Customer Data & Analytics Blog

The ROI of CDPs: Discovering which advertising efforts are paying off

Ariella Brown | 2 minute read


All businesses aim to improve their bottom line. The end goal is to increase revenue while keeping costs down. So some may be hesitant to add on an additional cost in adopting a CDP. But that kind of thinking is what is known as being penny-wise and pound-foolish.

"Half the money I spend on advertising is wasted; the trouble is, I don't know which half."

This difficulty was observed by a 19th Century marketing pioneer, John Wanamaker. To a large extent, it still holds true, but thanks to more advanced data collection and real-time analytics, it’s possible to do better.

While most businesses have a great deal of data on their customers, they often don’t know how to extract the parts that have a bearing on their marketing. It takes advanced analytics to effectively harness that data for micro-segmentation and offer the actionable insight in real time that are key to
successful one-to-one marketing.

Consider what a CDP does. It offers continuously unified and enriched customer data with on-going micro-segmentation, non-obvious pattern discovery and recommendations. That’s invaluable for your marketers because it gives them access to real-time customer profiles that they wouldn’t have
otherwise and gives them behavioral intelligence that can direct modifications to the marketing spending away from what doesn’t work to what does for smarter spending.

That opens up the potential not only to increase the revenue generated because of the insight provided by a CDP but to do so at reduced cost. Businesses that have given themselves the benefit of a CDP have discovered that advantage. The following three case studies demonstrate that the CDP’s insight on customers translated into measurable results of increased conversion, improved retention, more accurate campaigns, better returns, and reduced churn.

Improving conversion is a universal business goal. In the case of a leading bank, it sought to achieve that goal through more effective data modeling and campaign management. It hired Zylotech to create a customer and prospect data mart across 27 different data scores and to optimize lead scoring for potential customers. After integrating with Zylotech’s dashboard for reporting and data visualization and activating those results into the bank’s campaign tool, campaign accuracy increased by 20% to generate revenue. Their average prospect to lead conversion has seen more than 80% growth.

In the case of a major office supplies retailer with $22 billion in revenue and 80,000 employees across 2,000 stores, the goal was to unify customer records across all channels for improving their ability to do 1:1 marketing as well as more overall targeted marketing in specific segments. As a result of using Zylotech’s service, it improved customer retention and also uncovered numerous profitable micro-segments. As a result, the retailer saw a quadruple lift in campaigns success with a 50 percent increase in product purchase per customer.

Increasing sales among existing customers and reducing churn are two major challenges for ecommerce businesses. In the case of one that sold a major store brand of coffee, both ends were achieved when it hired Zylotech. Leveraging data insights on its existing customers, Zylotech was able to improve the seller’s customer segmentation and promotions effectiveness across channels, reducing churn and increasing sales from targeted campaigns designed for the company’s 2 million loyalty members. This translated into a $15 million increase in sales and achieving industry lows for customer churn.

The way to look at a CDP is not as an avoidable cost but as an investment that will increase your returns. While many technologies enable you to do one thing better, a CDP can support a range of strategies for leveraging your data more effectively to increase the lift of your marketing.

In other words, it can help you focus on the advertising that works and reduce your spending on efforts that don’t generate returns. In that way, you can stop throwing out half of your advertising money because you don’t know which half works, and all your spending would be directed toward optimal returns.

Ariella Brown is a Zylotech contributing writer.

If you liked this post, check out our other blog post on Democratizing data: How marketers are joining the data boom.



Topics: Marketing Technology