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CDP vs. DMP vs. CRM

Three little letters. Three very different possibilities. When it comes to data platforms, choosing the right one can make or break your digital marketing strategy. In this article we’re cracking open these acronyms and unlocking the potential benefits of each platform for your organization.

Indholdsfortegnelse

Indholdsfortegnelse

Quick insight

From targeted advertising campaigns to personalized customer experiences, it’s clear these three data platforms are quite different, with each offering its own range of capabilities geared towards specific business goals and requirements.

CHAPTER 1

What is the difference between a CDP, a DMP, and a CRM?

To understand the fundamentals of the CDP, DMP, and CRM, let’s check in with Gartner.

Recognized as the most complex and advanced of these three data platforms, Gartner defines a customer data platform (CDP) as “a marketing system that unifies a company’s customer data from marketing and other channels to enable customer modelling and optimize the timing and targeting of messages and offers.”

Meanwhile, Gartner’s definition of a data management platform (DMP) points specifically towards advertising and customer segmentation – “A data management platform is software that controls the flow of data in and out of an organization. It supports data-driven ad strategies such as segmentation.”

Finally, a customer relationship management system (CRM) is classified as a “business strategy that optimizes revenue and profitability while promoting customer satisfaction and loyalty. CRM software provides functionality to companies in four segments: sales, marketing, customer service, and digital commerce.”

From targeted advertising campaigns to personalized customer experiences, it’s clear these three data platforms are quite different, with each offering its own range of capabilities geared towards specific business goals and requirements.

CHAPTER 2

Use cases for a CDP, DMP, and CRM

In How to choose a CDP, we looked at the main reasons why organizations should invest in a CDP. For companies struggling with clunky, inaccessible databases, the standout benefit of switching to a customer data platform is the ease and speed at which marketing campaigns can be aligned across an organization. Other advantages of a CDP include:

  • A smarter segmentation process and the advanced personalization capabilities that allow organizations to innovate quickly – that means planning and executing those highly intuitive experiences that are guaranteed to surprise and delight customers.
  • The ability to harness your organization’s data to inform targeted advertising campaigns on paid media channels
  • Delivery of an accurate 360-degree view of your customers, based on a mix of behavioral, CRM, and transactional data.

The use case for the DMP is typically related to acquisition marketing (advertising). Storing third-party data gathered from other websites, the DMP categorizes this data into segments to build audiences that marketers can use for targeted ad campaigns.

With customer relationship management systems, the clue is in the name. Customer retention is the primary use case – organizations trust CRMs to manage relationships with both existing customers and prospects. Typically, the system needs to serve various teams across an organization including sales, customer service, and digital marketing.

CHAPTER 3

How CDPs, DMPs, and CRMs build user profiles

The type of data collected by each of these platforms – and how this information is shared within organizations, directly impacts the accuracy of the user profile built within each system.

A CDP builds user profiles primarily through first-party data. Data is gathered from people who have a direct relationship with your brand – those who have visited your website, subscribed to your newsletter, or made a purchase, for example.

Collecting data online from an organization’s website and from offline transactional data sources such as loyalty cards, the CDP stores this information within a unified customer data hub that can be accessed by other systems for purposes such as analytics, web optimization, email marketing, and retargeting.

Customer details submitted consensually such as their name, email address, and phone number are then matched with a specific purchase to accurately identify each customer.

Compared with the CDP, data collected by the DMP is much less granular. The DMP mainly stores third-party data from other websites – individual customers are not identifiable, and the information usually expires after 90 days. Once gathered, the DMP categorizes data into segments based on pre-defined audiences. Marketers can then choose relevant audiences for targeted campaigns. One caveat regarding the DMP is that third-party cookies are being phased out, which means the platform will need to evolve in order to provide value in the future.

Since the main purpose of a CRM is to manage an organization’s relationships with both its existing customer base and potential customers, these systems typically store and manage customer names, items purchased, payment methods, and previous emails sent to the customer. The CRM then processes customer details and previous transactions to build a picture of customers who buy specific products.

There is an obvious weakness, however. The CRM cannot sync customer data across multiple channels and touchpoints, which means data from the same customer gathered from the organization’s website and email campaigns will be treated as separate entities. Given that the user profile generated by a CRM can be somewhat fuzzy compared to profiles identified within a CDP, organizations often employ a CDP alongside their CRM to improve the accuracy of user profiles.

CHAPTER 4

CDP vs, DMP vs, CRM – differences and similarities

For a snapshot of what the CDP, DMP and CRM have to offer individually, let’s look at the main differences and similarities between these platforms.

 

The main similarities:

  • CDP and DMP: Both are usually managed by a marketing team
  • CDP and CRM: Both store first-party, second-party and third-party data
  • DMP and CRM: Potential weakness in terms of data privacy
  • CDP, DMP, and CRM: All three work toward improving customer experience through segmentation

The main differences:

  • A CDP integrates and unifies customer data, creating the most accurate user profile
  • A DMP uses third-party data, stored temporarily, creating an audience-based persona
  • A CRM system is typically managed by a sales team, with limited data integration

While each of these platforms plays a role in delivering outstanding customer experiences, it’s clear that the CDP is both the most solid and the most dynamic platform of the three. From harnessing secure, first-party data to performing advanced segmentation and personalization, the CDP is the game-changer you’ve been waiting for to take your digital marketing strategy to the next level.

Want to learn more?

Sitecore CDP is transforming results for some of the world’s biggest brands. Get in touch to learn more about how Sitecore CDP can deliver more value for your business and your customers.

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