Alex Bistran, Director, Revenue Marketing, Zylotech
The metrics behind marketing have become increasingly important as companies embrace digital transformation. Marketers and consumer experience teams today no longer navigate by experience or gut feel. They make data-driven decisions and measure their success by linking their efforts directly to revenue generation, customer lifetime value and other quantifiable goals.
Measuring success is critical as marketing and sales teams weigh new strategies and investments. Many organizations learned this lesson the hard way by investing millions of dollars into data warehouse projects only to struggle when it came time to calculate the return on that investment. In order to avoid making the same mistake in the future, businesses need to adopt a more ROI-centric approach to new sales and marketing technology such as customer data platforms (CDPs).
Measuring the success of a CDP
One of the challenges in measuring the value of a data warehouse is that the majority of warehoused data is never made actionable; it’s cleansed, stored and secured but only a small portion of that data is used for campaigns and decisioning. CDPs, on the other hand, are primarily concerned with actionable data that can add value to marketing campaigns, sales strategies and customer interactions. Therefore, it’s easier to measure the value of a CDP.
Businesses can measure the effectiveness of CDPs in a variety of ways. They can look at short-term results: email opens, engagement rates, website traffic and revenue per visit, for example. They can focus on long-term effects: shifts in customer lifetime value, churn rates or customer satisfaction scores. They can even measure operational efficiencies, such as time to launch a campaign, number of new campaigns per month or the time spent on day-to-day data management tasks. All these metrics help to create a fuller picture of how CDPs generate revenue, reduce costs and improve agility.
Look for ROI opportunities right away
Marketing and sales organizations need to be proactive when it comes to measuring ROI. This includes identifying early use cases that can quickly demonstrate ROI, such as optimizing ad spend through better targeting. Replacing spray-and-pray tactics with highly targeted ad campaigns powered by a CDP can be an excellent first use case to demonstrate value and gain executive buy-in. In some cases, CDPs can deliver measurable results within weeks. For example, Zylotech offers customers a data health score using our CDP technology that can give decision-makers clear visibility into their data quality is less than two weeks.
In just a few months, sales and marketing organizations should be able to connect the dots between CDP-driven initiatives and clear ROI. An effective CDP solution is one that tracks which marketing campaigns are working down to small details—e.g., whether a particular email has helped a customer or prospect move through the sales funnel. Metrics like these, performed in conjunction with traditional marketing techniques such as A/B testing, are vital to helping organizations optimize their sales and marketing strategies and keep customers engaged over time.
Most organizations today have dozens of different marketing and sales solutions, from CRM systems to standalone data analytics tools. With few exceptions, the most effective solutions are those that have wide user adoption in the enterprise. The single best way to foster adoption is to show that a solution has the ability to move the needle, whether that means higher customer lifetime value or lower cost of customer acquisition. By connecting CDPs to ROI, the potential for value increases as more teams within the enterprise discover the benefits of using a single trusted source for customer data.
To learn more about how a CDP solution can deliver fast ROI for your business, read the free eBook co-authored with the CDP Institute, Customer Data Platforms in the B2B Space.