CDP vs CRM: The 5 Main Differences, With Examples

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Choosing between a customer relationship management (CRM) system and a customer data platform (CDP) can be perplexing, especially when their roles seem to intersect.

You might already be familiar with CRM systems, as they’re widely used. However, the emerging concept of CDPs is still new, leaving many uncertain about the distinctions between these platforms.

While a CRM system focuses on managing customer interactions, sales, and support, a CDP collects and consolidates extensive customer data from various sources.

Here, we’ll clear up the CRM vs CDP confusion. Whether you’re considering using a CDP, sticking with your CRM, or using both, this guide will help you make an informed decision for your business.

Key Takeaways:

  • CDPs collect extensive customer data for personalized marketing and insights.
  • CRMs manage customer interactions, sales, and support for enhanced relationships.
  • Integrating CDPs and CRMs can optimize customer engagement.
  • Consider your business needs when choosing between a CDP, CRM, or both for comprehensive customer management.

CDP vs CRM: An Overview

Platform CDP CRM
Definition Collects and consolidates extensive customer data from various sources (including CRMs) into unified customer profiles Designed to manage and streamline customer interactions, primarily in sales, marketing, and customer service
Business Use Case(s) Used to create comprehensive customer profiles for personalized marketing, analytics, and cross-departmental insights Employed for managing customer relationships, sales pipelines, marketing campaigns, and customer support interactions
Used By Sales, data analysts, customer success, and customer support teams Sales teams, customer service representatives, marketing, and business operations
Data Sources All customer touchpoints (website, app, emails, surveys, transactions, offline interactions) Primarily direct interactions (sales calls, emails, forms, support tickets)
Popular Examples Segment, BlueConic, Tealium AudienceStream, Salesforce Customer 360 Audiences, ActionIQ Salesforce, HubSpot CRM, Zoho CRM, Pipedrive, Monday Sales CRM

What is a CDP?

BlueConic CDP Example
CDP Example: BlueConic

 

A customer data platform (CDP) is designed to collect, organize, and store customer data from various sources (including CRMs) into one unified database, creating complete customer profiles.

A CDP can be incredibly beneficial if you’re in marketing, sales, customer service, or analytics. It’s developed to meet the need for a centralized customer data hub.

The difference between CDP and CRM is that CRM systems primarily focus on direct customer relationship management, while CDPs take a broader approach.

They not only track direct interactions but also gather data from indirect channels like social media activity and web browsing, letting you personalize your marketing and customer experience strategies.

Key Features and Benefits of a CDP

Let’s talk about the core features and advantages of a CDP:

Key Features of a CDP

  • Unified customer profiles — By aggregating data from diverse sources, such as websites, social media, and email interactions, CDPs create detailed, unified profiles for each customer, which is valuable for understanding customer behavior and preferences.
  • Data integration — You can integrate data from various touchpoints, including online and offline channels, such as in-store transactions and customer calls. This ensures a seamless aggregation and management of customer data.
  • Real-time data processing — CDPs handle real-time data, such as customer actions and trends, allowing you to respond promptly.
  • Segmentation and targeting — You can segment customers based on criteria, such as demographics, behavior, and preferences, for more targeted and effective marketing strategies.
  • Privacy and compliance — CDPs are designed with data privacy and compliance in mind, helping you navigate the complexities of data regulations like GDPR and CCPA.

Benefits of a CDP

  • Enhanced personalization — By leveraging detailed customer profiles, you can create highly personalized marketing campaigns, improving customer engagement and experience.
  • Increased marketing efficiency — The ability to segment and target specific customer groups leads to more efficient and effective marketing efforts.
  • Better customer insights — Comprehensive data collection offers profound insights into customer behavior, preferences, and needs, enabling informed business decisions.
  • Cross-channel coordination — You can ensure consistency in messaging and customer experience across various channels, such as email, social media, and in-store interactions.
  • Informed decisions — The rich data repository in CDPs empowers you to make data-driven decisions, ultimately improving business outcomes and customer satisfaction.

Data Sources and Management

CDPs are adept at gathering and managing diverse data, which is crucial for a complete customer view. The software collects data from multiple online and offline sources.

This comprehensive data collection is critical to understanding customer behavior and preferences. In managing this data, CDPs excel in identity resolution.

Identity resolution involves matching and merging data from various sources to form a cohesive customer identity, which is crucial for maintaining data accuracy and consistency.

