Customer data platform vs CRM: What’s right for your business?

Highlights

You’ll learn about the differences between CDP and CRM:

Purpose

• CDP: Aggregates real-time data from multiple sources, enabling unified customer profiles for personalized marketing
• CRM: Focuses on managing customer interactions, enhancing sales and building relationships

Data type

• CDP: Processes first-party, behavioral and third-party data
• CRM: Use contact details, sales history and interaction records

Core functions

• CDP: Improves marketing campaigns with insights and omnichannel personalization
• CRM: Tracks leads and optimizes sales processes for customer retention

How did you choose your business's content management system (CMS)? Your research process looked like:

• Search Google for “best headless content management system”
• You visited the top headless CMS platforms
• You interacted with the sales team using their landing pages
• Watched a free demo to learn about the ease of use and other features of the CMS

Your research involved comparing different platforms and reading customer feedback from other users. During your engagement, you communicated with the brand through various channels, including their website, social media platforms, live chat and emails. 

Did each interaction with the brand feel even more personalized? The social media ads you saw were more relevant and the website had made changes to match what you’re looking for. Even the email felt more personalized and like it was crafted for you. So, how did the company manage to achieve this?

Were they using customer relationship management or a customer data platform? Companies can use both to collect customer information, but both serve a specific purpose. Despite some crossover, the two have different functions, purposes and objectives. 

So, how do you know whether a CRM or CDP is the one to choose and why? Let’s find out how.

What is a customer data platform (CDP)?

A customer data platform is a technology that gathers customer data from any channel, platform or data stream to build an ideal customer profile. These data platforms combine and unify customer data in real-time to help you know as much as possible about your customers. This customer data typically includes sales data, CRM, customer journey and analytics. CDPs collect the data from mobile apps, websites and email interactions.

CDPs aim to provide you with behavioral, transactional and demographic information. Organizing the information provides a 360-degree view of all your customers and what they like and dislike. Customers who use Contentstack’s Lytics get insights like the number of website visitors, their social media entry points, their product exploration process and marketing email interaction.

Key features of a CDP

Data consolidation

CDPs gather customer data from CRM platforms and other data streams. It supports structured and unstructured data. 

Data cleansing and unification

CDPs collect and unify data from multiple platforms to create an ideal customer profile. During the cleansing process, you merge and remove duplicate and inconsistent data. 

Real-time updates

CDP collects data in real-time to ensure all customer interactions are relevant. 

Integration with marketing tools

Integration with marketing automation allows businesses to create data-driven decisions for customer acquisition, nurturing and conversion.

Customer segmentation

Segment customers using detailed analysis of customer data like behavioral patterns, demographics, transactional records, purchasing preferences, location and age. 

Analytics and insights

Actionable customer behavior and market trends insights offered by built-in analytic tools help you optimize your marketing strategies and make informed decisions.

What is customer relationship management (CRM)?

Businesses use CRM tools to improve their customer relationships. The tool converts leads into satisfied customers and retains existing customers who repeatedly purchase. A CRM platform enables you to analyze customer data patterns by studying past interactions and sales behaviors to provide targeted customer interactions

For an e-commerce store selling handmade candles, a CRM can track your customers' names, emails and purchase history. This means they can send customers tailored recommendations or special offers. These tools keep customers satisfied and build loyalty. For instance, a CRM registers every candle purchase made by a customer. Using the CRM data, the store sends a thoughtful email with a discount on their favorite scent or a friendly reminder to restock their candles. It feels personal and helps you build stronger connections and keep customers happy.

Key features of a CRM

Contact management

CRMs store and organize customer information and communication history in a single central database. They provide quick access to customer data. 

Sales tracking

Built-in sales tracking empowers CRM systems to track the lifecycle of a sale, from initial lead to final purchase. This feature comes in handy for identifying growth opportunities.

Marketing automation

Most CRMs have tools for automating email campaigns and segmenting customer data. Automation saves time while achieving targeted and engaging interactions.

Customer support

Ticketing systems and live chat features of CRM make it easier to provide exceptional customer service. These features help you respond to customer questions and resolve issues.

Analytics and reporting

CRMs give you detailed insights into sales, customer behavior and how your campaigns perform to make smarter business decisions. 

Integration capabilities

CRMs integrate tools like email platforms, inventory systems and accounting platforms to streamline your workflow.

Customer data platform vs CRM

Benefits of integrating Contentstack’s headless CMS with CDPs and CRMs

Deciding between the two platforms is demanding because each one provides benefits. But what if you don't have to decide between the platforms? Integrating CDP and CRM with Contenstack's headless CMS ensures you deliver results. Such integration between CDP and CRM with Contenstack provides these advantages:

Enhanced personalization

CDPs track real-time data like customer preferences, browsing habits and what they’re likely to buy. CRMs keep track of customers' past interactions. When you add a headless CMS into the mix, it becomes easier to share personalized content that really connects with your audience and creates meaningful, impactful experiences.

Omnichannel content delivery

Unified data collected keeps your message consistent on various platforms such as websites, mobile applications, social media and email. Every interaction with your brand across different channels brings your customers one step closer to closing a deal. Consistent and omnichannel content delivery builds trust and customer loyalty.

Unified customer insights

Integrating your CRM and CDP with a headless content management system removes data silos, giving you access to a 360-degree customer view. In-depth knowledge about your customers helps you make smarter and data-backed decisions. Use the customer details to improve your marketing strategies and offer products that meet customer expectations. 

Real-time content update

Contentstack’s CMS enables real-time content updates across every platform. The headless CMS integrates with CDPs and CRMs to provide existing customer information. You can implement real-time content updates, adapt quickly to market trends and meet customer preferences.

Higher customer engagement

Combining CDPs and CRMs with CMS generates enhanced customer interaction opportunities. Targeted marketing campaigns can gain customer interest and build lasting relationships. Adjusting your marketing strategies to individual customer needs increases satisfaction and retention rates.

FAQs

What’s the difference between CRM and CDP?

Customer relationship management platforms control customer interactions and optimize your sales efforts. A CDP uses multiple data streams from different sources to generate dynamic, comprehensive profile data for individual customers.

Is CRM a data platform?

A CRM does not function as a data platform despite storing customer information. Specific customer data is stored within CRMs, although they lack the flexibility of CDP to aggregate and analyze data across different channels.

Can a CDP replace a CRM?

No. CDPs and CRMs serve different purposes. CDPs excel in data aggregation and advanced marketing insights, whereas CRMs manage and optimize customer interactions.

What does a Customer Data Platform do?

A customer data platform monitors data from multiple sources, helping you achieve personalized segmentation and enhance your decision-making capabilities.

Learn more

The decision between a CRM and a CDP depends on your business objectives. The right choice for your business should be based on how you currently gather data, privacy considerations and your customer engagement goals. 

• If your priority is understanding customer journeys using a wide range of first-party data, a CDP is a better option.
• If you depend on second and third-party data and your main goal is generating leads for your sales team, a CRM might be sufficient.
• If you want the best of both worlds, a CDP and CRM with a headless CMS is the perfect choice.

Recognizing the individual strengths and combining them through solutions like Contentstack’s headless CMS increases your ROI and future-proofs your strategy. 

Talk to us to know how Contentstack’s headless CMS helps you manage customer data and content delivery.