THE EXPLAINER CDPA 12-part monthly series by MarTech Advisor in associa�on with the CDP Ins�tute

Unpeeling what CDP means to you, one ques�on at a �me

Issue 4/12 | April 2018

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If you have those covered, then in April, we move one step closer to your CDP investment.

Building the business case for a CDP investment

1. What are the business impact areas of having a CDP- what will get be�er and how?

2. Where will we see the results first? Break down the areas of produc�vity that CDP can deliver

3. Why should management/ leadership care about CDP?

4. How much will it cost in the short, medium and long run?

Where to begin?

As we have seen in the last 3 issues of the CDP explainer, an appropriate CDP investment has the poten�al to transform your marke�ng outcomes. It can:

— Unify the customer view across campaigns, devices and formats

— Give a high level of visibility on iden�fiable and anonymous customers and

— Enable a marketer to make far more effec�ve, personalized and impac�ul marke�ng interven�ons

In short, the right CDP with the right data inputs and the right execu�on tools, can help deliver the elusive ‘seamless experience’ to customers along their buying journey. Enough data exists to suggest that offering true personaliza�on and a seamless experience will lead to be�er business outcomes in terms of faster, higher value and more sustainable conversions and reten�on.

Great. But you s�ll need to convince management that you need a 100K or more (depending on the solu�on you are seeking). And that is assuming your data inflow is of a usable standard. But in addi�on, the process of building the case helps clarity in your mind

exactly how you would use the CDP to make the transforma�on from campaign driven marke�ng to integrated and seamless marke�ng.

In the case of a CDP, the main area of impact is in knowing your customer and applying that knowledge to execute more personalized, relevant and �mely marke�ng ini�a�ves. Everything flows from there. Unfortunately, a CDP investment is not cheap – neither in terms of money nor effort. There are many pi�alls that can lead it to fail at an implementa�on level, and thus, you need to be very mindful of how you approach both- building the business case, and further down the line (assuming the investment is approved) at the project implementa�on phase.

INVESTING IN CDP: BUILDING THE BUSINESS CASE INTERNALLY

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Q1. WHAT WILL SUCCESS LOOK LIKE? STATE YOUR EXPECTED OUTCOME

Management cares about outcomes - here is how to get their a�en�on.Today, we run mul�ple campaigns via mul�ple pla�orms and channels, leading to lower produc�vity, minimal personaliza�on, and a higher cost per conversion. We are unable to connect the dots between the outcomes of each campaign.

If we only increase our efficiency by X as an outcome/ if we sell one more item per store per day/ or save Y on data management (or whatever the revenue metric may be), that will pay for this project in Z months.

Q2. WHAT IS STOPPING US FROM GETTING THERE TODAY?

List the present obstacles - what is stopping you from ge�ng to the ‘Desired Outcome’ state today:

— We don’t have access to data across systems

— We don’t have the right data

— The quality of input data is quite poor

— We are unable to convert the data into insight and ac�on fast enough, it gets outdated

— Trying to get insights out of the data is too �me and effort consuming and we don’t have the skills in marke�ng to actually do it

— We have the insights but it is challenging to translate that into ac�on via the many execu�on systems in a streamlined or orchestrated manner

— It’s a challenge to collate and feed the results and insights from all our campaigns back into a central hub to enrich the customer view

— We are unable to understand the customer’s big picture or connect the dots across the many touch points at which we (try to) engage with the customer without a unified view of the customer

— We waste hundreds of man hours se�ng up the audience for each campaign on each pla�orm (mul�plied by a steadily increasing set of pla�orms) - there are too many inefficiencies built into marke�ng ops

Q3. HOW WILL A CDP HELP US GET THERE?

In one word: data.

The availability, accuracy and accessibility of data is o�en the biggest barrierfor marke�ng teams to achieve goals.

Many tools, pla�orms and solu�ons will claim to help you get to the state of desired outcome. And they could. If they had the right data. Without data, none of it is remotely possible. And CDP deals with data. A CDP helps you turn data into a strategic asset. However, as David Raab cau�ons, it is important to note that the biggest barriers to the successful implementa�on of any solu�on (including CDP) are o�en organiza�onal silos, lack of budget, lack of relevant staff skills, and exis�ng systems that can't

feed data to the CDP or use CDP outputs. CDP doesn't solve those problems but can make them easier to solve by providing new technical capabili�es and highligh�ng non-technical barriers to change.

