Find out the ROI for a Customer Data Platform and all the guaranteed advantages and benefits of acquiring a solid CDP solution.
Customer Data Platform
June 19, 2020
To understand the ROI for a Customer Data Platform we need to first comprehend the core of a CDP.
In this data-driven world we currently live in, having a technology that does most of the work for you is key. That’s because you don’t want to end up with duplicated data or wrong information on your hands — something that happens a lot when people need to deal with a huge amount of data on a non-automatic basis.
Because of that, a system has been developed and recently gained attention: the Customer Data Platform. A CDP, how it is also called, is a software that gathers customer data to help marketing teams improve their strategies. That’s the basic, most direct explanation we can give to what is a Customer Data Platform. However, there’s much more to learn about it.
For example, did you know a system like this improves the ROI of a company? Other than updating the data collection system and automating data analysis, marketers will also have it as munition for brand-new strategies. Therefore, reducing customer acquisition costs and increasing return on investments.
Moreover, to better understand what is the ROI for a Customer Data Platform, we need to cover some ground:
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Knowing how to use a Customer Data Platform is what will get the company a better return on investment. Of course, the main goal is to know your consumer, but what you do with that information is the factor that will actually bring the results you’re looking for.
A CDP gathers all data in one place, including first-, second-, and third-party data. That’s why it’s considered one of the most complete systems to know your consumer. The type of information it collects varies from identity data, such as names, age, and demographic, to online behavior, like browsing history, purchase history, and downloaded files.
Despite being perfect for marketing teams, the Customer Data Platform can also be used by other sectors in a company — such as the product team or customer support. So, along with helping with segmentation and the elaboration of personalized content and ads, it’s possible to spot how you can make a product better, what new product you can offer, and generate audience engagement.
In order to use a CDP, it’s necessary to know the company’s goals and objectives. After all, that’s what needs to guide every strategic decision made.
The return on investment is important in a company’s strategy.
The ROI for a Customer Data Platform will only happen once the company understands where the CDP will fit in the strategy. In most cases, the results are positive. Even so, the best idea when acquiring this technological solution is to make its purpose as clear as possible.
How will a Customer Data Platform help the company? That’s the first thing to be asked before getting a CDP solution. To answer this question, some others need to be asked as well. For instance:
Those are just a few examples of questions that will help decide the best scenario for the company. If one or more questions have received the answer “yes”, then the CDP is the ideal pick for your situation.
Moreover, to make this investment really show its value, the first thing to do is determine a focus point. Everything the CDP makes possible will be worth nothing if you don’t know how and for what to use it.
In addition, keep in mind the solution a Customer Data Platform offers. Is that something your company will benefit from? Will it help improve the current plan of the firm? Recognizing what the platform does and if it’ll solve an actual problem is key to decide if your strategy needs a CDP — in case the final answer is “yes, it does”, the next step is to analyze some aspects of the software.
Overall, to make an informed and proper decision, the company will need to evaluate several items. For one, the investment that will be made. There are two options: buy a system or build your own. Both have their ups and downs, but the main contrast is that buying a CDP is less expensive than building one.
Additionally, efficiency needs to be taken into account. While before CDP marketing professionals had to deal with analysis, verification, and de-duplication manually, now they have the entire process automatized. This saves a ton of time and deprives of human mistakes.
The personalization across multiple channels should be considered one of the most important factors. Seeing that the CDP allows checking where the client had an interaction and how that communication went, the marketing group can create extremely personalized content and conversations for each customer — or group of consumers that have similar habits and interests.
You can also consider as a basis for new strategies elements such as more effective media buying, the possibility to personalize the website itself and other digital properties and create new data-related products.
When using the right strategy, there are many benefits a CDP can bring to the company. Aside from the return of investment we’ve been talking about, you can include in the list things like having a better relationship with the customer and having more results in overall ads.
Coming up with a marketing strategy will, eventually, help the team make better investments. A basic step-by-step as a plan to use the CDP can pretty much look like this:
Certainly, there are many other strategies that can be followed according to each company and its goals. However, the main benefit of acquiring a CDP solution to work with your marketing group is that the data will be thorough.
This means that, even if a customer interacts with an email marketing ad and ends up purchasing on a physical store, the CDP will recognize and process that information, since it also collects data offline.
Whereas implementing campaigns, the Customer Data Platform will also gather enough data to allow the marketing team to analyze which ads had better results and were worth the investment — plus, where they need to try something different.
Although, when using this kind of system, chances are conversion rates will go up because you’re delivering the right content, to the right person, at the right moment, and through the right channel.
When it’s known how to communicate and engage the audience, the so-called ROI for a Customer Data Platform will come naturally.
It’s essential to keep track of the marketing performance.
Customer Data Platforms were created with the objective of helping marketing teams, there’s no doubt about that. That’s why CDP and marketing are so connected. Still, that’s not the only branch that can take advantage of the software.
The sales team will also highly benefit from the database of a CDP. Given that marketing will classify leads so that the sales representative can assume, there’s no need to set a meeting and discuss the details with each other. It only takes the seller to access the information in the system and see the best sales strategy to follow.
Through AI and machine learning, a CDP solution will show:
With all of that in hand, both marketing and sales can have ideas and tactics to boost conversion rates.
Besides, the 360º view of customer activity is crucial to come up with unique approaches. We talk about 360º because of how complete the image is, you can see who is the customer, how they use the products, what they do on the website or mobile app, and how they engage with the brand.
Avoiding data silos is another advantage of the Customer Data Platform. Since the software is able to gather data from that variety of sources, it can also analyze and assume when a group of actions originates from the same customer.
For example, a client comments on a blog post, signs up for a newsletter, clicks on a post on social media, signs up for a free trial of the product, and then completes the purchase of a product. The Customer Data Platform will read that entire journey and associate it with that one customer. Thus, creating a single customer profile view while also grouping it with similar profiles for a further segmentation practice.
When a marketing team becomes aware of a customer’s journey, they know exactly what is the next step to take — having a clear vision and better insight into what to do. Even more because of the data-driven strategy they now can use with the help of the CDP.
Using the information available, the approach will be more accurate, getting to the customer at the right time and place. This will not only increase audience engagement but also make the customer journey shorter and more effective. As a consequence, giving the company a better ROI.
Guarantee a better ROI using a Customer Data Platform and give Arena’s CDP solution a try — talk to one of our consultants today.