How Smart Data Management Can Save Businesses Money

By Heidi Bullock, CMO, Tealium 

In this rapidly changing market, knowing your customers has never been more important. Today, companies can do that through customer data. Customer data platforms (CDPs) allow businesses to collect, optimize and activate customer data across every channel in real time. 

Why Businesses Should Prioritize Data Management

The customer experience is evolving faster today than ever before for a few reasons. First, the pandemic led to many new behaviors and interaction points between businesses and customers, and many of those are here to stay. Next, the third-party cookies and signals marketers have long relied on to inform their connections strategies are falling to the wayside. Finally, the increased scrutiny on protecting data privacy and securing personal information is resulting in a GDPR-like spread of regulations and new restrictions being placed on businesses. All these changes in the landscape point to one solution: shifting to a first party data strategy.

This seemingly straightforward answer begs the question: why isn’t everyone doing it? Well, there’s a straightforward answer there too: because operationally, it’s not easy. Data is living in a bevy of silos and different departments across companies are using it with different intent. Much of the data is low quality and incomplete. And as stated before, legal and operations teams are overwhelmed with activating data in a manner that adheres to expanding privacy regulations.

Hurdles and challenges in place, a CDP is the software solution that can solve these issues for companies. The selected CDP partner can guide companies through their first party data strategy to implementation and beyond, guiding them through the process. Taking that first step to getting started is often the hardest part. However once the ball is rolling, businesses that implement a CDP are on the fast-track to gaining the insights they need to know their customers better. 

How smart data management saves businesses money and boosts ROI

In the world of SaaS (software as a service) solutions, CDPs are still relatively new, but are much more widely adopted today than ever before. Why has there been a recent uptick in implementations? According to the 2022 State of the CDP Report, more than half of the respondents interviewed said payback on their CDP investment was achieved within six months of implementation, and 80 percent saw positive ROI within 12 months. Those results are powerful and are enabling more and more leaders to secure budgets for CDPs.

A CDP not only allows a business to do more with its most valuable asset (a.k.a. customer data), but it can also supercharge a business’s existing technology stack to deliver more value than it could before. So how does this work? Implementing a CDP enables businesses to structure a tech stack with turn-key integrations. Audiences and business-defined ‘rules’ are set up centrally and can be applied across various technologies, saving hours of integration work and significant amounts of money. This value spans multiple departments inside the company, creating broader value than many may have anticipated.

The benefits a CDP can unlock are truly limitless.  With a CDP, you’re unleashing ‘the art of what’s possible.’ From better personalization at scale and growth across every step of the customer journey (acquisition, retention, and expansion) to optimizing budgets and resources, the engagement and quality of interactions between businesses and customers is critical today. And I assure you, if your company isn’t doubling down here, your competition is. 

How to be successful in data management

• Put the Customer at the Center - In order to connect with your customers, you must know them. The role of CDPs is to help businesses manage their customer relationships and personalize their experiences accordingly.
• Create a Single View of the Customer - The strongest CDPs bring together first and third-party data sources to form a comprehensive 360-view of your customer across devices and channels, making that data available to your other tech and across the business. This is essential in keeping your customers at the center of the experience.
• Impact Marketing and Customer Experience - Customers are using more channels and devices than ever before while demanding exceptional experiences. With a comprehensive set of customer data, the right CDPs fuel privacy consent compliant, cross-channel marketing with comprehensive, trusted data. 
• Tear Down the Data Silos - The value of customer data extends across a business, but is only as good as the quality of the data. Top CDPs give teams the ability to access and improve customer data clarity across departments accurately and effectively.
• Be Ready for What’s Next – The best CDPs enable businesses to build and connect a tech stack that adapts to always-changing consumer behavior. With maximum flexibility to work with the tech you already have in place, CDPs with open platforms allow you to remain in the driver’s seat of your customer experience strategy, no strings attached.

Tangible value to be gained from a CDP

In a recent Forrester Total Economic Impact report, one healthcare business intelligence lead who implemented a CDP shared the example of advertisement copy optimization as a result of insights garnered through their CDP: “This resulted in a 22.8% lift in sales. Just this small change of copy is responsible for many hundreds of thousands of dollars…” stated the executive.

That same report revealed quantifiable benefits achieved by using a CDP over three years:  

• Campaigns increased engagement 8.5% by recapturing abandoned conversions 
• Improved customer segmentation and personalization drove more than $1.8 million profit, including a 3% increase to average order value 
• New revenue of $34 million due to real-time data access (e.g. sales representatives calling interested parties significantly faster)
• A $590,000 productivity lift for customer-adjacent teams, with up to 25% lift across digital advertising, web analytics, and database operations teams
• Technology stack optimization savings worth more than $782,000 
• Right-time data access enabled more than $1.2 million increased revenue 
• Composite organizations improved ability to reach customers up to 200% more than with stale data

Another way many companies can quickly realize value from their CDP is by unlocking new audiences. With the insights gained through the analysis of purchase history, browsed topics, favorited products, abandoned carts, etc., the number of audience segments can skyrocket from seven to 70, for example, for more precise targeting and experience management.

What’s next?

The CDP industry is booming and only projected to continue doing so up to $15.3 Billion by 2026. With 150+ companies self-identifying as a CDP, consolidation has already begun. 

Why is this accurate? The importance of privacy consent management and data security continues to spike. The right CDP helps businesses manage privacy consent orchestration into the customer journey and helps compliance departments sleep at night by ensuring customer data is secure. 

We’ve all learned that no one has a crystal ball, but CDPs help businesses prepare for whatever may come next. Business leaders can’t leave their customer relationships to chance, so choose the right CDP partner for your business and start activating your first party data strategy.