Insights at the intersection of digital business, technology, and customer experience from Maark agency leaders
Information about customers and would-be customers usually resides in at least one of three tools: Customer Relationship Management (CRM) systems, Customer Data Platforms (CDPs) and/or Data Management Platforms (DMPs). But the nature and uses of these three tools are often confused, so let’s lay them out.
Customer Relationship Management Systems
The CRM is the veteran of the bunch and is, essentially, the digital successor to the salesperson’s Rolodex, those flipping index cards that were popular in the last century.
Like Rolodexes, CRMs keep basic information about prospects and customers. But they also add much more –transactional history, connections with other contacts at the same account, a history of the marketing materials received and how prospects/customers reacted, and much more.
And, like any good database, they let a salesperson do searches by attributes, such as all the buyers of computer hardware at all accounts. Most importantly, CRMs let sales people expand from just having a record of contacts, to having a way of tracking relationships with customers and would-be customers.
While CRMs can be used to track consumer data, they were primarily developed to support sales efforts in business-to-business interactions.
The Customer Data Platform
Since the onset of the digital age, brands and agencies have collected consumer data on customers and site visitors from an increasingly diverse range of sources, in an increasingly diverse range of data formats.
This includes known visitors browsing data from web sites, data on product brochure downloads, records of customer purchases, comments and “likes” on social networks, email opens, location data, and many other kinds.
Before CDPs, the data was often stored in separate locations by a brand or agency, and often in different data formats. Sometimes, the different silos would be linked to the same customer by a common identifier such as an email address, but sometimes they weren’t and the silos would be used for different purposes, such as social ads based only on social interaction data. Data processing–including cleaning, assembling and analyzing the customer data for insights into what customers want–was often left to specialists, like data scientists.
In an effort to combine these many different data slices into unified customer profiles that can be analyzed by non-technical marketers and others, the CDP was born.
Its primary purpose is to unify the data into “golden record” customer profiles, which then guide marketing actions to those customers, such as ads, offers, customized content or emails. It brings together the customer data from many sources, usually linking them to the same person’s profile with a common identifier like an email address
While all CDPs provide an ability to build customer profiles from diverse data sources, some also include built-in tools, such as for cleaning data prior to profile integration or campaign tools to take action with the profile data, such as sending out directed emails.
CDP profiles are also commonly integrated with external implementation platforms, like email service providers or website content management systems, for such purposes as providing content and offers that are tailored to a given customer’s profile.
While CDPs have traditionally been utilized for consumer interactions, some platforms are starting to focus on B2B interactions.
Data Management Platforms
Although CRMs and CDPs commonly focus on first-party data–that is, data collected on users who are customers or who have visited your site or app–they can sometimes utilize data collected from anonymized third-party sources, if they have a way to link those data layers to a specific person, such as through a common cookie.
On the other hand, DMPs most often focus on third-party data. In most cases, DMPs are used to target unknown users with ads by segments, such as people who have visited sites that sell new cars and whose web request comes from southern California. These users can be targeted for ads on new Chevys at dealerships in Los Angeles when they show up at participating web sites, for instance.
Sometimes brands want to target their own customers with ads, and so might utilize first-party data through DMPs. Frequently, DMPs are integrated with Demand Side Platforms (DSPs) and Supply Side Platforms (SSPs) to target ads and offers.
Hopefully, the above helps to clarify this soup of acronyms. DMPs are primarily used to acquire new customers by targeting ads at unknown and anonymized users. CDPs are used to better engage with existing, known customers, and CRMs primarily help salespeople sell products or services to new or existing business accounts.