CRM vs. CDP: Which Data Software Is Best for Your Business?

Want to leverage customer data to maximize your sales, but deciding between customer relationship management (CRM) software and customer data platforms (CDPs)

CRM software helps you manage your company’s relationships and interactions with prospects and current customers, while CDP software helps you track and analyze your customers’ behaviors. 

Keep reading to learn more about the key differences between CRM vs. CDP software.

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Hvad er et CRM-system?

A CRM is a platform that helps you manage your company’s interactions with leads, prospects, and current customers or clients.

It can track essential data from your audience, like their:

  • Navn
  • Telefonnummer
  • E-mail-adresse
  • Job title
  • Company name
  • Relationship (e.g., customer, former customer, prospect, email subscriber)
  • Position in your sales funnel
  • Interactions with your marketing campaigns

By tracking these details, your CRM software helps you learn more about your prospects and their interests. As a result, you can always stay connected with your audience to foster brand loyalty and deliver personalized experiences that encourage them to convert into customers.

What is the purpose of a CRM?

The purpose of a CRM is to improve your relationships with leads, prospects, and current customers. 

A CRM platform comes equipped with various features and tools to help you track your leads in your sales funnel so you can deliver the right messages at the right time to encourage them to convert. 

You can also use a CRM platform to create personalized messages, like emails, that resonate with your customers’ interests. For example, you can send an email with product recommendations based on their previous purchases to increase brand loyalty and product sales.

What are the benefits of using a CRM?

Here are some benefits you can expect from using a CRM:

  • Reduced silos: CRMs are a central repository for all customer data, meaning they’re a great way for your entire team to access the contact information, sales history, marketing engagement, and customer service records they need. This helps reduce silos in your business and keeps everyone up to date on leads and customers. 
  • Improved customer relationships: When you can see every interaction your business has had with a customer in one place — from sales calls to emails and support chats — it becomes much easier to nourish those relationships and make more sales. 
  • Better productivity: Finally, CRMs are excellent productivity tools because they often provide sales and marketing automation features that boost your team’s efficiency.    

What is a CDP?

A CDP is software that creates individualized profiles of your customers and clients to detail their interactions and behaviors with your products or services. CDPs store and unify customer data in real-time and can track information like: 

  • Købshistorik
  • Website behavior, like which pages they visit
  • Marketing channel interactions

With a CDP, you can track your customers’ journeys and interactions on their path toward conversion. 

What is the purpose of a CDP?

The purpose of a CDP is to better understand the behaviors of your leads, prospects, and current customers. 

It lets you gain a unified view of your customer’s journey by tracking data across multiple channels and touchpoints. You can use a CDP to view how customers first discovered your business or which content they interacted with before making a purchase.

What are the benefits of using a CDP?

CDPs also bring unique benefits to companies looking to gather and organize their customer data. The advantages of using a CDP include:

  • Building ideal customer profiles (ICPs): Because CDPs gather lots of customer data to create a big picture view of interactions with your products and services, they can help you create ICPs to better understand how your customers reach your company.
  • Improved personalization: CDPs also collect lots of information from various sources, helping you create more personalized experiences for leads — which is a great way to convert them to customers.

What is the difference between a CRM and CDP?

Although CRMs and CDPs are both used to gather and store customer data, there are several differences between how they do so. So, what is the difference between a CRM and CDP? Find out the main differences below:

  • Big picture vs. individual customers: The primary difference between a CRM and a CDP is the scope of the data they examine. CRMs primarily track data about how specific leads and customers interact with your company. CDPs track overall customer behavior to give you a bigger-picture view of how all customers interact with your company.
  • Customer-facing interactions vs. product interactions: Another big difference is the kind of customer interactions each software considers. CRMs primarily focus on how customers interact with your team — through communications, engagement with marketing campaigns, and sales. On the other hand, CDPs track how customers interact with your products or services.

Who should use CRMs and CDPs?

The differences between CRMs and CDPs make each software better suited for different use cases. Here’s a breakdown of who should use each solution: 

Who should use a CRM?

While CRMs can help many different departments, it’s customer-facing roles—like sales and customer service reps—that most often use CRM software.

A CRM platform is mostly associated with sales teams because it tracks all the data your reps need to successfully close more deals. CRMs house all the contact details of your leads, so your sales team can easily communicate with prospects at each stage of the sales funnel to encourage them to convert into customers. 

A CRM platform is also helpful for enabling your sales team to view previous interactions your leads had with other sales reps. It helps your entire team stay on the same page when delivering messages to prospects and customers.

Marketing teams also use CRMs to get a unified picture of leads and customers. Because CRMs can store how a customer interacts with marketing messages and campaigns, marketers can easily bring up a customer’s history to see what steps they should take to keep strengthening the relationship. CRM marketing analytics can tell marketers which campaigns drive the most clicks and sales, which lead contact forms receive the most submissions, and more.

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Who should use a CDP?

Non-customer-facing roles, like leadership positions, often use CDPs. That’s because CDPs give you a complete overview of your customers’ behaviors, including how they use your website and which marketing channels they interact with.

With this data, you can make decisions to optimize your product and improve marketing strategies to drive more sales and revenue for your company in the future.

Which one is right for your business?

Trying to decide between a CRM or CDP? Many businesses use both to maximize their sales and revenue. 

But if you want to cut down on your software costs or solve a specific problem for your team, you might want to opt for one platform over the other. 

You should choose a CRM platform if you want to:

  • Manage contact data from your leads and customers
  • Keep track of your leads’ interactions with members of your sales team
  • Automate sales tasks and processes
  • Store lead and customer contact information in one central location for your entire team to access
  • Better understand and manage your sales pipeline
  • Give your sales team the tools they need to close more deals 

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You should opt for CDP software if you want to: 

  • Track your customers’ entire journey, from initial awareness to conversion
  • View how your marketing strategies work together to drive leads and sales
  • Analyze which content and marketing channels your audience interacts with the most
  • Optimize your sales and marketing strategies to drive more sales and revenue

Get more customer data to maximize your sales with Nutshell

Looking for your all-in-one customer data and sales-driving solution? Say hello to Nutshell.

Our powerful CRM software helps you automate sales processes, build strong relationships with prospects and customers, and close more deals for your business. 

If you’re ready to track and analyze valuable data about your customers, Nutshell is ready to help. Our friendly team is always available to provide world-class one-on-one support to help you maximize your sales with every feature our CRM offers. 

Contact us to learn more about how our CRM can grow your business, or get started with your free trial to test it out for yourself!

Photo by Alexander Sinn on Unsplash

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