Customer Data Platforms (CDP) and Customer Relationship Management (CRM) are two types of software that help businesses manage their customers. They both serve a similar purpose: to help you to identify, engage, and grow your customer base. However, there are some key differences between the two which should be understood in order to make sure that you’re getting the most out of your business toolkit.
Understanding the Customer Relationship Management (CRM) for Modern day Marketing and Growth teams
Customer Relationship Management (CRM) refers to a strategy, process, or tool that helps businesses manage their interactions with customers and prospects. In today's highly competitive business environment, the importance of retaining existing customers and attracting new ones cannot be overemphasised. This is where a CRM comes in handy.
These days - with all the everchanging innovation from product teams; features of CRM might vary from platform to platform. Depending on your needs for your Growth goals - Marketing, Growth and Product leaders tend to look for different things in a CRM for their Growth stack
A CRM system allows businesses to collect, organise, and analyse customer data to provide a more personalised and tailored experience. It allows businesses to track customer interactions across various touchpoints, such as email, social media, website, and phone, which helps in understanding customer information and behaviour.
One of the key benefits of a CRM system is that it enables businesses to streamline their sales and marketing processes. By automating mundane tasks such as lead nurturing and follow-up, businesses can free up their sales and marketing teams to focus on more strategic tasks. This, in turn, can lead to higher productivity, better lead quality, and increased revenue.
Another important benefit of a CRM system is that it provides businesses with actionable insights into their customer base. By analysing customer data, businesses can gain a better understanding of their target audience, identify trends, and make data-driven decisions. This can help businesses tailor their marketing campaigns, manage customer service and support, and drive customer loyalty.
One of our favourite Marketing Automation tool is Customer.io, you'll be able to do wonders with your lifecycle marketing and nurturing campaigns with it
Watch the customer.io team build campaigns for Marketplace
Best Customer Data Platforms (CDP) to choose from this 2023
A Customer Data Platform (CDP) is a technology solution that allows businesses to collect and unify customer data from various sources into a single, centralised platform. It helps businesses create a unified view of their customers, which can be used to drive personalised experiences and improve customer engagement.
Some of the key features you can expect from CDPs;
- Provide a 360-degree view of a customer’s journeys
- Accurately capture customers’ interactions
- Automatically updates data from multiple sources and sync them in real-time
One of the key benefits of a CDP is that it enables businesses to collect data from multiple sources, such as website visits, social media interactions, email marketing campaigns, and landing pages. This helps businesses create a comprehensive view of their customer's behaviour and preferences, which can be used to tailor marketing campaigns and improve customer experiences.
According to our friends at Segment; here's how they picture their story of CDP
Think about the last time you purchased a computer online. Your research process was probably something like this
- Google searched, “The best computers of the year”
- Visited a number of computer review websites
- Visited a few retailers that sell computers
- Watched a few videos to learn more about the technical details of different computers
When you finally decided on what type of computer to buy, you probably researched the best place to buy it from. You visited a few additional websites to compare costs, shipping times, return policies, and more.
Throughout all of that, chances are you interacted multiple times with the company that you ultimately purchased from — through website visits, live chat, Facebook ads, and email.
You might’ve noticed that each interaction with that company resulted in an experience that felt more personalized to you. The ads you saw on Facebook felt extremely relevant to you, the website may have made subtle changes to seem more personal to what you were looking for, and their email follow-up, despite the fact that it was automated, felt like it was crafted for you.
How was the company doing all of this? It’s likely they were using a Customer Data Platform (CDP) to tailor their marketing to you.
Summing it up - the importance and the benefit of a CDP is that it provides businesses (especially Growth, Marketing and Product teams ) with the ability to segment their customer base.
By segmenting customers based on their behaviour and preferences, businesses can create personalised marketing campaigns that are more likely to resonate with their audience. This can lead to higher conversion rates, increased customer satisfaction, and ultimately, increased revenue.
How does a CDP differ from a CRM?
The main difference between CRMs and CDPs is that CRMs don't have a centralised repository of information about your customers--they're more limited in scope. A CDP lets you gather up all the various pieces of information about each individual customer in one place so they're easier to access when needed; this makes it easier for companies to provide a better experience for their customers by understanding them better than ever before.
A CDP is a type of system that gathers data on customer actions within your digital product or services, while a CRM relies heavily on direct interactions between the customer and the brand.
CDPs are more powerful than CRMs in the way it aggregates, consolidates and resolves personal information from multiple sources like landing page forms and website activity into one place for easy access. This makes it easier for businesses to manage customer data by tracking anonymous users (which CRMs cannot do) so you can take action based on behavioural patterns detected by analysing past behaviour data over time.
The flexibility offered by CDPs also allows you to connect seamlessly with third-party applications such as product analytics tools or business intelligence platforms -- something that cannot be done easily with a traditional CRM. This means that businesses can get more quality from their data and use it to personalise their offerings and enhance their digital product, which ultimately leads to better customer experiences.
CDPs and CRMs are both software tools used by companies to manage their customers. While they may have similarities, there are also key differences between them. The main difference is that CDPs are much more powerful than CRMs across the board; allowing companies to store more information about each customer and use it for marketing purposes.
Benefits of using CDP over CRM
If you're looking for a better tool to manage your leads and generate more sales, CDP is the way to go. Here are some of the benefits of using CDP over CRM:
- Lead generation: A good lead management system will help you turn interested prospects into qualified leads by providing them with useful information about your products or services. It should also give you an easy way to track whether they have visited your website, downloaded an ebook or whitepaper and so on - all so that you know what stage they're at in their potential buying journey.
- Lead nurturing/management: Once someone has expressed interest in what you do (and perhaps even signed up for emails), there's still work left to do before that person can be considered a customer ready for sale--which is why it's important for businesses who want their marketing efforts to pay off well into the future not just focus on getting as many new subscribers as possible but also provide ongoing support throughout every stage of their journey until they actually make a purchase decision .
- Cost effectiveness: CRMs can be expensive because they require dedicated staff members who must collect data manually from multiple sources such as social media channels etc., while CDPs often come preloaded with templates which allow users access all relevant information without having dedicated resources - for example; segment charges you based on your MTU ( Monthly Tracked Users ) instead of "List size" or "leads" that are inactive
Thoughts from the team at Devhaus?: Use them both
You can use CDP and CRM together to track the data about your website visitors, and then use that data to better manage your customer relationships.
If you're not sure what kind of information you want to collect about your website visitors, check out this article on how to choose the right analytics tool for your business.
Here are the tools we'd strongly recommend you having in your growth stack:
Here's our Solution Architect - House; walking you through how to plan your 1st Party Data Strategy by
- Planning your event tracking plan and coming through with the right Data Taxonomy for your team
- How to map your properties in Segment ( with Mixpanel )
How to integrate your CDP and CRM into Webflow
For our friends who are using Webflow as your core Content Management System (CMS) - here's a video from our bossman McGuire Brannon - Webflow's VP of Education & Community, running through how they've used Segment as their CDP as well
For our friends who're new to Devhaus - here's the brief; Webflow is a drag and drop website builder that allows you to create a BEAUTIFUL websites without writing code (usually). This means you can use it to integrate your CDP or CRM with ease, which can help you improve the user experience of both platforms on your site.