CDP v. DMP v. CRM: These are all powerful tools for managing customer data for various marketing purposes.
But if you’re just starting to evaluate your data management options, it can be difficult to differentiate between each of these tools.
To the untrained eye, these tools feel and even sound the same. But they don’t collect, manage and activate customer data in the same way. This has major implications for your data management and overall business strategy, so you need to understand the key differences between each before booking demos and signing contracts.
Below, we’ll break down each platform’s capabilities, the pros and cons of each one, and the best use cases for each one. Let’s get started.
What is a DMP?
A data management platform collects user data from third-party sources (like website cookies), anonymizes it, then trades it with other companies for targeted advertising opportunities.
When does it make sense to use a DMP?
Because they typically hold user data for 90 days or less, DMPs are best suited for short-term paid advertising campaigns. But if your primary goal is to create a long-term customer database, a CRM or CDP is the better pick.
Note: DMPs are likely to evolve in coming years due to the imminent phaseout of cookies and tighter international data privacy regulations, although how exactly they will change remains to be seen.
What are some common use cases for DMPs?
DMPs use lookalike modeling to help companies find new audience segments.
What is a CRM?
Customer relationship management software manages all of your company’s relationships and interactions with customers and potential customers. This encompasses every point in the customer journey, from demo requests to support requests and calls, etc.
When does it make sense to use a CRM?
Unlike DMPs, CRM data is not anonymized, allowing you to create a full profile of each customer or lead’s purchase history, contact information, and form submissions, as well as their current place in the buying journey and any communications they’ve had with your team. This makes CRMs especially useful for forecasting sales pipelines and supporting sales/marketing/support alignment. .
While CRMs store first-party customer data, they only record the individual’s online behavior after they have already initiated contact with your company.
While this information is useful for sales, it leaves several important marketing questions unanswered. How are people finding your company? What pages are they visiting most before requesting a demo? So if your main goal is to understand your customer journey, and learn more about your audience segments, a CDP is a better option.
What are some common use cases for CRMs?
CRMs help companies track and nurture leads throughout the sales journey. Sales teams can use a CRM to send trigger-based emails based on previous engagement and mark leads as hot or cold based on prospect response. This helps sales teams react more nimbly to their prospects’ needs and manage the sales lifecycle at scale.
What is a CDP?
A customer data platform ingests customer data from every on- and offline touchpoint you use to engage your audience, from social media and email to events, website tracking, and display ads. From there, the CDP cleans and combines the data so that there’s a single customer profile for each person. (I.e., Jasmine has only one profile and that profile contains every interaction she’s had with your company across all channels).
When does it make sense to use a CDP?
Compared to its counterparts, CDPs collect a wider range of information and store it for a longer period of time. CDPs take in first-, second- and third-party data from both on- and offline sources. And while CRMs take in a
If your primary goal is to make data more accessible across your organization and use it for segmentation, activation and journey orchestration, a CDP is likely your best bet. (However, you can use a CDP in conjunction with a CRM!)
What are some common use cases for CDPs?
CDPs are the only tool of the three to convert unknown website visitors into known prospects, and to collect first-party data from both on- and offline sources, so they’re uniquely positioned to establish a single customer view.
They also have automatic mechanisms for cleaning and standardizing data, as well as merging duplicate customer profiles. As a result, CDPs provide the most complete, accurate, and up-to-date picture of each customer. Below are some other popular use cases for CDPs:
- create more actionable marketing segments
- conduct cross-channel marketing campaigns and trigger communications based on customer needs and behaviors
- provide on-page personalization messages, promotions and content recommendations based on past behavior
- cross-promote and upsell related products based on previous purchase history or browsing behaviors
- better evaluate your marketing channels and conversion tactics — and generate more revenue
TL;DR
Don’t feel like reading? We got you. Here, we’re comparing and contrasting the main capabilities of CDPs, CRMs and DMPs. Use this to evaluate your options and decide what tool is best suited for your needs.
- CRMs and CDPs take in first-, second- and third-party data, while DMPs are limited to third-party data.
- CRMs and CDP records are not anonymous, but DMP data is anonymized.
- CRM and CDP data is stored permanently whereas DMPs store data for 90 days or less (in most cases).
- CDPs ingest data from all on- and offline sources. CRMs collect data from specific interactions that a lead has with the company.
- CDPs and DMPs conduct website tracking — CRMs do not.
- CDPs are able to establish a single profile for each customer encompassing every marketing channel, while DMPs and CRMs are limited to specific touchpoints in the customer journey.
