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There are three small letters. There are three distinct possibilities. Choosing the correct data platform for your digital marketing strategy can make or break your campaign. In this post, we’ll decode these acronyms and reveal the possible benefits of each platform for your company.

What are the distinctions between a CDP, DMP, and CRM?

Let’s check in with Gartner to learn about the principles of the CDP, DMP, and CRM.

A customer data platform (CDP) is a marketing system that unifies a company’s customer data from marketing and other channels to enable customer modelling and optimize the timing and targeting of messages and offers, according to Gartner. It is the most complex and advanced of these three data platforms.

Meanwhile, Gartner’s definition of a data management platform (DMP) focuses on advertising and customer segmentation: “A data management platform is software that manages the flow of data in and out of a company,” according to Gartner. It enables data-driven advertising methods like segmentation.”

Finally, a customer relationship management system (CRM) is defined as a “business approach for increasing revenue and profitability while improving customer happiness and loyalty.” Companies can use CRM software for four different functions: sales, marketing, customer support, and digital commerce.”

From targeted advertising campaigns to personalized customer experiences, these three data platforms are clearly distinct, each with its own set of capabilities tailored to certain company goals and requirements.

Use cases for a CDP, DMP, and CRM

We looked at the primary reasons why businesses should invest in a CDP in How to Choose a CDP. The ease and speed with which marketing initiatives may be synchronized across an organization is a noticeable benefit of migrating to a customer data platform for firms suffering with bulky, inaccessible databases. A CDP also has the following benefits:

  • Smarter segmentation and enhanced personalization capabilities enable firms to innovate more quickly, which means designing and executing extremely intuitive experiences that are sure to surprise and delight customers.
  • The ability to use data from your company to create targeted advertising campaigns on paid media channels.
  • Based on a blend of behavioral, CRM, and transactional data, we deliver an accurate 360-degree view of your customers.The use case for the DMP is typically related to acquisition marketing (advertising).
  • The DMP categorizes third-party data obtained from other websites into categories to create audiences that marketers may employ for targeted ad campaigns.

The hint is in the name when it comes to customer relationship management solutions. Customer retention is the most common use case; businesses rely on CRMs to manage interactions with both present and potential customers. Typically, the system must support multiple departments within a corporation, such as sales, customer service, and digital marketing.

How CDPs, DMPs, and CRMs build user profiles

The sort of data collected by each of these platforms, as well as how that data is shared inside companies, has a direct impact on the accuracy of the user profiles created within each system.

A CDP primarily uses first-party data to create user profiles. People who have a direct relationship with your brand – for example, those who have visited your website, subscribed to your email, or made a purchase – provide data.

The CDP collects data online from an organization’s website as well as offline transactional data sources such as loyalty cards and saves it in a consolidated customer data hub that other systems can access for analytics, web optimization, email marketing, and retargeting.

Client data such as name, email address, and phone number is willingly provided and then connected to a specific purchase to accurately identify each consumer.

The data collected by the DMP is substantially less granular than that obtained by the CDP. Individual clients are not traceable, and the information normally expires after 90 days, therefore the DMP mostly saves third-party data from other websites. The DMP categorizes data into segments based on pre-defined audiences once it has been collected. Marketers can then select appropriate target audiences for their ads. The DMP has one caveat: third-party cookies are being phased out, which means the platform will need to evolve in order to give value in the future.

Because the primary goal of a CRM is to manage an organization’s interactions with both current and potential consumers, these systems often store and handle customer information such as names, things purchased, payment methods, and previous emails sent to the customer. The CRM then uses customer information and previous transactions to create a profile of customers who purchase specific items.

However, there is an evident flaw. Data from the same customer obtained through the organization’s website and email campaigns will be handled as separate entities because the CRM cannot sync customer data across numerous channels and touch-points.

Because the user profile provided by a CRM can be a little hazy compared to the profiles identified by a CDP, companies frequently utilize a CDP in conjunction with their CRM to improve the accuracy of user profiles.

Differences and similarities between CDP vs, DMP vs, CRM

Let’s take a look at the primary distinctions and similarities between the CDP, DMP, and CRM to get a sense of what each platform has to offer.

Platforms Visualised in Detail - Nigel Quadros

The following are the main parallels:

  • Both the CDP and the DMP are often administered by a marketing team.
  • CRM and CDP: Both keep data from first-, second-, and third-parties.
  • CRM and DMP: In terms of data privacy, there is a potential flaw.
  • CDP, DMP, and CRM are acronyms for Customer Data Platform, Data Management
  • Platform, and Customer Relationship Management Through segmentation, all three work to improve the customer experience.

The primary distinctions are as follows:

  • A CDP combines and unifies consumer data to produce the most accurate user profile possible.
  • A DMP creates an audience-based persona using third-party data that is temporarily stored.
  • A sales team is often in charge of a CRM system, which has limited data integration.

While each of these platforms contributes to providing exceptional client experiences, it’s evident that the CDP is the most stable and active of the three. The CDP is the game-changer you’ve been waiting for to take your digital marketing strategy to the next level, from utilizing secure, first-party data to performing advanced segmentation and customisation.

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