It will help to document how a CDP will address each of the obstacles in Q2. above (or your own), including the specific feature or func�onality of the solu�on that will solve each stated problem.

Here are the 6 crucial ques�ons to build your CDP business case

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Include suppor�ng reasons based on its importance to your organiza�on:

— CDP gives marke�ng control over customer data

— Packaged solu�ons mean there is no development or liability on the user plus data storage, security and transfer best prac�ces are followed and constantly refreshed

— Cost savings because of streamlined, centralized data management for complex campaigns and ever- increasing pla�orms/ touchpoints

— Increased efficiency of marke�ng automa�on across complex campaigns since all are using the same data and feeding back into the same data

— Improved campaign design based on holis�c insights on each customer, improved targe�ng, less wastage

Q4. WHAT IS THE EXPECTED ROI AND BY WHEN

— The cost of a CDP solu�on will be around the range of $X per month. (The actual cost will vary greatly depending on the details of the business and scope of features in the CDP being considered).

— The addi�onal costs related to manpower and systems would be $X1 per month

— It will lead to an ROI of $5X based on increased conversions and increased value per conversion.

— Current Average ROI based on mul�-pla�orm campaign driven approach is $3X

— Factor in all efficiencies and savings as well

Q5. WHAT ARE THE BUSINESS RISKS OF NOT ADDRESSING THOSE OBSTACLES WITH A CDP SOLUTION?

1. Compe��veness

— Our customers expect a seamless experience but at present, there is every chance they will be being retargeted for a product they already own (for example) or that we are sending them an offer that they have already rejected via another channel

— Our marke�ng ops people are spending dispropor�onate �me on tasks like list building and maintenance when they could be focusing on campaign tes�ng, execu�on quality and outcomes

2. Compliance:

— The reduced risk of data security with all the data centrally managed and a single window for data to flow in and out into other systems, instead of relying on third party SaaS vendors to manage the lists for their campaigns

— Improved compliance with laws such as GDPR – any change to a customer’s preferences gets updated on all touchpoints

Q6. WHEN CAN WE GET STARTED / OPERATIONAL ISSUES

— People requirements

— Data requirements

— Vendor selec�on

— Timelines

— Budget approval �melines and processes

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David Raab, Founder, CDP Ins�tute and MTA Category Expert for CDP weighs in:

1. What are the typical objec�ons you hear from management on inves�ng in a CDP?

Management may feel they spend too much already on martech and this will only add complexity and cost. the CDP rarely replaces an exis�ng system, so it can't simply take over exis�ng budget. Management may also prefer an IT-focused solu�on such as a data warehouse, so groups outside of marke�ng can take advantage of the unified customer view.

2. What are the most important metrics - in your view - to measure success of a CDP investment?

Marke�ng ROI in general (since improved data impacts all customer marke�ng ini�a�ves). More specific benefits include improved conversion rates, lower acquisi�on costs and savings in staff �me and cost.

BlueConic's Senior Vice President of Strategy, Cory Munchbach, talks about the typical CDP investment journey

What is the typical journey for companies that have invested in a CDP- from beginner to intermediate to advanced - what are the typical characteris�cs of each phase?

First, consider where you are star�ng from with your customer data. A customer data maturity assessment allows brands and publishers to evaluate their readiness for CDP and iden�fies data ini�a�ves most likely to succeed based on the readiness level.

BlueConic divides the CDP adop�on phases into Experimenter, Accelerator or Visionary - with the la�er being closest to the marke�ng Holy Grail of a single unified customer view.

As a company advances through the stages, they graduate from programs with fewer data sources and segments, to more sophis�cated data integra�on across mul�ple disparate sources.

What are the business outcomes to focus on when explaining CDP to leadership?

