Don't panic! I'm here to help. You should build it. Wait, no no, no. You should buy it. Wait, you should build AND buy it. Hold on. I don't know. I don't know! Help! Help!
Okay, let's all take a second to calm down. We can figure this out step by step. Together. Have you taken some deep breaths? Then, it's time to begin.
73% of companies report that a CDP is critical to their customer experience effort. Plus, 47% of respondents reported that they will increase their CDP budget by more than 25% in the next five years. But how should you be investing?
But first up, some definitions.
A customer data platform, or CDP for all you cool cats, is a centralised data infrastructure that clumps together a company's customer data, in order to build customer profiles and optimise customer engagement. According to the CDP institute - which has CDP in the name, so must be right - defines a Customer Data Platform as "packaged software that creates a persistent, unified customer database that is accessible to other systems." Put into English, it's a centralised system of customer data, made readily available to you and your teams.
So, a CDP is a software that aggregates and organises customer data, across a variety of touchpoints. They also collect and structure real-time data into individual, centralised customer profiles.
Customer Data Platforms...help companies solve a huge and growing problem: the need for unified, accessible customer data. Like most packaged software, a CDP reduces risk, deploys faster, costs less, and delivers a more powerful solution than custom-built alternatives."
— David Raab, Customer Data Platform Institute
These customer profiles are informed by a collage of first, second, and third party sources. This might include your; CRM, DMP, web forms, email, website, social media activity, behavioural data, transactional systems, and beyond.
If you are marketing to a substantial number of people and you want to exploit any kind of automation or sophisticated tactics, you are notionally using some kind of a CDP,” It’s about automation at scale, and the question is “how much you’re willing to invest in doing that very, very well versus getting by with rudimentary tools.”
- Nick Rockwell, SVP of Engineering, Fastly
Let's look at the two options side by side.
The cost of building a CDP comes from:
The cost of buying a CDP comes from:
So, if you're going on costs alone, buying a CDP is king. But before you make any rash decisions, let's look into it a little deeper, see what's right for you.
There's a few things you have to consider before you go ahead and buy a CDP. Most of all, you've got to consider what you need from your vendor. Any deal breakers? Time to swipe left. So, you should ask yourself:
So, now you've considered where a vendor falls in your company's needs. But let's have a further look into the pros and cons of buying.
The good thing about buying a CDP is that it will do exactly what it says on the tin. The bad thing about bought CDPs is they do exactly what they say on the tin. So it's important to see what your company needs from the platform before buying something that doesn't stretch quite far enough. Cons can include:
Bought CDPs are often oven-ready, good-to-go products, making their convenience the biggest pull. Plus:
But let's have a look into the other side.
Personalisation, personalisation, personalisation. That's what a built CDP offers you. And freedom, freedom too. Think: I'm a lone ranger in a cabin in the woods, I can build my farm exactly how I want. Wait, these logs aren't big enough. Woah, I've got to go and cut down the trees myself?!This is exhausting. But, boy oh boy, I can put up this windmill without even a smidgen of planning permission. Let's see if built will work for you.
If you can decide what needs your company has, you could probably make a really good case for building a CDP. You'll need access to your company's data warehouse or lake to build it on, plus a way to clean and enrich the data so it is compressed from a variety of different formats into one single format.
Plus, you'll need to involve not only your data scientists and analysts, development, maintenance, and IT, but your marketing team too. The CDP is being built for them, after all.