Getting to know each customer’s story helps you serve them better. If you know (through purchase history and feedback) that Shane Z prefers your eco-friendly products, you can send him personalized marketing emails recommending your new reusable items with biodegradable packaging.
But it takes the right customer analytics tools to piece this information together. When you’re dealing with thousands of orders and interactions across your website, social media profiles, email campaigns, and support tickets, making sense of all that customer data can quickly become overwhelming.
This data overload is why many businesses rely on both customer relationship management (CRM) systems and customer data platforms (CDP)—tools built to collect and unify all these customer interactions in one place. But with both options promising better customer insights, how do you know which one your business really needs?
Here’s a breakdown of the key differences between CDP vs. CRM platforms.
What is a customer relationship management (CRM) tool?
A customer relationship management (CRM) tool is software that tracks and manages interactions between your business and its customers. A CRM acts as a central database for all your customer data, storing everything from contact details and purchase history to support tickets and email conversations in one accessible location.
While older CRM systems relied on manual data entry by sales teams, modern CRM automation helps ecommerce businesses automatically log customer interactions, trigger post-purchase follow-ups, and alert support teams when customers need help.
How do ecommerce brands use CRM?
Marketing teams use CRM tools to segment customers based on purchase history and browsing behavior, making it easier to send targeted promotions.
CRM data also helps online retailers strengthen customer relationships by keeping track of details like size preferences, past issues, and shopping habits, enabling support teams to provide more personalized service with each interaction.
What is a customer data platform (CDP)?
A customer data platform (CDP) is a more comprehensive data management system that consolidates customer information from every touchpoint, including your website, mobile app, email campaigns, support tickets, and even in-store purchases.
A CDP automatically collects and unifies this scattered data to create complete customer profiles, helping you understand exactly how people interact with your brand across channels. In fact, a CDP can even pull in and integrate data from your CRM platform, making it part of your complete 360-degree customer view.
How do ecommerce brands use CDP?
Unlike CRM software that mainly tracks direct customer details, interactions, and sales history, a CDP captures the entire customer journey. It can reveal insights like which social media ad brought someone to your site, what products they browsed before hitting Buy, and whether they opened your marketing emails.
For ecommerce brands, these insights can help create highly targeted marketing campaigns—like sending special offers to customers who’ve abandoned their carts multiple times, or recommending products based on cross-device browsing history.
This deeper understanding of customer behavior helps teams make more informed decisions about everything from inventory planning to website design, ensuring your business meets customers’ needs at every step of their shopping journey.
How do CRM and CDP work?
While both tools help manage customer information, CRM and CDP differ in how they collect, process, and use that data. A CRM platform focuses on tracking direct interactions between your team and your customers, while a CDP automatically gathers and connects data from every customer touchpoint.
How CRM works
CRM systems are primarily used by sales and customer service teams to track direct interactions with customers and manage relationships over time.
Most CRM data is manually entered by team members during or after customer interactions, though modern systems now include CRM automation features for tasks like logging emails or phone calls. Your support and sales teams rely on this information to provide personalized service and maintain consistent communication.
Here’s how a typical CRM system manages customer data:
- Record each interaction. Your team tracks every customer touchpoint through manual entry and automated systems. The CRM software logs emails, calls, and support tickets to maintain a clear record of all communications.
- Build a customer database. The system creates one central hub for all customer information. Every team member can quickly access contact details, purchase history, support tickets, and past conversations.
- Coordinate team communications. The CRM platform helps teams work together effectively by showing who’s handling which customers and what’s been discussed, making sure everyone provides consistent, cohesive service.
How CDP works
A CDP automatically collects first-party data from all digital touchpoints to create unified customer profiles. Marketing teams typically manage CDP, but the insights drive decisions across the organization—from leadership to product development.
The CDP uses advanced automation to continuously gather, clean, and connect customer data from multiple sources, giving you a complete view of how customers interact with your brand.
Here’s how a CDP processes and manages your customer data:
- Collect data automatically. The system captures customer behavior as it happens, monitoring activity across your website, app, and email campaigns without manual input.
- Unify and standardize information. The CDP pulls together data from all your tools and platforms, including your CRM software, creating standardized customer profiles that update in real time as new data comes in.
- Create complete customer profiles. The platform tracks how customers move between devices and channels, building a comprehensive view of each customer’s journey from their first interaction to every subsequent purchase.
CRM vs. CDP: Key differences
You don’t necessarily need to choose between a CDP and a CRM platform. These tools serve different (but complementary) purposes in your customer data strategy. Here’s how:
1. Purpose and primary users
CRM software gives your customer-facing teams the tools they need to nurture relationships with individual buyers and manage a growing customer base. Support agents and sales teams turn to their CRM daily to check order history, track ongoing issues, and ensure smooth customer communications.
Meanwhile, a CDP helps marketing and product teams spot trends and opportunities across your entire customer base. Leadership can use these broader insights to guide business strategy, from predicting seasonal buying trends to identifying which product categories drive repeat purchases.
Even large retail enterprises with millions of customers and a sophisticated CDP still need CRM. Their support team can rely on it daily to look up customer histories and manage individual relationships, while their CDP handles the broader task of understanding customer behavior at scale.
2. Data storage and integration
CRM platforms excel at organizing structured data like contact details, purchase records, and conversation logs in an easily searchable format. They’re built to handle direct customer interactions and maintain detailed records of every conversation.
CDPs process large amounts of unstructured data from multiple sources, including website clicks, email opens, and shopping cart abandonment. They can handle millions of data points while maintaining data quality and consistency.
3. Identity connection
A CRM creates a single customer record once someone makes a purchase or contacts your team, tracking their interactions from that moment onward. These records help your team recognize returning customers and provide consistent service across conversations.
A CDP can piece together customer behavior even before someone identifies themselves, tracking anonymous website visits and later connecting them to a customer profile. They can even match customer activity across different devices and browsers to build a complete picture of their journey.
4. Cost
CRM software typically starts with lower monthly fees and straightforward pricing based on the number of users or contacts. However, the hidden costs arise from the time your team spends manually entering and updating customer information.
CDPs typically require a bigger upfront investment. Ongoing costs typically scale with data volume and the features you need. However, their automation capabilities reduce manual work and provide valuable insights that can directly impact revenue through better targeting and personalization.
CDP vs. CRM FAQ
What is the difference between a CDP and a CRM?
A CDP is a data management platform that automatically collects and connects customer behavior data from all your digital touchpoints, helping you understand how customers interact with your brand across channels. A CRM focuses on managing direct customer interactions and helping your team track conversations, support tickets, and sales opportunities.
Can a CDP replace a CRM?
No, a CDP can’t replace a CRM, because your customer service and sales teams still need a dedicated tool to manage day-to-day customer conversations and relationships. While a CDP provides valuable insights about customer behavior patterns, it does not help your team handle individual customer interactions like support requests, sales follow-ups, or account management.
What is an example of a CDP?
Shopify’s CDP helps you unify customer data to create targeted segments for marketing campaigns and personalized shopping experiences. The platform automatically updates these segments as customer information changes, helping you understand purchasing patterns and make smarter decisions about marketing, inventory, and customer engagement.