A Customer Data Platform Guide for Small Business Marketers

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As a small or midsize business (SMB), you’re accustomed to marketing on a budget. You can’t afford to waste any money on marketing software or on technology that isn’t delivering a clear and significant return on investment (ROI).

That’s why you may find yourself drawn in when you hear about a hot, new innovation in marketing technology such as customer data platforms (CDPs), a recent software evolution promising to innovate marketing automation.

A Customer Data Platform Guide for Small Business Marketers

According to a 2017-2018 CMO Gartner survey (full research available to Gartner clients), marketing leaders invest two-thirds of their budget in supporting customer retention and growth.

CDPs claim to help marketing leaders do just that.

In this article, we’ll demystify the defining features of CDPs and explore whether or not they’re the next best step in marketing technology for your SMB. By the end of this piece, you should be able to identify core CDP features, compare them to your current technology/software offerings, and decide whether it’s worthwhile to invest in a CDP.

What is a customer data platform?

Gartner defines a CDP as “a marketing system that unifies a company’s customer data from marketing and other channels to enable customer modeling and optimize the timing and targeting of messages and offers.”

To fit this definition, a CDP “must feature a marketer-friendly, web-based interface” that includes the following features:

  • Data collection: The ability to ingest first-party, individual-level customer data from multiple sources (online and offline) in real time with no storage limits.
  • Profile unification: The ability to consolidate profiles at the individual level and connect attributes to identities.
  • Segmentation: An interface that lets marketers create and manage segments.
  • Activation: The ability to send segments with instructions to executional tools for email campaigns, mobile messaging, advertising, etc.

In practice, CDPs enable automation of a step-by-step process that:

  1. Collects customer data.
  2. Unites that data into individual customer profiles.
  3. Separates profiles into segmented markets.
  4. Pushes those segments to technology that can execute specific marketing campaigns and messages.

The entire process looks something like this:

The key features of a customer data platform envisioned in one flowchart (Source—full content available to Gartner clients)

You may find other forms of software or technology packaged as a customer data platform, but to fit the definition of the market as we’re describing it, a CDP must function as outlined above.

Do I need a CDP or will marketing automation software suffice?

Since you’ve already invested in marketing automation technology, the only reason you’d want to spend more money on a CDP is if it leads to a higher ROI. The best way a CDP could achieve this is by providing new features and functionality that traditional marketing software doesn’t offer.

In this section, we’ll run down the four key functions of CDPs and discuss whether traditional marketing automation software provides the same or similar functionality.

4 key CDP functions to compare against your existing software

1. Data collection

What it is: CDPs take in customer data from a variety of sources—including browser cookies, names, emails, device IDs, pages visited, demographic information, purchase history, campaign engagement, and loyalty status—and store that data indefinitely in a usable format until it has been processed.

Can marketing automation software do it?  YES 


An important subsection of marketing technology consists of software dedicated to obtaining and managing leads. Lead generation software and lead capture software, in particular, are designed to automate the capture, segmentation and assignment of leads to improve targeted marketing communication and shorten sales cycles.

This is what the data collection component of a CDP does as well, meaning you likely already have access to this feature within your extant marketing software.

2. Profile unification

What it is: This part of a CDP creates a profile for every individual you interact with, tracks them across various devices, and eliminates redundant customer records (for example, when the same customer uses multiple email addresses). It may also match third-party identity and attribute data with personally identified customer data and aggregate related/linked customers (such as those who share a household) into a single profile.

Can marketing automation software do it?  YES 


If you want to create customer profiles using your existing marketing technology, look to your lead management software.

Though lead management features won’t necessarily create an explicit customer profile, they do give you an automated way to track leads and nurture them until they become buyers. Once leads are captured, they’re stored in a database where they can be evaluated and distributed across the company for the next step in the sales/marketing process.

3. Segmentation

What it is: One of the core features of CDPs is their ability to take all that customer data you’ve collected and automatically create segments—that is, linked groups of people who share one or more common characteristics. All CDPs contain rule-based segment creation, but some may also offer automated segment discovery, predictive analytics, and the ability to import and deploy custom models built in external advanced analytics platforms.

Can marketing automation software do it?  YES and NO 


Once again, segmentation is a key feature of lead management software.

This software sorts leads into various categories based on criteria you give it, such as geography, professional qualification, job role, or industry. If you have a linked system for lead generation, lead capture, and lead management, then you’re already able to accomplish the first three core functions of CDPs.

4. Activation

What it is: Once your CDP has captured customer data, turned it into profiles, and then segmented those profiles, it needs to actually do something with the segmented lists. Activation tools send the segments, along with explicit activity instructions, to outside execution systems (such as email marketing software) in order to launch campaigns, advertisements, and so forth.

Can marketing automation software do it?  NO (but it doesn’t need to) 


Because it’s a system that operates independently of your marketing software suite, CDPs need functionality that allows them to connect to that software so you can take advantage of your customer data.

When you’re using general marketing automation software—including lead generation/capture/management features—you’re likely utilizing a software suite that already provides access to email marketing automation. This means that even though it may not explicitly have the same activation features as a CDP, it doesn’t need those features, since execution is already part of the same system.

Should I invest in a CDP?

For its enterprise-level business clients, Gartner recommends the following:

“Customer data platforms (CDPs) present an alluring alternative to marketers who are frustrated with perceived, and actual, limitations in how their technology handles customer data management and customer analytics, but the market has yet to coalesce around standard capabilities. … Evaluate the overlap between CDPs and related technologies to learn how other systems present alternative methods for collecting, unifying, segmenting and activating customer data. Determine which technology, or combination of technologies, is best suited to meet your needs and don’t succumb to hype.”

A Marketer’s Guide to What Is—and Isn’t—a Customer Data Platform (full text available to Gartner clients)

As an SMB, then, you should be especially wary of succumbing to hype. CDPs may be appealing to large businesses that can afford to spend money on a flashy, new system that they don’t really need, but you have to be smarter when you invest in software and technology.

Right now, the CDP market is simply too new and inchoate for most SMBs to justify investing in technology that largely duplicates functionality already available from traditional marketing automation software.

 WHAT TO DO INSTEAD:  Instead of investing in a CDP, you should speak to your marketing software vendor to see if you can access more features and integrations—particularly those related to lead generation, lead capture, and lead management—that will provide you with most (if not all) of the tools available in a CDP.

Looking for Marketing Automation software? Check out Capterra's list of the best Marketing Automation software solutions.

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