Data is the key to everything. If you are willing to do a job and become successful in your expected sector, such as in marketing, sales, or product teams, the first thing you will need is information about your targeted customers. Based on that information, you have to make a proper plan so you can have their attention and increase the company’s profit. All these data and information requires to be collected and managed using two types of technologies. One is Customer Relationship Management systems (CRMs), and the other one is Customer Data Platforms (CDPs).
The names are pretty similar, but the aspects serve distinctive purposes effective on the bottom line. Both CRM and CDP are highly important in an organization to provide a consistent and personalized customer experience. The businesses must know what their target audiences from different channels are looking for and should plan accordingly along with the support of the teams working on marketing strategies or sales communications. The platforms may seek different business goals, but the endpoint is achieving success; therefore, the decisions made should be effective.
What is CRM?
Gartner described CRM as a business strategy that optimizes revenue and profitability. It is done by promotive customer satisfaction and loyalty to influence the target audience. Its software serves companies in four segments: sales, marketing, customer service, and digital commerce. This centralizes customer information depending on the customer’s past interactions with the company and the ways of reaching out. The data is collected using different channels of customer interactions and is important in both B2B and B2C contexts.
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In B2B, CRM enables pipeline management and sales energies by pursuing and exhibiting deals allied with companies. The analysis of customer engagement with other businesses helps in forecasting future revenue and planning the sales process with more accountability and transparency. In contrast, CRM influences facing customers in the B2C context. This includes call centers of customer service teams who work directly with the customers and interactions to provide services. The sales touchpoints in businesses aid the department in providing a relevant and personalized customer experience in one-to-one interactions.
What is CDP?
CDP is required to get an in-depth analysis to build customer profiles. Gartner has described CDP as a marketing mechanism that is combined with the customer data of a company. Marketing and other channels get the information about the customer modeling to optimize the perfect timing to target the messages and offers to influence the customers. This also entails advanced software to get the data and utilize it from time to time.
Marketers can benefit from CDP while creating better connections with the customers using advanced AI-based technology. It is like a platform that shows the single view of the customers and can be accessible for marketing and customer service tools. The data is collected from multiple sources, mastered, and stored for an indefinite period for customer profiles. It enhances the marketing campaigns and tailors customer experiences with others.
What are the differences between CRM and CDP?
If you need to have more granular insight into your target customer and how your plan can be successful, CRM and CDP analysis is the key. The analysis helps to bring out the optimized customer experiences at different levels. CRMs are essential to companies’ most common technology used according to their performance level for managing marketing data to improve customer relationships. CDPs, on the other hand, help to manage the customer data.
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Managing customer data is crucial by choice of CRM and CDP, but knowing the differences is also crucial for a marketer. Gartner’s VP analyst Lizzy Foo Kune describes CRM solutions as similar to CDPS, saying that “The promise was they’d break down silos in enterprises and design a view of the customer that wasn’t specific to sales or marketing or customer service.”
For differences, CRM helps in managing customer relationships while CDP helps in managing customer data. Other differences include the following:
- Application: In an organization, CRM is required for transaction tracking, sales pipeline analyzing, communicating with the customers, and taking notes about customer feedback. At the same time, CDP helps design an innovative marketing strategy for the business according to customer segmentation to create personalized campaigns.
- Data sourcing: For CRM data sources, customers are directly related through transactions of communications. In CDP, data can be sourced from social media, apps, point of sale, e-commerce transactions, etc.
- Customer solution: CRM cannot provide an AI solution as it doesn’t have machine intelligence. Meanwhile, CDP can track customer behavior by using “personally identifiable information” to emphasize a personalized target audience.
- Data collection: CRM doesn’t have the efficacy to track customers or data offline unless it is recorded manually. However, CDP can collect both online and offline data and can let you see an overall overview of the customer that helps in segmented branding.
- Duplicate data: CRM cannot distinguish multiple data types, but CDP can. It doesn’t matter what channels customers use for a transaction; CDP can specify and target.
- IT exclusion: The database of CRM is quite complex and requires a dedicated IT team to set it up and manage it, but the CDP database is simple and easy to use. It has integrated modules to handle complex processes without IT support, and marketers can use it as well.
- Consumer profile: CRM data tracks and interacts with known customers. CDP can identify both known and unknown customers and specify it in view.
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In comparing CDP and CRM, CDP is the complex and comprehensive solution that digs deeper to make the data available and goes beyond to collect data. For a detailed understanding of customers and better engagement of your business, CDP can be a better option. It will be more helpful to implement CDP if you have access to the customer information from CRM profiles, then it would give you more benefits with a comprehensive view of your targeted audience.
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Photo credit: The feature image has been taken by Airfocus. The infographics in the article have been created by the author for TechAcute.
Sources: Gartner / Gartner / Dom Nicastro (CMSWire)