Cracking the CDP ROI Code

Cracking the CDP ROI Code: Insights from 20+ Triumphs Reveal 90% Profit in Under 9 Months.

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March 7, 2023

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In our last post, we shared 170+ use cases for CDPs - with their correlated objectives (see https://www.linkedin.com/pulse/what-we-learned-roi-from-implementing-25-cdps-talking-van-hove-). In there, we share the actual real-life objectives we have set for each use case.

With the below content, you can translate these use cases into your own business case...

In today's data-driven world, Customer Data Platforms (CDPs) have become vital to successful marketing strategies. They enable companies to create unified, persistent customer profiles from multiple data sources and leverage these insights for more personalized and effective marketing campaigns. However, investing in a CDP requires a clear understanding of the potential return on investment (ROI) and how it aligns with your organization's objectives.

That's why we've created a comprehensive business case template specifically designed for companies considering a CDP investment. Our template is based on five key pillars that cover every aspect of a CDP's potential impact on your business. Best of all, it's free to use and download!

In our previous post we have shared 170+ use cases for CDP's; linked to their respective objectives and linked to clear KPI's. That exercise was based on 3 years of work implementing CDP's and has the aggregated list of objectives and KPI's used in all those business cases. Today we are taking things to the next levels. You can use those KPI's and objectives to start destiling your own business case. The template freely for you to download is prefilled with some hypothetical data - just so you can backtrack the logic in there.

You can discover how our business case template can assist in quantifying your customer data platform investment and accelerate your time to ROI.

The Five Pillars of CDP Investment Success

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ROI of a CDP

Download it freely from our google drive here: https://docs.google.com/spreadsheets/d/1BIqrBsRtRJLxplRbCapoa4P1lIURux4NUhkWS9bE_sQ/edit?usp=sharing

Our business case template focuses on five key areas that a CDP can influence:

  1. Margin from New/Improved Acquisition, Targeting, and Sales: Assess the potential revenue uplift from more targeted and effective customer acquisition strategies and how the CDP can help you better identify and engage high-value prospects.
  2. Margin Increase from Later Sales Transactions and Higher CLV: Determine how the CDP can help increase customer lifetime value (CLV) by enabling more relevant and timely cross-selling and up-selling opportunities, leading to improved customer retention and overall profitability.
  3. Higher CLV from Better Serving Existing Customer Base: Explore the potential benefits of more personalized and tailored customer experiences, which can lead to higher satisfaction, loyalty, and repeat business.
  4. Brand Experience Impact: Evaluate the impact of a CDP on your overall brand image, considering factors like customer engagement, personalization, and satisfaction.
  5. Campaign Operating Cost Savings: Calculate potential cost savings from streamlining marketing processes, reducing data silos, and improving data accuracy through the use of a CDP.

Customizable Investment Scenarios and Clear Assumptions

Our template allows you to create multiple investment scenarios based on varying CDP adoption, customization, and integration levels. You can calculate the Net Present Value (NPV) and time to ROI for each scenario by inputting your organisation's unique data and making clear assumptions.

In addition to providing you with a solid foundation for decision-making, the template also offers valuable insights into the key drivers of your CDP investment's success, enabling you to optimize your marketing strategies for maximum impact.

Our comprehensive CDP business case template provides you with the tools you need to make a well-informed decision about investing in a customer data platform. By evaluating the potential ROI across these five critical pillars, you can identify the most compelling opportunities for your organization and confidently move forward with your investment.

(P.S.: this is not complete, and too much focused on the Marketing side of the CDP use cases; we will optimise this model so that it better resonates with the CFO. Stay tuned)

Feedback is always welcome. This is never a finished document.