CDP vs. CRM vs. DMP: Their differences, capabilities, and how they work together
Companies often get confused between CDP, CRM & DMP, and little do they know that using all these three platforms together will be more beneficial for them. Insights into customers are the lifeline of every organization that wants to leverage customer data to generate business value. One of the major objectives of modern data-driven marketers consists of being able to successfully acquire, organize, store and analyze customer data to build a singular view of customer profiles. Organizations can divide and target key consumers more effectively with unified customer data. They can customize content, messaging, as well as overall customer experience over multiple channels.
Customer relationship management (CRM) systems, customer data platforms (CDP) & data management platforms (DMP), are all terms that are frequently used interchangeably, but all of them have different roles to play. All of these systems are crucial in providing exceptional customer experiences. And you can utilize all of these platforms to collect and handle first-party and third-party data from various sources. These platforms, however, have distinct purposes and requirements. The primary distinction is the type of information gathered by each platform & the way it is distributed throughout the business.
In this post, we’ll look at how CDP, CRM, and DMP vary and how they work together to provide you with a better knowledge of your customers for marketing purposes.
What is a Customer Data Platform (CDP)?
A customer data platform (CDP) is an information management system that uses a consistent and consolidated data warehouse to store and integrate data from numerous channels and sources in order to create a single, unified profile for each customer. A CDP aggregates customer data from all of your customer interactions from – websites, in-store or mobile app visits, and even a CRM or DMP.
A CDP only works with first-party data but combines various data points to build a full, unified, and actionable image of each client. These precise, cross-platform images of customers can be kept in a CDP for a long time. This also gives specific information on how to approach each lead/prospect/customer at each stage of the sales funnel.
The top 3 Customer Data Platforms (CDP) currently in the market are –
How does CDP Work?
To create a full customer profile, CDPs collect first-party customer data (transactional, behavioural, geographic, historical, etc.) across both online and offline data sources. Let’s have a look at the various components of CDP and which of these features are beneficial for your company.
1. Data intake – Initially, CDPs gather data so that it can be linked to an individual and a single record. With the CDP’s integration library, CDPs collect data from numerous sources. These can contain your CRM data, marketing automation tools, business intelligence tools, data platforms, lead scoring tools, accounting systems, and a variety of other things.
2. Identity resolution – The next major problem is connecting all of these data sources. CDPs stitch together multiple ‘versions’ of a customer or prospect to generate a centralized customer view – they ‘stitch’ various identities together.
3. Processing of Data – CDPs transform, filter, and enhance data using their UI or code. Consider this: in one system, you have the area codes for the ‘place’ of a lead, but in another, you write the complete name of the country – or in one, you have first and last names, yet you want them both in one. CDP exactly helps you in conjugating all these data from various platforms into a single place.
4. Audience segmentation – The ability to identify audiences is a key capability. CDPs enable businesses to be exceedingly particular with their audiences provided they have access to the full spectrum of data and can observe the numerous profiles that might comprise an audience. The idea is to find profitable markets to promote to, upscale or cross-sell to. You may construct case-specific audiences while also excluding specific individuals from an audience.
5. Data distribution and synchronisation – CDPs enable businesses to transfer data to other platforms, this process is known as “data activation.” Typically, an audience would be enabled in marketing automation software and nurtured on the most appropriate channels to enhance sales and profitability for a business.
What is a Customer Relationship Management (CRM) Platform?
A customer relationship management (CRM) platform’s primary focus is on managing relationships with current customers as well as leads in the pipeline. It helps in the organisation of data such as past purchases, customer contact details, and any other conversation that might have happened with that individual. With CRMs, interactions of customers with the company’s website, on-call, live chat, mail, promotional materials, and social media can all provide information to the service representatives.
CRMs are most often utilized by customer support and sales representatives since this data may be used to forecast a sales funnel. Providing a centralised mechanism for obtaining customer information, may assist in the synchronization of marketing, sales, accounting, and customer support divisions. CRM is far more than a marketing and sales tool since it unites the company’s perspective of customers throughout all functional departments, from sales to customer service.
The Top 5 Customer Relationship Management (CRM) Platform that you can choose from is –
1. Salesforce CRM
2. Pipedrive CRM
3. HubSpot CRM
4. Zoho CRM
5. Monday Sales CRM
How does CRM Work?
CRM software combined with marketing automation gives both marketing and sales teams a set of tools to monitor the sales and marketing funnel holistically, from the qualification of leads to prospect management, projections, and deal close. A CRM platform generally provides the following features:
1. Contact management: The Customer Relationship Management Platform keeps track of a company’s leads, enabling marketing teams to manually or automatically add new leads into their system and track and analyse data regarding them.
2. Pipeline monitoring: CRMs aid sales teams in the development of their sales procedures and pipelines. By consolidating all your pipeline data centralized in a single location, your sales team will always know what is the subsequent step in the sales cycle as well as where every prospect is in the pipeline at any point in time.
3. Marketing automation: Certain CRMs provide marketing automation features that allow you to automate some time-consuming operations in the funnel. You can automatically send marketing emails to customers at any time specified by your marketing team, or plan social media postings. Marketing automation’s purpose is to keep leads interested and convert them into customers.
4. Sales automation: CRMs are used by sales teams to automate parts of their sales procedure, allowing them to be more productive and devote more time to the most relevant tasks. CRMs can automate operations like allocating leads to salespeople, moving prospects along the pipeline, sending emails, & reporting outcomes.
