In the rapidly evolving landscape of marketing technology, Customer Data Platforms (CDPs) have become indispensable. Traditional CDPs and the newer composable CDPs (Customer Data Platforms) represent two distinct approaches to customer data management.

This article explores how they differ, their impact on marketers, and their use cases across industries, with examples such as HighTouch, Salesforce CDP, and Segment.

What is a Composable CDP?

A Composable CDP refers to a modular and flexible approach to customer data management. Instead of offering an all-in-one, monolithic platform like traditional CDPs, a composable CDP leverages existing tools and infrastructure to integrate and process customer data. This modularity allows businesses to “compose” their CDP using best-of-breed technologies, ensuring customization to fit their unique needs.

Key Features:

• Integration-first: Built on existing cloud data warehouses (e.g., Snowflake, BigQuery).
• Flexible architecture: Marketers can choose specific components (e.g., data ingestion, identity resolution) instead of relying on an all-inclusive package.
• Scalable: Evolves alongside an organization’s tech stack and data strategy.

Examples include HighTouch and RudderStack, which allow companies to sync data directly from cloud data warehouses to various marketing platforms.

Traditional CDPs: An Overview

Traditional CDPs are standalone platforms designed to ingest, unify, and activate customer data. They offer built-in features such as data collection, identity resolution, segmentation, and activation.

Key Features:

• Pre-built functionalities: All components are bundled into one system.
• End-to-end solution: Offers tools for data ingestion, enrichment, and activation in a single interface.
• Less customizable: Designed as a one-size-fits-all solution.

Examples include Salesforce CDP, Segment, and Adobe Experience Platform.

Key Differences

Feature	Composable CDP	Traditional CDP
Architecture	Modular and flexible	Monolithic and pre-built
Integration	Built around cloud data warehouses	Independent of existing data platforms
Customization	Highly customizable	Limited customization
Scalability	Scales with data warehouse growth	Limited by platform capabilities
Implementation Time	Requires technical expertise	Turnkey, easier setup
Cost	Cost-effective if infrastructure exists	Typically more expensive

How Composable CDPs Help Marketers

Composable CDPs empower marketers with agility, efficiency, and real-time capabilities. They allow seamless integration with existing tools and leverage cloud infrastructure to:

1. Enhance personalization: Use real-time, unified customer data for hyper-targeted marketing.
2. Reduce silos: Enable cross-departmental data sharing.
3. Improve ROI: Avoid redundant tools and optimize infrastructure costs.
4. Adapt rapidly: Scale and modify as business needs evolve.

Use Cases across Industries

1. Retail: Personalized Marketing
   • Example: A retailer uses HighTouch to extract purchase history from Snowflake, enabling personalized promotions on Shopify and Google Ads.
   • Impact: Improves conversion rates by targeting customers with relevant offers based on recent purchases.
2. Travel & Hospitality: Enhanced Guest Experience
   • Example: A hotel chain leverages Segment to unify booking, stay, and feedback data. Personalized travel offers are sent to customers based on past preferences.
   • Impact: Drives customer loyalty and upsells premium services.
3. Financial Services: Customer Retention
   • Example: A bank uses RudderStack to integrate transaction data with CRM tools, enabling timely offers for high-value customers.
   • Impact: Reduces churn and increases cross-selling opportunities.
4. E-commerce: Abandoned Cart Recovery
   • Example: An online store syncs customer behavior data from BigQuery to Facebook Ads using HighTouch to retarget users who abandoned their carts.
   • Impact: Boosts cart recovery rates and revenue.

Composable CDPs offer a groundbreaking alternative to traditional CDPs, especially for organizations prioritizing flexibility, scalability, and cost-effectiveness. With solutions like HighTouch, marketers can unlock advanced customer insights and drive impactful campaigns. By adopting a composable approach, businesses can future-proof their customer data strategies while delivering exceptional customer experiences.

For more details about Composable CDPs, refer to resources:

https://hightouch.com/blog/composable-cdp

https://hightouch.com/compare-cdps/hightouch-vs-salesforce-cdp