July 2022
BEGIN WITH
THE END:
When building the ideal data stack, focus on
BUSINESS OUTCOMES before tech functionality
“Begin with the end in mind”
“Almost all of is Habit #2 from Covey’s famous book The 7
Habits of Highly Effective People, which
remains a bestseller for over 25 years.
the world-class
This simple advice can be applied today to
athletes and other the debate around customer data platforms.
With so many CDP tech trends of the moment
peak performers are (composable? unbundled? or whatever we’re
calling it today?), it is easy to get lost in the
visualizers. They see merits of a best-in-breed versus an integrated
platform strategy, instead of letting business
it; they feel it; they outcomes dictate the ideal tech route.
experience it before For organizations considering an investment
in a CDP, it is smarter to focus on what you
they actually do it. hope to accomplish with your data, including
your goals, use cases, and activations. In other
They begin with the words, visualize actual business outcomes
rather than the technology that might get
end in mind.” you there. Then, and only then, can you
take a backward journey toward defining the
necessary technology and resources needed to
- Stephen R. Covey attain those goals.
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SHIFTING THE DATA TECH
CONVERSATION TOWARD OUTCOMES
When it comes to an organization’s data stack, there is a battle brewing The role of the CDP is yet to be fully defined by most companies –
between best-in-breed and platform strategies. On the one side, there and that’s okay. Like any technology, ideally a CDP scales with the
are integrated CDP solutions, and on the other, a composable strategy organization’s needs.
that integrates essential CDP features across multiple technologies.
“At the end of the day, it comes down to having the right infrastructure
Most often a composable CDP has a data warehouse as the foundation that fits your needs. If you have mountains of first-party data and none
while traditional CDPs take an integrated platform approach to of it speaks to each other, or you want to give your customers a more
functionality. The distinction between the two approaches is who is personalized experience,” says Wills, “then a composable CDP may be
ultimately in charge of the solution, according to AnnMarie Wills, CEO your best solution. But you won’t know that if you don’t start with your
& Co-Founder of Leverage Lab. “I like to think of the composable end goal in mind.”
solution as a developer’s CDP. Whereas the traditional CDP is more of
a marketer CDP.”
WHERE FIRST-PARTY DATA SHOULD LIVE
There are a plethora of platforms designed to store an organization’s first-party data. It is critical to not simply come to the thinking that “we
need a CDP” instead of doing the due diligence to identify the technology solutions that will best achieve the company’s goals. Enterprises
are leaping before even considering both their immediate and long-term data needs and, more importantly, what they hope to accomplish.
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“Current CDPs fall short of
expectations: Only 10% of CDP
owners today feel their CDP meets
all needs. That number drops to 1%
who believe their CDP answers future
requirements.”
- Marketers Need CDP Solutions That
Transcend Data Management, Forrester
*Image pulled from Forrester study, pg 6
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But where is an enterprise considering a CDP supposed to start? Ask your network or
Google it, and you’ll be bound to get a million viewpoints. Some headlines blare that the
CDP is dead, but your business associate is raving about the composable CDP. It’s a
polarizing issue, and most likely, what works for one business may not work for
another. The reason for this is the uniqueness of first-party data. It is proprietary
data that you solely collect, own and do what you want with.
As third-party cookies are phased out, and mobile privacy updates keep
mounting, first-party data will take center stage. Companies will always
need some form of a CDP, whether it’s a composable best-of-breed or
a data warehouse-first tech strategy. The house your first-party data
lives in is up to you – just make sure you have the blueprint for
business outcomes before buying the house.
FEATURES + FUNCTIONALITY = OUTCOMES
Let’s take a step back and revisit Marketing 101. The features are the tools of your CDP. The functionality is how
these CDP tools benefit your business outcomes. Sounds simple, right? Yet there has become a jumbled overlap
of the two. This has led to a muddled mess when it comes to identifying outcomes.
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THE #1 QUESTION TO ASK YOUR CDP
How can you ensure my success in activating my CDP in true operationalization?
“It takes about two to five years to
get to full operationalization of a
CDP. Ask your CDP vendor what it is
doing to get you there and how it
can help you get there faster.”
