Batman had an Alfred. James Bond had a Moneypenny. Buffy had a Giles.
Just like every leading hero and heroine needs a sidekick, an aide-de-camp—whatever you want to call the person in their life who knows them better than they know themselves—every business needs a means of gathering and analyzing customer data.
These days, there are three main types of platforms that businesses rely on as tools for building, managing, and nurturing their customer base:
- Customer Relationship Management (CRMs)
- Customer Data Platforms (CDPs)
- Data Management Platforms (DMPs)
In the most basic sense, each of these platforms helps gather and keep track of customer data. But don’t get it twisted: each has its own specific purpose.
Understanding these data platforms’ differences is crucial for learning how they all work together and selecting the right one for your organization.
CRM: The personal assistant
CRMs provide a full, 360-degree view of each customer by chronicling the story of their relationship with your business.
Just like a personal assistant—think Mad Men’s Joan Harris or Suits’s Donna Paulsen—a CRM’s job is to keep track of everything there is to know about a person (or an entire customer base), which makes them an asset for sales teams.
Also like a personal assistant, CRMs are excellent at anticipating needs. Sales teams use CRMs to learn more about customer behavior, segment them accordingly, and continuously work on boosting brand loyalty by nurturing those segments.
The data that CRMs rely on is, by and large, first-party data, which restricts the scope of what’s known by a CRM to sources owned by the business using it. For example, a CRM cannot keep tabs on a customer’s behavior on social media, but it can store data that a customer submits to a business’s website—like their name, email address, and phone number.
CDP: The personal genius
The biggest difference between CDPs—sometimes known as Customer 360s—and CRMs is that CDPs fill a gap in the CRM’s capability by collecting personally identifiable information (PII) and first-party customer data from external sources.
In this way, the main job of a CDP is personalization – enhancing a business’s understanding of a customer in a way that engages them effectively.
CDPs gather information about customers that paints a much more detailed picture of a contact than CRMs do. This makes them more valuable to marketing than sales teams for segmenting and targeting customers.
The ability of CDPs to help with personalization also makes their metaphorical role more nuanced than “personal assistant.” Instead, they’re more like a personal genius who can dig deeper for hard-to-get information and figure out what makes someone tick, like James Bond’s Q.
DMP: The scout
Out of these three types of platforms, DMPs are the odd ones out. Where CRMs and CDPs use first-party data to build detailed profiles of specific customers, DMPs catalog anonymized third-party data about a business’s audience.
Put another way, the role of DMPs is less about knowing the story of a customer’s journey and more about tapping into the facts that point to trends within a larger group of customers. Like Star Trek’s Spock, DMPs are analytical and aren’t concerned with personal details. Their focus is on scouting out the field to figure out what opportunities lie ahead.
For this reason, DMPs are well-suited for identifying key audience attributes and using those to help a business prospect brand-new customers. This is also why this type of platform, like CDPs, is typically managed by marketing teams for top-of-funnel strategies.
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Tips & FAQs
Among these three types of platforms, CRMs tend to be the most recognizable. And with good reason: as their popularity has increased, CRMs have gone from a helpful management tool for sales teams to an asset for businesses of all sizes. As a result, the market value for CRM software has consistently been on the rise for years, surpassing $96 billion in 2022.
That said, against the backdrop of the popularity of CRMs, the value-add that CDPs and DMPs offer within this trio of platforms can get lost in the shuffle. This can leave businesses asking questions like these about the ways these platforms work together and what considerations they should take into account.
Do I even need a CDP and/or a DMP?
You may not if your business revolves almost exclusively around sales and customer service. However, if your business also depends on digital marketing and advertising to fill your sales funnel, a DMP can help increase the effectiveness of your campaigns. Furthermore, a CDP offers the ability to nurture current and potential customers by building more detailed profiles of them, which can help you build better, more personalized experiences.
Can my current team implement and use a CRM, CDP, and DMP?
Skill requirements and overall usability can vary depending on the vendor you choose for these platforms.
As original out-of-the-box configurable online software designed to be set up in minutes, CRMs are the most user-friendly. CDPs are more complex, requiring a lot of integration that’s made easier when you have some technical knowledge. Finally, DMPs rank closely with CDPs in terms of complexity, although the technical skill required for implementing them varies by vendor.
How much more of a budget do I need to support a CDP and DMP in addition to a CRM?
Once again, the cost of these types of platforms can vary depending on the vendor. Overall, however, there are more budget-friendly options available for CRMs and DMPs than for CDPs. This is down to the quality and comprehensiveness of the data supplied by CDPs.
At the end of the day, these platforms work best together
CRM vs. CDP vs. DMP: No matter what you’re working with, every business leader knows that nurturing the relationship between business and customer is crucial to success. And, with more ways than ever to connect with customers, managing the information surrounding them is the first step to engaging them meaningfully.
To accomplish that, it’s important to remember these three platforms work best when used together. Alone, the right CRM can be a sales team’s ideal personal assistant, and the right CDP and CRP can be the personal genius and scout a marketing team needs. But to build stronger, more personalized customer relationships, a business needs more than one sidekick—instead, you need three.
Need help selecting & implementing data platforms?
Reach out to our data consultant team.
