{"id":1993,"date":"2021-05-04T21:19:00","date_gmt":"2021-05-05T02:19:00","guid":{"rendered":"http:\/\/davidgruehn.com\/?p=1993"},"modified":"2021-09-12T15:10:58","modified_gmt":"2021-09-12T20:10:58","slug":"crm-vs-cdp-whats-the-difference-between-them-and-why-should-retailers-care","status":"publish","type":"post","link":"https:\/\/davidgruehn.com\/index.php\/2021\/05\/04\/crm-vs-cdp-whats-the-difference-between-them-and-why-should-retailers-care\/","title":{"rendered":"CRM vs CDP: What\u2019s the Difference Between Them and Why Should Retailers Care?"},"content":{"rendered":"\t\t
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A key requirement to enabling the Holy Grail of retail Customer Experience, Customer Adaptive Retailing, is the ability to establish, maintain, and harness 1 on 1 personal relationships with individual customers. While this would have been nearly impossible even five years ago, a perfect storm is on the horizon for retailers with the potential to make this a reality based on a vortex of emerging technologies, digitally mature consumers, and a digital transformation impetus driven by the CV19 pandemic. A relationship implies that you “know” someone, and strong relationships are based on a foundation of intimate information sharing. Today’s digitally mature customers are willing to share intimate information with retailers if a foundation of trust is established that they control, along with their perceived value for doing so. While this critical first step alone seems daunting, the sheer volume of required data and the ability to effectively harness it could easily overwhelm even the most advanced retailers without the aid of advanced technology solutions. Enter Customer Relationship Management (CRMs) and Customer Data Platforms (CDPs).<\/p>

Despite their similar names, each serves a distinct purpose that has a tangible effect on achieving customer experience hyper-personalization. Both are highly ranked in achieving this critical objective because they\u2019re not mutually exclusive. They serve different purposes and are often used in tandem to provide a consistent, personalized customer experience. The key difference between them in a nutshell: CRMs help manage customer relationships, while CDPs help manage customer data.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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While both CRMs and CDPs collect customer data, the main difference between them is that CRMs organize and manage customer-facing interactions while CDPs collect data on customer behavior.\u00a0 For instance,\u00a0CRM\u00a0data will give you a customer’s name and other intimate data they’ve shared such as whether they have children or a dog, their history of interactions at various touchpoints, and their customer service history (among many other things), while\u00a0CDP\u00a0data can provide specific steps they’ve taken since engaging with the company, the channel they initially found a retailer, how they behave with various products, and what social networks they prefer.<\/p>

Customer Relationship Management Systems<\/strong>
CRMs are mainly designed for customer-facing roles, like salespeople and customer experience representatives.\u00a0 They excel at helping customer-facing employees secure new business, retain existing business, and managing individual customer relationships. Traditional\u00a0CRM’s have historically been utilized in\u00a0B2B\u00a0scenarios, while retailers utilized\u00a0clienteling<\/a><\/u>\u00a0solutions, primarily in-store, to help store associates\u00a0provide more personal and informed customer service with the goal of\u00a0influencing customer behavior related to shopping frequency, lift in average transaction value, and other retail key performance indicators.\u00a0<\/p>

The data CRMs collect is usually manually gathered, highly specific in its purpose, and hard to automate\u2014for instance sale associate notes from a recent store visit or a customer service interaction.<\/p>