Because a CDP is purpose-built for marketers, it enables control, scale and ac�va�on of the most valuable marke�ng asset – first party customer data - with speed, efficiency and autonomy. A CDP liberates customer data and as a result, delivers fundamental improvements in marke�ng outcomes across a range of areas. The ROI could be measured in a wide variety of ways, including:

• Gains in efficiency

• Speed to market

• Shorter sales cycles

• Mone�za�on of new and exis�ng audiences

• Greater effec�veness of interac�ons and experiences.

• Stronger data integrity and security

• Known, unified customer profiles

• More effec�ve or efficient product development

• More effec�ve programma�c adtech investments

What are the key ques�ons to ask poten�al CDP vendors at the final stage of nego�a�ons?

Depending on the maturity stages men�oned earlier, but at a high level, make sure you’re asking:

1. Once we deploy, will we, as the marke�ng team, be able to support, run and manage the CDP ourselves? What does that look like in terms of onboarding and training?

2. As we bring more technologies into the stack, a n d d e p l oy m o re c h a n n e l s fo r c u sto m e r communica�on, will the CDP be able to grow with us? Can it adapt to a future state that isn’t necessarily known at the �me of purchase?

3. Will the CDP help us address challenges related to customer privacy and consent?

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MINI CASE STUDY 1

How Ly�cs CDP helps The Economist connect all of their customer data together into a cohesive customer experience.

Outcome: The Economist grew their subscrip�on revenue by 400% over the span of 3 years and reduced their cost per acquisi�on by 80%. Depth of engagement has also improved.

How they got management support – and a CDP budget

In a tough business environment awash with disrup�on, The Economist's business model was under dire threat. To get support in a �me when new investments were hard to come by, the marke�ng team first tried a POC with CDP vendor Ly�cs, which delivered drama�c results in 2 months. Since then, to keep management engaged and suppor�ve, the modus operandi has been to deliver incremental improvements in a highly itera�ve way.

MINI CASE STUDY 2Readers are also encouraged to visit the CDP Ins�tute's to see examples of how ...........................companies from industries as diverse as food, insurance, consumer retail and educa�on have leveraged their CDP to achieve different marke�ng outcomes.

Outcome: With AgilOne, TUMI could stop over-discoun�ng and over-emailing customers, and engage more meaningfully. TUMI can now:

— Run fewer, more targeted campaigns- refocus marke�ng budgets on the engagements that ma�er

— Deliver higher ROI on marke�ng campaigns

— Deliver a consistent brand experience across all touchpoints

How they got management support – and a CDP budget

The biggest barriers for TUMI were:

— Siloed teams and people being compensated for the wrong things.

— Inconsistent strategy and brand voice: store managers, support centers, and other customer-facing teams were disconnected from the customer engagement strategy led by the digital team.

— The digital communica�ons experience (too many emails/ discounts) was inconsistent with the larger customer rela�onship with the brand, and the retail experience.

— Inability to iden�fy and engage with ‘nuanced segments’ – for example, the true brand fana�cs - and do it consistently across all channels

Recognizing these issues helped TUMI to address the real barriers to success and develop the right use cases even before they began evalua�ng CDP vendors. Crea�ng internal alignment across different customer facing teams, agreeing on a consistent brand strategy across all touchpoints and ge�ng leadership buy-in for this approach is what ul�mately helped make the case for CDP investments.

The metrics and the results: AgilOne helped TUMI measure and deliver

— Revenue per emails sent (40 million fewer emails but higher ROI)

— Lower marke�ng costs - eliminated 40 promo�onal days from the calendar year

— Increase in email subscriber list – grown emails daily by 200K

— Full price revenue growth (up by 28%)

— Overall revenue growth (up 60% compared to the previous year)

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GET ISSUE 1 OF THE CDP EXPLAINER (WHAT IS A CDP) IN PDF HERE

GET ISSUE 2 OF THE CDP EXPLAINER (DO I NEED A CDP?) IN PDF HERE

GET ISSUE 3 OF THE CDP EXPLAINER (AM I READY FOR A CDP?) IN PDF HERE

NEXT ISSUE: MAY: CHOOSING A VENDOR

— Overview of the industry/ market - What is the vendor landscape like?

— What kind of vendors can serve my unique CDP needs?

— What should I be looking for in a CDP vendor?