Competition is fierce in the area of customer experience, so having a deeper understanding of your audience is critical to success. This understanding needs to go beyond a general understanding of audience segments and personas, and achieve an ability to personalize experience for individuals.

Organizations have several tools at their disposal to better understand their customers. Two of the most important are customer relationship management (CRM) platforms and customer data platforms (CDP). For those less familiar with the distinctions and definitions of each, let’s briefly define them individually before we talk about how they can be used to work together.

What Is a CRM? What Is a CDP?

A CRM is a platform that stores information on current and potential customers, allowing an organization to identify potential sales opportunities, manage their marketing efforts, and more. It functions as a database that internal teams can manually input data into, and can also pull in data from external sources. In addition to serving sales and marketing teams, CRM systems also serve customer service and technical support areas of a business. Effective use of these platforms throughout the entire customer lifecycle can lead to greater customer lifetime value (CLV).

A CDP is a platform or collection of software that pulls data from multiple sources (structured and unstructured, behavioral and transactional, and others) to create a single, unified customer profile. This profile is then made available to internal systems for marketing and other purposes. One of the benefits of a CDP is that it sits outside of many internal systems and is able to collect customer and contact behaviors outside of internal channels.

Keep in mind that not every CDP or CRM falls rigidly into the above definitions, with some offering some features and characteristics of the other. While the CRM category is not new at all, the CDP category still seems to be evolving into a core definition of features.

Let’s look at how an organization can use both of these tools together to offer a more optimal customer experience.

Related Article: Improving the Customer Experience: Should You Invest in a CDP or a CRM?

Define the Source of Truth

One of the greatest values of good data is it can provide an objective source of truth. With multiple databases, customer records, and methods of gathering data from different parts of the customer journey, how can an organization know what to rely on as that one source of accurate intelligence?

Because of the diverse amount of information that CDPs collect, and the way they can take both structured and unstructured data to form a unified view of a customer, you can think of a CDP as your source of truth about an individual. CRMs can benefit from this data through integrations and pulling select pieces of information into a record, but the holistic view that a CDP creates puts it in a unique position in your data ecosystem. Likewise, CDPs benefit from integration with CRMs, or other systems like data management platforms (DMPs) as well as many more.

While a CDP and CRM can work well together, make sure that your teams fully understand what differentiates them, how each are kept up to date, and what information is best gleaned from each in order to provide a full picture of your customer.

Understand Internal and External Dynamics Dictating Use of CDP and CRM

Success working with CDPs and CRMs relies on internal teams understanding the strengths and weaknesses of each in relation to their desired goals, as well as implementing and enforcing best practices in how information gets updated within each type of platform.

For instance, marketers can have great success with CDPs when running real-time marketing campaigns that benefit from personalization and next-best action approaches. Because a CDP is capturing a mix of behavioral, transactional and other data, it is able to build an accurate view of that customer that can be used to target them with extremely relevant offers and information.

By the same token, sales professionals who are interested in building relationships with individuals will find a CRM more helpful because of its ability to capture the type of information that is most beneficial when building one-on-one relationships. Relevant insights can be pulled out of a CDP and inserted into a CRM contact record, but many of the things that a CDP stores are details that it is difficult to act on, and the volume of data collected is easier for artificial intelligence and machine learning to parse, rather than an individual person.

Learning Opportunities

While CDPs are incredibly helpful in building customer data profiles, don’t forget internal sales teams are using your CRM for critical business and this information can be incredibly timely and valuable. Understanding this dynamic between CDPs and CRMs can help you work out how to deploy each tool most effectively.

Related Article: Curiouser and Curiouser – Drawing the Line Between DXP and CDP 

Data Governance Is Key

I’ve written several articles about the importance of data governance and how even nontechnical roles in an organization need to understand, collaborate and contribute to data governance within an organization. When talking about CRMs and CDPs this is certainly no exception.

The quality of the relationship between your CRM and CDP is dependent on the quality of data that can reliably and consistently be shared and ingested by the systems. Data governance will ensure you are getting the most value out of the data you are collecting, and that your systems are being used to their strengths as well as to best support your marketing, sales and support teams.

Related Article: Why Data Governance Is a Shared Responsibility

Start With Strategy, Then Look at Platforms

This is a fast-changing space. Many CRM providers are adding CDP capabilities, and so many factors within your organization may depend on the systems and platforms you've already adopted. Don’t let your technology lead your strategy, however. Make sure you define a customer data strategy that defines your ideal scenario, and then determine if you have the right platforms to accomplish it.

After you’ve successfully defined your CDP and CRM strategy, you might need to incorporate some levels of automation and orchestration. Some of the platforms already offer varying levels of this type of functionality, particularly when a single provider provides both CDP and CRM features within a single ecosystem.

Depending on the platforms you use, you may be simply collecting a lot of data, but not taking a lot of action with it. Make sure to look into implementing next best action approaches, including marketing automation and personalization, that leverage all of the insights you are collecting both externally (e.g. user actions and behavior) and internally (e.g. sales team interactions).

Both CDPs and CRMs can play a vital role in delivering great customer experience. While the line where a CDP ends and a CRM begins continues to shift, as does the definition of the core functionality of both, understanding the basics and implementing the above approaches will lead you to greater success in your customer experience initiatives.

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