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In this article, I am going to share with you data platform comparison – What’s the difference among CDP, DMP, and CRM. You’ll learn the difference and why your business needs a data platform, and how to select.

What’s CDP

CDP stands for the customer data platform. It’s developed to collect and unify the data for the purpose to build a simple view of a customer profile. So, basically, CDP is able to connect to and integrate with CRM, chatbot, advertising, POS/Online shopping cart, email, App, social media and web analytic, etc digital platforms. Because of that, CDP enables you to eliminate the data silos.

Secondly, CDP improves customer analytics and segmentation. For example, you could identify Louis who clicks through your ads banner in CNN, when engages with your post on Facebook, which email he opens you blasted through Salesforce email studio. The omnichannel view of a customer is not a roadblock anymore.

Finally based on this insight of customer behavior, CDP support 1:1 personalized communication. Thus, you can activate customer data by using CDP, to feed the tailor-made discount offer or product information to a customer through an omnichannel approach.

Nowadays, well known CDPs are available many on the market, such as Salesforce Datorama, Lytics

What’s CRM

CRM is short for customer relationship management. It enables us to store customer personally identifiable information (PII) or we call deterministic data. Such as phone number, name, email address. Basically, the sales team uses CRM to record the interaction and purchase history with a customer manually. Also, the marketing team leverages it to implement 1:1 communication on email, mobile, web, App, and chatbot channel.

CDP and CRM both can store PII data, but the cons of a CRM is its capacity is not able to fully integrate data and provide a limited view of a customer.

For example, sales can see a customer interaction time and purchase record in CRM, but a sales can’t see a customer engagement on your company social media post, advertising banner, and which page a customer has viewed on the web. 

What’s DMP

DMP is an abbreviation of the data management platform. It can only store probabilistic data, such as cookies, mobile ID, social ID, etc, instead of PII. DMP is primarily used by advertisers. Advertisers leverage DMP to set up advanced targeting, increase reach accuracy, and optimize the advertising spending efficiency.

Basically, every advertising platform has its own DMP given to advertisers to leverage for free, such as Alimama, Tencent, and Google marketing platform, etc. Or advertisers can invest in one such as Salesforce audience studio (Former Krux). to eliminate the data silos issue.

However, the cons of DMP is it can’t identify a customer due to only storing anonymous data. So, it disables 1:1 personalized communication. Also, duplicate and overlap customers waste advertising dollars, and reduce communication efficiency.

Most importantly, data will be more often short-lived because cookies will be clear very fast. It’s difficult to implement continuous communication with your target customers.

Why it matters

The beauty of digital enables us to track, store customer data, and build up an accurate communication cycle for business purposes. Once you recognize data is an asset, you don’t wanna lose them. Then, with more fragmented data coming in, shaping a simple view of customers can relieve your depression and enhance the communication quality. So, you need a data platform to store and unify your business data asset for the purpose to personalise the communication and enhance the cost-efficiency.

When you are selecting a data platform, your business requirement and budget are factors to consider. So difference among CDP, CRM and DMP can help you make a right decision after you understand their pros and cons.

data platform difference

How to select 

Basically, each platform has its unique beauty and value. When considering a platform, cost includes tech staff and platform features, but also analyze what’s your team structure and business model. If your business is customer-centric, such as subscription model, and very online-focused, I’ll suggest below an order from bottom to top, to consider the investment.

data platform selection

Start with CRM

Acquiring a new customer is difficult and expensive, prospect collection is also not easy. On the other hand, customer retention costs much lower. So valuing each prospect and new customers coming in are critical for your business success.

CRM is a fundamental platform to help you with this because it’s a cheaper and efficient approach to store PII data. Different from the advertising platform, once you drive in PII data stored in CRM, you can further communicate with these prospects in an automated way through email, App, Web chatbot, social media, rather than keep spending in advertising through the DMP approach. Obviously, CRM is a place to store your data asset and retain customers, while saving dollars.

Furthermore, nowadays many CRM enables matching PII with probabilistic data in a single channel view. Take Hubspot for example, the platform enables us to connect with Facebook ads manager. Once a customer submits an inquiry on your web or App, Hubspot can help you try matching this customer profile on Facebook. Thus, you can activate this data and feed a 1:1 advertising message to this customer on Facebook.

If it’s not urgent to implement an omnichannel strategy on a large scale, basically CRM can fulfill CDP, CRM, and DMP in a single channel way.

DMP is a further step

DMP is primarily used by advertisers. It represents you are ready to invest many dollars on omnichannel, to drive exposure on a wider scale and more new customers. So you need a DMP to store probabilistic data such as cookies and optimize the reach accuracy.

Salesforce marketing cloud is a full gear marketing paradise. Apart from CRM, salesforce audience studio is a flexible and friendly-integrability option. It charges by volume, so you can well foresee monthly spending by controlling the advertising traffic. Also, it has a friendly integration feature. Google, Facebook, and Yahoo, etc top tier channels are just one-click to connect, but also tech staff can customize API to connect to other niche digital channels on the platform.

Most importantly, when you are using Salesforce CRM, it’s easy to build a connection between CRM and audience studio. That’s the beauty.

CDP is an advanced approach

When you recognize, omnichannel is a must-have strategy, and 1:1 communication is becoming a key factor to protect business market share, and increase sales. It’s time to consider a customer data platform. CDP is expensive, so I’ll suggest aligning with different division heads to summarise the top list of why to use. (Sales, marketing, customer service. Then, based on the needs, you need to consider what features to have and whether need more tech staff.

In Conclusion

Data platform investment is one key part of your business data marketing strategy. It can be a tactical approach or a long-term strategy to retain customer relationships and build brand advocacy. Clear understanding can help you save dollars.

I hope you enjoy reading What’s difference among CDP, CRM & DMP Data Platform, and find it helpful. if you did, please support us by doing one of the things as listed below, because it always helps out to our channel.

Louis Lu

By Louis Lu

Growth Hacker & Digital Marketer, with a proven record of over 11 years experience in 20+ Asian markets, and 24,000+ connections in Linkedin

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