All three are described as the home of customer data, which is why they are confused. They hold different data, for different users, for different purposes.
01The short version
- CRM: what your people know and do about customers. Filled in by staff. Used by sales and service.
- CDP: one profile per customer, assembled from every system. Filled in by systems. Used by other systems and by marketing.
- DMP: audiences for advertising, mostly anonymous. Filled in by ad and web data. Used by media buyers.
02CRM: the working record
A CRM is a tool people work in. It records leads, conversations, deals and tasks. Its data is rich where staff have been diligent and thin where they have not, and it knows little about what the customer did outside a salesperson's sight.
03CDP: the assembled profile
A customer data platform collects records from the CRM, the website, the shop, the till, billing and support, works out which belong to the same customer, and builds one profile. Its hard problem is identity: deciding that two records with different spellings and emails are one person.
04DMP: the audience
A data management platform organises audience segments and campaign data for advertising. It has been built largely on anonymous identifiers. As those are restricted by browsers and privacy law, its role is shifting toward first-party data, and it increasingly sits beside a CDP.
05Which do you need?
- Every company that sells needs a CRM, or something that does its job.
- You need a CDP when you have several sources of customer data that disagree, and decisions depend on joining them.
- You need a DMP when advertising is a large cost or a line of revenue.
In short
- A CRM is typed into by people; a CDP is fed by systems.
- A CDP's central job is working out which records are the same customer.
- A DMP serves advertising and holds mostly anonymous audiences.
- Most companies need a CRM first and the others only as data and spend grow.
Questions
Can a CRM act as a CDP?
For a company with one main source of customer data, the CRM is enough. Once web, shop, billing and support data must be combined and matched, that is a different job, and a CRM is not designed for it.
What is identity resolution?
Deciding which records across systems refer to the same person or company. It uses exact matches where they exist and careful fuzzy matching where they do not, with doubtful cases reviewed by a person.
Is customer data safe in these systems?
It depends on where they run and who has access. Profiles are sensitive, which is why some companies choose to run a customer data platform on their own infrastructure.
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