7 CDP Benefits—Even if You’re Smaller than an Enterprise - Klaviyo
2026-03-10 21:11 Diff
https://www.klaviyo.com/blog/cdp-benefits

You’ve heard it before: The data you have about your customers is “digital gold.”

But as your marketing team adjusts to data privacy regulations, evaluates your marketing budget in light of inflation and rising CACs, and decides where to invest in the future, the main question you should be asking yourself is: Are we a data-driven organization? Or are we data-driven in name only?

At Citizen Watches, business expansion has coincided with a wealth of data collection over the last few years. “And it’s all good data that we’ve harvested,” says Richard Cowell, VP of digital strategy and operations. “But being able to do something with that data has been quite difficult for us.”

They’re not alone. According to Klaviyo research, ecommerce marketers have plenty of data. But they’re still unable to execute the personalized omnichannel marketing tactics they deem important because the data isn’t clean (71%), it isn’t stored in a consistent format (57%), and it’s not easily accessible (53%).

It’s all good data we’ve harvested. But being able to do something with that data has been quite difficult for us.
Richard Cowell

VP of digital strategy and operations, Citizen Watches

Cowell puts it this way: “There’s no point in capturing it if you’re not going to do anything with it.” As long as it’s siloed, unorganized, and difficult to work with, the data you have about your customers is just sitting there. It’s straw. You still need to spin it into gold.

This is where a customer data platform (CDP) comes in.

For most small to midsize businesses, a standalone CDP is too much to set up and manage. It’s just not worth the investment.

But an embedded CDP is a different story entirely. Unlike a CDP that exists as a standalone product, an embedded CDP is built directly into another system. It enables businesses to collect, unify, and activate customer data without a separate CDP, streamlining workflows and reducing integration complexity.

Read on to learn why an embedded CDP might be the missing piece for simplifying your SMB tech stack—and finally getting more out of all that data.

1. An embedded CDP maximizes the value of the data you collect

For years, Facebook, Twitter, and Instagram were the place to go to build your business. But 2021 saw a marked shift in this paradigm when Apple’s iOS 14.5 update built a walled garden around iOS users—and significantly reduced social media’s targeting and marketing attribution capabilities as a result.

When Google finally eliminates third-party cookie tracking, reaching consumers via paid and performance marketing will become even more of a challenge for marketers—and a strong foundation of zero- and first-party data will be more important than ever before.

Both kinds of data are crucial for gaining a holistic understanding of your customers in a way that replaces fleeting buyer interest with long-term customer loyalty. And while a CDP ingests data from anywhere, which inherently means it also collects third-party data, “it’s still focused primarily on zero- and first-party data,” says James Fang, director of product marketing at Klaviyo.

That strong foundation then forms the basis for delivering personalized experiences not only through your own channels (more on this later), but also lookalike audiences and retargeting.

“Let’s say I just made a purchase at your business. You don’t want to retarget me, because you don’t want to spend ad dollars on someone who just converted,” Fang explains. “With a CDP feeding you data that tells you I just purchased, you can exclude me from that ad campaign and improve your return on ad spend (ROAS).”

In other words, owned and paid marketing don’t need to be mutually exclusive. A CDP unlocks the full potential of all your zero- and first-party data, so you can strengthen every touchpoint throughout the customer journey—without invading consumers’ privacy.

2. An embedded CDP breaks down data silos

For many brands, the marketing technology stack is complex, redundant, and overly expensive—and that’s reflected in the customer experiences they can, and cannot, create.

Justin Ragsdale, VP of business development and corporate strategy at full-service digital agency IM Digital, says the biggest data-related challenges his clients face revolve around data transparency across departments.

“Within the organization, teams are collecting data from many different channels—from the website, from email, from contact centers,” he explains. “And each of these teams need that data in order to execute their function within the organization. But what we’re seeing is that each team has just a fragment of the customer journey within their purview.”

Within the organization, teams are collecting data from many different channels. But each team has just a fragment of the customer journey within their purview.
Justin Ragsdale

VP of business development and corporate strategy, IM Digital

Marketers and tech teams that use separate point solutions for things like data storage, marketing activation, and data analysis are working in an unstable, inflexible technological environment that forces them to stitch together several solutions, increasing the complexity of their processes and making the customer journey less cohesive.

