With ongoing economic uncertainty, technology and business leaders will be pressured to put more focus on profitability, cost effectiveness, and operational efficiencies over the next year.
Making sure you get return on investment from your customer data platform (CDP) should be a top priority for any organization looking to integrate the technology across the business. Given that a customer data platform serves as a centralized data management solution, understanding how to generate business value in both the short term and the long term needs to be a major consideration prior to purchase.
A CDP can deliver value to your business by accelerating conversion rates, improving ad spend efficiency, deepening customer loyalty, and increasing customer lifetime value. It does this by creating single customer view profiles, so that personalized experiences and messaging can be delivered at the right time, and through the right channel.
In an earlier article, we talked about the benefits of launching a CDP pilot program that focuses on delivering immediate ROI from your CDP initiatives. As you define your pilot use cases, here are four ways you can begin to demonstrate business value from your customer data platform:
1. A Unified Customer View
One of the main functions of a CDP is to gather and integrate data from multiple disparate sources and systems. CDPs sit on top of other data management solutions, like a CRM, and ingest data so it can be unified into a single customer view.
Using identity resolution, CDPs stitch together known and unknown customer data to create a consistent customer identifier that’s used across all systems and campaigns. That customer identifier is used to further enrich a customer profile as more data becomes available.
CDPs also have data integration capabilities that allow data to be used by other systems that impact the customer experience.
Unifying data across systems reduces reliance on third-party partners or systems that often keep data in silos. As data is integrated, a CDP also cleanses and de-dupes customer records, freeing up space and reducing inaccuracies that could hinder marketing and operational efforts.
2. Personalized Experiences
Personalization is now considered table stakes for companies that want to know and serve their customers better. With single customer view profiles, brands can offer the personalization that customers have come to expect from brand
According to Forbes, forty percent of executives say that marketing personalization efforts directly impact sales, basket size, and profits. Personalization can also reduce customer acquisition costs (CAC) by 50 percent and increase marketing ad spend efficiency by 30 percent. By using a CDP with advanced personalization capabilities, brands can improve customer retention and customer engagement, and expand cross-sell and up-sell opportunities.
3. Reduced Ad Spend
One of the top use cases that companies use a CDP for is to improve ad spend efficiency. Since a CDP can gather and integrate data from CRMs, call centers, ERPs, and other data sources, they can help brands target high-value customers better, so ad spend is not wasted.
CDPs also allow marketers to improve ad spend through highly tailored lookalike audiences and micro-segmentation. Smaller, more focused audiences cost organizations less money, as marketers can focus their resources on higher-value prospects, and suppress communications from audiences that are unlikely to convert. This ensures that only the most relevant messaging is delivered to the right audiences – making the most out of every campaign dollar spent.
4. Improved Customer Loyalty
Customer lifetime value (CLTV) is a core KPI for marketers who want to reduce growing customer acquisition costs. The goal is to turn repeat customers into loyal, long-term advocates.
CDPs allow you to understand your customers holistically, and can affect content and the customer experience through relevant offers and messaging. Tracking and focusing on CLTV will allow you to retain your most valuable customers, increase revenue from less valuable customers, and improve the overall customer experience across multiple touch points.
Creating Business Value with a CDP
A CDP can provide business value to your organization in a variety of ways. First, it allows you to understand your customers across the customer journey by collecting and integrating data into a single customer view. This single customer view enables, marketing, sales and customer service teams to deliver relevant messaging and valuable, personalized experiences. With personalization, businesses can reduce cost of acquisition and improve ad spend efficiency.