After resolving identities, CDPs cleanse the data by removing duplicates and correcting errors. Furthermore, CDPs organize and update this data dynamically.

This ensures customer profiles reflect the latest interactions and preferences. This organization also offers easy access for analysis, ensures the data is actionable, and helps with decision-making.

When Should You Use a CDP?

A CDP can be a powerful tool for businesses of all sizes, but it’s not a one-size-fits-all solution. Here are some clear-cut scenarios where a CDP can deliver significant value:

You Have Customer Data Scattered Across Systems

CDPs are used to unify multiple sources, including your CRM, website analytics, email marketing, and offline sales, creating a comprehensive customer view.

You Want to Personalize Marketing Across Channels

Beyond basic segmentation, CDPs can tailor email campaigns, website recommendations, and even offline interactions based on individual customer preferences, purchase history, and behavior.

You Need to Improve Customer Engagement & Loyalty

Personalized experiences based on rich customer data help to foster deeper connections. CDPs can predict customer needs, proactively engage those considered at risk, and deliver relevant communications that drive loyalty and retention.

You're Drowning in Data but Starving for Insights

A CDP goes beyond basic analytics. It uses sophisticated tools to uncover hidden patterns, predict future behavior, and provide actionable insights for data-driven decision-making across all departments.

You Need to Comply With Regulations

CDPs offer robust security and data governance features, ensuring data anonymization, encryption, and access control, helping you confidently navigate privacy regulations.

Popular CDPs

These CDP examples are widely recognized for their effectiveness:

  • Segment — Known for its user-friendly interface and robust data integration capabilities.
  • BlueConic — Offers advanced customer profiling and real-time personalization.
  • Tealium AudienceStream — Emphasis on data governance and comprehensive customer data management.
  • Salesforce Customer 360 Audiences — Integrates seamlessly with Salesforce CRM for unified customer data.
  • ActionIQ — Known for its scalability and AI-driven insights.
  • Exponea — Offers omnichannel marketing automation and customer analytics.
  • Lytics — Focuses on customer data activation and cross-channel engagement.
  • Redpoint Global — Known for its real-time, context-aware customer engagement.

What is a CRM?

Salesforece CRM example
CRM Example: Salesforce

 

A CRM, or customer relationship management system, is a software tool designed to centralize customer information and improve customer relationships. CRM systems are used by:

  • Sales teams — To track leads and opportunities
  • Marketing teams — To manage campaigns and customer data
  • Customer service — To provide efficient support

CRM systems act as a centralized database for customer data, enabling businesses to better understand their customers’ needs and preferences.

CRM and CDPs share the common goal of improving customer interactions but differ in scope.

While CRMs focus on managing customer relationships and transactions, CDPs excel in collecting and unifying extensive data from various sources to create comprehensive customer profiles.

Together, they provide a powerful suite of tools for enhancing customer engagement.

Key Features and Benefits of a CRM

Let’s discuss the key features and advantages of a CRM:

Key Features of a CRM

  • Contact management — CRM systems offer robust contact management capabilities, allowing you to easily organize and access customer information.
  • Lead management — Capture leads from various sources like website forms, email campaigns, or events, qualify them based on predefined criteria, and assign them to sales reps.
  • Sales pipeline tracking — You can track the progress of sales opportunities, from initial contact to conversion, helping you optimize your sales process.
  • Task and activity management — CRM systems help you schedule tasks and activities, ensuring you stay organized and on top of important customer interactions.
  • Reporting and analytics — Access to data-driven insights and reporting tools enables you to make informed decisions and measure the effectiveness of your strategies.

Benefits of a CRM

  • Improved customer relationships — Personalized interactions through data-driven insights allow you to tailor communication, leading to stronger customer relationships and loyalty.
  • Efficient sales processes — Streamlining sales pipelines and automating repetitive tasks saves time and increases productivity.
  • Enhanced marketing campaigns — Cross-departmental access to customer data allows for targeted and effective marketing.
  • Data centralizationCRM apps centralize customer information, reducing data silos and ensuring data consistency.
  • Customer insights — Analyzing customer data helps you understand customer needs and preferences, leading to better decision-making and tailored services.

Data Sources and Management

CRM tools excel in efficiently gathering and managing customer data. They collect data from various sources, including customer interactions, website forms, emails, and social media engagement.

