How to Decide Between Building and Buying a Customer Data Platform?
Depending on your company’s size and industry, it may be more effective to build your own Customer Data Platform (CDP) or to buy one that’s built for your business type. This article will help you assess whether you should build or buy a CDP based on the features you need, the size of your company, and more factors that can help determine whether it makes sense to invest in building your own CDP or use an off-the-shelf solution instead.
Advantages of Building CDP
The major advantage of building your own customer data platform is that you have full control over it. You are not at risk of being locked into an expensive, long-term contract. And, since you are able to customize your platform however you see fit, it’s easy for your CDP to grow with your business as you scale up.
Furthermore, if something should go wrong or if there’s any sort of maintenance issue down the line, you can address it yourself instead of having to reach out to third-party support—saving time and money.
Finally, by building your own CDP, you avoid vendor lock-in; there’s no built-in incentive for them to charge exorbitant prices or make sudden changes that might disadvantage customers (though locking customers in may be good for their profits).
If you decide to build your own CDP from scratch, here are some tips:
- Hire a team with experience designing and building software because every project needs strong programming talent.
- Before hiring someone, ask what kind of legacy code they have worked on before—if they haven’t worked on existing codebases before, chances are they won’t be able to handle yours either.
- Be wary of companies offering one-size-fits-all solutions or platforms that integrate everything automatically, especially since these solutions typically require extensive integration work to get functioning properly with other tools.
- Choosing your database also matters greatly when building a CDP—make sure to take note of factors like transaction speed and cost per transaction when considering which database is right for you.
Advantages of Buying CDP
The basic advantages of buying a CDP are low upfront costs, ease of use, and being able to get up and running quickly. With a bought solution, you have access to an extensive feature set that covers everything from customer lifecycle management through marketing automation.
You’ll also be able to start tracking data immediately, rather than having a lengthy setup process—and implementing any future changes is simple if you don’t want to do it yourself. Generally speaking, there aren’t many limitations on what you can track with purchased software—although it may not be quite as customizable as something you build yourself.
For small businesses who need something quick-to-market without much IT involvement, choosing a bought solution might be best for them in terms of ROI.
Finally, business leaders often prefer buying when they know exactly what they want. If you already have a list of features that will provide value to your business, then buying should be relatively straightforward.
The basic features of a CDP include:
- Loyalty programs
- Advanced analytics
- Predictive modeling
- Machine learning
- Forecasting & sales tools.
You can also purchase additional features like customer service automation with chatbots, package shipping integration for e-commerce stores.
Which One is Better For My Business?
The best way to decide whether you should build or buy a customer data platform is to map out your company’s goals over time, then create milestones for yourself that will help you achieve those goals. This will help determine how much work you can do on your own versus what must be outsourced. Having clear metrics also makes it easier to determine which kind of solution is right for your business.
The better you understand your needs, the more likely it is that one option will be superior to another. Once you know what benchmarks are necessary for success, take into account factors like development costs, maintenance requirements, and ease of use.
Whatever decision you make—build or buy—you must ensure that any CDP works within your existing IT infrastructure; otherwise, everything might fall apart before it even gets off the ground. For better understanding, you can consult the Muse Digital team. They will help you decide better- whether you should buy or build CDP.