Customer Data Platforms are capable of doing an incredible amount of good for your business. As Christi Eubanks from Gartner notes, “The role of the CDP is not to store the data, but to act as the connective tissue between multiple marketing tools and conduct the orchestration across web, mobile, email, social and more.”

Different CDP platforms have different functionalities, and it’s important to understand what a platform is capable of. Even more importantly, you need to know what it’s capable of doing for your business. And you need to understand this before you take the leap and implement the system.

Here, we’ll take a look at the three broad categories for CDPs, which I like to call “the Three As”: assembly, analytics, and action. Read on to see what they are, what they do, and which type is the best fit for you.

Assembly CDPs: No Frills, High Function

Data assembly is an essential part of any CDP. The benefit of a Customer Data Platform is that it’s able to pull together data from multiple sources, both on- and offline, so that you can create a holistic picture of each customer or prospect. This allows you to understand their habits more fully. When you understand that, you can target them with specific messaging that’s more likely to drive positive results.

You can think of the data assembly CDP as the workhorse of the group. It provides the essential function of a CDP—the ability to gather all customer information in one place and share it across other systems—but not much else.

Who Should Consider an Assembly CDP?

There are not a lot of bells and whistles with a basic data assembly system. That means you need to have a team in place to take the data you collect, analyze it properly, and then put together a marketing strategy based on this new, deeper understanding you now have of your customers.

A data assembly CDP will provide you with all the information you need to get the job done, but then it’s up to you to put that information to good use. If you decide to go with this type of CDP, you’ll want to make sure you either have or are able to create adequate bandwidth within your organization to handle this significant increase in workload.

Because this is the most basic CDP offering, it’s best for businesses that don’t have massive amounts of data but do have the bandwidth to review and analyze the data. It’s for those who are looking to take advantage of this new technology but don’t necessarily have the budget to go for one of the other two options.

Analytics CDPs: Collect the Data, Connect the Data

The next step up on the CDP ladder is a tool that offers analytics. Like assembly CDPs, these tools also collect and assemble all data from across channels. But they take things a step further by offering analytics that help you understand what your customers’ moves mean.

A CDP’s analytics are comprehensive, ranging from attribution to lifetime value to likelihood to churn, buy, or convert. An analysis of all the data you’re collecting allows you to see meaningful patterns and act upon them. If you understand a customer’s behavior, then you can provide them with the right messaging at the right time to convert them or drive them up the product pyramid.

Who Should Consider an Analytics CDP?

Collecting data across channels is important, but it’s useless if you’re not analyzing it. A lot of smaller businesses don’t have a full-time analytics team. Selecting a CDP that can do that legwork for you might be beneficial. Otherwise, all of that beautifully organized data just sits there, collecting cobwebs.

The predictive analytics tool is hugely helpful to marketers. When you’re given insight into how customers will likely behave in the future, you’re able to get strategic and creative with future messaging and approaches.

Understanding your customers’ next moves before they even make them allows you to meet them right where they are. Additionally, when you provide highly-tailored responses to your customers’ needs, they feel cared for. That in turn builds a high level of trust in your brand. And as we all know, fostering trust is the thing that will keep customers coming back and turn the casual user into an enthusiastic whale.

Action CDPs: Lights, Camera, Comprehensive Marketing Tool

CDPs that also cover the customer experience are the top-of-the-line models. These tools go beyond simply collecting and analyzing data; they provide you with the means to put that data into action.

An action CDP allows you to do things like website personalization. This means a given customer encounters a different view of your website based on their prior interactions with your brand. That empowers you to present the offer or call to action most likely to drive them to make a purchase.

These CDPs also enable you to take a granular approach to email segmentation. You can send highly targeted messages to specific subsets of your customer or prospect base—again, with the intention of driving sales. You can customize a website or mobile app visitor’s experience based on what the CDP knows about her or him. Pretty cool.

Who Should Consider an Action CDP?

This type of CDP does a lot of additional work for you, which is both a good and a bad thing. It means your team has to spend less time implementing changes in approach based on CDP data. But those extra bells and whistles also come with a higher price tag.

For the small business owner, this tool might be more CDP than you actually need. It’s easy to see why a giant company needs help creating a highly personalized customer experience for their millions of users. But if you’re a small business with a solid marketing team, it’s likely they can take on tasks like email segmentation without the assist from a CDP.

Make sure you understand which of the Three As is best for you before you buy. CDPs provide all business owners with an exciting opportunity to learn more about their customers and develop a truly personalized approach to each interaction. No matter what the size of your team or budget, there is a CDP option out there that can help you better serve your customers and build long-term loyalty.

About the Author

Rob Ristagno, Founder and CEO of Sterling Woods, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. He started his career as a consultant at McKinsey. Ristagno holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.

Rob is the author of A Member is Worth a Thousand Visitors: A Proven Method for Making More Money Online. He regularly speaks at key media conferences, including at Niche Media events, Specialized Information Publishers Association meetings, and the Business Information and Media Summit.