- AnnMarie Wills,
CEO & Co-Founder, Leverage Lab
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Too many companies are chasing the wrong things by
confusing CDP features and functionality. According to DO I NEED A NEW
Forrester, the most important CDP functionalities that
enable meeting marketing and customer data goals include: CDP PARTNER? QUIZ
Only one in 10 Forrester respondents say their current CDP meets all of
Unified dashboarding (63%) their current needs. These are the essential questions marketing leaders
Real-time data processing (63%) need to be asking their CDP partner to discover if it is driving the best
Personalization tooling (58%) business value and outcomes:
Integration with other systems of record (55%)
“There is a wide breadth of capabilities that different CDP Answer YES or NO to the following questions. If you have more “no’s”
providers bring to the table. There isn’t a lack of capabilities. than “yes’s,” then it may be time to revisit your CDP partner choice.
There is a lack of companies that know how to take
advantage of the capabilities that already exist,” explains Does my CDP partner have …
Wills, “It’s not about saying ‘I want a 360-degree profile of
1. A clear picture of my specific industry, unique needs and the
my customer’ because that’s what a CDP already does. It’s customers we serve?
about asking what you want to do with that data.”
2. A strategic path for how we can get a return on investment?
Top-level business goals like higher revenue (58%), increased 3. A strong POV for activating our data against our marketing use
customer retention (56%), a better understanding of cases?
customers (51%) and increased trust from customers (48%) 4. An idea of the organizational change management that is needed
are expected benefits of a modern, effective CDP solution. to get the most out of our tech investment?
But unfortunately, close to half of the Forrester respondents
5. Knowledge of the levers that will drive value for us, or are they
say their CDP has underperformed against business simply selling us another piece of technology?
expectations. Take our quiz to determine if your CDP
partner connects with your business outcomes.
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3 REASONS WHY BUSINESS
OUTCOMES MATTER
As a marketer, you constantly ask your team, ‘why should the customer care?’
What’s in it for them? What value are they getting?
These same questions apply to taking a business outcome approach to CDPs.
Essentially, you should examine this tactic’s advantages and clearly understand
why it makes sense for your organization. All the CDP features and benefits are
nice to have, but your need to have, that’s business results.
Here are three ways a CDP helps drive business success:
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Image pulled from
Forrester study,
Image pulled from McKinsey at this link. page 5.
1. 2. 3.
Why personalization? Why revenue? Why data quality?
Perhaps you’re reading this white You will increase your revenue – it None of the above is possible without
paper and thinking, ‘it’s like is as simple as that. Leveraging good-quality data. Yet Gartner
they know me!’ That’s because data from a CDP is a domino effect: estimates that every year, poor data
personalized messaging along improved customer acquisition quality costs organizations an
every stage and channel of the > better customer engagement average of $12.9 million. Your CDP
customer journey makes a difference > greater customer satisfaction cleans up your records and corrects
in business outcomes. According > increased customer retention, and inaccuracies because you need to
to McKinsey, 71% of consumers expect results in higher customer be able to extract reliable, trusted
companies to deliver personalized conversion rates. When CDP users data insights to drive smarter, faster
interactions, and 76% get frustrated in marketing, IT, and customer business decision-making. Quality
when this doesn’t happen. experience were asked what aspects data gives enterprises that strong
Personalization drives performance, of their current CDP solution they understanding of their customers for
and companies achieve 40% more are mostly satisfied with, the top- a competitive edge.
revenue from personalized marketing scoring answer was return on
actions or tactics. investment (33%).
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DRIVING PERSONALIZATION WITH
FIRST-PARTY DATA aND MACHINE LEARNING
A large convenience store chain brought Leverage Lab in to organize its abundant data and drive personalization at every customer
touchpoint. The chain used weather, geo, transactional, and time-of-day data to optimize personalization from the gas pump to paid media,
right down to the moment of truth at the point-of-sale kiosk.
Leverage Lab used predictive machine learning models to create a segment of the convenience store client’s current users. This segment was
more likely than the mean to convert on an offering. The result saw the machine learning segment generate 2x more conversions than the
control audience.
