What is the difference between CDP and CRM?
While both customer relationship management (CRM) and customer data platform (CDP) gather customer data for enterprise use, they are fundamentally different from one another. CRMs chief users are not marketers; however, they sometimes had to contend with it for managing customer data and to perform analysis. Also, CRMs were built for the B2B environment but later evolved into the B2C space. CDPs, on the other hand are specifically built keeping the needs of marketers in mind; and were also categorically built for a B2C environment. Here are certain key differences between the two enterprise technologies that business leaders and decision-makers should be aware about.
CRMs are used mostly for execution purposes. CRMs are best suited for creating customer support dashboards or email automation systems. They facilitate direct interaction with customers and are often designed primarily for optimizing one kind of customer interaction. They’re used by companies in the following ways:
- Analyzing pipeline and forecasting
- Front-office related sales
- Mining for acquiring customers
- “Hit/Miss” scrutiny for a go-to-market strategy
- Customer service (post-sales)
- Marketing automation via performance analysis and campaign tracking
- Ease of purchasing through quote-to-cash processes
CDPs collect, consolidate, organize and present customer data for further execution by various marketing systems or personalization engines. CDPs can integrate with CRMs and other such customer-facing systems to accumulate information about customers like location, age, purchases, page views, clicks, etc., for further segmentation and modeling. Companies use them in ways like:
Data management, which includes integration, validation and cleaning.
- Identifying and classifying customer attributes and behavior across online and offline systems
- Defining customer profiles and their management for future use
- Customer behavior analysis to improve segmentation
- Analyzing customer purchasing history and other behavior for further recommendations regarding content or eCommerce
- Exporting segmented customer lists for deriving business intelligence or executing campaigns
- Predictive analysis for guesstimating customer behavior.
In entirety, CRM systems engage with customers directly by creating persistent customer profiles to support various company-wide functions; they do not consolidate and collate vast volumes of data from multiple sources.
CDPs, on the other hand, merge data of all forms and from all sources, no matter if it’s structured or unstructured, external or internal, so that a comprehensive view of customers can be chalked out for analytical purposes.