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Feb 8, 2017

Marketers Beware: CRMs Plus DMPs Don’t Equal a Customer Data Platform

crm vs dmp dmp vs crmAcquiring and maintaining a true 360-degree customer view is perhaps the most desired goal in the entire marketing field. It’s also one of the most valuable to customers, so every provider of marketing technology products attempts, at some point, to make the case that they can provide that 360-degree view.

And for several years we’ve all been told that we can just dump all that data in a data management platform (DMP), connect it together, and we now have a marketing database source of record. “Don’t worry,” we were told, “it’s all good and you’ll love it.” But lately, it’s become more and more clear to the market that this is not exactly correct. To those of us who actually look at corporate data sources, it was always curious to note that missing part about making sure the data was correct, standardized, matched, and keyed.

The latest version of attempts to continue pretending to be a marketing source of record suggests that pairing a DMP with a customer relationship management (CRM) solution can provide a 360-degree customer view throughout the entire anonymous-to-known customer interaction chain. DMPs can handle any type and structure of data, so the story goes, but CRM interfaces provide the best possibilities for sourced data because they allow you to link web behavior data with known customers and track it.

As the old adage goes, “If it sounds too good to be true, it probably is.” Well this DMP/CRM pairing is no exception.

The strengths of a customer data platform (CDP) are separate and distinct from that of a DMP and CRM. Chaining these two solutions together won’t provide the kind of cross-channel insights, or intelligent orchestration, required to fully leverage customer data in the always-on, multichannel world that marketers inhabit or provide the 360-degree customer view. And certainly not to the highest quality a CDP does. Having the DMP treat a CRM as a “source” while then holding all the other non-CRM sources does not a CDP make.

DMPs Don’t Have the Same Data Powers as CDPs

DMPs have told the same story for years: they can handle any data no matter the structure or cadence, can perform any attribution, send emails, perform advanced segmentation, handle personally identifiable information (PII), interface with demand-side (DSP) and supply-side platforms (SSP), conduct look-alike extensions, do organic retargeting … and so on. Essentially, making the case that they can do anything you need from a data perspective.

That’s not entirely true. DMPs can’t perform nearly the amount of functions that are intimated, and the proof in this is the number of customers with current DMP-centered stacks out on the prowl for a way to get their data from the silos (one of which is the DMP itself) and into a single place – reversing the trend and turning the DMP back in to what it is – another channel.

The DMP is a channel that can do amazing things, and the DMP itself interacts with specialized channels. What DMPs can do, and do exceptionally well, is typically interface to DSPs to buy and serve up advertising, perform look-alike extensions for audience acquisition, and facilitate organic retargeting. All of this is largely centered on interactions based on cookie/ID data (whether “pooled” or not) that identifies devices instead of individual customers and hopefully matching some percentage to first-party data.

Sure, DMPs can on-board PII (sort of), but there’s a fundamental truth that we in the data management business understand: ingesting data isn’t the same thing as making it actionable everywhere. First-party data is used as the “jumpstart” into onboarding processes, but is separately handled (and can take days), and thereafter is distinct from second- and third-party data. And it’s only actionable in the connection span of the DMP.

The first-party data is tagged in the DMP repository, but unless regular (read: batch) updates happen, it stays the same, except for what is in the connection span of the DMP. In contrast, the CDP tracks both anonymous and known interactions across the entire universe of interaction channels and identifies customers in addition to devices. Given the same data, plus DMP audience information as an inbound channel, the CDP can make real-time decisions across the entire spectrum, can do it using the very most current state and status information and can make decisions of arbitrary complexity, rather than simple “audiences.”

DMPs may be able to ingest PII, but they don’t necessarily serve it back to you or, for that matter, tell you how it all ties together, or improve its quality – fundamental elements to any business serious about putting their data to work. Furthermore, the data locked in a DMP also can’t be leveraged elsewhere in the business, which creates another data silo that prevents true business insight. On the other hand, the CDP absorbs any variety of data and links it, allowing the full spectrum of the business beyond marketing, from manufacturing and supply chain to store manager, to easily and readily consume it without further ado.