5. Analytics & reporting: CRM solutions can include built-in analytics capabilities that provide insights and assist in increasing customer satisfaction rates. This allows companies to track sales, marketing & support performance, create customised reports to fully understand the customer lifecycle, and display their data. Using CRM software, enhanced analytics and reporting may assist your company to engage better with your customers and manage resources to increase ROI.
What is a Data Management Platform (DMP)?
A data management platform (DMP) collects, categorizes, and classifies data concerning audiences for advertising campaigns from several third-party sources. It saves this data in a centralized location for a limited time in order to assist marketers in targeting online advertisements to the right audiences. DMP collects user information from third parties in order to effectively target audiences and classify important traits.
The platform accepts anonymous identities from your customers, compares them to third-party lists, creates a lookalike model using summary data, and picks comparable anonymous users from third-party records to deliver to advertising systems.
The top 5 Data Management Platforms (DMP) in 2023 are –
1. Adobe Audience Manager
3. Oracle’s BlueKai
4. SAS Data Management
How does DMP Work?
A data management platform (DMP) begins with gathering data. It accomplishes this by connecting with certain other AdTech and MarTech platforms, and by adding a tag to the website of an advertiser or publisher. Let’s go into the specifics of how DMP operate –
1. Aggregation of data – Data management tools gather vital consumer information. Data about the audience is acquired from a wide range of online & offline first-party sources. Moreover, DMP ad tech solutions integrate third-party information that can be utilized to enhance and enrich the view.
2. Arrangement of Data – Once the first and third-party data is gathered, DMPs begin processing it. The information is subsequently segmented and prioritized. DMPs organize data hierarchically, categorizing it based on predetermined factors and categorizing clear audience segments.
3. Analysis of Data – Once the raw information has been cleaned up and thoroughly split into taxonomies, it can be analysed. DMPs examine data from previous user engagement. A DMP tracks how people engage with an advertisement creative and determines which offers to receive the most positive feedback. This data is critical for the strategic optimisation of your marketing campaigns.
4. Data Allocation – When DMPs discover correlation & causation between parameters, they provide meaningful patterns that may be employed. DMPs capture response data and re-evaluate performance once it is applied in real life. This is a never-ending cycle of filtering, distilling, and refining massive data arrays in order to find the perfect customer for your company.
What is the Key Difference between CDP, CRM and DMP?
While all these three platforms have the same purpose of developing customer profiles, they do it in various ways and with distinct data sources.
CRMs can track leads’ journey throughout the sales funnel
From start to finish, converting leads to consumers can be a lengthy and often confusing process. A CRM simplifies this process. You may tailor your approach to each contact based on where they are in their journey. Emails can be sent in big batches in response to certain behaviour. Leads can also be granted ratings to move them across the sales funnel based on how they engage with your brand.
What if you want to link online data to a customer while they’re not available on the internet? A CDP is the only platform that can solve this. Since the majority of other platforms are restricted to the digital realm, a CDP can have an impact on the customer’s in-person interaction. This may help in making each interaction feel more meaningful. It may also provide a far more detailed and actionable customer profile in real-time.
DMPs can reach new audiences
Finding new audience groups to strategically break into is a challenging task. A DMP driven by AI can help you here. A DMP can determine what characteristics of your top clients may be exchanged with other segments via lookalike modelling. With these lookalike categories discovered, businesses can be focused on advertising while also uncovering new consumers via a data management tool.
|Data Source||Can use first-, second-, and third-party data||Can use first-, second-, and third-party data||Uses anonymous, third-party data|
|Goal||CDPs help engage and personalize all phases of the customer experience by getting unified information on your potential customers||CRMs are built to manage and nurture existing customers or leads||DMPs are built for prospecting new audiences to be targeted|
|Internal management||Usually managed by marketing teams||CRM is often managed by sales teams||Usually managed by marketing teams|
Let’s Discuss the Capabilities of CDP, CRM AND DMP.
Although CDP, CRM, and DMP have certain similarities, their strengths lay in different areas. In this section, we will look at the strengths of all three platforms and where you can use them to get the most out of them.
Customer Relationship Management (CRM) Platform –
1. First-party monitoring of data that can assist you in understanding how your contacts engage with your website.
2. You may develop marketing automation for SMS & emails with your contacts based on where they are in your sales pipeline.
3. You may also examine the performance of your members of the sales team.
Customer Data Platform (CDP) –
1. You could import data from your tech stack’s multiple platforms or acquire information from numerous data sources.
2. CDP disintegrates data silos & facilitates the set-up of cross-channel campaigns.
3. It can also enrich CRM records with useful data and context, allowing sales reps to concentrate on the most probable customers.
Data Management Platforms (DMP) –
1. DMP can be utilized to create digital ad campaigns for folks who aren’t known customers but whom you’d like to contact.
How can all these Three Platforms sync Together?
Marketers seek to deliver the appropriate message to the right audience at the right moment. So how can you know if the message, timing, and audience are all in sync? This is reliant on your data. Connecting these systems is crucial to leverage their capabilities. The three systems operate effectively together despite the fact that they are separate tools with varied capabilities.
You may combine data from CRM & DMP platforms and then use CDP to build and manage a complete overview of each user. DMPs can help attract prospects and leads which will be the lookalike of your ideal customer database. CDPs can assist companies in connecting and engaging with these potential customers, and CRMs can then maintain the ongoing connection between customers and your company. You are not required to select any one over the other. They all play important roles in enhancing the success of your Martech stacks and campaigns.
Syncing all these three platforms together can be a difficult task, talk to our expert to make this process simpler!