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What are the differences between CRM, CDP and DMP platforms?

Sales and marketing terms are like alphabet soup, and the different acronyms can get confusing. Find out the difference between three major platforms: CRM, CDP and DMP.

There are a lot of acronyms for sales and marketing software, and it's difficult to remember what each one represents.

Customer relationship management (CRM) systems, customer data platforms (CDPs) and data management platforms (DMPs) are similar in how they collect and store data, but they aren't the same.

Here are the differences between CRM, CDP and DMP.

Customer relationship management. CRM 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.

A CRM system stores all customer data from different channels, including all points of contact between businesses and consumers. Service representatives can access information from interactions with the company's website, phone, live chat, mail, marketing materials and social media. Service representatives can access this data to avoid making customers repeat themselves while on the phone, which improves efficiency and customer experience.

The leading vendors of CRM software are Salesforce, Microsoft, SAP and Oracle. CRM systems can be on premises, which means that the company using the software is responsible for administration, control, security and maintenance of the CRM system. They can also be cloud-based, enabling users to access the information remotely. CRM systems can also be open source, which enables customization of data on social media channels, improving social CRM practices.

Customer data platform. Some may mistake a CDP for a CRM, but it's a very different platform. A CDP breaks down data silos and unifies customer data -- primarily first-party data -- from disparate sources into one platform to provide a single customer view. It pulls together customer demographic, behavioral and historical data from both internal and external sources, including CSV files. Most CDPs come with APIs to extract the necessary data.

A CDP then analyzes this data in real time to predict which customers will buy which products or services, under what circumstances and with which incentives. Employees across an organization, such as in marketing, sales, customer support and finance departments can all access this information.

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.

By having all customer data in a single place, businesses can improve CX through personalization, product delivery and support. Organizations can integrate a CDP with marketing automation platforms to better target their customers.

A CDP is a packaged software that vendors sell, unlike a data warehouse that IT teams develop and manage. Companies that offer CDP products include Amperity, BlueConic and Evergage.

Data management platform. A DMP tracks and targets buyers like a CRM -- but it tracks everyone in the enterprise, whether they are a customer or not. DMPs collect and store large amounts of structured and unstructured data, including audience data from online sources, such as CRM systems, web analytics, mobile channels and offline data, which business can use to support media purchases and ad placement. This platform also gathers business intelligence data about enterprise digital media offerings to plan campaigns.

DMPs collect, organize and segment data -- both first- and third-party data -- into different customer types, such as location, income, browsing behavior and past purchases. Vendors that offer DMPs include Adform DMP, Adobe Audience Manager and KBM Group's Zipline.

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 system 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 system 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 collect personally identifiable information (PII) -- or data that can identify a specific person. This includes names, email addresses, phone numbers, social media interactions and more. DMPs do not use PII, but instead use anonymized data. CDPs also eliminate customer data redundancy by unifying customer data across channels.

While sales representatives can use a CRM to view a customer's purchase record, they can't see customer engagement on social media posts -- only a CDP can show that information.

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 system. DMPs fill 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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