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There are a lot of acronyms for sales and marketing software, and it's difficult to remember what each one represents. Let's delve into the differences between three major terms: CRM, CDP and DMP.
Customer relationship management (CRM). CRM is the granddaddy of them all, and refers to software and data management tools that focus on the relationship between the enterprise and its customers, suppliers and service providers. More than just a sales and marketing resource, it unifies the enterprise view of the customer across all business divisions, from supply chain management to human resources.
Customer data platform (CDP). Some may mistake a CDP for a CRM, but it's a very different platform. A CDP is database that pulls together customer demographic, historical and behavioral data. A CDP then analyzes this data to predict which customers will buy which products or services, under what circumstances, and with which incentives.
Data management platform (DMP). A DMP tracks and targets buyers, like a CRM -- but it tracks everyone in the enterprise, whether they are a customer or not. It also gathers business intelligence data about enterprise digital media offerings to plan campaigns.
Differences between CRM, CDP and DMP
All three platforms are different, but they also complement one another. CRM, CDP and DMP platforms are three distinct but harmonious components in one big machine, gathering information about customers and putting it to the best possible use.
CRM and the CDP have opposite purposes. CRMs focus on the enterprise-customer relationship and facilitate the customer journey at each step, such as establishing a relationship with the customer and brand loyalty. A CRM is the cornerstone of sales strategy and marketing campaign planning.
CDPs, on the other hand, are strictly information-gathering platforms. A CDP does a major job the CRM doesn't: It retrieves offline data and tracks customers beyond the company website, such as through social media and related sites. It produces an overall behavioral portrait of the customer beyond his or her formal back-and-forth interactions with the enterprise. CDPs also eliminate customer data redundancy by unifying customer data across channels.
For sales and marketing teams to do their jobs effectively, they need data on all of the potential customers, as well as current customers, which is beyond the scope of the CRM. DMP fills this gap. Like CDPs, DMPs gather data on potential customer behavior, culled from trackers on webpages. This data circles back into the CRM's processes, adding important data about the population that marketers can then segment and target.
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