The Difference Between a Customer Data Platform and Master Data Management

What is a Customer Data Platform?

A CDP is a specialized system designed to collect customer data from various data points throughout the customer journey. It serves as the central hub where you consolidate all your customer data and make it available to departments such as marketing, sales, and customer service. The platform integrates all available customer data within your organization and brings together both online and offline data. The primary goal? To create a 360-degree view of the customer, enabling you to deliver personalized and targeted marketing efforts. “So you mainly use a CDP to create a ‘golden record’ of the customer,” says Martijn. “In addition, a CDP offers a wide range of functionality for processing this data into, for example, target groups, segmentations, and other marketing and sales-related analytical applications.”

What is Master Data Management?

MDM is a method that ensures the uniformity, accuracy, ownership, and consistency of data within an organization. With MDM, you can harmonize data to elevate data quality to a higher level. “MDM is all about a ‘golden record’ for business processes. Think, for example, of the supply chain or HR procedures. MDM is therefore broader in scope and revolves around different types of data,” explains Martijn.

CDP vs. MDM: The 3 Key Differences

The focus of a CDP is therefore significantly different from that of MDM. But there are more differences between the two:

Purpose

As Martijn already mentioned, the biggest difference between CDP and MDM lies in the purpose of both applications. “The purpose of a CDP is to deliver personalized marketing and improve the customer experience. This is possible because a CDP allows you to collect data, combine it with data from other systems—such as your CRM—and use it to make predictions about customer behavior,” he says. “The main purpose of MDM is to ensure data quality, consistency, and reliability within the organization.”

Scope and Implementation

“I no longer need to explain to B2B and B2C companies why they need a CDP,” says Martijn. “Virtually all companies that sell or offer something online are already using a CDP. Data-mature companies see it as a smart investment that pays for itself, so they’re quick to adopt it. But MDM is a different story: it’s still in its infancy in many organizations. MDM is seen as a more specialized and complex solution that requires specific knowledge and expertise for implementation and management. And that’s certainly true in practice.”

Usage & Ownership

Another key difference lies in the use of the application and ownership. CDP is primarily used by sales and marketing teams to derive value from customer data. MDM is mainly used by IT teams and business units responsible for operational processes. Martijn: “Because you use both in different domains, ownership is often assigned differently as well. With CDP, ownership lies with the commercial side—for example, with a Chief Marketing Officer or similar role. With MDM, ownership is more diffuse, preferably divided into functional ownership and technical ownership.”

Which approach best suits your organization?

Depending on your industry, goals, and focus, you can determine what’s most appropriate for your company’s current stage. “Commercial companies can generally derive value from a CDP fairly quickly, if they aren’t already using one. Whether MDM can help them further depends on so many different factors,” Martijn explains. “If your company is looking for better decision-making and greater accuracy in its processes, for example, then MDM can offer a solution.”

Get started with a CDP or MDM through Macaw

Companies that want to get more out of their CDP or that want to integrate the CDP with all other applications in their IT landscape can turn to Macaw for customized assistance. Martijn: “And if you want to get started with MDM, we can support you from start to finish—from creating a strategic plan to implementing Profisee and building a solid business case.” Want to discover what else a CDP can do for you? Download the free white paper!