Data is used for many purposes in the business world. A primary reason that data is collected is to understand a customer base so that they can be catered to with the goal of better connecting and serving each customer group.
There are many platforms that gather and use data. Data platforms like this include data management platforms (DMP), customer data platforms (CDP), and systems like customer relationship management (CRM).
These platforms are often used by marketing and research and development (R&D) teams to heighten the customer experience and to attract more customers. Success in both areas result in higher sales for the company.
CDP and first-hand data
What is a CDP? Customer data platform is a system that uses first-hand data to help you to gain understanding of the customer journey. CDP can also use this data to create segmented customer groups where you can interact with them through a variety of channels.
Differences between data types
Just as there are many ways to use data, there are several types of data that are used for different purposes.
- First-party data. Using first-hand data can enable you to analyse your customers with a high reliability and accuracy. This data is owned by you and so isn’t shared by other parties.
- Second-party data. Second-hand data will also provide you with highly accurate data. However, this data is shared with trusted partners so is not exclusive to you and so allows for competition in your marketing agenda.
- Third-party data. Unlike the previous two, third-party data is not guaranteed to be collected with consent. The accuracy of the data will be low and will also be shared with many other companies.
Takeaway: Getting to know the differences in data management systems and the types of data that they use can help your business to excel.