Customer Data Platforms: Should You Build or Buy a New CDP?

Customer Data Platforms: Build vs. Buy?

To build or to buy a customer data platform (CDP); that is the question. By now, forward-thinking CMOs in every industry have recognized the power of data-driven marketing — how it increases engagement and helps you better understand your customers’ desires, preferences, behaviors and intents.

Yet creating a unified and complete view of the customer continues to be a challenge for even the most advanced companies. Before the advent of Customer Data Platforms (CDPs), which unify data coming from many streams to create a complete picture of every customer and his or her behavior, tools were pretty primitive. They simply weren’t designed to hold the massive amount of data being generated through today’s cross-channel marketing operations, and most of them don’t have the most current artificial intelligence (AI) and machine-learning algorithms to deliver the insights you need.

Customer Data Platforms: Build or Buy a CDP?

The Ultimate in Retail Personalization

Thankfully, today’s enterprise customer data platform solves the thorniest problems for marketers, automating customer data accuracy and integration, busting down different marketing technology silos, and improving data accessibility for your organization. A CDP helps marketing, product, support and service teams to personalize and create relevant experiences for every customer, using one unique profile per person, and driving revenue growth and increased loyalty. They’re basically a requirement for delivering a new level of experience, personalization, and convenience, and the question is no longer whether to implement one, but how.

Build or Buy? Ask These Questions First

When deciding whether to build your own customer data platform or buy one out-of-the-box, CMOs, CIOs and the teams that support them have several important issues to consider, such as their available resources and capabilities relative to CDP development, as well as time-to-market requirements. The following questions will help you determine the choice that’s right for your organization:

  1. Which aspects of customer data drive your business?

    Marketers must wrestle with their company’s first-party customer data, either tying it together themselves to build complete individual profiles of customers or relying on a third-party vendor to fill in the missing data that completes that task. Many organizations can spend years maintaining unified customer data themselves — and still be dissatisfied with the results. One key question for decision-makers to consider is which is more important: your data model itself or how long it takes to get actionable insights from it? If timely insights are what matter to your business, you don’t necessarily need custom systems to build your data model, and you can consider buying a customer data platform.

  2. How much time do you have?

    Unfortunately, today’s competitive business climate requires quick execution, along with the ability to deliver an exceptional customer experience. Every day counts. Buying a CDP rather than building it will give you a huge head start.

    Even large enterprises like Subaru can get set up in 30 days or less, and that company required more than 200 integrations. A top gaming company used Arm Treasure Data to unify data from 21 databases with nine different customer IDs in approximately six weeks. Once data was unified, it only took them a week to create 25 complex customer segments using key behavioral attributes.

    If you have the luxury of more time to invest, you can consider building your own solution, knowing that you will be required to build integrations with other platforms for data collection and sharing profile data with other applications. You’ll also have to maintain those point-to-point integrations yourself in the future if you choose to go that route.

  3. What resources can you spare?

    You’ll need to do a thorough assessment of your team to determine whether they have the right technical knowledge and expertise to build an internal system — or whether it’s better to rely on industry experts for this. One advantage to third-party CDP solutions is that they come with built-in experience and existing user communities to help solve such problems.

    To facilitate compliance with the growing array of data privacy regulations, another skill set you’ll need internally is data governance. This is a highly specialized area involving the organization and streamlining of data collection and data stewardship, as well as compliance with such directives and laws as the GDPR and the CCPA. Consider whether it might be easier to tap into the experience of industry experts for this role.

  4. Did you factor maintenance costs into the ‘Build’ option?

    An additional consideration: if you choose to build your own customized solution, you’ll gain the advantage of retaining full ownership of the code, but you’ll need to maintain the system, which will require additional expenses. Don’t forget to factor in your investments in maintenance and support as you crunch your numbers.

    If you choose a ready-to-use a system like Arm Treasure Data’s enterprise CDP, you’re guaranteed to receive competitive service levels, system reliability, and continual updates. It’s all built into the price. Treasure Data typically releases product updates every two weeks, continually adding product functionality, new system integrations and platform performance enhancements.

Data as a key ingredient for marketing success

Unified, accessible customer data is an essential ingredient for marketing success. And as consumers add new devices and touchpoints to their buyer journeys, CDPs have become a vital tool for customer data management: unifying and normalizing first-party customer data, improving data accuracy, targeting relevance and marketing campaign velocity. Data-driven marketing can become a real source of competitive advantage; the power is in how the data is used and the timing of the insights that are produced. Since CDPs continue to play a major role, always keep in mind the flexibility and configurability you’ll need to implement and sustain these vital systems if you choose to go it alone. For more information, see how Treasure Data can help your organization meet its CDP requirements.

Micki Collart
Micki Collart
Micki is a Senior Product Marketing Manager at Treasure Data where she focuses on helping the marketing community learn about customer data platforms, their evolving capabilities and the unique approach to customer experience that Treasure Data empowers.
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