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January 22, 2025

5 Ways to Know if a CDP Solution is Really a CDP

Customer data platforms (CDPs) are still emerging as a solution class, which means that there is still some lingering confusion in the marketplace about the proper definition. Some of the confusion stems from vendors making the claim that the capabilities of a CDP are already fulfilled by other solutions, which leads to many solutions branded as CDPs being limited in scope and functionality.

What is a Customer Data Platform?

The CDP Institute defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems.”

That definition leaves some room for interpretation. What is meant by persistence? At what cadence is the unified customer database accessible to other systems? What type of data is required to create a unified customer record?

How Can You Tell if a Solution is Really a CDP?

There are generally five key characteristics that separate a CDP from other solutions that, for one reason or another, cannot accurately lay claim to the CDP mantle. To be considered a CDP, a solution must:

  1. Accept data of any structure or cadence – A real CDP functions as a single point of access and visibility for data silos throughout the organization. The high variance in structure and cadence of data throughout most companies – streaming unstructured data from social media, structured batch data from the CRM, etc. – means that any CDP worth the name needs to accept any structure or cadence of customer data. As volumes of data increase, CDPs need to have the ability to ingest broader varieties of information and still leverage it. A CDP solution is a single point of truth for customer data across the enterprise.
  2. Resolve customer identities across the anonymous-to-known lifecycle – A CDP solution needs to possess robust identity resolution capabilities. From a functional perspective, this means blending anonymous behavioral data with known information about customers into a coherent customer identity. With identity resolution capabilities, a CDP should be able to build and maintain a golden record from everything that is knowable about the average consumer.
  3. Manage customer data in real time – CDPs are designed to build and maintain a golden record, which is also known as a unified customer profile (or single customer view). Any CDP worth the name must be able to perform the necessary tasks to accomplish that goal at the speed of the customer. While the tasks are often done at a real-time pace, the definition of “real time” is based on business needs. Real time for one business (or one use case) might be a few milliseconds, or a few seconds for another business. Despite this, the fact remains that any CDP needs to be able to update the unified customer profile at a moment’s notice.
  4. Empower business users with access to unified customer data – The unified customer profile created by a CDP solution means very little if no one has access to that data. CDPs need to allow marketers and other business users to access customer records with minimal IT assistance; this is partly what makes CDPs so different from traditional data management technologies and other customer engagement solutions. Business users who can access customer data at their moment of need can do their jobs quicker, which leads to greater responsiveness to customer signals.
  5. Function on any deployment model and database technology – A CDP needs to be flexible in its deployment model. Some companies prefer on-premises deployments, others are fine with cloud-based software, and still others tend toward a hybrid deployment. The type of deployment shouldn’t matter. In terms of database technology, many brands have legacy databases in place that they don’t want to transition away from. A CDP shouldn’t force any organization to deploy a new database – the solution is designed to maximize investments in data technologies, not replace them.

How to Compare CDP Solutions

Customer data platforms are a powerful solution class with a potent ability to ensure brands can deeply understand their customers. With a fuzzy definition in the marketplace, however, comparing CDP solutions can be a challenge. It’s crucial that companies know what to look for when evaluating solutions. If the solution being evaluated doesn’t accept all forms of data, handle real-time updating, make data accessible, have a flexible deployment model, or resolve identities across the anonymous-to-known customer lifecycle, then chances are the solution isn’t really a CDP.