What are the differences between CDP, CRM, DMP?

Modern marketing relies on data. Marketers strive to send the right message at the right time to the right segment of customers. Customer Data Platform (CDP), Customer Relationship Management (CRM), and Data Management Platform (DMP) are powerful tools in a marketer’s arsenal. They empower data-driven marketing. But what are the differences between these tools? Read one to know the differences and how you can choose between them.

What is a CRM?

A CRM tool collects and analyzes the data of existing or potential customers, and also the interactions of the business with them. These interactions are collected from the business’s website, telephone, email, live chat, social media, etc. The primary goal of a CRM tool is to integrate and automate sales, marketing, and customer support.

What is a DMP?

A DMP tool collects and analyzes the anonymous data of visitors. Concerning marketing campaigns and their targeted audiences, a DMP tool collects third-party data (data collected and shared from an external source, like Google Analytics) from a variety of websites and platforms. It aggregates this data and stores it in a central location for a short period of time to help marketers target web ads to the right audience. DMP tools are mainly focused on supporting advertising by targeting relevant and engaged audiences.

What is a CDP?

A customer data platform is used to collect and organize data from various sources including your website, mobile app, analytics systems, messaging systems, sales and support systems, etc. The CDP then consolidates and unifies this data to create unique customer profiles.

how does cdp work

A CDP tool connects to all sources of data. It then collects this data, consolidates it, and builds a single, unified profile around an individual customer. Also, a CDP tool connects to marketing tools to share this structured data. Therefore these marketing tools will be backed by powerful, structured data.

CDP vs DMP: How are they different?

David Raab, the founder of the CDP Institute, explains the contrast between CDPs and DMPs best: “CDPs work with both anonymous and known individuals, storing personally identifiable information such as names, postal addresses, email addresses, and phone numbers, while DMPs work with almost exclusively with anonymous entities such as cookies, devices, and IP addresses.”

  1. CDPs impact all types of marketing, whereas DMPs mainly focus on advertising to more suitable target ads.
  2. CDP platforms collect mostly first-party data (direct from the source), whereas DMPs collect mostly third-party data (through data providers, managers, and services).
  3. CDPs consider personalized, specific customer identifiers (like name, email address, and customer ID), whereas DMPs consider anonymous customer identifiers (like cookies, etc.)
  4. CDPs maintain data over a long period of time to build in-depth, accurate customer profiles and nourish relationships, whereas DMPs maintain data for a short period of time to target ads.

CDP vs CRM: The Differences

CDP systems are more comprehensive and flexible than CRMs. Both CDP and CRM collect customer data however, CDPs create unified customer profiles. In other words, CDPs can connect to CRMs, collect their data, and consolidate it with other customer data, and create single-view customer profiles.

  1. CDPs collect data on anonymous visitors, whereas CRMs just control known or potential customers.
  2. CDP platforms analyze lifetime customer behavior and customer experience, whereas CRMs primarily analyze the sales pipeline and forecasting.
  3. CDPs consolidate customer data from a large number of sources, whereas CRMs collect individually-entered data that can get wasted or mislabeled if not handled correctly.

CDP vs CRM vs DMP use cases

Let’s look at a few use cases to see how customer data platforms, data management platforms, and customer relationship management platforms are used. We’ll base these examples on a fake e-commerce company, which sells online fashion. They use a CDP, a DMP, and a CRM.

Clover Clothing has connected their CDP with their website to monitor all website activity and customer engagement. The CDP captures data when a customer opens specific products pages. The customer then reads two blog posts. The CDP captures that data too. Having all this customer data, the CDP understands the similarity of those products and blog posts. Then the CDP tags that person as an enthusiast for specific features in products.

cdp single customer profile

A few days later, that customer comes back to Clover Clothing’s website. Clover Clothing’s CDP has the ability to recommend other products based on what that customer previously viewed. Clover Clothing’s CDP creates a customer profile based on all data captured from customer’s behavior and experience. Therefore it’s capable of analyzing it and providing actionable insights that help Clover Clothing build stronger relationships with its customers. On the other hand, Clover Clothing uses its DMP system for advertising to better target ads.

CDP, CRM, DMP: Which is right for you?

All CDPs, CRMs, and DMPs can be very useful platforms. Deciding which one to use depends on your goals, but there is some overlap between the three platforms.

Use a DMP if you plan to build marketing campaigns for audiences that are unfamiliar with you. DMPs use third-party data, so they are best for this goal. They can give you access to audiences that you don’t know. The collected data may be useful for the later targeted marketing campaigns.

A CDP adds to the functionality of CRMs and DMPs by integrating the data from first-, second-, and third-party sources. In other words, CDP incorporates CRM and DMP information to provide a comprehensive view of each customer so you can find all the information you need from a single application. Following you can compare the functionalities of each system:

cdp vs crm vs dmp

Your CDP can monitor and categorize website visitors, while you might use a DMP to take some of that data and use it to build advertising audiences. Your CDP can also analyze your current customers, who can bring you more profit than any other audience segment.

Conclusion

When you invest in your existing customers, your customers will become loyal, will become your ambassadors and they will lead you to new customers, at a fraction of your usual customer acquisition cost (CAC).

By analyzing your existing customers and their needs, you can improve your customer loyalty, and get them to come back and order again, and again. This way you can personalize your business, your product, and your approach for each and every one of them.

The best way to have this personalized approach in your business is with Customer Data Platforms. CDPs are fully automatic, simple to understand, and flexible for different businesses. With a CDP you realize what is the current status of your business and what are the routes to growth, by analyzing all data from their “existing customers”. In summary, the CDP provides very straightforward answers to:

– Get to know your best customers

– Know the ones who are about to leave

– Understand how you can stop your customers from leaving and how not to lose another customer again

– Know how you can increase customer loyalty and engagement

– Know what leads your business to more profit, from each and every one of your customers

And a great CDP provides a simple answer to each of these questions and provides you with the next action: The recommendations on what you should do, as a business, to grow.

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