Many marketers are familiar with Customer Relationship Management (CRM) platforms and Data Management Platforms (DMP), but lately, a new term, Customer Data Platform (CDPs) are gaining traction in the market.
According to Gartner, CMOs around the world invests two-thirds of their budget in supporting customer retention and growth. As customers are interacting with brands over phones, tablets, desktops, smart TVs and through other channels, marketers are portraying an acute need for a platform that provides them with a unified view of their customers’ data and activity. That’s how CDPs started gaining traction.
A CDP is a marketing system that unifies a company’s customer data from marketing and other channels.
According to experts, CDP is designed specifically as a central location for — customer profiles, customer identifier, web and mobile session details, app interaction details, email responses, lifecycle stage update and so forth. All this data is organized and structured in a manner so that it could be easily managed by a marketer with zero fuss.
CDPs are meant for marketers
CDPs are made for marketers and these platforms allow them to have a holistic view of every single customer. With the help of a CDP, a marketer could easily access all sorts of data(browsing history, previous purchases, lifecycle stage, email, contact number and more). When we break down a CDP, these are most important takeaways:
- They are managed by marketers
- They employ a unified and persistent, single database for customer behavior, profile and other related data
- They use a consistent identifier across all the channels for a given customer
- They integrate well with other platforms (CRM, Helpdesks, Ad Services and more) and allows the marketer to use the data in the CDP to be used by external platforms without any change
Now one can argue that a CDP seems similar to CRMs and DMPs — they all collect and store customer data in one platform. But there are glaring differences in how the data is collected and processed. The next section addresses what makes them different from CRMs and DMPs.
Speaking of data, what are the types of data that can be accumulated in a CDP and how does it differ from CRMs and DMPs?
Data Aggregation in CDPs can include:
- Details about customer’s web and mobile sessions
- Demographical data
- Behavioral data
- Data about in-product and in-app usage
- Partner and external app data
- Event and clicks data
- Customer profiles and more
While these are the most important set of data a CDP keeps a track of, it is not limited to just these. For instance, CDPs could be set to track all other sorts of data like email responses, social media mentions and more.
Therefore, it becomes a very useful tool in your business and at times it’s not just useful for marketers, but also for customer support or account managers, as they can closely watch and monitor customer accounts, and resolve any queries that might persist.
How are CDPs different from CRMs and DMPs?
There are several ways CDPs differ from CRMs and DMPs, here are the major ones:
- CDPs can be integrated with different sources together with no technical assistance, while CRMs and DMPs might require assistance from a developer.
- DMPs and CRMs can’t perform advanced identification like CDPs as they lack the consolidated data sets that CDPs are meant to collate.
- Nowadays, CDPs are assisted with AI and ML algorithms to build customer profiles with pure raw data, unlike CRMs and DMPs where you might have to feed data manually.
- CDP can disclose new customer traits that can be used for personalized marketing. CRM and DMP store anonymous user profiles and can only segment the audience.
- CDP can store contextual, demographic, as well as historical data, while CRMs and DMPs can extract only segmented data based on different categories.
Although there are many similarities as well between CRMs, DMPs, and CDPs, and in certain ways, they complement each other, if you are in the market looking for third-party solutions for a short-term basis, CRMs and DMPs in combination will work out well. But, if you are out there for a long run in the market, and want to have long-term relations with your customers by collating all data at one place, CDPs are your best bet.