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Difference between CDP (Customer Data Platform) and CRM

by | 13 Dec 2023

The customer data platform is the new trend in business. Whether it is for the marketing department or other departments, the CDP is very popular. This system that unifies a company’s customer data from marketing and other channels needs to be well understood in order to use it properly. Find out what CDP is and why it can be interesting (or more interesting than a basic CRM) for your business.

What is a Customer Data Platform?

Today, marketing is all about customer data. Good marketing and a successful business start with an up-to-date and efficient database. Customer data is the fuel for your sales team. This is where the CDP (Customer Data Platform) comes in. According to Gartnera marketing system that unifies a company’s customer data from marketing and other channels to enable customer modelling and optimise the timing and targeting of messages and offers“.

Indeed, the Customer Data Platform is more than a database. The objective of a CDP is to centralise all data and unify it around customer profiles. A Customer Data Platform brings order to customer data. In effect, it’s organised around customer profiles so that they can be easily exploited by marketing. Furthermore, the Customer Data Platform serves to enrich customer relationships and marketing. By improving the segmentation and personalisation of data, marketing campaigns, targets and messages, promotional offers and website content.

A more complete and powerful tool

The Customer Data Platform can also be seen as a tool that brings together various data from different channels. Such as Data from the mobile, website, customer service, checkout systems, social networks etc. Indeed, this very complete tool organises customer data and redistributes it to the various activation tools. It includes the CRM but also the DMP (data management platform), Marketing Automation, emailing software, etc.

Difference between CDP and CRM

As mentioned above, the customer data platform is an even broader and more comprehensive tool that is active in various departments of the company. The CRM will therefore be part of it. CRM means Customer Relationship Management. It’s software that manages customer relationships. Usually, the sales team uses this tool to interact with customers based on the available customer data. This data usually comes from conversational history. CRMs centralise most customer information but are not designed to store very large volumes of data (unlike CDPs).

CDPs collects and organise customer data in different categories

Indeed, Customer Data Platforms contains four main kinds of customer data :

  1. Identity Data
    This type of data allows companies to uniquely identify each customer. It is the basis of each customer’s profile. Identity data contain information such as contact info, demographic information, Professional information etc.
  2. Descriptive Data
    Descriptive data gives a fuller picture of your customers. It depends on your company’s sector. Some industries like retailers, collect information on the amount spent on clothing. In the automotive sector, it could be data such as the cars of their customers, etc.
  3. Behavioral Data
    Quantitative or behavioural data allows you to understand how each customer has engaged with your company. CDP data are analyses of actions, reactions or transactions with customers. It usually contains Email communications, online activity, customer service information…
  4. Qualitative Data
    Qualitative data gives more information about customers’ personality. This data collects opinions, feedbacks from the customers… Surveys like NPS, CSAT or CES can be very useful to gather more qualitative data.

Should you use a CDP instead of a CRM?

First, you should start by identifying your objectives, your needs and your expectations. Indeed, the first thing to do to know which tool to use for your business is to analyse your objectives. Then, you can imagine the use cases you would like to develop with your data management solution. Do you want to target/retarget internet users who match your target audience for advertising campaigns? Or nurture a long-term customer relationship? Maybe you want to work on loyalty and reduce churn? If you want to offer your customers an omnichannel customer experience, a CDP should be considered. After asking yourself all these questions, you will be better able to know whether a CRM is sufficient for you or whether a more comprehensive tool such as a CDP is needed.

The added value of a CDP

The added value of CDP is that it is the most advanced tool for deploying an omnichannel strategy. Don’t forget that the choice to implement a Customer Data Platform must be part of a global project. Before launching into the use of a new tool, it is necessary to integrate a real reflection on the customer journey, on the service you want to offer, and on customer relationship management in general.

If you also want to implement a Customer Data Platform in your company and offer a multi-channel customer experience to your users, don’t hesitate to ask our experts. They will guide you and help you to choose the right tool for your business.

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