CDP vs CRM: What is the Difference?

Customers engage with products and services on a variety of digital platforms, but unless their interactions are captured by customer management software, their data cannot easily be used to inform marketing and sales interactions. This type of software makes it easier for businesses to understand their customers’ behaviors, which consequently means that businesses listen and cater to customer preferences more frequently. In other words, customer data solutions can be beneficial to both the business and the customers whose data they process.

Customer data solutions fulfill a variety of use cases, but two of the most popular are the customer data platforms (CDP) and customer relationship management (CRM) software. While some buyers might think they need to make a selection of CDP vs CRM for their business, it’s important to know their key differences and how these two types of software can supplement each other.

Also read: How to Develop a Customer-Centric Marketing Mentality

Choosing Between CDPs and CRMs for Your Enterprise

What is a Customer Data Platform (CDP)?

The customer data platform is a centralized database where customer data is stored and updated regularly. While several other types of customer management tools focus on one kind of customer engagement or data type, CDPs exist to unify all known customer data in singular customer profiles. 

Because CDPs are typically connected to all of the other company technologies that collect customer data, these platforms break down silos in order to develop the most accurate customer profile from the data found in each system. Although these other tools are important because they work together to update and correct the CDP, the CDP is typically considered the most accurate, up-to-date body of customer data because of its multiple points of reference. 

Take a look at five of the top customer data platforms on the market below:

  • Tealium
  • Treasure Data CDP
  • Salesforce Interaction Studio
  • Microsoft Dynamics 365 Customer Insights
  • Oracle Unity Customer Data Platform

More on CDPs: Powering Digital Transformation with Customer Data Platforms

What is a Customer Relationship Management (CRM) Tool?

Customer relationship management tools are frequently used to manage customer-facing data, specifically by marketing and sales representatives who want to guide customers through their buyer’s journey. The ultimate goal of a CRM is to move a prospective customer to a repeat customer by relying on data insights. The type of data that a CRM collects is used to create specialized workflows and triggers, which automate the kinds of touchpoints that different prospects and customers receive during their buyer’s journey. 

In order to support customer recruitment and retention goals, CRMs focus on providing detailed demographic data about potential customers, but also details like how frequently they’ve visited your site, whether or not they’re opening your targeted ads and emails, and the types of questions they’ve historically asked your customer service and virtual assistance teams. To collect and manage this kind of data, CRMs usually connect to company websites and e-commerce sites, email and chatbot messaging, mobile apps, social media, and advertising platforms.

Take a look at five of the top customer relationship management tools on the market below:

  • Salesforce
  • HubSpot
  • Zoho CRM
  • Keap
  • Insightly

More on CRMs from CIO Insight: Customer Relationship Management (CRM) Explained

CDP vs CRM

CDP and CRM solutions share many common features, especially since they focus on cleaning and managing customer data. Both solutions also tend to integrate easily with other enterprise software, making it easy for different enterprise teams to access and utilize customer data for their specific needs.

However, CDPs and CRMs differ on a few core fronts:

  • CRMs mostly focus on the marketing-sales pipeline and dive deep into customer details that will be relevant to the sales cycle. CDPs offer a more holistic look at customer data that can be more easily applied to business planning, long term customer programming, and other enterprise strategies.
  • Because CRMs are so focused on sales and direct customer engagement, most of these tools natively include communication apps and other ways to directly engage in customer service. CDPs are more of a repository for customer data and are therefore less customer-facing.
  • CDPs, by design, are expected to connect with any systems that provide or use customer profile data. As a result, these tools are created with deep libraries of native integrations. Some CRMs have large integration libraries, but most rely on a few key integrations or API connections.

Other enterprise software to consider: CRM vs ERP: What Are the Key Differences?

How CDPs and CRMs Can Work Together

CDPs and CRMs are often viewed as separate systems with different use cases. However, CDPs and CRMs can reveal valuable details about customer data when they’re used together. 

Use CDPs to better understand customers beyond the sales cycle and to keep a more accurate collection of data for your CRM. Inversely, use your CRM to continually add and update contacts in the CDP, which further enriches that source for other enterprise software that rely on the CDP’s data collection.

Many companies start with a CRM because they have more visibility in the enterprise software world. However, these same companies often choose to add CDPs to their portfolio later, in order to get more in-depth, holistic views on their customers. Regardless of the size of your business and current customer pool, the answer to CDP vs CRM is clear: CDP and CRM work better when they rely on each other’s data management strengths.

Learn more about the top customer data platform solutions here: Best Customer Data Platforms (CDP) 2021

Shelby Hiter
Shelby Hiter is a marketing content writer with more than five years of experience in writing and editing, focusing on healthcare, technology, data, enterprise IT, and technology marketing. She currently writes for three different digital publications in the technology industry: Datamation, Enterprise Networking Planet, and CIO Insight. When she’s not writing, Shelby loves finding group trivia events with friends, cross stitching decorations for her home, reading too many novels, and turning her puppy into a social media influencer.

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