The ROI in a Customer Data Platform

If you’re wondering about the potential customer data platform ROI for your company, look no further. We asked respected analysts to calculate the financial impact of Treasure Data’s customer data platform. Here’s what they found:

Nearly half of surveyed executives said their CDP solution is driving customer loyalty and ROI. Forty percent also expressed confidence that CDPs will help them meet disruptive and competitive challenges in the near future. Research shows that Treasure Data CDP clients enjoyed:

• More closed sales with higher conversion and close rates
• Increased customer transaction with improved real-time segmentation and messaging
• Greater customer retention
• Higher cost savings in marketing campaigns

Challenges

Among the interviewed organizations, auditors identified challenges resistant to satisfactory resolution without a customer data platform solution.

Key among them were disconnected data silos, which made it impossible to unify customer profiles and target audience segments precisely. As a result, companies missed opportunities to engage many new leads as well as existing customers.

Scattered information from outmoded systems delayed the ability to spot red flags and hindered company reactions to impending customer churn. They faced difficulties coordinating customer-facing teams around legacy systems. Lastly, duplicate customer records unnecessarily inflated operating costs for marketing campaigns by delivering redundant ads to the same clients.

Marketers also cited siloed applications, outdated platforms, poor data quality, and lack of access to centralized data as key challengesto understanding target consumers.

In the end, companies and marketers alike agreed that adequate resolutions to these challenges would help them utilize available customer intelligence more effectively. 

Solution Requirements

The respondents set the following solution requirements for better customer data management:

• Unified customer data: Audiences must be tracked and profiled correctly across channel and touchpoint engagements. Instead of silos, data systems must be centralized.
• Flexibility and integration: Companies must have the ability to operate a CDP solution along with other systems and data sources. For the interview participants, Treasure Data did not require a lock-in or an exclusive execution system. Clients could also access a library of connectors that allowed seamless integration.
• Future-proof: Companies seek a CDP solution that addresses immediate needs while still remaining viable for years to come. Treasure Data is readily scalable, and adapts to business needs over time via AI and machine-learning capabilities.

A customer data platform meets the solution requirements above, as well as others unnamed in these particular studies. A CDP works to create a holistic view of customers by unifying and centralizing fragmented data. This enables sales, marketing, customer support, IT, and other departments to work effectively and act immediately on customer insights. For marketers, CDPs allow for strategies that expand and target quality segments while also reducing campaign operation costs. 

Customer Data Platform ROI

Numbers don’t lie. Based on the collective metrics of all interviewed companies, analysts assumed that the composite organization had a conversion rate of 1.0%, a close rate of  14%, and a retention rate of 90%. It also had an annual marketing budget of $20 million to run an average of four yearly campaigns. They were able use the premises of these key assumptions to quantify the costs and benefits of deploying Treasure Data’s CDP as follows:

Costs

The total costs of CDP implementation breaks down into license costs, resources, and professional services. The present value was calculated over three years and adjusted for risk.

• License costs included annual subscription fees for storage, bandwidth, and processing. The analysis assumed that the initial licensing level was able to keep up with growing customer records and additional campaign analysis until Year 3.
• Resource costs covered planning and data migration, CDP implementation and integration, and vital employee training. Ongoing management of Treasure Data’s CDP requires minimal resources and personnel. This analysis assumes only two full-time employees for data management, IT admin tasks, database administration, and added campaign analysis.
• Professional services costs encompassed third-party assistance in implementation and ongoing management. Some of the interviewed organizations reported using Treasure Data’s professional services for ongoing CDP management.

Benefits

The numbers reveal that Treasure Data’s enterprise CDP solution yields the following benefits:

• Larger customer sales: Personalization of ads and messages on a massive scale not only engages new customers, but also drives more purchases from existing clients. This increases sales for large and small companies alike. Treasure Data enables organizations to customize ads targeting different, smaller audience segments within a larger marketing campaign. This approach suits online channels and loyalty apps that use deep data to deliver ads/offers at an ideal time and location.A participating Japanese travel company shared that they were able to target more female business travelers than males with ads for higher-rated hotels.

  “Before we had Treasure Data implemented, we did not know our customers very well, so advertising campaigns were just a few simple banner ads. With Treasure Data, we found a large opportunity with just simple segmentation: Women business travelers were ready to spend on average around 10% more for a hotel than men, because we learned that they valued higher-rated hotels and certain amenities such as a gym or yoga.”

  General Manager, Travel company

• Improved customer retention:  Another benefit of audience segmentation is knowing which clients are likely to churn. For example, a mobile media company cited their ability to determine appropriate interventions for players on the verge of uninstalling a mobile game. They used Treasure Data’s CDP for A/B testing to find an effective intervention.

  “We tested three groups: One, doing nothing, the control group. Two, we gave them 5 dollars they could spend in our store. Third, we provided 2 dollars’ worth of in-app purchases for free. Option three was by far the most successful strategy and one we now follow.”

  Business Intelligence Director, Mobile media company

• Campaign operation cost savings: CDP implementation and data migration cleans up poor quality data and duplicate records that eat up marketing resources when the same customer receives multiple ads. A food and beverage company reported that Treasure Data insights delivered considerable savings for online advertising, especially since their digital marketing vendor based rates on ad impressions.

  “We had 24 million records ingested into Treasure Data. After deduplication, we arrived at 10 million.”

  CDP Global Implementation Lead, Food and beverage company

Other benefits include improved customer lifetime value and flexibility in customer data platform use cases.

To discover your company’s customer data platform ROI, consult an expert today. Go beyond customer insights enrichment and unlock the full power of your customer data. Request a demo, call +1.866.899.5386, or contact us for more information.