CDP vs CRM: What's the difference?

Knowing how to effectively organize customer data is essential for any company. The benefits of efficient management may include increased revenue and customer retention, as well as strong customer relationships, more effective marketing campaigns, and more.

Customer data is the most important type of information a company owns. It can be especially hard to manage. When it is scattered across multiple documents and inboxes, maintaining the company's relationships is a challenge.

So many businesses apply various tools specifically designed for proper data collection. They may have some common features as well as significant differences.

Oftentimes, it is hard for users to decide which platform is suitable for their company and specific audience segments. For instance, CRMs and CDPs. When you understand the key differences, making the right choice is easy.

What are Customer Data Platforms (CDPs)?

This toolkit is widely used by sales teams and in marketing activities. Many professionals are familiar with it. What does CDP stand for in marketing? A CDP is a customer data platform that is intended to collect, organize and centralize customer data.

It combines information and third-party data from multiple sources and creates a unified data silos that is available to other systems. This software allows companies to segment their data to better understand their customers and conduct more personalized targeted marketing campaigns.

For instance, it is easy to determine your target audience based on everyone who has visited a certain page on your website. CDPs gather personal and engagement information, behavioral and attitudinal data. It helps build complete and dynamic customer profiles.

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The Benefits of Implementing a Customer Data Platform

The following benefits of using a CDP system can be outlined:

1. A single place for all your data. Oftentimes, customer data comes from multiple channels. If it is not centralized, it might be hard to get a clear picture of the customer behavior and preferences. A CDP system lets you improve your customer experience by providing a single central database for all your data.

2. Efficient marketing campaigns. Having a complete view of your customer journey allows sales and marketing teams to create more effective campaigns and reach the right people. Improving the quality of your services increases the level of customer satisfaction and the chances of them returning to your company.

3. Comprehensive data segmentation. Keeping all your client information in one data management system makes it easier for you to segment your customers and use advanced data analysis. Uncovering new segments and identifying their preferences lets teams create products that satisfy their specific needs.

4. Increased revenue. Applying this system to your business can increase brand awareness, which plays an essential role in customer engagement and increased revenue.

5. Data availability. Customer information is valuable for all company's departments. Sales and marketing teams, business development sections, client service, and others depend on its availability. A customer data platform provides access to a unified database, which helps different teams produce better results.

Customer data platforms often integrate with multiple external applications. It allows you to have a more complete solution and easily connect your systems and data strategies.

What is Customer Relationship Management (CRM)?

Customer relationship management (CRM) is a powerful software system designed to help organizations with sales, marketing, and service management. It enables companies to put a strong focus on managing customer relationships as well as communications with partners and suppliers.

Using a customer relationship management platform makes it easier to acquire new customers, retain existing ones, provide good support, real-time marketing, and much more throughout the entire customer journey. Creating a centralized database is one of the common features CRMs and CDPs offer. CRM software stores and collects data about every lead, deal, and all past interactions with your customers.

Customer relationship management systems can track users on your website and accumulate the required data. Also, this software enables you to compile in-depth reports and automate a range of repetitive tasks to ensure customer success.

Benefits of Using CRM to Manage Customer Relationships

Using CRM software comes with these advantages:

1. Reduced data entry. CRMs let you automate repetitive tasks within customer journeys, such as creating contracts and sending emails to new clients.

2. Detailed reporting features. Using this software allows you to evaluate the effectiveness of your advertising campaigns and get in-depth reports and CRM data that help make better business decisions deriving the organization forward.

3. Increased revenue. Having a set of effective CRM tools at your disposal helps foster relationships with your customers and increase brand recognition. It drives better engagement and improves sales and profitability.

4. Improved collaboration and more data availability. In today's environment, multiple product teams play an important role in customer interactions. Demand for great client service is quickly growing. So being able to effectively collaborate on tasks and projects is crucial for any business. CRM systems improve collaboration by providing a unified place for all your data. Each team stays updated on the current status of every project and can quickly get access to the necessary customer information. It helps address any issues faster.

5. Availability on multiple devices. Many CRM platforms offer mobile solutions to help you manage your data and sales process on the move.

