Customer data is the lifeblood of any modern company that wants to leverage data for business value. Being able to gather, manage, understand, and store data effectively in unified single customer view (SCV) profiles is the ultimate goal of data-driven marketers. With that unified data, brands can now segment and target valuable customer groups more efficiently and effectively, tailor content, messaging, and the customer experience across any channel.
But being able to accomplish all that is no small task, and will involve at least one, and perhaps several marketing technology customer data solutions to make it all a reality. So, what is the difference between CDP vs. DMP vs. CRM, and how can each be leveraged by smart marketers to differentiate their brands from competitors and serve the needs of digitally-savvy customers?
The question marketers need to ask themselves is: How does a CDP, DMP, and CRM platform figure into your corporate martech strategy? They’re all very different solutions, and many businesses use more than one to meet their needs. In fact, a lot of organizations are trying to align their CDP, DMP and CRM solutions to get the most out of all their martech and adtech. At the same time, some other businesses are considering consolidating their tech stack down to just one of these choices for simplicity.
What are the most effective ways to use all of these technologies, and what are their differences?
What is a CDP?
A customer data platform (CDP) is a software package that consists of a centralized database that has the ability to ingest, integrate, manage, and deliver customer data to other technology solutions in order to personalize the customer experience (CX).
CDP software collects and integrates all forms of customer data with the intent to create a unified customer profile (also known as a single customer view (SCV). This unified view can then be used to align all business efforts around a single source of customer truth. CDPs can collect consumer behavior, demographic, and transactional data to track and analyze customer interactions with your organization.
What is a DMP?
A data management platform (DMP) is a software tool used primarily in advertising and marketing to build profiles of anonymous individuals, store summary data about each individual, and share their data with advertising systems.
DMPs are used to store, manage and analyze data about ad campaigns and audiences. A DMP connects to a DSP (Demand Side Platform) or SSP (Supply Side Platform) to purchase ads through ad networks. A DMP ingests anonymous identifiers for your customers, matches these against third party lists, builds a look-alike model with summary data, and selects similar anonymous individuals from third-party lists, and sends those lists to advertising systems.
What is a CRM?
A customer relationship management (CRM) is used to store, update and maintain information about customers. Some CRM data is entered automatically, such as when a customer submits a website form, while other data is entered manually, often by salespeople or customer support staff after a conversation with a customer.
A CRM system is used to track and record all touchpoints along the customer journey, from pre-purchase, to purchase, to retention and advocacy. The system enables organizations to record customer interactions (e.g., phone calls, including dates, times and call transcripts), as well as customer purchase history (e.g., product numbers, purchase dates, purchase amounts). CRM systems help organizations provide better customer service and customer experience. When used effectively, CRM systems can help retain customers and grow revenue.
What’s is the Difference Between CDP vs. DMP vs. CRM?
All three platforms have their own functions and use cases in the marketing ecosystem, but there can be some overlap. What they share in common is that all three have been designed to improve the overall customer experience, making targeting and segmentation easier.
A CRM is where your sales, services or marketing teams typically manage customers and update data directly, meaning the data is input manually by these teams. A common use for a CRM is to compile and manage all contacts with a customer, including sales calls, contact center records, support, and maintenance calls. A DMP tracks third-party user behavior, but it only stores data for a short period of time (mostly in the form of a third-party browser cookie ID). A DMP helps with lookalike modeling at the aggregate level and targeted paid media spend, but you cannot use it alone to build detailed profiles of individual, identifiable customers. A CDP, on the other hand, pulls in data from all of the different sources (online and offline), to create a true single view of customers, storing data as long as necessary without limitations (including first-party, second-party, third-party, and PII data). With a CDP, you wouldn’t typically update data directly in the CDP, it would pull data automatically from other systems and aggregate it.
Find out about the Top CDP Use Cases and How to Develop Them
Orchestrate Marketing with a CDP
One of the benefits of an enterprise CDP it can activate audiences via your existing tools. In fact, being able to select best-of-breed solutions for your overall martech stack is a big CDP benefit. Your marketing team is already used to working with activation tools, and these tools are industry-leading with key functionality—so it is more effective if marketing can continue to use current tools and not have to learn entirely new ones.
This is why the right CDP is a good choice to orchestrate marketing across all of your activation channels. A CDP with orchestration capabilities can determine which channel to use, which message is best suited for the target audience, and when to send specific messages—for every single customer. Your marketing team can build templates and manage content in the activation channels as they do currently.
And that’s part of what’s driving today’s move toward CDPs. Marketers don’t have to switch, and they don’t have to learn a new (potentially inferior) tool. Rather, they can focus on building successful campaigns, exploiting new insights from their CDPs, and creating profitable, personalized customer journeys that acquire new customers and build loyalty in current ones.