By now you are convinced that your organization could use a Customer Data Platform (CDP) like Salesforce Data Cloud. But how do you build the business case for one?
Latest estimates from reliable sources put the CDP market at over $2 billion in 2024, growing almost 20% during a difficult year.
CDPs can be described as plumbing, ingesting data locked up in home-grown and SaaS solution tanks; organizing that data (harmonization, identity management) and enriching it; making it available.
They are a tool to be used by anyone who works with or on behalf of customers: marketing, customer care, e-commerce, sales, etc.
In building out your case for a CDP, we propose a simple framework:
(1) Customers and the Business
The CDP's profile should be more complete and accessible than any customer profile you already have, so activities you do on the data – such as segmentation, predictive modeling, privacy management, and measurement – will be more accurate, insightful.
Customers: These willful actors (people, households, accounts) get value from a CDP because their experience is better; more concretely, the images, text, video, numbers they see are more engaging to them personally, which leads to …
Business: You (the business) gain value from a CDP by improving the customer experience; higher engagement, done right, leads to greater lifetime value: higher loyalty (or lower attrition), more frequent purchases, and higher basket sizes.
(2) Direct and Indirect
Direct value is easier to measure; things like sales, video completion rates, repeat purchases, basket size. Indirect value includes behind-the-scenes or backstage elements which do have economic equivalents and can be calculated, with some effort.
Direct: Based on your business, direct value is top-line or lifetime value-enhancing beneficence.
Indirect: Workflows and processes are determined by the systems around them; people do back- and screen-flips to make things work, heroically; a CDP can automate away manual steps, increasing productivity or efficiency; it can also systematize and warrant customer data dignity.
And right in the middle, there is:
(3) Data Management
--> Moving from Anonymous to Known Profiles: As scaled pseudonymous identifiers such as browser cookies and app IDs decline, marketing and media all but require first-party data to work.
--> Data as an Enterprise Asset: Data can raise the value of your business, most obviously if you decide to sell or go public; it also provides option value, giving you an opportunity to do more in the future, if you want.
--> Managing Technical Debt: Rather than creating an additional data silo, the CDP can unlock information sitting within other silos, improving its power. It does this by setting up pipelines, ETL, flows and pipelines that can minimize friction in other systems.
There's a chapter on this very topic in my new, upcoming book "Customer 360: How Data, AI and Trust Change Everything" (Wiley, 10/24).
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