CRM vs CDP and why you need both
A couple of months ago, a client asked me about the difference between CRM and CDP and wanted my advice on which system he should invest in to support his omnichannel transformation journey. More recently, I was asked the same questions by another client. Also, after doing some research online, I noticed that there’s often confusion about the difference between CRM and CDP and what they bring to the table. This led me to write this article.
Elements of?context
Before jumping right into it, let me bring a little bit of context about those clients :
Quick definition of CRM and?CDP
Before comparing them, let’s start by defining them:
CRM
A Customer Relationship Management is a sales, service & marketing system that automates and streamlines the sales, service & marketing processes of the company across the entire customer lifecycle to:
CRM systems are performant in managing B2B marketing use-cases, but they tend to be pretty limited for B2C marketing use-cases. This is due to their unability to store and process all the amount of digital data necessary to address advanced B2C marketing personalization use-cases.
CRM has been around since the 1980s and is very mature with an important footprint (Most companies in 2022 already have invested in a CRM system).
CDP
A Customer Data Platform is a marketing system that collects and unifies the company’s customer data across all channels (website, mobile app, call center, POS, social media etc.) to :
CDP systems are very performant in collecting, storing and managing massive amounts of customer data (including behavioral and browsing data) which makes them relevant for building customer 360 databases and managing B2C marketing use-cases in the digital age.
CDP is a fairly new technology (born in the digital age) and has a relatively small footprint but is growing very rapidly.
CRM vs?CDP
CRM and CDP serve different purposes and therefore are designed to address different use-cases and even though there could be a small overlap between them, they are mostly complementary.
Let's compare them using the following criteria applied to a B2C environment:
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Main purpose
Most relevant use-cases
Key capabilities
Scope of data
In a nutshell, where CRM only captures photos of the customer interactions, CDP captures the entire movie. This makes CDP more adapted to customer knowledge and personalization at scale use cases.
Users in your company
Example of providers
Summary table
Wrap-up?: CRM and CDP are complementary
As a conclusion, if you are the CIO of a retailer or of a business operating in a B2C context with large amounts of data, you need to invest in both a CRM and a CDP system?:
CRMs and CDPs are complementary and made to live side by side where the CRM will act as a System of Records whereas the CDP will act as a System of Reference.
SAP S/4 HANA Service Consultant and Certified C4C (Sales and Service V2), SAP CRM
2 年Well explained Thanks
Salesforce CRM(Sales,Service,B2B eCommerce, CPQ, Order Mgmt.) Expert across Industries(Distribution/Mfg.). 22+yrs experience In Technology Consulting, CRM Sol Arch, Project Management, Pre Sales and Sales/Marketing.
2 年Thanks for sharing.
Well written, completely agree.
Digital Transformation @ Accenture ? ?MBA ?Engineering (B.S) ? Past Employers: Wipro, L'Oreal, Oracle Selectminds, Reuters...
2 年Insightful! Thanks for sharing.
Digital Transformation and GenAI Development at L'Oréal
2 年Keep them coming Talal! ??