CRM vs CDP: What's the difference?
Last updated: December 05, 2022 Read in fullscreen view
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What is CRM (Customer Relationship Management)?
Customer relationship management (CRM) tools are the go-to solutions for businesses looking to acquire, nurture, and manage customer relationships effectively. CRM systems enable you to centralize all customer information, thereby providing context to all your customer-facing teams and adding layers of personalization into every customer interaction.
When CRM came into the picture, a 360-degree perspective of customers and their customer data analytics got a boost. As a result, businesses were able to design efficient customer experiences. However, these customer interactions occur across a range of channels, not simply sales and customer service. Hence, it was clear that the CRM lacks a standard data model.
What does CRM software do?
CRM software is used to streamline and automate your entire customer-facing processes. From lead acquisition to nurturing and conversion to post-purchase service, CRM systems let you manage every aspect of your customer-facing operations from a central hub, eliminating data silos and barriers for your teams.
What is a Customer Data Platform (CDP)?
According to the CDP Institute, a CDP “is packaged software that creates a persistent, unified customer database that is accessible to other systems.” The system enables users to combine massive amounts of data gathered from many channels and sources.
The resulting data gives you a single customer perspective,’ allowing you to create a better customer experience. Customer Data platforms overlap with a variety of other relevant technologies, according to Gartner. There’s a significant overlap with CRMs, and with data infrastructure providers like data warehouses.
Difference between a CRM and a CDP
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CRMs are for customer-facing roles: CRMs are mainly designed for customer-facing roles, like salespeople and customer success representatives.
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CDPs are for non-customer facing roles: CDPs help non-customer facing roles like marketing, product, and leadership, not just sales.
Let’s list out the differences clearly to understand how both the tools compare with each other.
| CRM | CDP |
|---|---|
| Manages Customer Relationships | Manages Customer Data |
| Arranges and handles customer-facing interactions with your team | Collect data on customer behavior with your product. |
| A client’s identity, history of engagements with the sales team, and support issues they’ve filed can all be found in CRM data | It may show you every single step a client has taken since first contacting your firm, from how they found you to how they use your product. |
| CRM is for customer-facing roles. | CDP is for non-customer-facing roles. |
| Data is collected manually | Data is collected automatically. |
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