Customer Relation Management (CRM), Data Management Platforms (DMP), and Customer Data Platforms are very common to hear when you work in marketing. They are the vital tools that allow a marketer to work with data and align their campaigns for higher productivity.
Even though all three of these collect and store data, they are different from one another. All three of these possess different capabilities, but it can be hard to differentiate between them.
So, to make it easy for you to understand, let’s start with brief overviews of these three tools and how they take your marketing to the next level using data-driven insights.
Customer Relationship Management (CRM)
CRM is the data management tool that strengthens the communication and relationship between a business and its customers. It contains information regarding the interactions between the sales team and the customers. One needs to have a login id and password to access the data.
The tool also stores data of the customer and improves its access to the business. That makes it easy to know the customers before interacting with them.
The tool can capture customer’s data during their direct communication with the brand. It stores data from different platforms such as live chat, website, phone, marketing materials, social media, and emails. The companies then use this data to avoid redundancy during the conversation with the customers and work more efficiently.
But there are some drawbacks of using CRM. For example, the tool isn’t fully capable of integrating data. It results in a limited perspective of the customer. It lacks at showing customer’s interaction with the brand on social media and their activities of interest on your website.
But apart from that, the CRM collects all the other kinds of data, including current/potential customers’ relevant contact info and history of customer interaction with the brand. The collected data helps in creating a personalized experience for the customer. It also helps in creating a positive relationship with the client.
Data Management Platform (DMP)
The work of the DMP tool is gathering, formatting, and classification of data from different sources. Just like a CRM, this tool also targets and analyses the buyers. On top of that, DMP also tracks enterprises regardless of their title as a customer.
Advertisers majorly use this tool. It helps them in informing and feeding media about campaigns so that advanced targeting can take place. It can work towards collecting data and organizing it. It uses cookie information, IP address, and other device information for user targeting over customer attributes. But the tool also makes sure that the records are anonymous to keep up with privacy.
DMP’s job is to organize and segment the data into different types such as browsing behavior, past purchases, location, etc. It could be first-party data or third-party data. The tool also stores the data in a central location for a brief period. It helps advertisers and marketers in targeting their ads to the audience. To get more info please visit here:
The functioning of DMP works somewhat like this.
- It starts by collecting third-party data through data providers.
- Create and manage a directory of anonymous profiles.
- Work with data, including IP addresses and cookies.
But a drawback of DMP is that the data doesn’t have a long shelf life. That’s because the cookies usually clear up fast, and it can become hard to join the dots of interaction between the website and the visitor.
Customer Data Platform (CDP)
Customer Data Platform or CDP may seem very similar to CRM. But both these tools have very different functions. It’s a data management platform with a unified database. It integrates data from different channels and turns it into a unified profile for a single person/customer.
It focuses on behavioral, demographic, and historical data and uses both external and internal sources. It includes CSV files.
This data is accessible to everyone, including marketing, customer support, sales, and even the finance department.
Customer Data Platforms mainly work with first-party data. But they are also known for taking in data from any source. Also, they work with both known as well as anonymous data. This data may include email address, name, phone number, and other information. It also stores the data for a longer period of time. This builds an accurate profile of the customer and helps to strengthen the relationship with them.
And finally, it shares the data across all the systems that need it. This can have a direct impact on all marketing strategies. The best part is that the CDPs can take data from DMPs and CRMs and share the required information. CDP helps maintain a standard of data that can be used in marketing, paid advertisements, and email platforms, making it easy to market.
The Difference Between These Tools
As we explained each one of the tools to you in detail, you must have known by now that improving the customer experience and creating segments is common among them. But apart from that, CDP has its features, such as it fully integrates the data of the customers. It also produces a unified view for them. On the other hand, CRM somewhat integrates the customer’s data and is usually managed by a company’s sales team. And CMP uses 3d part data, provides temporary storage, and does not provide any single customer view. The thing common between CDP and DMP is that the marketing team manages them. The similarities between CDP and CRM include their ability to extract data from 1st, 2nd, and 3rd parties. And they both store data for future use. The similarities between CRM and DMP are that issues regarding data privacy may occur in the future. CDPs are known for eliminating the redundancy in customer data and unifying it across different channels.
CRM can be used to view purchases made by customers, but it can’t track customers’ engagement on social media that only CDP can do.
To do an effective job, the sales and marketing teams need every data required to study and interact with the potential as well as the existing customers. This gap of data requirement is filled by DMPs and then goes back to CRM for processing. It shows how amazingly these tools work together.