CRM (Customer Relationship Management), CDP (Customer Data Platform), and CXM (Customer Experience Management) – are all terms related to managing customer interactions, but they differ in their focus and functionality.
Understanding the differences between these terms is crucial because it can help businesses select the right tools and strategies to achieve their customer engagement goals. There are a lot of those small but important details that you might want to notice during the process of understanding these terms – and rest assured, we’ll try to clear them up for you in this article.
CRM vs CDP vs CXM
To start differentiating between these three, we’ll first look at the definitions, and then the use cases and examples for each of them.
CRM (Customer Relationship Management)
A CRM (Customer Relationship Management) is a software system designed to help businesses manage interactions and relationships with customers. It focuses on managing customer data and interactions to improve customer satisfaction and retention which typically involves the use of technology such as customer databases, marketing automation tools, and customer service platforms to help businesses keep track of customer interactions and better understand their needs and preferences.
Notable features:
- Store and organize customer information
- Track customer interactions and behavior
- Automate various marketing and customer service tasks
Example:
Salesforce provides a variety of tools and services that enable businesses to automate their sales processes, track customer interactions, and analyze data to make informed business decisions.
The platform is known for its flexibility, scalability, and ease of use, which makes it a popular choice for businesses of all sizes and industries. Additionally, Salesforce has a large ecosystem of third-party apps and integrations that can be used to extend its functionality and customize it to meet the specific needs of each business.
CDP (Customer Data Platform)
A CDP, on the other hand, is a type of software that collects, stores, and manages customer data from multiple sources to create a unified customer profile. Typically, a CDP is designed to help businesses improve their understanding of their customers, personalize their marketing and sales efforts, and improve customer experiences.
CDPs are different from traditional CRM systems in that they focus on consolidating data from all sources, including online and offline interactions, website behavior, social media activity, and third-party data. This data is then organized into a single, unified customer profile that can be used to inform marketing and sales strategies, as well as to personalize customer experiences.
Notable features:
- Data integration: The ability to collect data from a variety of sources, including online and offline channels.
- Data cleaning and normalization: The ability to clean and normalize the data to ensure consistency and accuracy.
- Customer profile creation: The ability to create a unified customer profile that combines data from all sources.
- Analytics and reporting: The ability to analyze and report on customer data to gain insights and inform marketing and sales strategies.
Example:
Tealium is a CDP that provides a suite of tools for collecting, managing, and utilizing customer data to improve customer experiences. The software is designed to help businesses create a unified view of their customers by consolidating data from multiple sources and providing a centralized location for managing that data.
CXM (Customer Experience Management)
A CXM platform, or customer experience management platform, is a software solution that helps businesses manage and improve their customer experiences across all touchpoints and channels. A CXM platform enables businesses to collect, analyze, and act on customer feedback and data to improve customer satisfaction, loyalty, and advocacy.
Notable features:
- Data analysis: The ability to analyze customer data to gain insights into customer behavior, preferences, and sentiment.
- Personalization: The ability to use customer data to personalize customer experiences, such as website content, product recommendations, and messaging.
- Collaboration and communication: The ability to enable collaboration and communication among customer-facing teams, such as sales, marketing, and customer support.
- Reporting and analytics: The ability to generate reports and analytics to measure performance and identify areas for improvement.
Example:
Filum is an experience management platform designed to help businesses and organizations capture and analyze customer feedback, measure customer satisfaction, and improve the overall customer experience.
The platform allows users to collect feedback from multiple channels, including email, web, and mobile, and use advanced analytics and reporting tools to gain insights into customer sentiment and behavior. Filum also offers a variety of features such as automated surveys, sentiment analysis, and trend monitoring to help businesses identify areas for improvement and take action to enhance the customer experience.
Where they overlap
Since these software and/or platforms all serve to manage customer interactions and improve the customer experience, there are several areas where they overlap such as:
- Customer focus: All three disciplines are centered around the customer and aim to improve the customer experience.
- Data-driven: CXM, CDP, and CRM rely on customer data to inform decision-making
- Omnichannel: CXM, CDP, and CRM all involve managing customer interactions across multiple channels, including email, social media, mobile apps, and other touchpoints.
- Integration: CXM, CDP, and CRM all require the integration of data and systems from multiple sources, such as customer feedback, purchase history, and social media interactions.
These similarities are what give rise to the confusion that businesses tend to face when choosing a solution to improve the customer experience, which can further lead to wasted time and investments. It’s important to understand the goals that each of these platforms tries to achieve, which leads us to our next point.
Where they differ
Each one of these platforms serves a different purpose, and you might want to choose a different solution based on what your goal is. The gist of it is that CXM is about managing the overall customer experience, CDP is about collecting and unifying customer data, and CRM is about managing customer relationships and interactions. For example:
- Customer Experience Management (CXM): CXM refers to the process of managing and improving every aspect of a customer's experience with a brand, from initial awareness and acquisition to post-purchase support and retention. CXM focuses on creating a positive, seamless, and consistent customer journey across all touchpoints and channels.
- Customer Data Platform (CDP): CDP refers to a software system that collects and organizes customer data from multiple sources, including online and offline interactions, and creates a unified view of the customer. This unified customer profile can then be used for personalization, segmentation, and targeting in marketing and other customer-facing activities.
- Customer Relationship Management (CRM): CRM refers to a software system that helps businesses manage customer interactions, relationships, and data throughout the customer lifecycle. CRM typically includes functionality for sales, marketing, customer service, and support, and enables businesses to track and analyze customer interactions, preferences, and behavior.
Conclusion
Now that you know how each platform serves a distinct purpose in managing and improving customer engagement and experience, we hope you can feel confident to choose the right platform based on your specific needs and goals. Ultimately, the right platform will help you improve your customer experience and stay competitive in your respective industries.