This provides a comprehensive overview of customer activities and preferences, and as the data is managed through a structured database, it’s easily accessible and kept organized.

Contact management features store and update customer profiles, enabling you to keep track of essential details and interactions. Additionally, CRM systems often offer integration capabilities.

This allows data from other software and tools to be seamlessly incorporated, ensuring that data remains updated and consistent across various platforms for accuracy and to reduce data redundancy.

Furthermore, CRMs offer automation capabilities that simplify and accelerate data input and management processes, reducing the need for manual data entry and ensuring accuracy.

Automation saves time and minimizes errors, so customer data remains reliable.

When Should You Use a CRM?

A CRM platform can streamline operations and boost results, but it’s not a magic bullet for every business. Here are some clear indications when a CRM can deliver significant value:

You Rely on Manual Lead and Sales Management

Spreadsheets and sticky notes are inefficient and error-prone. A CRM centralizes lead capture, tracks deal stages, and automates workflows, saving time and improving sales visibility.

Communication With Customers is Fragmented

Scattered emails, phone calls, and notes across different teams create a confusing customer experience. CRM software consolidates all communication history, enabling personalized interactions and seamless department transitions.

You Lack Sales Pipeline Clarity

Understanding deal progress and forecasting revenue can be a guessing game. A CRM provides real-time insights into your sales pipeline, allowing you to identify bottlenecks, manage resources effectively, and predict future performance.

Customer Service is Inconsistent, Impacting Customer Retention

Handling customer issues through disparate channels leads to inconsistent service and resolution times. A CRM provides a centralized platform for managing customer support requests, ensuring efficient resolution and improved customer satisfaction.

Collaboration Between Sales and Marketing is Weak

Siloed data and communication disconnect marketing efforts from sales goals. A CRM bridges the gap, allowing marketing to generate qualified leads and sales teams to nurture them effectively, optimizing the entire customer acquisition journey.

Popular CRMs

EDITOR’s CHOICE

Monday CRM – Affordable, Easy to Use, and Scalable

  • Powerful Sales Automation
  • Task and Project Tracking
  • Efficient Roadmap Planning

Popular CRM examples include:

  • HubSpot CRM — Offers a user-friendly CRM that integrates seamlessly with its marketing and sales tools. It’s popular for its ease of use and comprehensive features.
  • Salesforce — Known for its robust features and flexibility, Salesforce is a widely used sales CRM that offers a range of solutions for sales, marketing, and customer service.
  • Zoho CRM — Known for its affordability and feature-rich options. It caters to businesses of all sizes and offers sales automation and analytics.
  • Pipedrive — A CRM designed for sales teams, Pipedrive focuses on pipeline management and is praised for its intuitive interface.
  • Monday Sales CRM — Offers a versatile solution that integrates with its work operating system. It’s known for its visual and customizable interface, making it easy to manage sales processes.
  • Oracle NetSuite — Oracle’s NetSuite CRM is part of its comprehensive business software suite. It’s favored for its scalability and ability to handle complex business processes.

CDP vs CRM: Which Should I Use?

Choosing between a CDP and a CRM depends on your specific business needs. A CDP is the right choice if you require comprehensive customer data aggregation for personalized marketing and cross-departmental insights.

On the other hand, if your primary focus is on managing customer relationships, sales pipelines, and customer support interactions, a CRM is the preferred solution. In some cases, businesses benefit from using both in tandem.

By combining a CDP’s capabilities for comprehensive customer data consolidation and insights with a CRM’s proficiency in managing customer interactions and relationships, businesses can optimize their customer engagement strategies.

FAQs

How do CDP and CRM work together?

What’s the difference between CDP, CRM, and DMP?

Is Salesforce a CRM or CDP?

References

  1. What is GDPR? (GDPR)
  2. How Encryption Works (Internet Society)
  3. Benefits of a CRM (Info Entrepreneurs)

Related Reading

Maheen Kanwal
Technology Expert
Maheen Kanwal
Technology Expert

Maheen Kanwal holds an MBA and brings and 8+ years' experience working in and writing on the fields of business and people management, including a four-year stint as the HR Management Executive for a large Oil & Gas firm. Over the years, she's managed every side of business and people management, from recruitment and organizational development to performance reviews and certified skills training. She's also an experience Business Tech writer, with articles appearing in Technology Advice, Small Business Competing, Webopedia, Software Pundit, and Techopedia.