Functions of the two solutions i.e. Customer Relationship Management and Customer Data Platform are quite similar in nature.
To better orient the strategy of a company, it is important to know the customers or prospects. With CRM and CDP, data collection and management is made easy.
After all, both work with collecting and storing consumer data. Despite this, there are relevant differences between the two systems, from the types of data collected to the purpose of each.
The difference between CRM and CDP may not be obvious at first, but it exists and needs to be understood.
Let’s Understand CDP and CRM
Customer Data Platform is a software that unifies customer data from different business systems, creating unique and persistent records that are accessible to other systems.
The main advantage is that CDP avoids data silos, that is, data available to a department is isolated from the rest of the organization.
Silos are not good, as they threaten the accuracy of customer profile data, slowing down a business’ pace and productivity. That’s because the data is precious, not only to the sales team.
Another relevant advantage of CDP, compared to other solutions, is that, by storing its own copy of data in a single customer record, it mitigates some of the risks associated with GDPR.
With the use of CDP, it is still possible to outline the personas of your business. Criteria such as gender, age, and profession can help draw information such as interests, occupation, hobbies, and lifestyle of the clients you want to reach.
The persona is the one who will base your business plan, direct your strategy, and define the language that should be used in the means of funding.
Customer relationship management is a system developed to assist sales teams.
However, nowadays, the platform is also used by other sectors of a company, such as HR and the supply chain.
Likewise, it is a platform used in B2B businesses, where the data allows us to analyze the sales funnel and identify where there is more chance of closing a deal.
An eCommerce has several processes that need to work in an aligned way all the time. If the simple redirection of a banner fails, a chain of other actions may stop working correctly, and the purchase will never be made.
To avoid this, CRM gives a comprehensive view of the business, facilitating the elaboration of more effective tasks.
CRM is a primarily operational tool for sales, marketing, and customer support to do their day-to-day business. It relies on direct customer data entry to operate efficiently.
Customer relationship management has practically become an obligation of doing business today for all businesses, from a small business to a multinational, and is no longer a differentiable capability.
Customer relationship management can be defined as a technology to manage your company’s relationships and interactions and potential customers and actual clients.
It is used to more traditionally manage consumer engagement with your business.
On the other hand, CDP offers a more in-depth and complete analysis of the behavior of the customer as a whole and not just in relation to his company.
CDP can centralize all customer interaction data from sources, which allows you to cross-reference this information to get to know your customer.
CRM was designed to improve sales management, as the sales team can capture, track, and manage customer details.
A CRM compiles customer data and helps to optimize a company’s interactions with its known customers. However, if a customer is unknown, a CRM cannot identify or become involved with it.
In contrast to CRM, CDP can identify new sets of customers from multiple sources and present it in unified information.
The data collected by a CRM is not treated as a single customer view process, which means that customer records are not combined, merged, or deduplicated.
As a contract management solution, CRMs can be used to view as much data as possible about an individual record.
Contrary to CRM, CDP is meant to take care of a large volume of data and even integrate it to function together seamlessly across channels.
In addition, CDPs allow you to automate and, at the same time, customize certain relationship actions to improve the customer experience, while CRMs are better suited for salespeople to manage their accounts.
Using data from a CRM and a CDP, marketers are able to search for exactly who this audience is.
Before choosing one of the two technologies, understand what your business needs at that moment.
While CRM focuses on sales functions and managing customer data, CDP is essential if you plan to run scalable custom campaigns that rely on offline transaction inputs or social data.