Customer Data Platform (CDP) is an all-in-one platform that stores customer data from all aspects of your business and makes this customer data available to all your systems in the form of a customer database. This customer database is always unified and persistent. Customer Data Platforms are usually pre-built systems that businesses integrate into their pre-existing tech stacks and systems. They are responsible for centralizing all the data collected by a business. The customer data stored and managed by CDPs are used for customer services, customer experience initiatives and marketing-sales campaigns.
Customer Relationship Management (CRM) platforms are responsible for managing the interactions of your business with customers and prospects. CRMs are implemented to enhance customer interaction with your business. These platforms use large amounts of data collected from previous customer interactions and analyze them to develop insights into the future interactions of your business with the customers. The analytics produced allow your business to design marketing strategies that will keep your business connected to the customers. CRMs streamline the whole process for the customer-facing teams, making it possible for your teams to focus more on generating profits.
Key differences between CDPs and CRMs
- Potential users
CDP is used not only by customer-facing teams but also by non-customer facing teams such as leadership and product teams. But a CRM is solely used by customer-facing teams.
- Data collection and management
Data for CDP is collected automatically through technological devices and can be exported to use in other tools. But for CRM, customer data is collected manually by sales representatives and is difficult to export outside CRM.
CDP is used for understanding your customers’ behavior, while CRM is used for improving the interactions of your business with your customers and prospects.
Common functions between CDP and CRM
Even though CDP and CRM are two different types of tools, they have a few common functionalities. Some of these common functionalities:
- Both CDP and CRM are known to collect first party, second party and third-party data. Both these tools collect and store this data to be used further for the benefit of your business.
- Although CDP has quite a different functioning capacity than CRM, the aim of both tools are very common. Both CDP and CRM do what they do intend to improve customer experience. Both these tools do segmentation to achieve that goal.
A Few Notable CDP vendors
Exponea is an end-to-end CDP. It has been designed to handle customer data under a single roof. The multiple touchpoints and devices set up by Exponea make data collection optimized and easy.
CaliberMind is an intelligent platform that employs chain-based attributes to assess the true worth of each channel contributing to the journeys of your customers
The segment has powerful integrations, which make incorporating it into a never business quite effortless. The real-time analytics, awesome dashboards and customization opportunities offered by segment make it a choice for many.
A Few Notable CRM Vendors
One of the largest CRM software packages in the market is SalesForce. It has a systematic lead to conversion approach that makes your business growth steady and strong.
- HubSpot CRM
HubSpot CRM is one of the best free CRM software packages available in the market. HubSpot CRM has a wide range of features that can be used for businesses as well as enterprises.
- Microsoft Dynamics 365
One of the top products of Microsoft is Microsoft Dynamics 365. It has a very extensive functionality when it comes to CRM. Microsoft Dynamics 365 can be integrated with LinkedIn for better features.
Ever since its introduction, CDP has been one of the fastest-growing trends in the business world. The market of CDP has been observing a Compound Annual Growth Rate (CAGR) of 34.0%. But in 2020, the Information Technology (IT) industry saw a sharp decline in the market value. Currently, CDPs are functioning at their maximum capacity to grasp the tune of the market.
CRM is an essential tool for every business. Over the global market, CRM software is gaining more and more demand. CRMs are expected to have a CAGR of 11.3% over the next few years. This rising technology is proving to be one of the most sought-after technologies in the IT market.
The dynamic nature of the modern-day business environments, necessitate the availability of both CRMs as well as CDPs. So, in the future, we can expect to see various innovations for both these product categories.