Chief Product Officer

Customer-centric CMOs use a data-driven approach to make their decisions and interact with their audience. The reason is that data-driven organizations are 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times as likely to be profitable as a result [2].

This mindset requires a thorough clarification on the role and use of a Data Management Platform (DMP), a Customer Relationship Management (CRM) and a Customer Data Platform (CDP). 

We have already addressed how CDPs have evolved over time, out of the CRMs and DMPs. Prospective and existing customers were dealt as leads who were scored during the tipping point of the CRM-age. Eventually, they were treated as data points with the use of DMPs. But, customers prefer to be acknowledged with their own unique identity. It turns out it is a more human problem that CDPs are solving than a technology problem. 

Data lake vs CDP

Does that make CRMs and DMPs extinct? Not really.

They are still used for a variety of reasons and their role stays intact when the marketing goals are well-articulated. In fact, CRM is one of the sources that is integrated into a customer data platform that aids the creation of customer identities. Data coming in from a DMP that is built around silos can also be ingested into a CDP. In this scenario, a CDP is intelligent to attribute data based on earlier data attribution with the use of machine learning; breaking silos.

The following guide helps marketers define the role of each technology and how each one could be put to the best of your use.

The table below gives a clear distinction of a CRM, DMP and CDP based on the technology itself, customer understanding, and business adoption. 

 Customer Data Platform (CDP)Data Management Platform (DMP)Customer Relationship Management (CRM)
Definition A marketer-managed system that creates a persistent, unified customer database that is accessible to other systems. [3]DMP consolidates data from a variety of first, second, and third-party data sources, and further allows organizations to segment their audience to deliver an ultra-targeted display ad experience.CRM manages first-hand customer data and analyzes it across customer segments created within the approach.
FunctionsA CDP ingests customer data from different sources to not only target ads but also create personalized communication.DMP serves a single function that addresses different ad medium and platforms.CRM performs that function of maintaining customer records and providing data for further campaigns.
Data TypesManages primary, secondary, and tertiary data.Manages primary, secondary, and tertiary data.Deals with first-hand data.
Data RetentionCDPs collect and manage private data for longer durations.They utilize cookies to collect data, and hence the user profile data typically lasts for 90 days.This is a cloud-based platform and it just stores data that is collected by the system.
Data CapturingIt allows both push-out and pull-in data. Allowing campaign management from within a single dashboard.DMPs majorly push data to ad networks.CRM pulls in data from a data import or lead capturing. Data can be exported in traditional data formats only.
Customer Profiling
User ProfilesEnterprise CDPs use a combination of deterministic and probabilistic mappingDMPs can profile users using anonymous data based on probabilistic mapping, increasing guesswork.It records and uses customer data for cohort segmentation.
Cohort SegmentationLayered by AI, CDPs can auto-segment cohorts without much human intervention.DMPs allow customer segmentation, but cannot be automated.Customer segmentation is based on very basic parameters.
Business Adoption
Use CasesA marketer can use this across industries and all through different stages of a customer lifecycle.DMP is used by marketers and advertisers as a tool that can develop look-alike models.It helps in storing relevant customer data that works as high quality and appropriate input for campaigns.
PricingIt has multiple modules and your enterprise can choose based on your immediate and long-term needs.If you are opting-in for data to be collected from third-party sources, then you would be charged for using the pre-built customer segmentation templates.This is based on the number of users accessing a CRM and based on the data you want to store.

Why do you need a Customer Data Platform?

In the pre-CDP era, fractured customer identities, data silos, mass customization, and marginal ROI surmounted to poor customer experiences. This led to the need for a technology that bypasses the silos of data banks and interacts with each customer with uniqueness.

Marketers worldwide say their primary challenge in executing a data-driven customer experience strategy is a fragmented system to deliver a unified view of the customer experience across touchpoints (38%), followed by silos of customer data that remain inaccessible across the entire organization (30%) [1]. This large challenge that creates a bottleneck for the marketer to truly understand her customers, led to the strong emergence of a CDP.


  1. CMO Council, Empowering the Data-Driven Customer Strategy
  2. McKinsey:Five facts: How customer analytics boosts corporate performance
  3. CDP Institute

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