In the age of customer centricity, faced with an increasingly attentive and aware consumer, a brand’s ability to create relevant customer experiences across every physical and digital touchpoint plays, without a doubt, a crucial role in its success.
From the website, to the social channels, from newsletters to the application, to the point of sale: the customer journey unravels with increasing fluidity and immediacy between online and offline (so much so that it no longer makes sense to distinguish between the two), the touchpoints with the brand are multiplying: each of them is, for the latter, an opportunity to intercept the needs and requirements of the person in front of them, but also a “ground” for judgment, comparison and evaluation of their brand image and reputation.
Being able to actively preside over the different customer contact points therefore becomes vital for the company, but to do so requires a thorough understanding of who is in front of them, that is, having a complete, up-to-date view of their tastes, interests, and habits in order to best meet their needs and expectations.
But how to do it? The martech mode offers, to date, numerous technology solutions more or less oriented to a data-driven and customer-centric approach. But which one to choose?
In today’s article, we try to shed some light by comparing two of the best performing technological solutions, CRM and CDP: we will understand their peculiarities and differences and discover how they represent solutions that can coexist and integrate perfectly.
CRM vs. CDP: technologies in the service of data
In a previous article, we have already had the opportunity to elaborate on the characteristics and peculiarities of CRM and CDP, let us now try to bring out the main differences with regard to the data processed.
Although CRM and Customer Data Platform have some functionality in common, the architecture with which they are designed and the goals for which they are designed make them profoundly different technology solutions.
It is often used to say that CRM stands to the company’s sales department, as CDP stands to the marketing department: although this is a simplification, such equivalence opens the way for us to a first macro difference between the two solutions.
CRM (customer relationship management) is a tool designed to support the actual sales process and customer relationship management, although still in its infancy.
All the data that are collected are obviously functional to these objectives: although they come from the different departments of the company (sales, marketing, customer care, just to name a few) they are used to build a complete profile of the customer, from first contact to post-purchase, and they can coexist with data on customers and other actors in the supply chain.
This is data that, in most cases, is entered, managed and updated manually and mostly involves direct interactions between company and consumer.
Here emerges the second major peculiarity of CRM: it is a solution created to ensure centralized management of data about the customer. Second major peculiarity, but also most obvious limitation: CRM does not handle cross-channel data or data from multiple sources; it does not connect, in input, to external sources.
Data and customer information to support the sales process, centralised, but updatable and manageable manually and not coming from multiple channels and sources: we start here to bring out the peculiarities of a CDP.
Customer Data Platforms are often considered the direct heirs of CRM systems. They are born with the main objective of enabling a 360-degree, comprehensive, real-time updated and reliable view of each individual user, whether a customer, a lead or even an anonymous user.
Biographical data, cross-channel browsing and purchasing behaviors, interests, habits and more: CDPs enable data to be collected directly from multiple channels and sources, processed and updated in real time. Once collected, the data are normalized at the single customer view level.
All of this translates into the ability to perform in-depth analysis on each individual user, knowing their habits and predicting their behaviors, i.e., deploying an effective profiling and segmentation strategy, the basis for personalized customer experiences.
Customer data platform: profiling at a higher level
Even from an initial comparison with CRM, the potential of a CDP especially in terms of data management and normalization, from different sources and touchpoints, is evident.
It starts from here to design marketing strategies from an omnichannel perspective, having a complete view not only on one’s customers, but on 100% of one’s audience.
Also included here are all users, definable as anonymous, that is, those who access the site or ecommerce or interact with the brand without releasing data and contact information.
It is estimated that they, on average, make up more than 94 percent of a brand’s audience, a gold mine that can be tracked and segmented precisely through the use of a CDP, such as Blendee.
Tracking and data collection, but that’s not all: the boost offered by artificial intelligence and machine learning enables marketers and strategists to combine data, detect patterns, and predict user behavior, delivering content and products in line with user expectations.
In fact, an analytical phase is followed by a “data activation and orchestration” phase in which funnel and real-time personalization activities are managed directly from the platform and in omnichannel mode.
Customer Data Platform: everything you need in one solution
A CDP responds to 4 main functionalities:
- data collection: a CDP, collects data and information from multiple sources and channels whether these are online or offline;
- identity management and single customer view: if in the use of many CRMs, there is a risk of duplicate master records, CDPs resort to the use of identifiers and deterministic matching to solve the problem of data from multiple parties;
- segmentation the ability to have data within a single platform allows effective cross-channel segmentation criteria to be fielded;
- data activation a defining aspect of CDPs is to be able to exploit the full potential of dynamic segmentation for real-time, omnichannel personalization activities.
According to a study released by the Harvard Business Review, 73 percent of marketers would like to use all available data about their customers, but only 18 percent actually manage to do so.
A customer data platform is an indispensable tool for customer-centric strategies!
CDP or CRM: what to choose?
After analyzing their peculiarities and differences, the question seems almost ritual: should one opt for a CDP or a CRM?
The adoption of technology tools and solutions in the enterprise should always be guided by the goals you want to achieve and the needs you want to meet. CDP and CRM are solutions that allow for undoubtedly different activities: without a doubt, CDPs offer much more advanced capabilities in terms of profiling and data orchestration than CRM.
Unlike CRMs they also allow for more simplified management, are easily integrated with web platforms, eCommerce, cash and management software even through APIs, and also do not require dedicated IT teams, as is often the case with CRM. As anticipated, CRM and CDP are easily integrated solutions, and very often the former are a valuable input resource for CDPs as well.