 What About Adding a CRM? (DMP VS CRM)

What happens when you consider adding a CRM to the mix? CRMs contain profiles of known customers, so it stands to reason that linking a CRM and a DMP would solve the problem of tracking customer behavior from anonymous to known across channels, right?

Not so much. CRMs are largely focused on customer transactions. If a customer calls, emails, or buys, most CRMs record the transaction and allow access to the entire transaction history, so you know how best to respond to an inbound customer interaction. As a result of this set up, CRMs are strongest when deployed in support of contact centers, for sales reporting, or for order/service tracking. Again, it isn’t that CRM solutions aren’t valuable in the decision domain, but only as one more input to (and one more output from) the CDP.

A CRM isn’t sophisticated enough for 360-degree marketing, which is why there’s a host of other marketing solutions available for activities like email, social marketing, advertising, and related marketing tasks.  In addition, they are notorious for creating and exacerbating data quality issues like record duplication.

Moreover, CRM systems don’t have the MDM ability needed to produce a truly coherent series of persistently keyed records representing people, devices, cookies, DMP identifiers, voice of customer data, ratings information, weather, IoT data points, in-home micro-inventory management and so on. Only a properly deployed CDP can really handle all this complexity in a consistently seamless way. To truly support the business, these are things that just must be done. Data lineage is not accomplished by dumping CRM data into a “schema on read” style repository. In other words, CRMs can’t reconcile multiple profiles of a single person, device, or visitor, which is one of the most powerful (and valuable) functions of a CDP.

Even when you link a CRM and a DMP together, there’s little to no integration of a return trip to serve up a new offer based on an action, or lack of one, or communication with other channels, especially if they aren’t the favorite integration channel of the CRM product chosen. It is simply trading one set of handcuffs (silos in the DMP-centered stack) for another (a CRM solution, with silos in the DMP-centered stack). In essence, the DMP-centered stack product is NOW saying “well, we do care about good quality data sources now, and we choose a CRM system for that.” But the handcuffs are the same, just with a few more sparkly things to distract from the actual issue with having a purported system of record without a fully integrated data solution.

Get a Customer Data Platform for a 360-Degree View

If you really want a 360-degree view of your customer, and most marketers do, you need to leverage a customer data platformPurpose-built CDPs like what are included in the Redpoint Customer Engagement Hub™ are designed to sit behind all the channels of interaction and provide a global view of customer behaviors, actions, and data to drive cross-channel orchestration and conduct hyper-personalized campaigns across anonymous and known interactions.

DMPs and CRMs are channels of interaction. Channels that perform their core tasks exceptionally well, but channels all the same whether inbound, outbound, or both. CRMs are customer-focused to the extent that they can be and are valuable in their designed space, but they can’t be used to enable marketing and the rest of the business in the same way a CDP can. Similarly, DMPs are vital to managing certain online interfaces and do lookalike extensions exceptionally well, but they can’t track customers along the full anonymous-to-known interaction cycle while also being a data source of record. They don’t give any finished data back to the business for use outside of their designed space either.

Contrast this with CDPs, which ingest multiple types of data of any type from multiple channels, integrate it all together, and allow for high-level visibility that can be used to orchestrate cross-channel customer engagement and serve and enhance wider business functions beyond marketing. With a CDP, you’re able to serve business users that require data at any level of detail—across anonymous and known interactions—and no matter if you’re looking at online or offline engagement or “n” party data.

That’s the power of a CDP, and why the DMP/CRM pairing just can’t compete. So, if you’re looking for a platform that can give you a true 360-degree view of the customer and provide cross-channel insights paired with intelligent orchestration, then you need a customer data platform —not a cobbled together solution that tries to pass off as a pseudo-CDP.

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Steve Zisk 2022 Scaled

Steve Zisk

Product Marketing Principal Redpoint Global

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