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Why your CRM is not a Customer Data Platform - Part 1

Published: Wednesday, 16th January 2019 by Joe Cripps, Product Manager, D4t4 Solutions Plc

A recent Gartner survey regarding misconceptions about the function of CDPs for marketing revealed that 51% of marketers believed that their CRM was a CDP*. While experts in either of these fields would probably consider this to be absurd, to an extent it is understandable why these two technologies could be confused.

Unless you have had hands-on experience of working with customer data, the need for a CDP is not immediately obvious. It is natural to assume that a typical modern organization that spends many millions each year on enterprise technology solutions would have an accurate view of their customers. There are a number of solutions that have been available for many years, which have been extensively adopted to achieve this outcome.

CRM solutions are perhaps the highest profile example of a technology focused on customer data and other information related to the business such as supply chain and sales channels. These technologies are sophisticated databases which enable users to collate, optimize and unify this customer data. So, on the surface it is easy to see why this appears to be the same as a CDP, whose primary function is to eliminate messy and siloed customer data.

The problem is, CRM systems only partially resolve customer data silos. The fundamental difference between CRM and CDP is data collection. CRM systems do not capture first party customer experience and behavior data from an organization’s digital channels (such as their website or mobile apps), whereas this data collection is one of the defining capabilities of a CDP. This means if a company intends to capture experience data- for example by using Tag Management System (TMS) to extract behavioral data - without a CDP, the data they capture will most likely form a separate silo to their CRM database. In effect this set up has the opposite outcome to what a CDP aims to achieve, so your CRM plus a TMS is most definitely NOT equal to CDP!

Customer Relationship Management plus a Tag Management System is most definitely NOT equal to a Customer Data Platform!

The issue is that the behavior and experience data captured by the TMS is not necessarily in a format that is compatible with the CRM system, so cannot be easily ingested. But assuming this integration could be achieved, the CRM system could still not be considered a CDP because of their inability to connect in real-time to the systems of insight and engagement which organizations rely on for digital marketing, analytics and decisioning.

CRMs are also limited in terms of the types of data they typically ingest and tend to be focused on sales and financial data, contact history and demographics. They were not designed to contain a definitive record which includes all of the digital interactions made by customers across an organization’s digital touchpoints. While many CRM systems have developed extensible data models, they may still struggle to combine customer interaction data with the personal, demographic and transactional data which they were designed to handle. CRM systems are also unable to create profiles for anonymous or unidentified customers and to update this profile with personally identifiable information when the customer provides consent for data processing or to receive marketing communications.

In addition, CRM systems cannot offer the compliance capabilities that some CDPs are now providing. Now that GDPR and other data privacy laws have come into effect, organizations need a clear record of their customers’ consent to the capture and processing of their personal information in order to prove they have a legal basis for the use of this data. While CRM systems can be used to record customer interactions with staff, including their consent choices, they are unable to automatically capture this data from digital channels. For example, if a banking customer opts out of marketing communications in branch, a member of staff can update the CRM system, but if they opt out on the bank’s website or mobile app, a means must be found to capture and ingest this information into CRM.

Finally, CRMs were not designed to have genuine real-time capabilities as they serve as a relatively static record of customer information. Typically, a CRM system would be updated every 24 hours, meaning that they would be an unsuitable backbone for real time interactions. Although the actual real-time capabilities of CDPs vary greatly from vendor to vendor, in general these systems are designed to have far less latency that CRM software. Depending on requirements, CDP products could deliver unified customer data within minutes or seconds which would enable customer data to be used in email campaigns for example. Or if your requirement was to deliver customer data for web or mobile page content personalization, this would necessitate data connectivity within less than 500 milliseconds. In this scenario, a genuine real-time CDP such as Celebrus would be required.

In conclusion, despite the apparent similarities, CRM and CDP are entirely different forms of technology which has been designed to achieve different outcomes. A CRM application falls a long way short of being a CDP and similarly, a CDP would not be able to achieve the things that a CRM system can do.

In the case of the leading global banks that rely on Celebrus to Capture, Create, Connect and Control their customer data, their CRM works alongside the Celebrus CDP. Celebrus captures and enriches granular customer experience and behavior data and feeds this in to augment the customer data housed within their internal systems to provide a highly accurate and complete record of customer experience and interactions.

However, large banks are much more complex than almost any other type of organization. As a result, their CRM is likely to be far removed from the way most mid-market organizations would approach the subject. As a result, the precise way in which a CDP interacts with a bank’s CRM is fundamentally different. In my next blog I will examine what is typically meant by the term CRM in a banking context and will refer to Celebrus use cases to explain how an enterprise CDP can feed customer interaction data. In the meantime, click here to find out more about how leading banks are leveraging the Celebrus real-time CDP.

*Gartner, Survey Analysis: Distilling Marketer Adoption, Views and Misperceptions of Customer Data Platforms, Figure 1, 19 November 2018

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