CRM vs CDP: When to Use Each (and Why They Often Coexist)

What’s the difference between a CRM and a CDP? Can the two coexist? Should they?

Acronyms can be confusing — and the cost of operating a CRM and a CDP can easily run into the millions — so it’s no surprise that digital leaders often stop me by the water cooler to consult me on these questions.

A CRM is where you orchestrate marketing campaigns, whereas a CDP is where you keep your customer profiles.

But that’s just the short answer.

The long answer is a lot more nuanced than that.

So here’s what else you need to know before closing the browser tab.

Which came first: CRMs or CDPs?

CRMs, short for Customer Relationship Management systems, are older — much older — than CDPs.

The first CRM system, Act!, was created in the late 1980s. It was like a digital Rolodex, which helped sales teams track leads through the pipeline. Before Act!, this was typically done on paper. Later came marketing and customer-support CRMs in the 1990s.

The first CDPs, or Customer Data Platforms, didn’t appear until the mid-2010s, when software companies like Lytics and Tealium launched software platforms for ingesting profile fragments from upstream data sources and stitching together unified customer profiles in a single place.

Why does this matter?

The key thing to take away here is that a CRM and a CDP solve two very different problems.

A CRM is concerned with where customers are in the sales pipeline or marketing funnel — and how to spur those customers forward with the help of agentic AI, human conversation, or marketing automation.

A CDP ingests fragments of customer data from different sources and, like solving a puzzle, stitches those fragments together into unified customer profiles. It then makes it possible to segment and activate those customers through ads, marketing, or sales.

A CRM, then, is one of the many data sources for a CDP.

Neither platform can really replace the other.

Then why the confusion?

When Customer Data Platforms were still new and hadn’t yet matured, the boundaries between CRMs and CDPs were blurred.

A sales, marketing, or customer-support CRM needs to keep customer data in profiles in order to be useful. To create unified customer profiles, a CDP must ingest customer data and stitch it together, also in the form of profiles.

In the early days of CDPs, CDPs and CRMs weren’t very well integrated. Customer data had to be duplicated in both systems and wasn’t always synced in real time, which led to differences that confused business teams and frustrated IT.

This has all changed now, and there’s dependable synchronization and little-to-no functional overlap.

Can a CRM and CDP coexist?

A CRM and a CDP can — and often do — coexist in the tech stack of an organization.

In fact, in large organizations where the sales, marketing, and customer support teams are supported by different teams within IT, it’s not uncommon for a CDP to coexist with multiple CRM systems.

Many vendors selling both CRMs and CDPs have addressed the overlap by removing profile storage from their CRMs and converting them into communication orchestration platforms that access profiles directly from their CDPs.

For example, that’s what Adobe did when it overhauled Adobe Campaign, its CRM, to directly push and pull data from Adobe Experience Platform, its CDP.

Should a CRM and a CDP coexist?

So, should an organization own and operate a CRM and a CDP at once?

The answer is never a simple "yes" or "no."

You can have a CRM without a CDP. However, it’s rare for organizations to need a CDP without first having a CRM.

If your organization has a sales, marketing, or customer support team, you need a CRM. And if those teams need unified customer data, you may need a CDP.

Of course, a CRM and CDP are only as effective as their configuration, integration, and operations allow.

That's where we come in.

If you’re struggling with getting the most out of these systems, let’s talk.