The result is a Frankenstack—a conglomeration of different technologies, whether built in-house or tacked on through acquisition, that are loosely tied together and create massive overhead for maintenance and usage. That may include:

  • Data warehouse
  • Analytics platform
  • Data management platform (DMP)
  • Ecommerce platform
  • On-site personalization tools
  • Marketing automation platform
  • Reviews platform
  • Loyalty platform
  • POS system

This kind of stack is in serious “technical debt,” Fang says. “From an engineering perspective, it’s been really hard for all these systems to integrate with each other”—meaning marketers can never be confident that all their data is connected, accurate, and up to date.

Through pre-built integrations, open APIs, webhooks, SDKs, and other sophisticated methods of data collection, an embedded CDP “solves that pipeline issue,” Fang says, “getting data from one place to another more effectively.”

From an engineering perspective, it’s been really hard for all these systems to integrate with each other.
James Fang

Director of product marketing, Klaviyo

In other words, an embedded CDP is not just one more platform you’re tacking on to your tech stack. It figures out where there’s overlap between the data from all these different tools, and then combines, consolidates, and normalizes it in one place.

If a CDP is doing its job, it’s the piece of your tech stack that makes all the other pieces live up to their full potential.

3. An embedded CDP unifies your data into a single customer view

A big reason “getting data from one place to another more effectively” matters so much, Fang says, is “getting a single view of your customer across all their interactions across your entire brand.”

“The challenge is uniting all of that data together so that each team member can see the entire customer journey, instead of just seeing a portion of the customer journey,” Ragsdale agrees. “We want to embrace the entire customer journey and be able to unite that data across the different touchpoints we’re providing for customers.”

We want to embrace the entire customer journey and unite that data across the different touchpoints we’re providing for customers.
Justin Ragsdale

VP of business development and corporate strategy, IM Digital

Kunle Campbell, co-founder at Octillion Capital Partners, an acquisition platform company liberating commerce founders with hassle-free exits, calls the single customer view the “holy grail” for digital marketers and brand leaders.

“If personalization is the ‘nirvana’ for marketers in today’s omnichannel reality, then having as much congruent information as possible for each customer is paramount,” Campbell writes. “The single customer view should be your dashboard to beat all dashboards: a single dashboard that displays all the personal data for a given customer.”

With a unified, holistic view of your customer, you can speak to them more accurately and more effectively.
James Fang

Director of product marketing, Klaviyo

How do people navigate your website? What actions do they take before they bounce or buy? Where are they in the funnel? Whether they’re shopping in store, they’re shopping online, they’re engaging with your loyalty program, they’re talking to your customer service team, or anything in between, Fang explains, “a CDP pulls all that data together into one single view, painting a cohesive picture.”

“That’s super, super valuable,” Fang adds. “With a unified, holistic view of your customer, you can speak to them more accurately and more effectively.”

4. An embedded CDP teaches you about your audience

With a single customer view, you suddenly have much greater visibility into each individual customer—which translates to “understanding your audiences really effectively,” Fang explains.

Whether that means insights into how different demographics engage with your marketing across channels, their purchase history across categories, what’s making them convert, and even how they’re likely to behave in the future, “a CDP can be that bridge,” Fang says.

We really need to build that 360-degree customer view so that we understand who our customers are and what they’re doing, and then deliver them what they need.
Justin Ragsdale

VP of business development and corporate strategy, IM Digital

For example, Ragsdale says, “if I understand not only what and where a customer is buying, but also intimate details of their conversations with a customer service agent, that data could be critical to understanding, ‘OK, should I be offering this customer an incentive? Should I be segmenting this customer differently?’”

“We really need to build that 360-degree customer view so that we can understand who our customers are and what they’re doing, and then deliver them what they need,” Ragsdale adds.

A CDP gives you the insights you need to understand what kind of outreach and communication works best for different slices of your audience—and that level of sophisticated segmentation is crucial for increasing customer engagement and reducing customer churn.

A CDP fills that need, in terms of the analytics capabilities to understand those insights and enable you to build more persona-driven, insights-driven segments.
Nick Kobayashi

Group product manager, Klaviyo

“If you think about these well-known companies like Amazon, Netflix—all these brands where you’re aware of how personalized your experiences are, out of that there’s been a lot of recognition that you need a software to understand all those different identifiers and sources and touchpoints you’re having with your customers,” points out Nick Kobayashi, group product manager at Klaviyo.

