Customer Data Platform vs. CRM: Which Is the Best Enterprise Solution?

Developed in the 1990s as an off-the-shelf solution for tracking and managing customer interactions, Customer Relationship Management (CRM) systems have become ubiquitous tools for business today. Many companies, however, are trying to stretch their current CRM system’s capabilities for marketing purposes that lie outside its scope. In today’s data-driven economy, a Customer Data Platform (CDP) offers a better enterprise solution to maximize the digital customer experiences that drive revenue.

Let’s take a closer look at the roles of customer data platforms vs. CRMs in businesses’ consumer-facing operations—particularly in sales and marketing.

Customer Data Platform vs. CRM

As its name implies, a customer relationship management system is primarily concerned with collecting customer information and building relationships via brand interactions. In this sense, a CRM system can even be perceived as fulfilling the part of an after-marketing, after-sales service following a customer’s initial conversion or interaction with a company. A CRM relies heavily on first-party data the company collects from known customers and prospects.

On the other hand, a Customer Data Platform is a centralized database that collects first-, second-, and third-party data. It unifies these into customer profiles in order to orchestrate a highly personalized customer experience. CDPs were developed around 2016 and are uniquely designed for today’s hyper-digital customer journey and the marketing challenges they bring.

One major advantage of CDPs over CRMs is the ability to derive deep customer insights from a rich data lake fed by omnichannel data streams. This allows a CDP to fine-tune marketing initiatives and target customers with precision. The same deep insights also enable CDPs to segment audiences and build lookalike targets for sales funnels.

To put all of this into perspective, the table below compares sales and marketing use cases  side-by-side for a Customer Data Platform vs CRM.

Marketing CDP CRM
  • Personalizes customer journey across all channels
  • Orchestrates marketing communications as one consistent experience
  • Automates campaign activations such as text, emails, advertising, web browsing personalization, mobile offers, in-store communication, and others
  • Tracks and assesses campaign effectiveness on key performance management metrics
  • Improves and fine-tunes campaigns on demand
  • Tracks lead conversion
  • Tracks campaigns
  • Analyzes pipeline and win/loss rates
  • Keeps records of customer service and contact center interactions
  • Unifies profiles using data gathered from all customer-facing systems including CRM, point-of-sale systems, website traffic analytics, second- and third-party data, and more
  • Targets and acquires new customers
  • Prevents churn by intervening with machine learning-recommended actions
  • Uses predictive scoring for higher conversion rates
  • Forecasts sales through predictive analytics
  • Tracks communication with customers through sales channels interaction, contact center, support calls, and similar points of contact
  • Improves relationship with customers following conversion
  • Used to prioritize and follow up leads during the sales cycle
  • Manages salespeople and documents sales performance

While a CRM system works well for tracking day-to-day transactions, it lacks both scope and depth of vision into the entirety of the customer journey. CRMs only capture a narrow scope of touchpoints with which customers interact, and are unable to contextualize behavior due to the absence of accurate multi-touch attribution. They also lack the advantages of real-time data, omnichannel personalization, and predictive analytics that—you guessed it—CDPs bring.

In practical application, it looks something like this:

CRM: Builds customer profiles from online and internal sources
CDP: Unifies customer profiles using data from brand channels, internal databases, second-party sources, third-party sources, online, and offline sources

Because a CRM only collects first-party and online data, users find it difficult to analyze customer behavior across channels. The time it takes to manually encode and synchronize data from external sources and second/third parties can mean the difference between accurate interpretation and guesswork. A CDP is able to ingest omnichannel data as well as streaming, real-time, and bulk data for audience segmentation and marketing personalization.

CRM: Automates marketing initiatives such as email campaigns
CDP: Coordinates targeted marketing campaigns at scale and across channels for consistent, hyper-personalized experiences

Legacy CRM systems are inadequate for creating rich customer journeys and consistent experience. At best, they activate linear campaigns across primary channels such as email. A CDP uses unified data to segment audiences and activate personalized campaigns that meet customers at every touchpoint. This creates not only a consistent, but a relevant experience for customers, who are then encouraged toward conversion with recommended next best actions.

CRM: Used to manage sales teams and pipelines
CDP: Used as an analytical engine for marketing, sales, customer service, and customer experience

A CRM works well as an operational tool for managing sales performance and pipelines. It also tracks purchase history and forecasts revenue. A CDP, on the other hand, serves as an analytical engine for multiple consumer-facing teams through its centralization of data from internal and external sources. These include the CRM itself, advertising platforms, point-of-sale, loyalty programs, and more. A CDP uses its customer data foundation and deep analytical capabilities to provide teams with actionable insights and drive higher conversion rates.

