CRM vs. CDP vs. DMP: Understanding the differences for your marketing goals
You’ve probably heard these three acronyms in meetings and stakeholder chats, and sometimes in the same sentence. But what are the distinctions between a CRM, CDP, and DMP? And how do companies use each to manage and act on customer data?
Making the right selection and understanding their differences will determine your business strategies. So, let’s set the record straight.
What is the difference between a DMP, CRM, and CDP?
A data management platform (DMP) stores, organizes, and manages data from first-, second-, and third-party platforms. This data is often anonymized and used for marketing tasks like audience segmentation. Storage is short-term.
On the other hand, a customer relationship management platform (CRM) is designed for sales. It gathers prospect information through the direct contact customers have with your brand.
Like a DMP, a customer data platform (CDP) is designed for marketing. However, the data CDPs gather is typically persistent. A CDP gathers this customer data from several different sources to build a unified view of your customer so your team can precisely execute marketing strategies.
To sum it up:
- CRMs are tools for gathering customer information to initiate direct contact with these customers
- DMPs gather and manage short-term data for marketing activities
- CDPs build persistent profiles of your customers for marketing activities
Now that we have the basics covered, let’s dive into the specifics of CRMs, DMPs, and CDPs, covering how they differ, how they work together, and the best customer for each type of platform. Let’s start with how the three collect their data.
How DMPs, CRMs, and CDPs collect customer data
Every business ingests some form of first-party data — data that’s provided directly by the customer. This may include contact information like phone numbers or emails, job titles, names, purchased products, subscriptions, or even addresses.
CRM data is usually gathered manually. This means sales development representatives (SDRs) gather contact information through sign-up forms, emails, social media interactions, or surveys.
On the other hand, CDP and DMP data is collected automatically through avenues such as web tracking, mobile apps, APIs, and integrations.
What’s more, DMP data is rarely first-party, and what first-party information that is gathered is anonymized.
These days, how that data is stored can vary by platform. For instance, Simon Data runs on Snowflake, a cloud data platform that takes all structured and unstructured data and unifies it.
Not all platforms are created equal!
What are the benefits of a B2C CRM?
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Marketing is tough, and competition is fierce. A sales team would have a hard time keeping up with the complexities of modern marketing without a good customer relationship management platform in place. Let’s look at the most significant benefits of using a CRM:
More consistent customer interactions
Have you ever received a newsletter that you only vaguely recalled signing up for eight months earlier? Chances are you hit the unsubscribe button and move on to your next task.
A CRM helps you stay at the front of your prospects’ minds by constantly staying in touch with them — whether by email, direct mail, or targeted campaigns. With CRM automation, salespeople stay on top of each account, communicating with leads at optimal times and anticipating objections.
Improved customer loyalty
No customer likes feeling like a number, and a CRM ensures that you treat every customer as an individual. A good CRM will help marketing teams track details about their interactions with each customer so that they can build better relationships.
With a CRM, marketing teams can track customer interactions, preferences, and histories, and use that information to deliver a more personalized experience. By understanding each customer’s unique identifiers, you step up your customer experience.
Improved decision making
A customer relationship management system offers reporting and analytics features for improved, data-driven decision-making. Good CRMs often include near-real-time data capture, guiding your customer journey with a better-informed sales process.
Who should use a CRM?
Are you a sales or billing team? Do you offer customer support? Then you’re the best candidate for the features and tools offered by a CRM.
If you send quotes or work with outbound marketing strategies to contact potential customers who require direct interaction, a CRM is designed for you. CRMs enrich customer-facing roles by arming them with data, automation, and a single view of the customer.
It’s important to note that CRMs and CDPs can work in tandem. In fact, depending on your marketing goals, it’s often best to integrate both into your workflow. As an example, Simon Data provides a list of all the platforms it integrates with in case you want to connect it to your existing CRM.
CRM example: Salesforce
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One of the best examples of a CRM is Salesforce. As the leader in the CRM industry, Salesforce helps sales, service, and marketing teams deliver an exceptional customer experience through automation and features that speed up the lead outreach process.
Salesforce enables personalized messaging that meets prospects where they are. As a CRM, Salesforce offers a more organized approach to selling that ultimately drives revenue.
What are the benefits of a DMP?
Think of a DMP as a couple of tools in a Swiss army knife, but not the whole package. DMPs do some of what CDPs do, and, as a result, they’re helpful for paid advertisers just looking to sort through second- and third-party data or marketers who want to segment their audience. But, many DMPs integrate into CDPs! Here’s how DMPs help marketers:
Better organization with centralized data
Much like a CDP, DMPs centralize your data. The difference is you’ll usually have this data anonymized and for the short term. However, this is still a massive benefit for marketers who bounce between tools to get insights. You won’t need to gather your customer data from multiple sources and cross-reference for accuracy. A DMP does it for you!
Audience segmentation for more personalized marketing
Also like a CDP, a DMP offers segmentation so you can divide your audience into buckets based on real-time data. Rather than sorting for this information yourself, a DMP can do this in seconds and update information regularly.
