August 17, 2018
Whether you’re just starting out, or are ready to expand your current CDP capabilities, Customer Data Platform strategy can be complicated. Rob Ristagno (CEO, The Sterling Woods Group) shares his CDP insights in this week’s Friday Four.
Customer Data Platforms (CDPs) have been a buzzy industry topic for a while. Are companies using them effectively or do we have a ways to go?
“Yes and yes. For companies that are effectively using CDPs, there is a real strong ROI. That being said, it’s still a bit of the “wild west” when it comes to CDPs. According to a study by Forbes, only about 1 out of 10 companies are effectively using their data, which screams CDP opportunity to me. There are some clear benefits out of the box related to streamlined data centralization and reporting. But that alone probably won’t drive revenue or justify the investment.
Companies that are somewhat ahead of the curve are finding useful ways to analyze this data to make sense of it. The companies that are really getting their money’s worth are the ones that can translate the analysis into action, and thus improve customer conversion and retention — the true drivers of revenue and thus ROI!”
Can a CDP drive revenue, or is it just a more fully realized database?
“Yes, a CDP can increase revenue, but publishers need to go into the investment with a proper business plan. In other words, strategy must come before technology selection.
Centralizing data is nice, but it’s tougher to justify the investment if the plan stops there. The key is to have hypotheses on how taking action on the insights from a CDP will drive new business or retention. Companies that do it well have ideas on how to use CDPs to optimize digital advertising spend, increase conversions, provide better customer service that will lead to higher retention, and launch new products that will be successfully adopted by the market.”
What do you see as the next step for “CDP 2.0” and is it too late to get into the CDP game if you’re just starting out?
“CDP 2.0 is applying Artificial Intelligence to the insights to automate the decision making process. For example, can we automatically detect a new customer segment, determine what types of content will increase their conversion for that group, then generate an email campaign that features said content and send it only to the relevant persona?
It is absolutely NOT too late to get started. According to one of Gartner’s recent reports on CDPs, over 80 vendors now call themselves Customer Data Platforms, doubling the size of the category over the last year. That means we’re still in infancy and it’s not too late to get started.”
#FridayFavorites: What’s your favorite hobby?
“I’m a sucker for trivia – watching Jeopardy, listening to trivia podcasts, and (when we can get a babysitter) playing pub trivia with my wife.”
Rob will dive deeper into CDP planning in his session Customer Data Platform Strategy at the AAMP Conference (Oct 18, downtown Los Angeles). See you there!