6. Great customer experience. Since all your lead and customer profiles are kept in one place, it is easier to create targeted campaigns. You can view your client's entire path to purchase and analyze their behavior at certain stages.

Today, there are various CRM solutions on the market. Most companies apply these tools to build lasting relationships with their clients and streamline business processes.

Cloud-based systems to store customer data have become standard. However, some providers also offer self-hosted solutions.

CDP vs CRM: the key differences

Although CRM platforms and CDP systems have a range of similarities, they use different methods to collect and manage customer data. CRM systems mainly focus on fostering client relationships and facilitating the customer path to purchase at each stage, such as building brand loyalty.

CDP applications put a stronger focus on structured or unstructured data collection from online and offline sources. This information is then used to analyze order history and other behavior patterns and provide further recommendations regarding content, digital advertising, or eCommerce.

CDP vs CRM: Data collection

It is not surprising that CDP, CRM, and DMP applications can be easily confused with one another. They all collect users' data but do it differently.

Some users do not see the difference between CDP and DMP apps. However, there is a big one. Customer data platforms use all types of data they collect, including both third and first-party data, for marketing purposes, whereas DMP applications mostly focus on third-party information.

DMPs are built for advertisers to help them improve aspects of marketing such as ad targeting. In addition, DMPs don't maintain historical data, unlike CRMs, which keep history as the primary objective.

CRM vs CDP: Overall purpose

There is also confusion regarding customer relationship management vs customer service management purposes. The first one provides a comprehensive understanding of the customer, their purchasing habits, and their needs. It aims at developing lasting connections and improving the overall buying experience.

Customer service management solutions are intended to provide assistance with any product or service. They focus on enhancing customer satisfaction by quickly resolving all their complaints and queries regarding a certain product. Providing the needed support at the right time helps gain trust and loyalty.

Who they are built for

CRM systems are primarily created for sales teams to collect and manage the details about leads, prospects, and clients in a sales pipeline. They are perfectly suitable for optimizing one-to-one interactions with customers. Marketing enters the scene through integration with marketing automation platforms. Transactional data is added from financial systems.

CDP apps are mainly designed for marketers. Since this software merges information from multiple channels, marketing specialists can get every detail about their customers. Some robust tools include such features as data quality and modeling, real-time personalization, and workflow automation.

Which data they collect

CRM platforms gather and store data on direct, one-on-one interactions with clients via email, phone, live chats, websites, and social media platforms. You can have a complete view of the customer record on one screen.

Availability of customer relationship management data in a single place is crucial for call centers and support teams. Being able to access lots of relationship histories helps provide a better customer experience during 1-to-1 interactions.

CDPs collect such personal information as names, contact details, birthdays, payment preferences, etc. Also, they collect data on website visits, subscriptions, social media and customer support interactions, email open rates, transaction details, loyalty programs, and more. Having access to all this information in one place lets businesses conduct a thorough analysis and gain a deeper understanding of what their customers need.

CDP vs CRM: Which is right for your business?

If you are on the fence about choosing the right platform, consider the needs of your entire company and separate departments. So CRM vs CDP. If your company mainly needs to get a comprehensive view of who your consumers are, how they engage with your services, you can opt for a CDP solution. It will assist you with creating efficient campaigns and making informed marketing decisions.

If your company requires an effective client relationship management platform, you may choose a CRM space. You will be able to manage your interactions with people in a more personalized way and gain their loyalty.

Some toolkits cover many business aspects and can become a unified workspace for your team. Customer relationship management platforms are suitable for various industries, startups, small and medium-sized businesses, and large enterprises.

There is an opinion that small organizations do not need a CRM software since they process smaller volumes of information compared to big companies. Besides, this software might be expensive.

However, it is not true. Small companies can greatly benefit from implementing such a tool. Relationships with customers have become more important than ever. Providing an excellent consumer experience is a competitive advantage any business should strive to gain.

There are multiple solutions designed specifically for smaller teams. They are more affordable, easy to set up, and do not include overly complex functions.

