It would be easy to assume that in the current frighteningly uncertain era, CxOs aren’t ready to make major investments in data-driven marketing and company operations. But surprisingly, they’re still interested, and it might be because they were already expecting a recession, but the prospect of the rewards of understanding customer intent and behavior was too important to ignore. Some are even accelerating their plans for digital transformation, with customer data a central part of their roadmaps.
Why Are Companies Still Investing In Digital Transformation?
CFOs, for example, were already pessimistic about the 2020 economy well before Covid-19. In the most recent CFO Global Business Outlook survey, in 2019, more than 50 percent of CFOs believed that the U.S. would experience a recession before the end of 2020. But despite the pessimism, CDPs still showed record growth in 2019. Maybe many in senior management are continuing to invest in customer data because it’s never been more urgent to understand what their customers will want, do, and buy next as conditions change week by week during the continuing epidemic.
And despite the economic clouds that were already gathering on the horizon toward the end of 2019, CEOs weren’t focused on cutting costs. Instead, they were interested in proceeding with caution and improving profitability. A 2019 Gartner survey found that CEOs were most interested in resisting downward market trends by identifying new opportunities for growth and better managing costs.
The takeaway? Today’s uncertain times are actually making digital transformation a more urgent goal. That’s because a CDP can use data analytics and machine learning harness data to improve profitability across an organization.
Step 1: Summarize Your CDP Use Case
It’s important to understand the case for customer data and CDPs. If you’re a C-suiter–or if you work closely with one–you’re uniquely able to play a role in defining the value of specific uses for customer data: retail customer journey personalization, improved targeting and segmentation, rapid prediction and influencing of customer behavior and buying, or even the rapid design of new or improved products, services, and brands. According to the Farland Group, C-suite executives are inherently different from other audiences. They value getting to the heart of the matter quickly, honing in on a project’s outcomes, and discussing strategy, not tactics. Set up your pitch for success by framing it with a succinct executive summary.
- Focus on specific problems: You want to be able to make a statement like this: “During the past three quarters, sales have slowed. We want to reverse this trend by increasing the average sale per customer and buying frequency. We can achieve this goal with data-driven shopping recommendations and personalized coupons.”
- Diagnose the cause: “Currently, we don’t have the tools to convert data into personalization. Although we collect a lot of customer data, it’s stored in various silos (point-of-sale, a customer loyalty program, website, local store Wi-Fi data).”
- Predict what’s next: “If we fail to understand how customer behavior is changing, we will lose sales and market share to competitors who can satisfy new demand, in different channels, better than we can.”
- Prescribe a solution: “We should implement a Customer Data Platform to unify customer data. Using a CDP, we project the average sale per customer will increase by 155 percent and the purchase frequency will increase by 40 percent.”
Everyone’s business case is unique. What’s essential is to identify challenges with customer data management, how they impact your ability to gain customer insights, and why those insights matter. You may also want to note why these issues exist and why past approaches have failed to solve them. Most importantly, create a sense of urgency with financial metrics that prove how these issues impact business outcomes.
Step 2: Answer the question: “Why a CDP?”
-Your next task is to think back to a time before you’d done your homework. You probably had a lot of questions, like: “What is a CDP?” and “How is a CDP different from a CRM and a DMP?” Now it’s time to use your knowledge by preparing a few basic, high-level definitions.
After that, explain how an enterprise CDP will best solve your use case, achieve important objectives, and help your marketing team get better results. For example, if your department’s goals are to improve advertising effectiveness through timely personalized customer messaging, highlight how a CDP can unify customer data to create multi-dimensional customer models and generate uniquely targeted lists. Or, if your goals are to improve customer loyalty, talk about how a CDP can merge clickstream data from a mobile app and join it with existing web, point-of-sale, and other customer data to create a better customer experience.
Step 3: Get A Vision Of The Big-Picture Impact You Want
C-level leaders know that it’s important to have a vision of the big picture when making any major changes to their strategy or operations. that C-level leaders can rally behind. So, your next goal will be to show them how a CDP will also help your organization achieve a range of strategic initiatives that have already been endorsed, presenting a vision of how a CDP contributes to the creation of an ideal data-driven operation.
To make your point, it’s helpful to mention how a CDP can streamline partnerships with other C-level executives. A frequently overlooked CDP benefit is that it decreases the need for IT support by creating efficiencies between the marketing and IT teams. Here are a few ways CMOs and CIOs both win with a CDP:
- Improved data collection/management. CDPs take over the hard work of collecting, searching, and managing customer data for both the marketing and IT departments.
- Automatic unification of customer views. CDPs remove the heavy lifting out of customer identity stitching, which reduces both data labor and maintenance.
