How do you measure the success of a CDP?
“How do you measure the success of a CDP?” It’s a question that bears repeating because of how often it’s asked. The primary goal of any CDP should be to unify all of your customer data to build comprehensive customer profiles with no context gaps.
That is simply the baseline requirement for a CDP, but there’s no direct line from “comprehensive customer profiles” to big fat revenue spikes that you or anyone can gloriously plant a flag in at your next QBR. The truth is that a 360-degree view of the customer is not valuable in itself; its value springs from the possibilities it unlocks.
Welcome to Part 4 in our 4-part series on customer context gaps and how incomplete or siloed information about your customers can wreak havoc on customer experience and your bottom line. To read our previous installments, check out part 1, part 2, and part 3.
What follows are ways that marketers can measure the efficacy of a CDP within their organizations. This list is neither exhaustive nor are different approaches mutually exclusive to each other. A good CDP offers the flexibility to tailor itself to your business, and the signs of success will vary across companies.
Such possibilities include:
Measurable affinity and engagement indicators
We have a client that used to barrage new customers with onboarding emails that were coming hot and heavy from all directions: from the marketing team, from CS, and from local brick & mortars trying to get foot traffic.
All told, a new customer would receive 14+ emails in their first 5 days of signing up. But no one inside the company knew this until they settled into their centralized orchestration UI (care of Simon).
Enterprise businesses are too complex to effectively chart, track, and optimize user journeys because oftentimes multiple business units are running discrete journeys. Often, even within the marketing team, it’s not always easy to create a comprehensive map of the customer experience.
A zero-gap customer profile living inside a centralized orchestration UI untangles a lot of these internal knots to improve engagement metrics. By gaining the control needed to tailor messaging and communication volume for each customer, key affinity and engagement metrics (NPS, unsubscribes, open rates, click-through rates, etc.) are much easier to influence.
With a self-serve UI, marketers can help themselves to gap-free customer profiles to build micro-segments that would have previously taken an overworked IT team a week or more to build. By eliminating the friction between idea and iteration, it opens the marketer’s brain to new creative possibilities that can quickly be tested and validated.
Hypothetically speaking, a trending topic on Twitter noticed on the way to work could trigger an idea for targeting Gen Z females in the New York Metro Area with a specific product through a particular channel.
With a centralized UI giving Marketing Domain Lordship™, this inspired marketer could roll into work and launch their micro-targeted pet project campaign before getting to the bottom of the first latte of the day. She’d hope to get results by the end of the final latte, but — depending on the sample size — might take until happy hour.
Notice that this capability is not your classic QBR quotable outcome. It’s the imaginative, innovative, and rigorously scientific work enabled by the capability that will make all the difference. By freeing your marketing experts to toy with and test the data for themselves, they will discover new strategies and tactics to drive positive business results.
Cost-effective media buying
With rich, real-time data flowing into customer profiles, it is no longer necessary to invest heavily in third-party data. A CDP also enables agile suppression lists to eliminate wasted budget on acquisition campaigns directed at existing customers.
A full view of the customer journey can also enable more effective spending across the scope of your media. Through attribution and incrementality testing with proper lookback windows, marketers can easily assign an ROI to each touchpoint. This information will allow more informed spending decisions across segments.
Using segments in the attribution process is also valuable for seeing which segments respond to a certain touchpoint over another. Without segmenting your attribution assessments, you might erroneously downshift spending on a channel that is incredibly effective at driving acquisition within a microsegment. Regardless, with the right information at your fingertips, you can make informed decisions to ensure that every dollar out will reach its maximum earning potential.
Good ol’ programmatic
With robust, gap-free customer profiles, marketers have the power to gather new measurements and use that information to improve programmatic performance.
For instance, when all your marketing black holes are plugged, you can get a clear view of the lifetime value of different segments. You can use this information to acquire lookalikes through something as simple as Facebook or Google campaigns. You can also update and/or replicate a journey that influenced a specific cohort with the aim of acquiring more customers of that demographic.
CPA, CPL, ROAS, new customers, and LTV:CAC are all well-established ways to measure campaign effectiveness. You can, of course, go one better and create hold-out groups to test the old way of doing things against the new way to get a campaign-generated margin based on A/B testing, net cost of marketing, and promotions.
Today’s rapidly changing engagement landscape presents brands with unprecedented circumstances, and with tech-first challengers looking to enter more and more markets, the pressure is on. The only realistic path to meeting these skyrocketing customer expectations at scale is to build these experiences on the bedrock of customer context — in every moment, using all of the engagement channels available.
Closing marketing black holes and maintaining customer context requires implementing a seamless customer architecture with a purpose-built CDP at its core. While few offerings in that category rise to the challenge of contextual integration, execution, and usability all at once, it’s important to use those capabilities to guide vendor conversations and evaluate fit.
Ultimately, there’s a huge opportunity for any brand that can rise to the occasion by delivering engaging, differentiated, and, most importantly, human experiences to every customer.