If you don’t have a CDP, “you’re probably not collecting that data, which means you’re not listening to your customers,” Kobayashi says. “A CDP fills that need, not only in terms of being able to collect and unify all that data, but also in terms of the analytics capabilities to understand those insights and enable you to build more persona-driven, insights-driven segments.”

5. An embedded CDP orchestrates (and delivers) omnichannel personalized marketing

Lately, something Kobayashi hears frequently from brands is that they want to become “more lifecycle-driven, instead of running ad-hoc campaigns and automations.”

“That’s where segmentation becomes really important,” Kobayashi explains. “You need the tools to identify where the trends and opportunities are, based on all your customer data.”

Otherwise, Kobayashi says, “you are most likely running very generic marketing or advertising campaigns, where you’re basically using a list instead of the kind of dynamic segmentation that would lead to personalization. They’re not very personalized or focused on someone’s actual interests.”

You need the tools to identify where the trends and opportunities are, based on all your customer data.
Nick Kobayashi

Group product manager, Klaviyo

And that’s a mistake. Companies that excel at personalization in marketing generate 40% more revenue from related activities than average players, according to McKinsey & Company—and while 71% of consumers expect personalization from the brands they interact with, even more (76%) get frustrated when they don’t get it.

“For years, we’ve been preaching to our marketing teams, ‘You have to send the right message to the right person at the right time,’” Ragsdale points out. “What CDPs have changed is the way we look at managing that experience. So not only am I sending the right message to the right person at the right time, I’m also looking at the right channel, the right specific kind of content, and I might even be looking at the right price point for that particular customer.”

“We’re really taking it to the next level in terms of providing the best possible experience for our customers,” Ragsdale adds. “And that’s only possible with a CDP.”

We’re really taking it to the next level in terms of providing the best possible experience for our customers. And that’s only possible with a CDP.
Justin Ragsdale

VP of business development and corporate strategy, IM Digital

Remember, too: “One of the biggest challenges brands face when it comes to monetizing their CDP is that they’re able to paint a clear picture of their customer, but they lack the ability to take action on the insights provided by the CDP,” Ragsdale explains.

An embedded CDP not only activates your data in real time, but also takes care of marketing automation activities for you, rather than sending data downstream to another piece of tech.

6. An embedded CDP boosts key marketing metrics

Long-term, a CDP elevates your marketing efforts, resulting in “incremental performance gains,” Fang says.

That could mean improvements in customer lifetime value (CLTV) and revenue, as well as “retention because you’re using your first-party data to its fullest potential, and decreased acquisition costs because you’re being smarter with your acquisition marketing,” Fang explains.

Based on everything you’ve implemented, a CDP helps you see what’s working and what’s not working, and then optimize your marketing strategy moving forward.
Nick Kobayashi

Group product manager, Klaviyo

And smart marketing is a self-perpetuating cycle, because it reveals which channels and methods deserve more budget allocation in the future.

“Based on everything you’ve implemented,” Kobayashi says, “a CDP helps you see what’s working and what’s not working, and then optimize your marketing strategy moving forward.”

7. An embedded CDP improves operational efficiency—and saves you money

Because multiple teams, from lifecycle and performance to sales and customer service, can access the centralized information in an embedded CDP, it’s not hard to see how all of the above translates to improvements in productivity and efficiency—both within teams and between them.

Historically, for example, when the Citizen Watches marketing team wanted to build a segment based on women who purchased a watch in the last 12 months, they had to reach out to a separate team. “That slows us down,” Cowell says. “Whenever we have to stop and involve another team, it delays the process by hours or even a day.”

“That’s not a situation we’d like to be in,” Cowell adds. “We’d like to be in a situation where we can just pull the data from one place and be able to trust the integrity of that data.”

We’d like to be in a situation where we can just pull the data from one place and be able to trust the integrity of that data.
Richard Cowell

VP of digital strategy and operations, Citizen Watches

Bubs Naturals, meanwhile, has “very few employees in house,” says co-founder TJ Ferrara. “Having them reach into too many different systems creates a lot of confusion. Consolidating platforms and creating some efficiencies internally would help us grow a little bit more.”

By reducing “time spent on maintaining integrations, changing integrations, resolving identities, and de-duping profiles,” Fang says, an embedded CDP frees up bandwidth to devote to strategy and crafting consistent, cohesive experiences—at scale.

