CDP: the next step after the CRM

What is a CDP? Is it the same as a CRM? In this blog we try to explain in a simple way what the use of each of them allows your company to do, and their main differences.

The massive expansion of CRM makes many companies see it as the end of their road to becoming a data-driven company. However, every day there are more possibilities to know your customer and improve your customer experience. This is essential today, as more than half of consumers have switched brands in the past year due to a bad customer experience.

What is a CRM and what is a CDP?

A Customer Relationship Management (CRM) is a technological tool that allows companies to know their customers through their relationships or points of contact with them. The sum of your customers' interactions with your campaigns or promotional methods is accumulated in your CRM to achieve a better understanding of your customer.

A Customer Data Platform (CDP) is a platform that allows you to bring together all the data collected by your company (first-party data); the data you have from third parties, such as social media, Google Analytics or the CRM itself (second-party data); and socio-demographic or market data (third-party data). The combination of all this data allows you to obtain a 360º view of your customer, which, added to the use of artificial intelligence (which CDPs have integrated), lets you understand your customers down to the smallest detail, and thus predict future behavioral trends.

Why are companies not happy with their CRM?

To understand this we need to look at the problems companies encounter with their CRM:

• Tension between departments. Interdepartmental communication is key, and the data teams have and the way they deal with it must be aligned. Many companies find that this does not happen, leading to disputes between Marketing and Sales.
• It does not predict behavior. Analyzing the behavior of your customers is very useful to understand what they like. However, with the advances in technology, not being able to predict behaviors with the necessary information is a limitation.
• The data is not up to date. Many users have long complained that some CRMs are not constantly updated, and therefore their reliability can be low. By not having the data updated in real time, confusion can arise and the data may not be read correctly.

Is the solution in the CDP?

CDPs were born with the intention of overcoming these problems. With an intelligent CDP, you have all the information unified and updated in real time, all departments can access the same information, and the sum of the information from each department makes the data obtained more enriched.

But one of the biggest changes from a CRM to a CDP is the ability of the CDP to predict future behavior with AI. By studying the behavior of each person and unifying all the data, you can anticipate their movements and gain efficiency in your campaigns.

For example, if you have John as a customer of the loyalty plan of your clothing shop, and you unify the data he gave you when he joined (name, date of birth, address, etc.) with his purchase record, the analysis of your sales by dates in recent years, and the effect that certain types of campaigns (online, street posters, etc.) have on the audience to which John belongs, you can predict with high accuracy how much John will buy next month if you run an online campaign.