The Differences Between MDM, CRM, and CDP Solutions

CRMs, CDPs, and MDM platforms all rest on a foundation of data, in particular, surrounding data about customers. To be sure, these platforms all seek to understand and help organize data, but each at different depths and breadths.

Let’s begin with some brief definitions of the three acronyms: CRM, CDP, and MDM.

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What is a CRM?

Customer Relationship Management (CRM) systems are purpose-built applications to track and catalog direct interactions between a brand and its customers. These interactions include face-to-face engagements, emails, social media, chats, texts, support requests, meetings, quotes and requests. They are used in the implementation of sales and marketing to help acquire customers.

What is a CDP?

Customer Data Platforms (CDP) create a persistent unified database of individual customers from all sources of customer data, meaning offline and online sources, like mobile, but also including data from CRMs. In this way, a single 360-degree view of the customer encompasses everything the company knows about that customer.

What is an MDM?

If CDP seems to be one level higher than CRMs, then MDM systems are one level higher than CDPs. Master Data Management (MDM) platforms tie together master data from multiple domains across the enterprise, including both CRMs and CDPs, but also other systems like ERP, the domains that don’t seem to pertain to customers, but do, like through products (at least when they are purchased).

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How They Work

The common thread throughout the above platforms is customer profiling and the data that they each use to build those profiles.

CDPs build profiles using first-party sources, namely the interactions that sales, marketing, and customer support teams have with customers. Data is also consolidated from customer interactions online, through social accounts, and email systems. But also offline transactional data is used, such as point-of-sales (POS) systems or loyalty cards. Then customer opt-in information found in CRMs, like names and addresses, can be matched to purchased goods which can be fitted together to present a fairly unified view of a customer. These views can be further leveraged into email campaigns, and remarketing. CDPs are highly granular, powerful, and beneficial for enterprises.

To contrast, Data Management Platforms (DMP), using third-party data, form customer archetypes rather than profiles. Because third-party data is anonymized and pre-segmented, customer identities are not available. DMPs are useful when marketers want to target specific audience segments to launch targeted campaigns.

MDM platforms and CDPs seem too similar because they aggregate data. And while there is overlap, CDPs primarily focus on features that sync data sources. The more encompassing MDM platforms that take in data from across all domains focus on record matching, transforming data, and singling out the common threads among domains to make all data in the organization usable as a single source of truth for the business.

Popular Uses

In general, both CRMs and CDPs support sales and marketers in their work, maintaining customer data and customer analytics. Whereas, MDM platforms primarily transform data from across domains to be clean, accurate, unified, and structured.

Popular CRM use cases include:

  • Automating tasks
  • Building omnichannel or personalized customer experiences
  • Managing sales pipeline
  • Analyzing the sales cycle and customer behavior

Common CDP use cases include:

  • Unify customer data
  • Enhance customer segmentation and personalization
  • Deploy omnichannel marketing and messaging
  • Discover actionable analytics and business insights

MDM is most often used to consolidate:

  • B2C and B2B Party Data
  • B2C and B2B Product Data
  • Multi-domain Master Data

It should be pointed out that CRMs, and CDPs are proficient in data analysis, but MDM platforms are aggregators, and linkers of data that are not analyzing trends or customer behavior. They overlap but serve two distinct purposes, in the first two, they are intent on insights, and MDM is about connecting the customer common throughout domains.

Which Is Right for You?

Most companies can easily benefit from using systems that track and analyze customer interactions like a CRM does. But integrating more data domains and increasing data complexity requires systems to bridge those domains and align data, like how CDPs or MDM platforms do.

But which one is right for you?

This question cannot (and shouldn’t) be answered perfectly here, each organization’s tech stack is unique and deserves to be thoroughly considered against multiple vendors for the best solution. However, below is a set of points of comparisons between CRM, CDP and MDM, which highlights potentially where to focus your research efforts.

  • CRMs and CDPs utilize and store first-, second-, and third-party information.
  • CRMs and CDPs are used by sales and marketing departments to facilitate customer acquisitions.
  • CRMs and CDPs aim to improve customer experience.
  • MDMs manage the master data of many domains, like products, but also customers, so CRM data sets are subsets of MDMs.
  • CRMs excel at the single domain of storing customer data and analyzing it. MDMs excel at transforming data and establishing consistency across domains.
  • MDMs can bring context from multiple related but separate systems, improving efficiencies and reducing costs.

For many small businesses, a quality CRM system may satisfy all their needs. But when businesses grow, and their definition of core data changes, an MDM solution will become a welcome addition.

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