Customer data is crucial to build strong relationships that foster brand loyalty and maximize your marketing results. That’s why digital marketing software is invaluable in helping businesses track and analyze crucial information about their audience.
Two such software solutions are customer relationship management (CRM) and customer data platforms (CDPs). While both tools enable you to track and manage customer data, they aren’t interchangeable terms and offer different features.
On this page, we’ll discuss the major differences between a CRM vs. CDP. Here’s a quick overview of the topics we’ll cover below:
- What is a CRM?
- What is a CDP?
- What is the difference between a CRM and CDP?
- Is a CRM or CDP better for your business?
So keep reading to learn more!
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What is a CRM?
Before we dive into the core differences between CRM vs. CDP platforms, let’s go over their definitions.
CRM platforms track valuable information about your customers and clients, such as their:
- Phone number
- Email address
- Job title
- And more
By tracking these details, CRM software helps you stay connected with current and potential customers and deliver a personalized experience tailored to their interests and needs.
What is a CDP?
CDP stands for customer data platform. It’s software that stores and unifies customer data in real-time. A CDP creates an individualized profile detailing the interactions and behaviors of each of your current customers and prospects.
For example, it can track their:
- Website behaviors
- Marketing channel interactions
- And more
This data helps you analyze each stage of your current and potential customer’s journey on their path toward conversion.
What is the difference between a CRM and CDP?
Now that we’ve discussed the definitions of a CRM and CDP let’s answer your main question, “what is the difference between a CRM and CDP?”
Here are four major differences between a CRM vs. CDP:
One of the most significant differences between a CRM and CDP is their use. Let’s explore common CRM and CDP use cases below:
The purpose of a CRM is to help you improve interactions and relationships with your customers.
CRMs help you track the history of your company’s relationship with current and potential customers to inform your future interactions. This information helps your sales team contact leads and clients at the right time to close more deals.
In addition, it helps your marketing team implement personalized marketing messages that resonate with specific customers to encourage more leads and conversions.
On the other hand, the purpose of a CDP is to help you better understand your customers’ behaviors. CDPs enable you to track and manage customer data across multiple touchpoints and marketing channels to gain a single, unified view of your customer’s journey.
For example, you can view how customers first discovered your business and which pages and content they interacted with before making a purchase.
2. Data types
CRMs and CDPs also track different types of data.
A CRM collects first-party data that helps you stay in touch and form long-lasting relationships with your customers and clients.
A CRM can collect data like:
- Email addresses
- Job titles
- Company names
- Phone numbers
- Social media profiles
- Purchase history
CRM data is crucial in helping you communicate with prospects to close more deals. It also helps you stay in touch with current customers to build brand loyalty and encourage them to purchase your products and services again in the future.
A CDP collects data that helps you learn about your audience’s behavior on your website and how they interact with your marketing channels. CDPs collect first, second, and third-party data from your website, email lists, social media pages, and more.
It then stores and organizes this data into individual profiles for each of your current and potential customers.
With CDP data, you can view how your customers interact with your business across multiple channels to see a complete picture of your customer’s journey from initial awareness to conversion.
You can track:
- Which pages users visit on your website
- How much time users spend on your site
- What content they view
- Which marketing channels they interact with (social media, email, etc.)
- And more
For example, you might notice that one of your customers first found your business through a search on Google. They then visited your website and read one of your blog posts before filling out a contact form and making a purchase.
3. Data collection
Another significant difference between CDPs and CRMs is how they collect and gather data.
CRM data is gathered manually in most cases. For example, your sales team will update the data in your CRM each time they interact with one of your prospects.
This data can include notes about the:
- Sales pitch
- Topics your team discussed with a lead
- Previous interactions with a potential customer
- Contact details
On the other hand, CDP data is gathered automatically. That means you can collect valuable information about your audience’s behaviors with little to no effort on your part.
4. Data analysis
Analyzing your data is essential to gain valuable insights that can help you improve your sales and marketing strategies. How you analyze your data differs depending on whether you use CRM or CDP software.
Analyzing data stored in a CRM helps you streamline your sales processes and manage your sales pipeline.
For example, your entire sales team can use the data in your CRM to ensure they reach out to your leads at the right time with the helpful information to close more deals for your business.
Analyzing the data stored in a CDP helps you understand your customer’s behavior and journey from awareness to conversion.
As a result, you can view which marketing channels and strategies drive the most conversions and sales for your business. You can then optimize these strategies to drive better results for your company in the future.
CRM vs. CDP: Which is the right fit for your business?
So, now that we’ve discussed how CDPs and CRMs differ, you might be wondering which one is the right fit for your business.
Let’s dive into who should use a CRM vs. CDP below:
Who should use a CRM?
You should consider using a CRM platform if you need to:
- Store and maintain lead and client information in a central place for your entire team to access
- Track and store an abundance of customer and client data
- Track customer and client interactions with multiple members of your team
- Monitor your sales team’s productivity and structure
- Better understand and improve your sales funnel
If you want to keep your sales team on the same page and help them contact your leads at the right time to drive conversions, investing in CRM software is a must.
Who should use a CDP?
You should consider using a CDP if you need to:
- Automatically collect valuable customer and client data in a central place
- Track the entire journey of your customer and clients
- Analyze how your marketing strategies work together to drive conversions
- Optimize your marketing strategies to drive better results
Investing in a CDP is essential if you want to analyze how your customers interact with your business across multiple channels and which strategies drive them towards conversion.
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