“Personalized experiences are the subtle
expressions of data-driven insight, that
can only come from well-organized and
strategically focused first-party data.”
- AnnMarie Wills,
CEO & Co-Founder, Leverage Lab
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LET’S TAKE These are the five crucial steps to elevate your
ACTION: 5 STEPS organization to outcome success:
TO BUSINESS 1. Define the outcomes you hope to achieve: Remember, you start at the
beginning with the end. Use the traditional SMART method of creating objectives
OUTCOME that are: Specific, Measurable, Achievable, Realistic and Timely.
SUCCESS 2. Evaluate your current tech stack: Look at your entire integrated
data tech stack and assess if your CDP’s features, functionalities, and
Watch any action movie, and mixed in
capabilities benefit your organization. Create a SWOT (strengths, weaknesses,
with a few plot twists, there is bound to
opportunities and threats) analysis of your CDP and associated tech resources.
be a mission plan that is essential to the
hero’s success. But just like in the movies,
3. Communicate with stakeholders: Ask across a range of titles from
you will encounter obstacles (or enemy
the C-suite to the dev team to gain various perspectives. Inquire about
fighters!) along the way. That’s when it’s
expectations around not only business outcomes but also around use cases,
best to talk with a first-party data consultant
timing, budget and other relevant areas.
like Leverage Lab.
4. Create a plan: Keep it short and to the point. Include
Wills says Leverage Lab was launched
responsibilities, a timeline, and the steps you will take to meet your
in the infancy of the CDP space and has
business outcome goals. Include your KPIs and how you will measure
witnessed the transformational potential of
your success.
the CDP. She shares, “For a company to get
a guaranteed return on their investment and
5. Pivot as needed: Be ready to shift your plan in response to
have a guaranteed model to follow, that would
expected and unexpected complications. This pivot is especially true
be the reason to work with us. We’ve built our
in the marketing world, which is constantly influenced by the latest
methodology to ensure that you have a solid
trends, new regulations, or changes in customer behavior.
framework to follow to receive value from your
CDP and an impact on your organization.”
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THE END IS ONLY THE BEGINNING OF
BUSINESS SUCCESS
We understand that taking a more strategic, outcome-based approach to themselves. Think about the outcomes they hope to achieve as you
your first-party data initiatives may be a tad mind-blowing. It could go move them along the funnel from awareness to conversion – and, more
against how you think or how you’ve been operating up till now. But we importantly, how you can get them there by infusing first-party data
must be open to new ideas and innovative ways of doing things because empowered by a CDP. A CDP consultant can help shape your customer
the same old, same old will quickly become outdated and leave you in journey roadmap and ensure you get maximum value from your first-
the back of the pack. party data.
“The tools and capabilities of your CDP must be paired with a solid And just like Covey’s high performers that “begin with the end in mind,”
strategy, creative, and other marketing activations. It’s a framework that you may be thinking, what’s next? What happens after you’ve achieved
works collectively. If it’s not all syncing, then you won’t get the business your desired outcomes? Well, it’s never too early to start thinking about
outcomes,” concludes Wills, “cause the technology itself will not solve the future stages of activating your customer data – after all, another
your problems, you need to be able to bring it all together, and we can Covey habit is “be proactive.”
help with that.”
Begin with clearly defining your goals, use cases and desired outcomes,
and then work back toward the necessary technology and resources to
reach your goals. By shifting your perspective and putting the focus on
business outcomes, success becomes the destination, not the journey.
We’ve talked a lot about the relevance of tech in your CDP journey, but
it’s also important to remember that your customers are on a journey
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REFERENCES
1. The 7 Habits of Highly Effective People
2. Forrester: Marketers Need CDP Solutions That Transcend Data Management
3. McKinsey: Next in Personalization 2021 Report
4. Gartner: How to Improve Your Data Quality
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About Leverage Lab
Leverage Lab is on a mission to connect fragmented silos of
customer data and drive revenue. As the unrivaled first-party data
consultancy, we empower teams with deeper knowledge, tools and
insights to create a more engaging customer journey. We’ve helped
brands from around the globe drive new revenue, boost ROI and
build deeper connections.
Contact us: info@LeverageLab.com Follow us:
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