisition rates, and a reduced customer lifetime value. The first step to overcoming the challenges of data management is to better understand its tools and techniques.

Customer data platforms (CDPs) are part of a group of many customer data solutions that an enterprise can use to coordinate and utilize big data. In fact, it is one of the most effective and popular methods of customer data management available today. Yet, many business leaders still don’t recognize its value in capturing all segments of the consumer funnel – especially in the context of other data management alternatives. The purpose of this article is to help inform executives and managers on the various types of customer data management solutions available, and how their benefits and limitations compare to those of CDPs.

What Value Does a Customer Data Platform Provide?

When making comparisons, an established anchor point is key. In the context of this piece, we will use customer data platforms as the baseline for customer data solutions, in order to describe and weigh the advantages and disadvantages of every alternative.

Customer data platforms are used to aggregate, evaluate and share data from multiple channels across multiple departments. Why this is valuable is because it is able to create a persistent, unified customer database that companies can use to track and record customer behavior over time. Unifying your customer database means linking same-customer information from multiple systems to create a more comprehensive customer profile. With more comprehensive, data-backed customer profiles, organizations can develop marketing and business strategies that more accurately reflect the needs and interests of their customer base. The more informed your strategies are, the more likely they are to succeed. Customer data platforms, when implemented effectively, offer a strong return on investment (ROI) based on their ability to facilitate informed customer data analysis. These benefits have not gone unnoticed, either.

In the past five years, customer data platforms have become one of the fundamental tools for modern customer data solutions. The number of companies with deployed CDP, for example, increased from 17% to 29% between 2019 and 2020.  In the same study, 47% of the respondents expressed that they were looking to increase their CDP budget by more than 25% over the next five years. Despite their recent popularity and success, CDPs aren’t the only customer data solution companies are using to improve their front-end and back-end operations.

How Other Data Management Solutions Compare to CDPs

There are several different data management solutions one can draw from when it comes to collecting, tracking, and using customer data. However, the efficacy of these alternatives, in comparison to CDPs, depends on the needs of the organization. For instance, CDPs are the ideal solution for developing real-time customer profiles for marketing or business purposes. To better support your choice of data management solution, here is a quick breakdown of some of the other customer data tools as they relate to CDPs.


The key difference between CDPs and DMPs is in the type of data and insights they are trying to collect. A data management platform (DMP) is a specialty data warehouse that stores audience and campaign data from a wide range of sources. These sources, for example, could include the demographic and behavioral data of a publication you are looking to advertise on. The goal of a DMP, in contrast to that of a CDP, is to identify the patterns and variables driving customer behavior as a whole. Instead of creating individualized profiles from multiple systems, DMPs focus on extracting big-picture insights that impact customer activity across segments, markets, and demographics. While both data management solutions aim to unify customer data, the data collected – and how they collect it – is quite different. 

The scenarios in which a DMP would be preferable to a CDP depend on the organization and its goals. If an organization wants to evaluate consumer behavior more holistically – or with a wider lens – then a DMP’s consumer trends may be more useful than a CDP’s customer profiles. For instance, a tech company looking to enter the video game industry may not have the internal customer information needed to successfully fuel a CDP. Similarly, they may want to analyze the behavioral data of customers not currently involved with their business. In either case, a DMP may be more effective at creating and analyzing audience segments that the firm can target during its market entry.


Unlike CDPs and DMPs, Customer Relationship Management (CRM) focuses on using its customer data collection to help businesses better manage their customer relationships and interactions. The data captured and stored by CRMs is mostly generated through its internal customer engagements. This includes transactional and sales data as well as other behavioral metrics relating to engagement. While CRMs lack the ability to aggregate and unify data, other customer data solutions, like CDPs, can be used to help supply it with the necessary indexes to function effectively. This is because customer data solutions are not mutually exclusive. Many are even designed to synergize with each other. Therefore, when selecting a customer data solution, it is important to understand your goals and objectives when it comes to data collection, because this will impact the solution(s) you eventually implement.

When CDPs are the Optimal Customer Data Solution

CDPs are the optimal customer data management solution in the context of customer profile creation. CDPs centralize first-party data into a single, unified customer database where the software can then provide insights based on intelligent data point connections. This is extremely valuable for B2C and B2B businesses that want to create more profitable consumer experiences, interactions, and marketing strategies to elevate their business.

As effective as these customer data solutions are in unifying, organizing, and analyzing user information, implementing them can be quite challenging. Due to the messiness of customer data, optimizing your data management solutions can require additional assistance. Fortunately, Enabled Concept can help facilitate CDP integration while also providing insights for tactics further along in the consumer funnel e.g., conversion rate optimization. To learn more about how Enabled Concept can help successfully implement your customer data solutions, contact us today.

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Ron Bisaccia