From cost to profit center: How to transform customer 360 investments
To IT leaders, it’s obvious that data strategy deserves a special place at the table for any discussion about strategic business initiatives. However, for CMOs and CROs like myself, who must justify and weigh expenditures against bottom line impact, investing in customer data typically looks like a red-ink proposition.
This happens because total cost of ownership (TCO) for customer data is a necessary but insufficient part of the business value conversation. What’s missing is a discussion around the opportunity costs and benefits that remain invisible not because they were never realized — but because they were never even expected in the first place. That’s because the health of your data and ROI are inextricably linked. When you improve data health, you enable your data to become a contributor to the bottom line instead of a drain on it.
“Cutting the sales cycle from 90 days to 60 days — a 33% decline — results in a total throughput increase of 50%, which translates directly to increased revenue.”
6 ways data health can transform customer 360 from cost center to profit center
IT leaders can become indispensable partners to their CMO and CRO simply by putting these opportunities for ROI front and center. Here are six specific ways that data health can transform your customer 360 investment from a cost center into a profit center:
- Improvement in cost of acquisition (CAC): Healthy data makes it possible to run more targeted marketing campaigns that are relevant to customer needs (and that actually get delivered to the right contacts). With more targeted engagement based on accurate contact information, marketing and sales teams can achieve better outcomes, such as increased pipeline and reduced CAC.
- Increase in sales velocity: Customer 360 can shrink the time it takes to convert a lead to a sale by providing one single view of the customer/account and a seamless process for handover from marketing to sales to procurement) This translates directly to annual revenue. For example, cutting the sales cycle from 90 days to 60 days — a 33% decline — results in a total throughput increase of 50%, and that translates directly to increased revenue.
- Improvement in retention, upsell, and cross-sell: With healthy data about prior customer activity and product usage, you can send timely contextual communications to your existing customers. The improved engagement and reduced churn that result from this deep customer knowledge will have an outsized impact on the value of that customer over time. This is especially true for companies that have repeat or subscription customers.
- Product innovation: To be competitive in the market, companies need to quickly capture insights based on data on product usage, customer feedback, and market or channel dynamics. These insights, both qualitative and quantitative, serve as the basis for product innovation. Data-driven product innovation can help drive improved market share, customer satisfaction, pricing leverage, and more.
- Opportunity cost of time to market: Manual data correction or siloed tools can add weeks or months to your time to market — time that directly impacts your ability to respond to market and competitive dynamics. By putting trusted data in the hands of decision-makers and program managers across your organization in a timely manner, you give them the power to make faster and better business decisions.
- Risk mitigation: Even without the demands of regulations such as GDPR and CCPA, you would want to keep your data safe and secure — customer data doubly so. Technology that supports data health lets you control how customer data is collected, stored, and accessed, all while maintaining compliance with security and privacy regulations. These protections will keep you safe from the potential risks of fines from regulators, costly legal fees, and, worst of all, loss of consumer confidence.
Any conversation about adding value to the business must start with the preventative measures, effective treatments, and supportive culture of holistic data health. Armed with data-driven customer insights that the entire organization can trust and act upon, any business will be well positioned to get real value from their customer 360 initiatives.
To learn more about the relationship between data health and successfully fulfilling the customer 360 promise, we invite you to download the Talend white paper, “Customer 360: Get the data health you and your customers deserve” or explore the resources in our data health knowledge center.