Customer Data Platforms (CDP)– Why Unified Customer Profiles matter

Who owns an iPhone is probably familiar with the "Screen Time" feature. It not only shows how much time you spend on your smartphone each day, but also provides surprisingly detailed insights: How many minutes on Instagram? How often was the device unlocked? Which app sends the most push notifications? Anyone who has ever looked at this consciously quickly realizes: Our digital behavior is measurable – and full of patterns.

Such data, which on a small scale reveals our habits and interests, is also highly relevant for companies on a larger scale. Because everywhere we go online – while surfing the web, shopping, using apps, or reading newsletters – we leave behind traces. For companies, this holds enormous potential: those who understand how, when, and with what customers interact can tailor communication, offers, and services accordingly.

These digital traces can be valuable for companies – provided they are systematically collected and analyzed.

This is the task of so-called Customer Data Platforms (CDPs).

A Customer Data Platform (CDP) is a software solution that centrally aggregates, unifies, and persistently stores customer data from various sources. The goal is to create a comprehensive, up-to-date profile of each individual – across all channels.

In contrast to systems like a CRM (Customer Relationship Management) or a Data Warehouse, which are often designed for specific departments or historical analyses, the CDP was built from the ground up to make first-party data accessible in real time for personalized actions. It's not a data archive, but an operational platform that not only stores data but makes it directly usable for marketing, sales, or customer service.

CDPs integrate data from a wide range of sources – such as websites, apps, email campaigns, POS systems, or support tools – and combine them into a consolidated customer profile. This profile can then be used, for example, to deliver targeted marketing messages, classify users into specific segments, or provide personalized product recommendations.

A CDP is more than just a database – it consists of several functional layers that are closely interconnected. Its goal: to consolidate data from various sources, analyze it, and make it immediately usable. The typical structure can be divided into four key steps:

CDPs integrate data from various internal and external sources: websites, mobile apps, CRM systems, newsletter tools, POS systems, or even IoT devices. This includes structured data (e.g., customer numbers, order histories) as well as unstructured information (e.g., click behavior or support tickets).

A central element is the so-called identity resolution. It ensures that multiple interactions – e.g., a website visit on a laptop and a purchase via smartphone – can be assigned to the same person. This is technically achieved via unique identifiers such as email addresses, logins, or cross-device IDs.

From the unified data, the CDP creates a consolidated, dynamic customer profile. This profile grows with every new interaction and can be divided into segments based on specific rules – e.g., “active buyers,” “cart abandoners,” or “high upselling potential.”

The final step is the use of the data. CDPs provide the processed profiles to other systems – e.g., for email marketing, personalized content on the website, or targeted advertising campaigns. This often happens via integrations with common tools like HubSpot, Salesforce, Google Ads, or Meta.

Customer Data Platforms give companies direct access to connected customer data – in real time and across all channels. The added value becomes apparent on several levels:

CDPs enable a 360-degree view of the individual customer. They link previous purchases, interactions, support requests, and behavioral data into a continuously updated overall picture. This allows companies to know not only who the customer is but also what interests them and how they behave.

A key goal of many marketing departments is to tailor content individually to users. CDPs make this possible – contextually and in real time. Whether product recommendations, discount promotions, or the selection of a newsletter topic: content can be delivered based on the individual profile.

With more precise audience targeting and automatic segmentation, scatter losses can be minimized. Campaigns can be planned and executed more effectively – with greater relevance and better conversion rates.

CDPs break down data silos. Instead of isolated systems for each department, there is a central data source that various teams can access. This not only improves coordination but also ensures a consistent customer experience across all touchpoints.

CDPs also offer advantages from a data protection perspective: They enable centralized management of consent data and support features such as data requests or deletion obligations in accordance with the GDPR. At the same time, they provide greater transparency about how customer data is collected and used.

The use of Customer Data Platforms (CDPs) is increasing worldwide. According to the CDP Institute, the CDP industry’s revenue is expected to reach 2.5 billion USD in 2024, up from 2.3 billion USD in 2023. These figures highlight the continued growth and increasing importance of CDPs for businesses.

Companies that implement CDPs often report a fast return on investment (ROI). According to the “2024 State of the CDP” report by Tealium, 79% of companies achieve a positive ROI within 12 months of introducing a CDP. This underscores the effectiveness of CDPs in improving customer retention and marketing efficiency.

CDPs are proving to be economically viable, often paying off within the first year despite high initial investments. Following this trend, one can say that data from CDPs will become even more valuable in the future, especially in conjunction with AI-based solutions. For example, such data is extremely helpful in training specialized chatbots and also makes a real difference in modern marketing. Companies that fail to consider and analyze customer data may find themselves at a competitive disadvantage in the future.

The selection and implementation of a Customer Data Platform should be strategically planned. The following points are considered critical to success:

Customer Data Platforms help companies collect, link, and utilize customer data centrally – forming the basis for personalized communication and efficient marketing. Those who choose the right platform and implement it strategically benefit from better customer relationships, greater relevance, and increased competitiveness.

Given the growing volumes of data and rising expectations, now is the right time to engage with this topic – before others gain the decisive advantage.