The Difference Between a CDP & a CRM
Do you get confused with the three letter acronyms CDP and CRM getting thrown around in the tech world? We can help with that. Gartner reported that 47% of marketing leaders said they already have a CDP in full production and another 19% are in the process. Interestingly, Gartner also reported that over half (52%) identify Salesforce Analytics Builder as their customer data platform.
There’s clearly a disconnect when it comes to distinguishing the two systems, so let’s start very basic. CDP stands for Customer Data Platform. CRM stands for Customer Relationship Management. They might sound like they do the exact same things, yet, they’re actually pretty different. And though there are more differences than what are mentioned below, understanding the difference between the two can help start you on your customer data journey and which is the right fit for your company!
Customer Relationship Management systems are primarily used by the salesperson is a technology for “managing all your company’s relationships and interactions with customers and potential customers.” He or she using a CRM is able to easily manage accounts, build and manage a sales pipeline, track phone calls, and add information they may want to know in the future.
A CRM does not match data across channels. For example, suppose a woman purchases a purse one day, interacts on the brand’s website another day, and clicks on its Facebook ad a couple days after. A CRM would not be able to pick up those interactions and match them to that particular woman in one database. This makes it extremely difficult to track her customer journey and is likely not very helpful when trying to target customers like her.
Another notable difference is that a CRM does not pick up offline data. If that same woman also made a purchase in-store, there would be no way to see that transaction in your CRM unless you manually entered it. Similarly, if this woman made a purchase online and was not previously in the CRM database, since she is unknown, she could not be added or tracked. A CRM focuses on known customers or prospects only.
The marketer and strategist primarily uses a Customer Data Platform. He or she using a CDP desires to create highly personalized campaigns and target segmented audiences. The primary function of a CDP is to combine various sources of data (e-commerce, POS, social media, etc.) into one primary platform, so you can see a full, 360-degree view of who your customers are. It’s kind of like “contacts” in your phone. It encompasses the person’s name, email, phone number, company, title, etc. From there, the user can select multiple audiences to market to because at the end of the day, the more targeted your campaigns are, the greater their success will be.
Suppose a man purchases a tie on a retailer’s website. A couple days later he buys a shirt in the store. A month later he clicks on an ad from the brand’s app and buys trousers. A CDP can attribute all those interactions to this particular man. Now you are able to track his FULL customer journey. You can see his identity, where he lives, where he works, or how many children he has. You can see if he’s married, his purchase behavior, and so many other characteristics! Customer matching is an incredible part of a CDP because that customer’s information is found in one, single record, making it incredibly easy to know who your top-performing customers are and why.
Another impressive part to a CDP is it can identify the same person with different names. Let’s say “Robert Smith” bought a shirt online. He then filled out a form to sign up for the newsletter with the name “Robbie Smith.” Later on, he purchased a watch in-store with the name “Rob Smith.” A CDP can attribute this data to the original “Robert Smith” so there are no duplicates! Additionally, CDP’s have the ability to track unknown customers. The user can view and unknown customer just like everyone else that is a known, repeat purchaser.
Want to learn more about CDP’s and the difference between a CRM? Contact us here!