Better audience insights using second- and third-party data
Maybe you feel like you can sort through first-party data yourself, but a DMP can serve you insights from your third-party and second-party data to help you identify audiences you’re missing or neglecting. Perhaps you’ve been missing an audience of users who visit your site frequently — a DMP can help surface a blind spot in your marketing strategy.
Who should use a DMP?
DMPs are particularly helpful for those working in the paid media space. DMPs quickly serve anonymous data that can help you target new groups. DMPs will usually give you prebuilt targets for your display ads, making your job as a paid media specialist easier.
But if you need more for your martech stack, like persistent data storage of existing and potential customers, a CDP is the way to go.
DMP example: Lotame
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There are a lot of DMPs out there, but Lotame is one of the most popular. Lotame does everything you would expect from a DMP: aggregates, analyzes, and activates your anonymous, short-term data in a cookieless landscape.
Lotame even lets you import first-party data as well, giving you a more holistic view of your data. Lotame offers digital marketers a quick way to tap into new audiences with paid media.
What are the benefits of a CDP?
Using a customer data platform for your marketing campaigns determines whether you reach your key performance indicators (KPIs) or fall short. A CDP offers several benefits:
Removal of data silos
Data becomes harder to use when it’s siloed inside different sources and applications. For improved messaging and more proactive marketing campaigns, a CDP works to unify this data — whether it’s zero-, first-, second-, third-party, online, and offline data.
Deeper customer insights
A customer data platform enables marketers to build comprehensive customer profiles (i.e., customer 360s) that offer insight into real pain points, interests, wants, needs, and even firmographic data (the equivalent of demographic data for B2Bs). With unified customer profiles, marketing teams can execute new marketing strategies and create hyper-segmented and personalized campaigns.
Savings through automation
In a data-driven world, automation is your best friend. It takes repetitive yet critical tasks off your to-do list, saving you time and resources so you can focus on higher-ROI initiatives. Automation also allows marketers to establish evergreen strategies that bring in a consistent, predictable stream of new leads and more data, all while building brand awareness.
Increased personalization
Today, marketing is all about personalization. About 75% of consumers are more likely to purchase from a business that offers them a personalized experience. According to McKinsey, even B2B customers prefer an ongoing omnichannel experience that’s personalized to them.
Personalized experiences are so powerful that customers are willing to switch to providers that offer them. Yet you can’t launch fully personalized marketing campaigns without a platform that gathers, cleans, centralizes, and organizes your data to make it usable. With a CDP, marketers draw data-driven insights about customers' wants and needs.
Better prediction with ML and AI
AI and ML enhance personalization in marketing campaigns, and the ability to predict the wants, needs, and, in some cases, actions of its customers takes any brand’s marketing efforts to the next level. Brands gain a competitive advantage by using predictive analysis to find new marketing opportunities, customer lifecycle, and better manage resources.
Predictive modeling can forecast churn, likelihood to purchase, and even products customers might be interested in. Sounds like it does half the work for you, doesn’t it? That’s why ML and AI are important to consider when buying a CDP.
Who should use a CDP?
CDPs combine zero-, first-, second-, and third-party data for more effective behind-the-scenes marketing. Marketing channels like social media, email marketing, SMS, and pay-per-click (PPC) make CDPs ideal for marketing teams who want to grow company revenue, expand market share, and market new product initiatives.
CDP example: Simon Data
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The Simon Data CDP is a no-code customer data platform designed to help marketing and tech teams deliver results in the form of new customers and better retention. With the automation and tools needed to create a true omnichannel experience, Simon Data’s customer data platform enables teams to establish ongoing marketing funnels that are hyper-personalized and built with the customer in mind.
Simon’s CDP’s invaluable features provide the functionality to meet all your marketing team’s needs:
- Audience management
- Email marketing campaigns
- Customer identity
- Predictive modeling
- Data unification
- Cross-channel orchestration
- Multichannel orchestration & experimentation
- Customer data segmentation
Let’s say you’re trying to build a recurring workflow that sends email messages to specific customer segments about special deals or seasonal offers. Simon Data’s dashboard simplifies the automated workflow creation process by enabling you to set your desired frequency, maximum period, date and time, and messaging.
The Simon CDP combines the automation and detailed data you need to execute highly personalized campaigns that won’t fall flat. Plus, it eliminates the need to work with siloed apps by unifying data collection with robust go-to-market tools.
CRM vs. DMP vs. CDP: Key differences
While both platform types process data for the best sales outcomes, they have some key differences. CRMs shine in the following use cases:
- Increasing customer lifetime value
- Increasing cross-selling and upselling
- Improving customer service
- Gaining insights into customer behavior
DMPs give you these benefits:
- Better organization with centralized data
- Audience segmentation for more personalized marketing
- Better audience insights using second- and third-party data
And on the other hand, here are some ideal CDP uses:
- Activating real-time, zero-, and first-party customer data you already have
- Executing data-driven marketing campaigns
- Managing the marketing lifecycle
- Unifying and segmenting your customer data
- Used by and designed for marketers
These distinctions can empower you to build a martech stack with confidence. Now, you should have a better idea of what your company needs and who needs each tool. Want to see a CDP in action? Book a demo with our team today.