All in All…

CDPs surpass CRMs thanks to a wider range of data sources, deeper customer insights, and more targeted marketing approach. Unlike CRMs, CDPs get marketing and sales teams on the same page to personalize outreach and fine-tune messaging. Both teams can use a CDP to combine marketing campaign insights with sales performance data to meet customer needs consistently and drive conversion.

A CDP’s richer customer data foundation, coupled with its more powerful capabilities, make it the best enterprise solution for companies tapping into the wealth of customer data today.

Level Up With Treasure Data CDP

Treasure Data’s best-of-breed enterprise customer data platform (CDP) aligns marketing and sales team goals with a centralized data foundation. Thanks to a multi-touch attribution model and a real-time data dashboard that tracks sales and marketing metrics, both teams can make best-informed decisions.

Using Treasure Data, marketers can quickly pull up targeted audience segments in a specific region and pinpoint channel touchpoints that feature the most frequently in short sales cycles.

Conversely, sales teams can use Treasure Data to forecast behavior and purchase trends in a particular context to execute targeted marketing campaigns accordingly.

Funnels for Marketers

Treasure Data offers Funnels under Audience Studio. This tool helps visualize a customer’s progress in the buying process, allowing marketers to tailor marketing campaigns via multi-channel activations.

Funnels creates a customizable marketing funnel with up to eight stages, so marketers can analyze and refine stages along the way. Specific stages can be activated for campaigns within the funnel.

Here are just a few things you can do with this feature:

  • Edit and duplicate existing funnels
  • Customize time ranges, from days to months
  • Display profile counts and dates
  • Display growth rates according to percentage and date
  • Track number of profiles by stages
  • Zoom in on specific profiles to view attributes and behaviors

Treasure Data’s multi-touch attribution model uses machine learning to analyze every touchpoint along the customer journey to determine the likely contribution each has made toward a sale. Marketers can also see how different combinations of channels and campaigns perform so they can amplify what works and adjust what doesn’t. This helps to better allocate marketing spend and effort for each campaign and customer outreach. For example:

  • Relocate a low-performing social media post to a channel with more customer activity
  • Extend the content of a blog that generates a lot of discussion into a series of relevant posts to drive continuous engagement
  • Schedule strategic live events for future campaigns when a live Q&A is widely shared

Treasure Data helps marketers track every potential customer’s progress through the sales funnel so you can respond quickly to shorten the sales cycle.

Funnels and Accounts Engagement for Sales

Sales teams can take advantage of Treasure Data CDP’s fully customizable dashboards to track sales funnel and account engagement. Sales teams can track the following metrics by week, month, quarter, and year:

  • Raw leads
  • Marketing Qualified Lead (MQL)
  • Sales Qualified Lead (SQL)
  • Deals Won
  • Number of engaged campaigns
  • Target Account Reach
  • Revenue

Treasure Data CDP provides a high-level overview of your business intelligence tool of choice. Teams can track the current status of active deals in the pipeline using customer journey maps across personas. Treasure Data CDP also enables B2B marketing reporting functionality for B2B sales and marketing teams.

Teams can leverage Treasure Data CDP to increase customer lifetime value through personalized interactions. Machine learning-recommended actions deliver the right sales touch at the right time for cross-sell and renewal opportunities. Sales performance analysis and forecasts also help decision-makers to better strategize and avoid premature optimizations.

Check out Treasure Data CDP’s additional B2B sales and marketing analytics features:

  • Display engagement score of last X days for company accounts
  • Track number of engaged people and web visits
  • Track what content is being consumed by specific companies
  • Track content and campaign contribution to revenue by channel type, campaign, and company account
  • Choose from a range of Attribution Models to track content/campaign contribution: Multi-Variable, First Touch, Last Touch, Liner, Linear, Time Decay, U Shaped
  • Combine Multi-Touch Attribution model with customer journey to determine influential touchpoints

Watch our take on CDPs, CRMs, and DMPs in this Coffee Break FAQ session video below:

CDP vs DMP vs CRM: Replace or leverage?

Treasure Data helps transform customer intelligence into tangible results through machine learning-powered insights, cross-channel personalization, tailored customer views, and enterprise-grade security and privacy. We help you target specific audience segments and even individual profiles with timely incentives that keep the conversation going. Thinking of leveling up to a Customer Data Platform vs. CRM? We can help answer your questions.

To learn how to leverage data to improve your customer experience, consult an expert today. Want to learn more? Request a demo, call 1.866.899.5386, or contact us for more information.