While the widely known quote by Benjamin Franklin ‘time is money’ is used often, it rings especially true in the business world. Making the most effective use of your time opens up more opportunities to bring in revenue, and time lost is inevitably money lost. Even if they may present an initial investment cost, solutions that can save time – especially ones that reduce lengthy processes – ultimately save money by freeing up teams to pursue more profitable paths.
But acting at the right time is also an important factor in business success. The Customer Data Platform (CDP) market is projected to grow to over $15billion at a rate (CAGR) of almost 35% over the next five years, and for good reason; brands and businesses are struggling to leverage the increasing amounts of 1st party data at their disposal. These organisations are now catching on to the benefits that these platforms can deliver in terms of access to centralised data and how this can be leveraged to both save time and increase revenue. When every one of us creates an average of 1.7mb of data every second – an ever growing figure – and a 2018 Gartner report suggesting that on average companies lose 12% of revenue due to bad data, effective data management should be a priority to process and improve quality in good time.
The growing strength of CDPs has been further expedited by the overall growth of digital channels, something that was fast-tracked further by the Covid-19 pandemic. With the ongoing shift towards privacy-first data management solutions amid a changing regulatory landscape, many are seeing a CDP solution as even more relevant. When deciding whether a CDP is right for your company, two of the most crucial factors to weigh up are the time it takes to implement a CDP into your workflows and business, and the time it takes for a CDP to return on its initial investment (realise ROI).
Working out how to effectively implement a CDP and how to prove its return on investment (ROI) in a time-efficient manner can be a major pain point for businesses getting to grips with this technology for the first time. We’ve explored options around how to approach both steps below – with the aim to save you time, so you can focus on everything else.
Think of implementing a CDP in the same way as you would build a bridge. On one side, you have a set of customer data or an internal department, with the same on the opposite side. The ‘bridge’ allows for the easy, efficient, and safe exchange of ‘data traffic’ between the two sides where it was not possible before; a CDP can unite more than just two departments or data sets, but stick with us here.
One of the first stages in constructing this bridge is to understand where you’re anchoring each end, and what the bridge is bringing together. Similarly, the first step to implementing a CDP is reviewing where any potential data silos are within your workflows and organisation, which departments need to be able to share data more effectively, and which tools the CDP needs to act as a bridge between.
We’ve spoken in a previous blog about how best to integrate a CDP into existing systems and workflows, and how to anticipate any time-consuming issues where existing tech might not ‘play well’ with a CDP. Once a CDP is in place and connected to the necessary systems, it can begin connecting and centralising all of your customer data, creating an audience-specific view of aggregated customers across multiple sources or databases. One of the key benefits of a CDP is automation: it can unite data from a range of sources (CRMs, marketing clouds, ecommerce engines etc.) automatically, saving a huge amount of time and trial-and-error that occurs when employees do this manually.
Once the CDP ‘bridge’ is firmly anchored, with relevant secondary systems plugged in and data fed into the system, it can then reconcile customer identities, including first-party data (such as email addresses and mobile numbers) and third-party data (mobile device IDs and, formerly, third-party cookies). This can then be used to generate a cross-device identity, and generate valuable insights that can be used to optimise your campaigns and deliver personalised customer experiences.
The CDP can connect this customer data to many different types of output systems, such as marketing automation tools, demands side platforms (DSPs) and content management systems (CMS) – bridging the gap between data inputs and effective outputs – and allow your teams to have centralised, compliant access to all the data they will need, and the means to export it to their execution set ups. This creates efficiency across the board; teams don’t need to trawl for data or ask around internally to work around silos, or waste time curating and exporting the data into disparate execution systems. With the CDP bridging the gap, things flow more speedily and more seamlessly.
You can’t spell ‘proving worth’ without ROI
Proving return on investment has always been vital across the marketing landscape, and being able to justify the initial expense of a new platform or approach is one of the key considerations in establishing whether a CDP is worth the investment. What can complicate this is how lengthy the process of proving a CDP’s ROI can potentially be and how many factors are at play. While it’s tempting to rely on a simpler metric like comparing overall revenue growth for companies that use a CDP versus those that do not, this approach doesn’t embrace the intricacies and goals of your business.
Measuring the success of a CDP largely depends on the primary use case within your organisation; are you looking to use the CDP to upgrade capabilities, or create internal efficiencies?
For the latter, proving ROI can be a case of measuring internal performance – have processes noticeably sped up? Are your teams saving time and releasing more person-hours to spend on other tasks? Comparing the results of analysing internal performance before and after the implementation of a CDP can be used as an ROI proof point. In the case of upgrading capabilities, benchmarking success can be achieved by looking at the performance of cross-channel campaigns that weren’t possible before the introduction of a CDP. Having a greater degree of access to personalisation data could mean that cross-channel messaging can be tailored to be more personalised, and therefore more effective; measuring the incremental uplift from these campaigns can then be used as a marker for CDP ROI.
Proving the ROI of a CDP can also be done by looking at improvements and time/cost-saving across your marketing ecosystem. There are many factors you can offset against the overall cost of implementing a CDP to establish ROI including; the cost savings across your marketing team from more effective operations, the increase in revenue gained from leveraging customer data, lowering the Customer Acquisition cost and reduced regulatory risk from more effective and compliant data handling. While it may take a little time to work out these factors, this time will certainly not outweigh that saved longterm across the business through successfully onboarding a CDP.
Ensuring that a customer data platform is right for your business, challenges, and approach will require research, testing, and internal discussion. However, choosing the right CDP partner to help answer your questions and work out your unique challenges and application can help streamline this process. When seeking the right CDP to meet your needs and the right partner to help implement your solution, time is of the essence.