Marketing, sales, and product data are essential to best serve customers. You also need a way to collect and manage it. This need can be fulfilled by two platforms: customer relationship management (CRM) and customer data platforms (CDPs). The newest entrants to this space are Customer Data Platforms (CDPs). These platforms are used to better understand customer behavior and provide more targeted marketing and sales efforts.
What is a Customer Data Platform?
A customer data platform (CDP) enables you to create and maintain richly descriptive profiles of customers. This view includes all data types and is sourced from all data repositories.
CDP can unify and collect a variety of data from websites, point-of-sale systems, and social media. They also integrate with your comprehensive business management solutions like ERP, CRM, and eCommerce solutions. The platform unites and cleans data, making it available to all systems within the organization for the purpose of supporting the creation of customer profiles, segmentation, and more targeted marketing.
Marketers can create advanced analytics using the right analytical and reporting tools, which can be integrated with a CDP platform. This includes reports, dashboards, and KPIs that can provide customer segmentation and sentiment insight they can use for personalizing marketing campaigns and customer interactions.
A Forrester survey revealed that, while many organizations have significantly increased the amount of consumer data they have, only half of them are able to use the data to personalize customer interactions. A majority (38%) of respondents to the survey identified siloed consumer data as a barrier to personalized customer interactions. A Gartner survey also found that organizations that share data with other departments can enjoy a threefold increase in economic benefits than those that don't.
How is customer data platform (CDP) different from CRM and complements CRMs?
The key difference between CRMs and CDPs is that CRMs track interactions between specific accounts and your brand.
CDPs monitor overall customer behavior and provide insight into the customer journey. They use integrations and code snippets embedded within different touchpoints to automatically collect, clean, and consolidate user behavior data, such as desktop, mobile devices, and even CRMs.
CRM, on the other hand, manages individual customer interactions through the manual collection of information during 1-on-1 transactions between customers. CRM data is extremely specific as it refers to details that are unique to customers, such as their names, contact information, and past interactions.
What do CRM and CDP do to gather and manage data?
CDPs automatically collect data using different touchpoints and devices via APIs and code. This allows them to gather large amounts of customer data.
The majority of data is first-party data. These data are directly collected from customers through forms, cookies, and other digital engagements. You have complete control of it. Some of the data contained in a CDP are third-party data, information collected by outside providers. This means that your company doesn't have any direct connection with the consumer. This is important because third-party data can be stolen, bought, or collected without consent.
Because the data comes from multiple sources, CDP data cannot be used during collection. The CDP cleans and combines the data after collecting it. To transform the "clean" data into a single view you can use to analyze brand behavior, the central database stores it.
The automated data collection from CDP allows you to store data in the database for extended periods of time. This allows you to build customer profiles and create more strategic campaigns.
On the other side, CRM data is created manually by salespeople or via automation tools to enter contact engagements and sales activity. This is sometimes referred to as first-party data about consumers. It is the data that your company owns. CRM data is focused on recording an interpersonal or transactional interaction, such as notes from the most recent sales call. This information can be used to guide future interactions. Integrations with ERP, financial, and marketing automation systems can bring additional data into the CRM system.
How to determine if an organization needs customer data platform (CDP)?
It's not an issue of either/or for most companies to choose between CRMs and CDPs.
It's easy for a CDP to be the right solution for you if you are addressing a specific need in your team. If you are looking for ways to improve the user experience of your audience and to be more competitive in your industry, then consider investing in both.
If you want to manage customer relationships more efficiently and personally, a CRM like Microsoft Dynamics 365 Sales and Marketing is a great solution. CRMs are great for all types of teams and can be invaluable in an emergency. Many businesses start with a CRM but realize it's not enough.
CRMs are not like CDPs. They don't give a single view of all the information you have about each customer. CRMs are designed to aid future interactions with customers.
If you want to know more about your customers and their interactions with your business, a CDP like Dynamics 365 Customer Insights is a great tool. This gives you a wider view of your customers that you can use in many ways, from marketing to product development to business decisions.
Can CRMs and CDPs be used together?
Although CRMs and CDPs have different sales and marketing data management options, they don't necessarily need to be chosen. Each plays a unique and valuable role in improving customer experience.
You can use the rich source of PII/behavioral data in a CRM to pull it into your CDP, where it is normalized and becomes part of the overall customer profile in real-time. You can also use CRM to input the CDP. However, this is less common due to integration problems in many CRM systems.
Get in touch with us if you would like to start a CDP journey, CRM journey, or both!
Saurav Pranay
Saurav is a Microsoft certified member for Dynamic and Project Online and has over fifteen years of experience in Project and Process management and has been involved in many Dynamics and Project Online implementations and have addressed solutions to challenging business needs by clients.
Posted by Advaiya
CDPComprehensive business managementCRMCRM systemsCRMs and CDPsCustomer data platformCustomer engagement solutionCustomer insight consultingCustomer insightsCustomer relationship management solutionsDynamics 365 Customer InsightsERP/CRM systemsMicrosoft Dynamics 365 Sales and MarketingMicrosoft Dynamics CRM
