CDP vs. CRM vs. DMP: Their differences, capabilities, and how they work together
November 12, 2021 | 4 minute readTL; DR: Learns the basics of CDPs, CRMs, and DMPs. See how they differ and how they can work together to give you a stronger understanding of your customers to use in your marketing.
Customer data platforms (CDP), customer relationship management (CRM) systems, and data management platforms (DMP) are all vital tools in a marketer’s arsenal. They help digital marketers work with data and use it to inform their campaigns, personalize their marketing, and gauge the effectiveness of their efforts.
First, let’s get acquainted with each one of these solutions.
What is a CRM?
A customer relationship management (CRM) system collects customer data through the direct interactions customers have with a brand. These interactions usually occur in a one-on-one scenario, such as over the phone, by email, on social media, via web chat, or on a website. The type of data collected includes things like contact information and a history of a customer’s interactions with the brand, including all purchases.
Almost three-fourths of CRM users (74%) say the tool improved their access to customer data, which allowed them to understand customers better and led to more successful interactions.
Customer service representatives make great use of CRM systems, and the customer insights they provide can be hugely helpful to marketers. The data collected can help you analyze the sales pipeline and conduct forecasting, craft a personalized customer experience (CX), and foster a positive relationship with the customer.
But there are limitations. CRMs are not designed to track unfamiliar or anonymous users, which makes gathering data on these users difficult. This is one of the reasons why a CRM plus other solutions can bridge that data gap.
Find out about the different types of CRM's.
Now the next question—how is a CRM different from a CDP?
What is a CDP?
A customer data platform (CDP) is a data management system with a persistent and unified database that consolidates and integrates data from multiple channels and sources to build a single, unified profile around an individual customer. This data aids in personalizing marketing messages.
What problems does a CDP help you with? CDPs work mainly with first-party data, but they also take in data from any source and work with both anonymous and known data, such as name, email address, phone number, and other types of personally identifiable information.
According to Forrester, customer experience leaders realize that effective CDPs turn data into actionable insights and that having mature customer profiles brings better business outcomes. Their study even found that firms with the most mature customer data profiles were 7.9x more likely to increase revenue by more than 10%.
A CDP can also store data over long periods of time to build in-depth, accurate customer profiles and nurture customer relationships, then share data with any system that needs it. In fact, customer data platforms can draw data from CRMs and DMPs and share information back with them.
Find out how to make your customer data more effective with a CDP and how to set one up properly.
Now what’s the difference between a CDP and a DMP?
What is a DMP?
A data management platform (DMP) gathers, categorizes, and classifies data from multiple sources concerning marketing campaigns and their targeted audiences. It stores that data in a central location for a short period of time to help marketers target web ads to the right audience.
While a CDP is built for marketing, a DMP is built for advertising.
Learn more about a CDP differs from a DMP.
To do so, DMPs mostly collect third-party data from data providers, managers, and services, as well as anonymous data (cookies, device IDs, etc.). This leads to a weakness of data management platforms—DMPs aren’t designed to manage personally identifiable information at the individual customer level. An additional solution is needed to take those data points and drill them down to get a complete customer view.
See how to unify and activate data across channels with Oracle BlueKai DMP.
Does a CDP or DMP replace CRM?
Marketers strive to send the right message at the right time on the right channel. But how do they know if it’s the right message, right time, and right channel? They depend on their data. A key to leveraging the strengths of these systems: connecting them. That’s where a customer data platform comes in. By integrating data from CRM and DMP systems, business intelligence and identity resolution tools, and martech and adtech platforms, a CDP can help you construct and control a 360-degree view of each individual customer.
Research from Ascend2 and Research Partners found that 47% of marketers surveyed identified data-driven personalization as the tactic most critical to their decision-making.
Therefore, CDPs, CRMs, and DMPs are only going to grow more important. While they’re different tools with different capabilities, the three systems work well together. DMPs can drive in new prospects and leads; CDPs help brands connect and engage with them; and CRMs then manage the ongoing relationship between customers and brands.
You don’t have to choose one over the other two. They all serve valuable roles in improving the effectiveness of your martech stack and campaigns.
To learn more about customer data platforms (CDP):
- Check out "How to make customer data more effective with a CDP"
- See how to "Anticipate customers needs with a CDP"
- Read our guide: Making Sense of Customer Data Platforms
Check out:
Watch the brief demo of Oracle Unity Customer Data Platform below.
Michael McNichols
Senior Content Manager
Michael McNichols is a Senior Content Manager for Oracle Digital Marketing. He has over ten years of experience in professional writing and has been widely published.
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