- Increased marketing autonomy. CDPs offer a full suite of self-serve tools for marketers, eliminating the need for IT to generate time-consuming reports.
B2B marketing platform Kapost is a real-world example of how this synergy works. To coordinate and automate its activities, Kapost relied on a variety of internal SaaS tools, such as Mixpanel, Salesforce, and Marketo. However, extracting and enriching the data within these tools was a constant challenge. Building a new performance metric required a small army of software engineers. Moreover, the in-house database built to aggregate data could not keep up with the scale required and needed constant supervision from the IT team.
To re-imagine these processes, Kapost used a CDP to centralize its data across multiple databases and SaaS tools. In just 30 days, Kapost was able to provide its teams with easy access to all of its data for the first time. Today, DevOps owns the process of ingesting sensitive product data, while business operations controls the business logic driving KPIs. The CDP has freed Kapost’s business operations team from dependency on engineering and provided a powerful analytics infrastructure.
Step 4: Back Up Your Message With Facts And Figures
Conceptual selling points are great. Above all, however, you want answers to the question “so what?” Every C-level executive wants to know: “What’s the impact on our bottom line?” Lucille Mayer, chief information officer at BNY Mellon in New York, told Forbes:
The key to gaining respect [with the C-suite] is to speak authoritatively about your subject. Hard data and metrics rather than qualitative facts gain credibility.”
Lucille Mayer, Chief Information Officer at BNY Mellon in New York
Revenue, expenses, and growth translate into overall profitability—or not. So talk about profit margins, comparing today’s financial situation with a projected future state. This is where you get into details about key financial data like ROI and total cost of ownership. Some potential talking points:
- The monthly cost of a CDP is projected to be $X. This includes staffing and systems costs at $X.
- The ROI for the marketing department would be $X. We got this number by anticipating [30% increased in-store revenue, 15% increased campaign conversions, etc.]
- There would also be $X in efficiencies and savings for [the IT department, sales, operations, etc.].
Some other brands that are using CDPs have realized impressive results. Here are a few examples:
- Automotive manufacturer Subaru combined customer data scattered across business silos to optimize marketing ROI. Results:
- 350% increase in advertising CTR
- 15% increase in order rate from one “cash back” campaign for $26M in net sales
- Cosmetics company Shisedo consolidated customer data to take advantage of upsell opportunities in their loyalty program. Results:
- 20% increase in in-store revenue per loyalty member after one year
- 11% increase in revenue
Step 5: Propose Your Solution
Now it’s time to provide an objective analysis of the solution that will enable your ideal vision. Start by listing your decision criteria and which CDP vendor delivers the most value. Here, the key is to stay focused on strategy. In an article about communicating with the C-suite, Roanne Neuwirth writes: “Executives care about how they can solve business problems and enhance revenue and profit. They are not interested in…technologies and products—those are only a means to an end and are readily delegated to others to review and purchase.” So if you want to discuss CDP features, make sure to link them to projected results. Among the top CDP requirements for CMOs:
- Customer segmentation. Create flexible segments that are based on customer behavior, as well as stored customer data.
- Integration of offline and online data. Stitch together disparate customer touchpoints into a single profile identified with a unique customer ID.
- Advanced reporting and analytics. Ensure everyone is able to instantly access the updates and strategic information they need to do their jobs.
Step 6: Outline Next Steps, Define KPIs, and Prepare Answers To Follow-Up Questions
At the end of your pitch, provide some clear expectations for when executives would expect to see the value from a CDP deployment. It’s also helpful to offer a high-level roll-out plan with a schedule featuring major milestones. Attach metrics to each milestone that will demonstrate deployment success. Other details to include:
- Data requirements
- People requirements
- Budget approval processes/timelines
Beyond that, be prepared to answer questions at the end of your presentation, such as:
- How does CDP fit in with our current martech solutions? Ideally, a CDP will serve as a hub that intelligently organizes information from all of our data silos.
- Is a CDP difficult to integrate with other solutions? Most CDPs can be integrated with a few clicks.
- How can you be sure that CDPs are here to stay? Many experts consider CDPs the future of marketing.
Summing It All Up – Innovate Today To Prepare For Tomorrow
What’s the best way to summarize a CDP’s potential significance for your organization? The key is to focus on the idea that a CDP doesn’t just store customer data, it provides value by unifying data from various silos to create individual customer profiles that are based on real-time behavior. Then, it uses machine-learning for important insights that can be used to understand what customers valued yesterday, what they want today, and what their expectations will be tomorrow. Beyond that, a CDP can eliminate data-related expenditures, de-silo corporate assets, and achieve a broad range of strategic goals. Ultimately, a CDP will help your organization use its data more effectively, contributing to improved productivity, streamlined operations, and diversified growth–all of which are crucial to profitability no matter where the economy goes.