CDP and CRM: What’s The Difference & Which One Is Best?
CDP and CRM
The difference between a customer data platform (CDP) and customer relationship management (CRM) solution may be difficult to determine at first, because both options collect, store, and put customer data to use in support of business goals. While their functions may overlap, the CDP vs CRM debate becomes easier when you get clarity about the people, processes, and use cases for each option.
CRMs
Designed to improve personal interactions with customers, CRMs feature contact information for leads and existing customers, as well as historical data, like past customer-support tickets and notes entered by a salesperson, such as the pain points a prospect raised at a demo or a client’s hobbies. Maybe they like to golf or garden, or maybe they continue to have trouble with an issue that one of your products solves — any tidbit that could help your colleagues better connect with a customer or prospect may be included in a CRM. This digital data is used only within the CRM. Extracting it requires work.
CDPs
CDPs are all about scale and automation. The data they collect is more broad than what a CRM captures. Information from every customer touchpoint or source feeds into a CDP, such as:
- Customer loyalty programs. Who are your repeat customers?
- Social media tags or check-ins at brick-and-mortar locations. Which stores attract high-net-worth individuals versus Gen Z shoppers?
- Email service providers. Which links did customers click on, and what are their email addresses?
- E-commerce platforms. Did the customer list more than one shipping address?
- Product-review platforms. What feedback have customers left on underperforming products? What do they say about your latest launch?
- Digital ads. Which ad did they click on to get to your product page? Was it one shown on Instagram, or were they hooked by a QR code at an event?
CRM vs. CDP: Which is the right fit for your business?
Who should use a CRM?
You should consider using a CRM platform if you need to:
- Store and maintain lead and client information in a central place for your entire team to access
- Track and store an abundance of customer and client data
- Track customer and client interactions with multiple members of your team
- Monitor your sales team’s productivity and structure
- Better understand and improve your sales funnel
Who should use a CDP?
You should consider using a CDP if you need to:
- Automatically collect valuable customer and client data in a central place
- Track the entire journey of your customer and clients
- Analyze how your marketing strategies work together to drive conversions
- Optimize your marketing strategies to drive better results
How do CDPs and CRM Gather and Manage Data?
Although CDPs and CRMs serve different, yet similar purposes, they both still act as a marketing system that collects data, such as first-party data.
- CDPs gather data through an automated process. Designed to help non-customer facing roles like marketing, product and sales; the data CDPs collect is usually automatically gathered using integrations and code snippets. As a multiple source system, customer data can be gathered online and offline, allowing the unified data to be cleansed, deduplicated and normalized.
- CRM gathers data through a manual process. Designed for customer-facing roles, such as a salesperson, it responded to the need for a centralized account of direct interactions between the existing customer and representatives of the business. Since CRM data manually gathered the data collected is hard to export and hard to automate.
As a side note, CDPs are similar to a traditional data management platform (DMP), as they both collect structured and unstructured data from online and offline data sources. However, CDPs use personally identifiable information (PII), like identity data. DMPs used for anonymous data.