As retailers shift toward creating seamless customer experiences which transcend their channels, they’ll require more robust\u00a0CRM\u00a0solutions that encompass all their channels and integrate with a\u00a0CDP\u00a0to unify the entire shopper experience and more accurately capture an individual customer’s 360 degree view.\u00a0 This will be essential for creating hyper-personalized customer experiences.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Customer Data Platforms<\/strong>
CDPs are targeted at non-customer facing roles like marketing, product, and leadership, as well as sales.\u00a0\u00a0The goal of a\u00a0CDP\u00a0is to unify fragmented customer data and make it usable. CDPs do this by gathering data from an ever-growing list of customer touchpoints \u2013 everything from mobile apps, point of sale, page views, emails, chat bots, surveys, social media sites, to wishlists \u2013 all in one place.\u00a0\u00a0This data is then used to produce a single view of the customer through a process called\u00a0identity resolution<\/a><\/u>: the process of attributing customer behavior and interactions with a business – across all touchpoints, platforms, or channels – into a single unified customer profile.\u00a0 Marketing can use this single view of the customer to build effective, personalized marketing campaigns, leadership to understand the overall cost of acquisition and lifetime value of each customer, and sales to build hyper-personalized customer experiences.\u00a0<\/p>

The data CDPs collect is usually automatically gathered\u00a0<\/a>using integrations with all forms of data services and systems. This encompasses customer data from a retailer’s own 1st party data as well as\u00a02nd and 3rd party data<\/a><\/u>\u00a0sources.\u00a0 CDPs aggregate the data into a contextual and unified customer profile, scrub it using real-time segmentation and advanced analytics, and then send it to where it needs to go downstream via connectors to provide compelling hyper-personalized customer experiences.<\/p>

Why Should Retailers Care About Both?<\/strong>
If you’ve ever been happily married or in a successful long-term relationship, you know that a key to that success was maintaining a fine balance between intimate communication and consistent,\u00a0positive\u00a0interaction –\u00a0insight AND action.<\/em>\u00a0 Retailers must emulate these critical components to build, maintain, and harness the long-term relationships they seek with each of their customers.\u00a0 This will require the effective utilization of\u00a0both\u00a0<\/em>a Customer Relationship Management solution and a Customer Data Platform, preferably integrated, that focus on the retail industry’s unique challenges.\u00a0\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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A rich, unified 360 degree view of each customer will provide the foundation upon which a retailer can build hyper-personalized customer experiences, but at the end of the day, it’s the people engaged at every touchpoint with a customer that will make the difference – and they will require a readily accessible, easy to use solution to not only build a new customer experience for that moment, but capture and share with the rest of the organization the result of that unique customer engagement to perpetuate the critical customer journey cycle.<\/p>

The legacy worlds of Business to Business (B2B), Business to Consumer (B2C), and Business to Business to Consumer (B2B2C) are all rapidly converging into the emerging world of Direct to Consumer (D2C) where the customer is the center of the shopping universe.\u00a0 There is now only\u00a0ONE\u00a0retail channel – the Customer Channel – and retailers that thrive going forward will be those that can race the fastest down that super-channel buyway of hyper-personalized customer experiences.<\/p>

Sources:<\/u><\/p>

CRM vs. CDP: What\u2019s the difference between a CRM and a CDP?<\/a>
Identity Resolution: The Definitive Guide<\/a>
Hyper-Personalization: 4 Examples of Retailers Doing it Right<\/a>
Hyper-personalization vs. Segmentation: Has Big Data made customer segmentation redundant?<\/a><\/h6>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Despite their similar names, CRM and CDP each serve a distinct purpose that has a tangible effect on achieving customer experience hyper-personalization.<\/p>\n","protected":false},"author":1,"featured_media":2524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[319],"tags":[324,325,327,326,256,320,72,323,283,328,322,247],"class_list":["post-1993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-1st-party-data","tag-2nd-party-data","tag-360-customer-view","tag-3rd-party-data","tag-b2c","tag-cdp","tag-crm","tag-customer-adaptive-retailing","tag-customer-data-platform","tag-customer-relationship-management-system","tag-hyper-personalization","tag-sap"],"yoast_head":"\nCRM vs CDP: What\u2019s the Difference Between Them and Why Should Retailers Care? - DwG Retail<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/davidgruehn.com\/index.php\/2021\/05\/04\/crm-vs-cdp-whats-the-difference-between-them-and-why-should-retailers-care\/amp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CRM vs CDP: What\u2019s the Difference Between Them and Why Should Retailers Care? 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