Main Features of the Quality CRM

Here are the main features an efficient CRM platform should provide:

1. Comprehensive databases. CRM databases make it easy to collect and store every interaction a business has with its clients. Since it is all kept in one place, there is no need for team members to log in and out of multiple applications, copy and paste account numbers into various tools to get basic information about their customers.

2. Customization capabilities. Customization features let you tailor the software to your specific needs. You can use extensions, plugins, and other add-ons to extend your tool's capabilities. Some platforms provide access to API, so developers can fully customize your software.

3. Workflow automation. Automation capabilities can simplify your work processes. An efficient CRM system enables you to set up custom rules and provides sales force automation. For instance, when a sales rep makes calls or sends messages to someone, the software can automatically log hours and keep track of all communications.

4. Lead management. This feature helps identify your leads and track their actions along the sales cycle. Using targeted marketing enables you to nurture your leads and possibly turn them into clients.

5. Analytics and reporting. CRM analytics might be considered a form of online processing that can include data mining. It lets you analyze valuable data about your potential and existing consumers, evaluate your business strategies, and make informed decisions. The reporting feature provides a summary of performance metrics. You may use these detailed reports to improve your sales and marketing campaigns.

6. Sales forecasting. It helps predict your future sales based on information from your current pipelines. Also, forecasting shows market dynamics and enables you to anticipate changes and reduce your business risks.

7. Employee tracking. This function provides an opportunity to track employee activities and performance. Each team member uses their own account to track working hours, tasks, meetings, goals, and more. It allows managers to write performance reviews, reward employees, and determine which areas need improvement.

8. Integration with external applications. Synchronization with a range of other tools significantly maximizes the productivity of your business. It saves much time by reducing or eliminating the need to switch back and forth between different apps. You can also automate a bunch of mundane tasks, so you can focus on more important activities. Integrations can be built into the CRM system, developed by independent parties, or designed using APIs.

Full-featured CRM solutions can cover all aspects of your business. You can easily collect and organize your customer data, group your contacts, manage tasks and projects, compile in-depth reports, track performance, automate recurring tasks, and more.

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Bitrix24 - The Best CRM System

Bitrix24 is one of the all-in-one CRM platforms providing a range of robust tools to help you streamline your business processes. The software is highly customizable and suitable for companies of any size. It offers cloud and self-hosted solutions, free and paid versions. The program is available on mobile devices, so it is easy to access your account from wherever you are. Its key features include:

1. An unlimited database. With Bitrix24, you can create a free database of your past, existing, and potential clients, get a broad view of their purchases and other actions related to your business.

2. Customer service. The software can be used as a helpdesk solution for client support and ticket management. You may provide support using chats, email, telephony, and mobile messengers. The program also allows you to use canned replies and create knowledge bases for self-service.

3. Analytics and advanced reports. These instruments let you visualize sales trends, forecast future sales, and evaluate the performance of each team member. In-depth reports show your major customers, provide period comparisons, and calculate your advertising ROI. Since the software is customizable, you may compile reports for any individual pipeline.

4. Sales funnel automation. With the Bitrix24 automation functions, you can send automated notifications, emails, and messages to encourage your potential clients to become loyal customers.

5. Lead generation. Using demand generation tools helps generate more leads via social media and mobile messengers. The program shows where most of them came from and what percentage became your clients.

6. Multichannel communication. High-quality communication tools are instrumental in keeping everyone on track. You may use live chats, built-in telephony, video and audio calls, comment boxes in tasks, and more.

7. Email marketing. All your incoming emails are added to your customer profiles inside the program. You can reply directly from the system and automatically track email open rates and link clicks. Bitrix24 also enables you to divide your audience into segments and use bulk email marketing features.

8. Calendars and bookings. Individual and group calendars are built inside the system, so you can easily schedule calls, meetings, and book reservations. Group calendars are used for planning projects and marketing campaigns that include multiple people.

9. External integrations. Bitrix24 syncs with Facebook, Instagram, Google apps, Cloudware,

Implementing an all-in-one solution to your business processes can increase your team's productivity in no time. Customizable platforms easily adapt to any company's needs.