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What is a CDP?

The driving force behind every great customer experience. Data’s beating heart. Martech’s game changer. These are just a few of the ways we can describe the customer data platform. But what exactly is a CDP and what role does it play in the delivery of exceptional customer experiences?

Table of contents

Table of contents

Quick insight

The CDP complements existing marketing strategies by activating customer insights, in real time, to trigger unique and memorable experiences for customers across advertising, marketing, e-commerce, and customer service.


What is a Customer Data Platform?

To start, let’s take a look at the Customer Data Platform Institute’s definition:

"A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems".

They break it down as follows:

  • "Packaged software": the CDP is a prebuilt system that is configured to meet the needs of each client. Some technical resources will be required to set up and maintain the CDP, but it does not require the level of technical skill of a typical data warehouse project. This reduces the time, cost, and risk and gives business users more control over the system, even though they may still need some technical assistance.
  • "Creates a persistent, unified customer database": the CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results.
  • "Accessible to other systems": data stored in the CDP can be used by other systems for analysis and to manage customer interactions.

This definition paints the CDP as a dynamic multi-tasker, tirelessly working behind the scenes to manage, process, and convert data into meaningful customer experiences. But, as David Raab, head of CDP Institute points out, not all CDPs are created equally. Differences that exist between CDP products include: the types of data they ingest, how they unify customer identities, the support they provide for real-time updates and queries, and ancillary capabilities such as machine learning, segmentation, message selection, and campaign management.

As we’ll see, the CDP has been evolving for some time, refining and improving its processes to meet (and exceed) the ever-changing expectations of customers.

Chapter 2

Key features of a CDP

How do you know if a CDP really is a CDP? Well, in order to qualify as a CDP, a customer data platform should satisfy the main capabilities of the CDP Institute’s definition. The following are some of the basic capabilities to expect from a CDP:

  • Marketers should be able to manage the day-to-day running of the CDP with just light support from IT departments or tech teams as and when required
  • The CDP should be capable of collecting data from multiple sources such as servers, CRM, and email, while unifying that data to create individual profiles
  • The CDP should have a web-based UI that allows marketers to segment customers into custom audiences
  • The CDP should be accessible to external systems where data can be shared through emails, apps, social media, web, and mobile

Now let’s take a closer look at how the features work together to allow marketers to deliver outstanding customer experiences. Gartner’s Market Guide for Customer Data Platforms 2020 recommended that the product must feature a “web-based interface” that enables data collection, profile unification, segmentation, and activation.

Data collection

Gartner defines data collection as “the ability to ingest first-party, individual-level customer data from multiple sources, online and offline, in real time and without limits on storage. Data persists as long as needed for processing. This includes first-party identifiers, behaviors and attributes.”

Typical types of data collected by the CDP
  • Topline information such as preferred channels, days most active, personal contact information, and insights on spend
  • Types of sessions on channels
  • Propensity toward ancillary services
  • Loyalty data
  • Service history
Profile unification

One of the most important functions of the CDP is its ability to consolidate profiles and connect specific attributes to specific identities. This means identifying individuals, cleaning data, and linking multiple devices to that single individual.


Once data is collected, it is assigned to a segment within the CDP. Each segment contains a subset of users that share common attributes, behaviors, or transactions. Marketers can use segments in the following ways:

  • Personalization: For example, a marketer within the retail industry could run a social media campaign aimed at members aged 35 and under who have made a purchase within the past year.
  • Filter audiences: Filter out segments so you’re only showing 100% relevant campaigns to the right audiences at the right time.
  • Promote new products: For example, a marketer within the aviation industry could decide to focus on a segment aged 55 and over who purchased flights to different destinations in the same region. In turn, they might be able to identify a gap in the market for a new type of product or offer.

The decisioning function within the CDP uses rules and predictive analytics to make smart decisions about the best customers to talk to, the best things to talk to customers about, the best channels to talk to customers, and the best time to talk to customers. Marketers can target customers within specific segments with relevant offers – one example is highlighting new or similar products to customers who have previously purchased an item or product from a specific brand.


The final step is the activation process which involves sending segments (with instructions on how to activate them) to engagement tools in order to trigger email campaigns, mobile messaging, and social media campaigns.

Chapter 3

The evolution of the CDP

Over the past 10 years or so, marketing technology stacks have been leaning more and more on CDPs. It’s easy to see why. The CDP complements existing marketing strategies by activating customer insights, in real time, to trigger unique and memorable experiences for customers across advertising, marketing, e-commerce, and customer service. The latest and greatest development in the CDP landscape is the “Smart Hub CDP”. In this chapter, we’ll explore its advanced capabilities.

Smart Hub CDP Key Capabilities

The Smart Hub CDP is the “gold standard” of CDPs, a well-oiled machine that centralizes intelligence, providing businesses with a consistent view of the customer, a consistent set of segments, and a consistent overlay of intelligence, which ultimately improves alignment across departments. Here’s a breakdown of the components that contribute to the smooth running of the Smart Hub CDP:

  • The CDP capability is responsible for owning customer profiles (both anonymous profiles and customer profiles), as well as identity resolution. It uses that blend of data (engagement, behavior, customer history, transactions), to segment and build audiences.
  • The Smart capability manages digital decisioning. It takes data about individuals who are interacting with a product or site and figures out what’s the next best action, experience, or offer to push toward this person or segment depending on their scenario. Often, you’ll see experimentation and optimization built in to Smart CDPs to enable marketing teams, e-commerce teams, and digital teams to experiment with conversion rate optimization or a new feature rollout. You’ll also see predictive insights – AI that’s built into the platform, as well as activating AI that sits outside of the Smart Hub CDP.
  • The Hub capability drives personalization, engagement and orchestration – deciding how to use the data and intelligence ingested by the platform to surprise and delight customers at the right time with meaningful offers and experiences via the website, mobile app, social media, or email.

Chapter 4

CDPs and the future of marketing

Since the outbreak of COVID-19, companies have been raising their game like never before, investing heavily in their digital marketing strategies in order to adapt and survive. In a recent webinar with Boxever (recently acquired by Sitecore), Scott Brinker, editor of, discussed the transformative effects of the pandemic and its impact on the traditional rules of marketing. To meet new and emerging demands, he advises companies to focus their attention on centralizing, automating, decentralizing and humanizing everything they do, and embracing continuous change as they do it.

Sounds like a complicated balancing act, right? This is where the CDP comes in, primed and ready to sift through data, mold it into personalized campaigns, and offer your customers experiences that truly resonate. With digital marketing and personalization processes accelerating at an unprecedented pace, there really is no better time to embrace the CDP.

Learn more about the lightning-fast capabilities of Sitecore CDP or visit the Knowledge Center.

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