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CDP investment outcomes: 2.5x more likely to outperform competitors

ClickZ recently hosted a webinar called “The Customer Data Maturity Model: Where Do You Sit?”, featuring some of the top minds in the CDP industry and marking the launch of a new seven-stage Customer Data Maturity Model.

Customer Data Platforms (CDPs) are powerful tools that marketers increasingly rely on to deliver effective marketing campaigns at scale. The global CDP market is expected to grow to $3.3 billion by 2023, up from $903.7 million in 2018.

 

The webinar is presented by Tim Flagg of ClickZ, David Raab, Founder of the CDP Institute, Anthony Bobitol, Marketing Director at BlueVenn and Andrew Campbell, Martech Director at Home Agency.

Content produced in collaboration with BlueVenn.

What is a CDP?

There’s a lot of confusion around what a CDP is. Anthony Bobitol, Marketing Director at BlueVenn, helps to clarify this by listing the five criteria used by the CDP Institute to classify “Real CDPs.”

A CDP must be able to:

  • Ingest data from any source
  • Capture full details of ingested data
  • Store ingested data indefinitely (subject to privacy constraints)
  • Create unified profiles of identified individuals
  • Share data with any system that needs it

“A good CDP vendor will help determine which data is useful and which isn’t,” says Botibol. “There shouldn’t be any system limitations that prevent the user from storing what they need. Persistence of the data is key. Once a CDP is taking data from all sources, it becomes the central source of truth about your customers and how they’re interacting with you over time.”

once a cdp is taking data from all sources, it becomes the central source of truth about your customers

Creating unified profiles is the secret sauce for CDPs, which focus on matching the available data with an identified individual or profile.

Personally identifiable information or other personal data points (e.g., device I.D., phone number, email address, etc.) can help users build identities which can be used holistically for analysis, marketing campaigns or as power for other marketing systems.

“This is really about open access,” explains Botibol. “The CDP should be agnostic to whichever other systems it’s going to talk to and not have any bias to its own proprietary systems. This is another key component of a CDP which makes it very attractive. Ultimately, a CDP can help reduce the costs involved in maintaining separate databases for individual systems.”

How businesses are investing in CDPs

BlueVenn wanted to understand how businesses use CDPs in the real world, so they partnered with London Research to survey approximately 200 global companies about their use of this technology.  All companies that participated had annual revenues of at least $50 million, with 70% of companies based in the US and 10% in the UK.

About half of the respondents indicated that they are already using a CDP while 35% are planning to invest in one. This aligns with similar research by companies like Gartner, though there is some confusion regarding the difference between a CRM and a CDP.

CDPs have higher adoption among larger organizations that have revenues over $499m versus those with revenues between $50m and $499m.

CDP adoption is higher among larger organizations
Source: BlueVenn

Furthermore, organizations using CDPs are almost twice as likely as their non-CDP-using peers to make engagement a top priority (25% versus 13%).

“If you ask people what’s important about a CDP, the answers come back that it’s the access to the data as opposed to things like doing predictive modeling or creating customer data sets,” says Botibol. “Those are important, but they are capabilities that companies often have from other systems. What the CDP offers is the ability to get data from lots of different sources and pull it together.”

The link between CDP investment and business outcomes

BlueVenn’s research revealed that CDP users were 2.5x more likely to have significantly outperformed against their organization’s main marketing goal in 2018 versus non-users.

“We did find a very clear link between CDP deployment and business success,” explains Botibol. “It does show that some of these businesses are seeing better business performance following a CDP purchase.”

CDP users are also more likely to use other technologies such as formal metrics, centers of excellence and technical standards, and less likely to use outside consultants.

martech method vs cdp deployment
Source: CDP Institute

The seven-stage CDP maturity model

Andrew Campbell, Martech Director at Home Agency, outlines a seven-stage approach to achieving a CDP maturity model. Says Campbell, “We wanted to include a practical tool that people could use to understand their circumstances and their opportunities in relation to CDPs.”

The goal of the maturity model is to help businesses to design and prioritize what their requirements are from a CDP. The seven-stage model requires businesses to:

  • Define and prioritize CX requirements
  • Rigorously translate these into customer data requirements
  • Audit current capabilities
  • Define a data and technology roadmap aligned to business goals
  • Adopt an integrated approach to leveraging (and monetizing) customer data
  • Identify and unlock synergies across marketing programs

The model itself attempts to map out what the CDP capability is at each stage, from developing a unified customer profile (stage one) to deploying advanced analytics (stage seven). The webinar goes into detail about each stage, but here is an overview of all stages, from one through seven.

seven stage cdp maturity model
Source: CDP Institute

The above graphic defines each stage and lists the benefits that users can expect to receive at the corresponding stage (to the right).

CDP-equipped organizations see better outcomes

The survey results demonstrate that CDP-equipped organizations are 3-5x more likely to have the following attributes:

  • A full view of customers across online and offline channels
  • Better attribution beyond first/last click, which improves paid media performance
  • Use of machine learning to aid real-time decision making
  • Greater ability to deliver real-time personalization of content
  • Stronger testing and optimization capabilities for website and email strategies
  • Ability to set up/execute multichannel campaigns from a single technology platform

“There’s a big difference between people who’ve got the data and can pipe it into a CDP environment and those who don’t have it,” says Botibol. “If you haven’t got the data, you’re not in the game.”

Personalization is a common activation component of CDPs. Rather than using behavioral or clickstream data, companies are starting to use complete datasets, plug them into a CDP and combine the offline/online data to personalize the user experience.

“CDP users are doing many things in a more mature way,” explains the CDP Institute’s David Raab. “We found that CDP users are happier with their martech, not because they have a CDP, but because CDP users are good at adopting this technology. It’s almost impossible to solve all your problems without having a CDP.”

Check out the full webinar, The Customer Data Maturity Model: Where Do You Sit? on-demand to learn more.

The post CDP investment outcomes: 2.5x more likely to outperform competitors appeared first on ClickZ.

Reblogged 4 weeks ago from www.clickz.com

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