Essentially, “you’re doing more with your data in fewer systems, so you’re going to save a lot more time,” Fang says.

And money. In addition to making your attribution and reporting more accurate so that you’re confident you’re prioritizing the right stuff, when you implement an embedded CDP, “you’re lowering your overall expenses from development while building more internal efficiency,” Fang explains. “So it’s time saved, cost saved because of time, and reduction in overall operating costs.”

A CDP lowers your overall expenses from development while building more internal efficiency. So it’s time saved, cost saved because of time, and reduction in overall operating costs.
James Fang

Director of product marketing, Klaviyo

Ragsdale summarizes the potential time and cost savings of an embedded CDP this way: Without one, “there’s the cost you’re paying for licenses on these different platforms. But then there’s also the cost of becoming an expert on different platforms, the cost of managing the integrations between the platforms, and the cost of manually extracting data and insights and plugging them into other platforms.”

“When you bring all those things together,” Ragsdale says—“the return on investment (ROI) from reducing those manual labor costs and reducing those technical licensing costs, juxtaposed with the added ROI from the ability to deploy these personalized campaigns and experiences for your customers”—the value of an embedded CDP is “almost unquantifiable.”

Learn how Klaviyo Data Platform helped 2xist discount and advertise more efficiently.

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Why all businesses need “a CDP that simplifies your tech stack”

Today, “brands are recognizing they need to own their tech stack themselves, instead of having an agency or a consulting firm manage it for them,” Kobayashi explains. “That means they’re learning how to manage customer data and drive personalization strategies on their own.”

And that’s where there’s been “a big gap” in the market, Kobayashi points out.

Although CDPs have been around since 2013 or so, “your expectations of what a CDP should do for you have probably evolved over time alongside your business, and now you’re looking for something more,” Kobayashi says. “Usually what that ‘more’ means is you want a CDP that simplifies your tech stack.”

A CDP that is simply offering to sync your data, store it, and normalize it is not enough.
Tony Morelli

Director of product design, Klaviyo

Remember, that’s not every CDP. Traditional, standalone CDPs require an entire data engineering team to manage, and most of them focus on either data management or data activation or data analytics, but not all of the above.

“What we’re seeing is that the market for the traditional CDP is continuing to shrink,” says Tony Morelli, director of product design at Klaviyo. “A CDP that is simply offering to sync your data, store it, and normalize it is not enough.”

“You really need a silver bullet, a panacea—something that will be the remedy for everything for your business,” Morelli adds.

You really need a silver bullet, a panacea—something that will be the remedy for everything for your business.
Tony Morelli

Director of product design, Klaviyo

Sounds great. What does it look like in practice? Kobayashi sums it up this way: “fewer integrations between where your data lives, and fewer integrations between where your analytics, segmentation, marketing, and advertising happen.”

In other words, an embedded CDP like Klaviyo Data Platform isn’t just one more bill you’re paying to complicate your tech stack. It “consolidates as much as possible,” Kobayashi says.

It’s all about the less tools, the better.
Richard Cowell

VP of digital strategy and operations, Citizen Watches

“Generally, the greatest reward of an embedded CDP—that it’s a part of your stack that is able to solve multiple needs and take over 60-80% of what you typically rely on other software to accomplish,” Kobayashi explains.

Or, as Cowell puts it, “it’s all about the less tools, the better.”

Who uses a customer data platform?

CDPs were originally intended for marketers. But often, due to steep technical learning curves and custom development needs, they are co-owned by IT or engineering and development teams. CDPs also serve data privacy and governance purposes, which are often owned by IT, too. But since the ultimate goal of a CDP is to improve marketing, a CDP should be accessible and user-friendly enough that marketers can use and maintain it on their own, without relying on developers or data scientists.

What are the key functionalities of a CDP?

A CDP is a software that pulls all customer data together into a single view of the customer; resolves identities between data sources; and activates (or sends) data either natively or across other external systems for marketing, analysis, and other downstream business functions.

What are the CDP use cases for B2B?

The primary value a CDP provides to a B2B brand is account-based marketing, in which multiple individuals are associated with a single account. CDP use cases for B2B brands include B2B analytics, churn prediction, next-best-action recommendations, sentiment analysis, hyper-personalized omnichannel campaigns, and more.