Introduction

Reverse ETL and customer data platforms (CDPs) are two big data trends that have been receiving a great deal of attention. While both CDPs and reverse ETL can help you make smarter data-driven decisions, there are also several crucial points of distinction. In this article, we’ll answer the question: what’s the difference between reverse ETL and a customer data platform?

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Table of Contents

What is a Customer Data Platform (CDP)?

A customer data platform (CDP) is a system that collects large quantities of customer data (i.e. information about your customers) from a variety of channels and devices, helping to make this data more accessible to the people who need it. CDPs are responsible for sorting and categorizing data, as well as data cleansing to remove inaccurate or out-of-date information.

Note that CDPs and customer relationship management (CRM) software are not quite the same thing. According to Forbes“a customer data platform is like a CRM on steroids” because it helps you not only collect information but also use this information to engage your customers more meaningfully.

What is Reverse ETL?

The “traditional” ETL (extract, transform, load) process consists of three steps to integrate your enterprise data:

  • Extracting data from sources such as databases, flat files, websites, APIs, SaaS applications, etc.
  • Transforming the extracted data to fit the schema of the target repository.
  • Loading the transformed data into a centralized destination such as a data warehouse.

In reverse ETL, the sources and destinations of the ETL process are switched: data is transferred out of a centralized repository, and into third-party applications and platforms. These third-party systems are usually operational systems that are explicitly designed for certain types of users—for example, your sales, marketing, or customer support, team.

The data warehouse, in the reverse ETL process, acts as a “single source of the truth” that stores the most accurate, up-to-date information, and propagates it to various third-party systems as necessary. Reverse ETL makes it easier for your employees (especially non-technical users) to access the data and insights they need, inside the platforms they’re already familiar with.

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4 Differences Between CDPs and Reverse ETL

Now that we’ve defined reverse ETL and customer data platforms, we’ll go over the most important differences between the two.

1. Terminology

For starters, the terms “reverse ETL” and “CDP” don’t refer to the same concept or entity. A customer data platform is a third-party system for storing and analyzing customer data. “Reverse ETL,” on the other hand, refers to the process of transferring data into third-party systems such as CDPs—not the systems themselves.

2. Purpose

Customer data platforms are designed with a single purpose: collecting customer data. This makes CDPs primarily useful to your marketing and sales teams. Reverse ETL, on the other hand, can be applied to any type of data or system, including sales and marketing but also other functions such as customer support or finance.

3. Functionality

As a corollary to the above point, the different purposes of reverse ETL and CDPs also affect the types of analyses and insights that can be achieved. With reverse ETL, all of your data is available within a centralized data warehouse (at least initially). With more data from more sources, you can generate more insights and also perform data modeling. CDPs, however, only provide access to customer data, which places certain limitations on the analyses you can perform.

4. Technology

CDPs typically use event-driven APIs for ingesting new data. When information is available, a trigger is released informing the system so that the ingestion process can begin and the new data can be immediately available. Reverse ETL, meanwhile, typically uses batch APIs for collecting data. Batch jobs are run at regular intervals, and new data will not be available until after the next batch job is complete.

How Xplenty Can Help with Reverse ETL

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To sum up the differences between reverse ETL and customer data platforms:

  • Customer data platforms (CDPs) are third-party systems that enable a specialized analysis of customer data for your sales and marketing teams.
  • Reverse ETL is the process by which data is transferred into third-party systems such as CDPs, but also other platforms used by other teams and departments.

Have you decided that reverse ETL is the right way to operationalize your enterprise data? In that case, you’ll need an excellent ETL tool, with the functionality you need to work seamlessly with your business. 

Xplenty is a powerful, feature-rich ETL and reverse ETL tool, helping users of all stripes build automated data pipelines to their cloud data warehouse. With more than 100 pre-built connectors and integrations, and a simple drag-and-drop visual interface, Xplenty makes it simple to move your data where it needs to go.

Want to learn more about how Xplenty can help with your ETL and reverse ETL needs? Get in touch with our team of data experts today for a chat about your business needs and objectives, or to start your 14-day pilot of the Xplenty platform.