Customer Data Platform vs CRM | What's the Difference?
There’s a reason why a lot of restaurants are focusing on their business data and asking questions like: customer data platform vs. CRM, what’s the difference?
Data allows restaurants to get to know and stay connected to customers. It allows you to see what is working when it comes to marketing and menu choices. And, it’s how you can make plans for improving everything from your operations to your advertising campaigns.
Data is a powerful asset, and more and more restaurant owners are leveraging it to improve their business. If you are interested in tapping into the power of your restaurant data, let’s start by breaking down the difference between a customer data platform vs. CRM.
Customer Data Platform vs. CRM
Despite their similar names, both technologies serve a unique purpose with different tangible effects on your customer experience. To understand the difference between a customer data platform and customer relationship management system, start by understanding what each system is and what it can do for your restaurant.
What’s a Customer Relationship Management (CRM) System?
A customer relationship management (CRM) system is software that helps a business manage interactions with customers. A CRM creates profiles for customers and includes any data related to the customer’s interactions with the brand.
Most CRMs store information such as:
- Customer name
- Customer contact information (email and phone number)
- List of all communication with the customer (such as calls with sales and customer support, emails sent/received, quotes sent, etc.)
CRMs are most often used by sales, marketing, and customer service teams. Teams use CRMs to track interactions with customers as they move prospects through the sales funnel.
What’s a Customer Data Platform (CDP)?
A customer data platform (CDP) is software that manages comprehensive business data. It includes data related to customer demographics, psychographics, contact information, brand engagement, purchasing habits, and behaviors. CDPs curate information from multiple data sources and showcase data on a customer level as well as on a more broad market or location level.
A customer data platform pulls data from:
- Customer relationships management (CRM) systems
- Point of sale (POS) systems
- Social media analytics
- Website analytics
- Customer surveys
- Other third-party sources
CDPs curate a variety of restaurant data and analytics that are useful for sales, marketing, and customer service teams -- as well as operations and management teams.
What’s the Difference Between a CRM and CDP?
The difference between a CRM and CDP is in the scale of data each collects. Both a CRM and CDP collect and manage customer-level data, but a CRM has a smaller dataset than a CDP. A CRM houses customer-level data related to individual interactions with a brand, whereas a CDP manages customer-level data as well as data related to sales, social media, website analytics, operations, and more.
CDP vs CRM: Functions and Uses
- Data management - integration, validation, cleaning
- Identifying and categorizing customer behavior
- Defining unified customer profiles for future use
- Analyzing customer purchase journey for retargeting
- Exporting segmented customer lists for deriving business intelligence or executing campaigns
- Predictive customer behavior
- Analyzing sales pipeline and forecasting
- Sales related to front-office
- Mining for new customers
- Post-sales customer service
- Marketing automation
- Quote-to-cash processes
All in all, CDPs gather, analyze, organize and present customer data that is fed to marketing campaigns and personalization engines. In addition, you can integrate CDPs with CRMs and other customer-facing solutions to gather useful metrics like customer demographics, page views, page clicks, etc. This information helps further segmentation and data modeling.
CDP vs CRM: Data Collection
CDP data is automatically gathered using code snippets and integrations. Data can be sourced from mobile devices, software or apps, laptops, websites, etc. Raw data is filtered, cleaned, and matched to formulate useful insights to be used by different teams. So, you have full control over the data.
CRM data is gathered manually. Salespersons take notes that can be difficult to standardize. Most of this data is solely focused on finalizing the deal. So, CRM data is challenging to use or export elsewhere. Moreover, data can be used and controlled within the CRM only.
Can a CDP Replace a CRM?
When it comes to customer data platforms vs. CRMs, you are probably wondering which one you need for business.
A customer relationship management system for your restaurant is useful, but you may not need one if you have a customer data platform. You can replace your CRM with a CDP.
A customer data platform can fill the same functions as a CRM. A CRM collects and manages a specific type of consumer data, and you can set your CDP to collect and manage the same data.
- If you have an existing CRM and want to keep it, you can. You can connect it to your CDP to create a robust system for managing all consumer data.
- If you don’t have an existing CRM, you might not need one if you have a CDP. You may be able to set up your CDP to collect and manage the customer data typically curated in a CRM.
A customer data platform will provide more value to your business than a CRM. If you have the option of one, choose to use a CDP which can collect data similar to what a CRM would collect in addition to other valuable datasets.
CDP vs. CRM? What’s Right for You?
Data stored in a CRM is useful. It offers insights on an individual customer level, but data in a CDP can offer so much more. Data in a CDP can:
- Centralize customer, sales, and operational data from multiple sources into one software.
- Create robust customer profiles with demographic and contact data.
- Identify customer trends and habits.
- Segment customers based on engagement and connect with them via text and email.
- Personalize marketing messages and add individual targeting options.
- Identify the most effective marketing channels and top-performing locations and offerings.
- Create more targeted marketing messages and campaigns.
- Identify opportunities to improve operations and create new offerings.
If you want to get the most out of your data, choose to use a customer data platform over a CRM. It will help you take control of all of your brand data and allow you to make business adjustments and improvements based on better insights.
For help setting up a customer data platform, talk to the team at MyArea Network. We specialize in helping hospitality brands take control of their data by setting up custom dashboards. (Then, we help you analyze your data to create better, more effective marketing decisions.).
See how we can help your brand take control of your data and learn from your analytics. Schedule a call with our team today.