CDP vs CRM: Discover their unique roles in data and relationships

Highlights

You’ll learn about the differences between a customer relationship management platform and a customer data platform:

• CDP: Collects and unifies customer data to create a 360-degree profile
• CRM: Builds and nurtures meaningful customer connections

Data collection

• CDP: Automatically gathers data from multiple sources
• CRM: Gathers insights through hands-on updates and direct interactions

Who use them

• CDP: Focuses on marketing teams for segmentation and insights
• CRM: Helps sales and support teams handle leads and customer relationships

Every time someone clicks, browses or purchases from your brand, they leave valuable digital footprints about who they are and what they want. You receive valuable insights. However, collecting all your customer data only finishes half the job. You complete the job when you know what to do with it, tie it back to your goals and turn it into strategies that grow your business.

What happens when you do not use the right tools? Your customer data gets wasted and you miss opportunities. That’s where a CDP and a CRM enter. While both tools work with customers’ data, they do it in a different manner. 

Understanding CDP vs CRM, their use cases, how they use and manage customer data and how Contentstack integrates both to deliver personalized and data-driven customer experiences will help you use both in tandem. 

What is a CDP?

A customer data platform (CDP) is a system that collects data about every customer from different sources and provides real-time 360-degree customer information. It creates a unified and consistent customer profile on every platform. The customer profile includes their behavioral, demographic and transactional information. Such clean and structured data is accessible to every department for use. 

Examples of CDP data sources

CDPs collect data from:

• Web interactions (browsing history, site visits, clicks and searches)
• Purchase history (in-store transactions, e-commerce orders and product returns)
• Ad campaign (impressions, clicks, conversions and ad spend performance)
• CRM systems (customer account details and support interactions)
• Mobile app engagement (app downloads, in-app behavior and notifications)
• Point-of-sale systems (purchase location and payment methods)
• Email marketing platforms (open rates, click-throughs and segmented audiences)

Benefits of a CDP

• Unified customer view: Collects data from different sources to create a 360-degree customer profile
• Enhanced campaign segmentation: Provide personalized experiences to specific customers using behavior-driven insights
• Predictive analytics: Use machine learning and predictive analytics to forecast customer trends and deliver proactive solutions
• Reduces data silos: Enhances collaboration by uniting departments
• Regulatory compliance: Centralized data management ensures adherence to laws like GDPR and CCPA

How does Contentstack support CDPs?

Contentstack enhances the use of CDPs by providing integration for better data consolidation and activation with our recent acquisition of Lytics. The combination of Contentstack's headless CMS and CDPs makes customer data flow smoothly across all touchpoints. Your teams can use this consolidated data to deliver personalized, omnichannel experiences on every touchpoint. This reduces data silos, allowing different teams to access a unified view of your customers in real-time.

What is a CRM?

Customer relationship management or CRM software strengthens bonds and enhances interactions with current and future customers. Using a CRM, you build and nurture long-term relationships. Your CRM is a central place to manage and analyze historical customer data. The data can enhance customer relationships, refine sales strategies, personalize marketing efforts and drive business growth through more informed decision-making. CRMs collect data from one-to-one interactions between customers and businesses. These interactions include sales calls, support tickets, emails, demos and contracts. 

Use cases of CRM

• Sales tracking: Using CRMs, sales teams can see deal statuses, control pipelines and generate accurate sales forecasts
• Customer support: CRM support teams create customer requests, maintain customer interaction history and monitor problem resolution.
• Lead management: CRMs facilitate lead management by gathering customer data from different sources and distributing leads to the right team members. 
• Marketing campaign management: CRMs help marketing departments by creating, implementing and evaluating campaigns and strategies. 
• Customer feedback analysis: It can record and evaluate customer data to identify patterns and areas of concern.
• Employee collaboration: These platforms can integrate customer data across different departments to enhance collaboration. This means that sales, support and marketing teams can work together. 
• Task and workflow automation: CRM can send emails, schedule follow-up appointments and enter new data, saving time on repetitive tasks.

Benefits of a CRM

• Centralized data repository: All customer interactions are accessible from one system, reducing inefficiencies
• Improved customer journeys: Track and optimize every touchpoint across the customer lifecycle
• Upselling and cross-selling opportunities: Focuses on valuable customer insights to identify additional revenue streams
• Enhanced team collaboration: Builds collaboration among sales, support and marketing teams with shared records

How Contentstack complements CRMs?

Contentstack helps CRMs deliver unique customer experiences. Its headless content management system (CMS) generates, stores and publishes content across different digital channels. When you connect your CRM with Contentstack, you can use customer data to create content depending on the customer's wants, needs and requirements. When interacting with your customers through your website, mobile app or email, you ensure that each message is relevant and meaningful. 

CDP vs. CRM

How do CDPs and CRMs complement each other?

When teamed up, CDPs and CRMs fill the gap between personalized customer engagement and insightful data analysis:

• Unified customer profiles: CDPs collect data from different sources to develop customer profiles. Your CRM can use these to track customer interactions and manage relationships. For instance, a CDP collects a customer's purchase history, while a CRM records follow-up interactions.

• Streamlined data sharing: CDPs organize the behavioral data, which can flow into CRMs to offer sales and support teams richer insights. For instance, a CDP tracks website visits, which a CRM uses to personalize outreach.

• Better personalization: CDPs provide targeted marketing campaigns and CRMs customize follow-ups. For instance, a CDP identifies customers' interest in a specific product, and a CRM assigns a sales rep to send personalized offers.

• Improved customer experiences: CDPs reveal customer preferences, and CRMs turn these insights into action plans. If a CDP shows a customer prefers email updates, a CRM can ensure that future communication matches that preference.

• Stronger forecasting: Combining CDP's analytics with CRM's reporting feature can improve predictive abilities. Analyzing purchase trends using a CDP and forecasting future needs using a CRM becomes easy. 

Should you choose a CDP or CRM for your business?

While a combination of CDP and CRM works for every business, you can use them independently. Companies focusing on customer service and sales process optimization prefer a CRM over a CDP. Some other scenarios where a CRM is a better choice include:

• Managing a large customer or lead database with pipelines that require structured follow-ups
• Enhancing customer satisfaction through improved service and support operations
• Industries like B2B and consultancies where long-term customer relationships are essential

However, a customer data platform is better suited for those companies looking for data unification and marketability. Some scenarios where a CDP would be the better option include: 

• Companies looking to do personalization at scale in their marketing strategy
• Companies with scattered data sources that need one single source of truth for customer information
• Retail and e-commerce, where insights into customer behavior go a long way toward understanding customers. 

FAQs

What is the difference between a CRM and a CDP?

CRMs focus on individual customer interactions and operational benefits for sales and support teams. CDPs consolidate data from various sources to enhance marketing strategies and personalization.

Can a CDP replace a CRM?

No, because they serve different purposes. CDPs provide advanced data unification and insights, whereas CRMs are indispensable for sales and service processes.

What is the difference between a CRM and a CDP segment?

CRM segments are typically created based on interactions and attributes captured through direct engagement, such as purchase history, contact details and communication records. CDP segments are more comprehensive and dynamic, derived from behavioral data, website activity and third-party data across multiple channels. 

What is CDP called now?

CDPs are still commonly referred to as Customer Data Platforms, but their roles and capabilities constantly evolve.

Learn more

The choice between a CRM and a CDP depends on your company's needs and how you use and handle customer data. Some companies use both in tandem, whereas others focus only on one, depending on their business requirements. CRMs manage customer communications and CDPs unlock advanced business capabilities to use the collected data. 

To understand how Contentstack can integrate CDP and CRM platforms, talk to us.