Martech often feels like a swimming pool of alphabet soup. If you were a picky eater, which letters would you choose?

Customer relationship management systems (CRMs) and customer data platforms (CDPs) should be at the top of your list. High-performing companies use these marketing platforms to manage their customer database and deliver high quality communications throughout the customer journey.

What’s a CRM System?

A CRM system is a marketing platform that tracks a company’s interaction with prospects and customers. It allows you to leverage customer data to support one-to-one customer interactions in sales and customer services.

What’s a CDP?

A CDP serves as a central repository of all customer data, which can then be accessed by other marketing systems such as eCommerce platforms, email marketing software, etc., to inform customer interactions at scale.

The Difference Between CRM and CDP

To decide which platform to use, you need to understand the main differences between CRM and CDP:

Who Uses CRM and CDP?

CRM systems support customer-facing roles, such as salespeople and customer success teams. Sales teams can log their customer interactions and use the data to understand customer preferences, improve outreach, and accelerate the sales cycle. CRM platforms can also record customer interactions at digital touchpoints, such as website forms, support requests, social media messaging, and more to help drive meaningful customer interactions.

CDPs are marketer-managed systems that capture data across various marketing channels to provide a unified view of each customer. Marketing teams can use the information to implement marketing campaigns using other software. They can reach prospects and customers at scale, implement segmentation strategies, and deliver relevant content throughout the entire customer journey to progress the audience down the sales funnel.

What Are CRM and CDP Used For?

Sales teams use CRM platforms to log and manage a company’s relationships with individual customers. The centralized platform helps salespeople collaborate effectively to pursue new business opportunities and retain current customers. Meanwhile, customer support/success teams use CRM software to track how many tickets are submitted and how they get resolved. They can then deliver personalized follow-up communications to improve customer engagement and satisfaction.

Through the process of identity resolution, CDPs create a single customer view from data gathered at every customer touchpoint (e.g., website, POS, social media, emails, live chat, etc.) They make the information available to other systems from a centralized location as a single source of truth. This information enables marketers to design personalization strategies, product development teams to prioritize new features, and leadership to act on metrics such as cost of acquisition and customer lifetime value.

What Type of Businesses Do CRM and CDP Best Serve?

The more manual nature of CRM platforms lends itself to B2B sales, which has a more predictable and higher-touch sales cycle. You can link up individual stakeholders within an account to understand the needs of a customer as a whole and deliver the most relevant solution. CRM systems are also better suited to managing the smaller number of accounts and contacts associated with B2B sales.

CDPs, on the other hand, offer automation and integration capabilities. They can handle the much larger amount of customer data typical in B2C or D2C marketing. They’re ideal for brands that gather customer data from many different touchpoints. They can accurately assign the data to specific customer profiles to inform the delivery of real-time, cross-channel, and personalized communications at scale.

How Do CRM and CDP Gather Customer Data?

Most data in CRM systems is gathered and entered manually by customer-facing team members during or after each customer interaction. Since the data is specific and personalized, the process doesn’t lend itself well to automation. The data collected is often unstructured (e.g., notes about a customer) and intended for use within the CRM among sales teams. While you can export the information to other platforms, the process is technically more challenging.

On the other hand, CDPs collect customer data automatically through integrations with various marketing tools and devices (e.g., smartphones, PCs, websites, emails, mobile apps, social media, CRM, etc.) They show marketers how, where, when, and why customers interact with a brand. The software then filters, cleans, and sorts the data, which can then be exported to other marketing platforms and inform future customer interactions.

What Are the Benefits of CRM and CDP?

CRM platforms help facilitate personal relationships between your company and its customers. Sales teams can leverage historical data to inform customer interactions, increase customer acquisition, and improve customer loyalty. CRM systems help salespeople optimize a brand’s one-to-one interactions with each customer. They also allow you to track post-sales activities to inform customer retention strategies and drive revenues through cross-sells and upsells.

CDPs give you a broader view of your customers and their behaviors throughout the customer journey, thanks to their ability to consolidate all customer data from multiple sources. You can build a single customer view to support accurate data-driven decisions. For example, marketers can find out what led prospects to their websites and which landing page is most effective in converting visitors to customers.

CRM or CDP: Which One Should You Use?

While both CRM systems and CDPs help you leverage customer data to facilitate the customer journey, they support different applications and focus on different aspects of customer interactions.

Use CRM platforms to facilitate direct customer interaction and manage customer relationships in a more personalized way. They’re great for analyzing and forecasting the sales pipeline, supporting front-office-related sales, enhancing post-sales customer service, understanding “hit/miss” in go-to-market strategies, and facilitating marketing automation via performance analysis and campaign tracking.

Use a CDP if you aim to gain a unified view of your prospects and customers and insights on how they engage with your brand. CDPs are also a more suitable choice if you plan to share customer data with other systems and inform decision-making in other departments within the business, such as marketing, product development, and financial decisions.

Whether you use a CRM system or a CDP, all your touchpoints must effectively collect customer information. This will help you build a customer database to generate accurate insights about your target audience and inform your sales and marketing strategies. As such, customer data collection should be part of your web or mobile app’s product strategy to ensure that the process is an integral part of the user experience.

Sounds complicated? Don’t worry, we’ve got your back. Get in touch to see how we can help you collect the right customer data at the right digital touchpoint to inform your audience and revenue strategy.