So You Need a CDP… How Will You Choose Whether to Build It or Buy It?

 In Customer Data Platform, Marketing Strategy, Martech

When it comes to evaluating a customer data platform (CDP), companies often ask themselves a critical question: Should we buy a CDP, or can we build this ourselves? The truth is, the decision to build or buy your CDP isn’t an “all or nothing”, simple yes or no decision. A successful implementation requires a discussion around time, cost, and important components for your business.

In this most recent whitepaper, Build or Buy Your CDP? Choosing an approach that’s best for your business, David Raab of the Customer Data Platform Institute shares the mixed nature of the build vs. buy debate. CDPI highlights how companies can move forward by focusing on the more practical questions of what to build and what to buy to create the highest business value.

Let’s not forget, optimizing the customer experience is a team sport. Marketing and IT teams consistently find themselves working together to make the best decisions about a brand’s martech stack and vendors — and a CDP is no different. There are pros and cons to building a solution entirely in-house or buying a complete external solution. But a hybrid approach can be just the ticket when it comes to adding value to the business. 

Raab and CDPI take some of the guesswork out of the build versus buy debate and explore how to: 

  • Generate business value and evaluate the cost factors 
  • Determine which components of a CDP to buy and what is reasonable to build 
  • Inspire both business users and IT teams to work together 
  • Understand the impact your choice will have on revenue, business users, development costs, support costs, opportunity costs and overall risk of each approach
  • Leverage key CDP value measures
  • Move forward in making the right choice for you!

Hear it from Tealium Customers

Tealium can help determine what makes the most sense to build while remaining vendor-neutral as you purchase certain components. USAA spoke about their build vs. buy decision at Tealium’s Digital Virtualocity event in May 2021, with Accenture weighing in on how they and Tealium assisted with their approach. USAA, a Fortune 100 company and one of the largest financial services and insurance providers in the US, worked together with Tealium and Accenture to take their CDP from good to GREAT.

Customer experience is the key outcome of any CDP and a primary factor for USAA. Response time when handling member requests is critical.

“An hour wasn’t fast enough for us,” said John Salinas. “Use cases started popping up where we needed the data really fast – within 5 minutes of the click happening. Then we needed the data within 30 seconds. And as we looked into it, our current upstream data feed could not technically support the speed that we needed.” 

These are serious factors to consider when building a CDP: Can your current data processes handle the scale? If not, can you scale the business up without affecting customer experience? Given enough time and investment, a brand could certainly create the defenses, security, and scale that’s needed, but there are definitely more immediate options such as Tealium Event Stream. 

By implementing EventStream API Hub, USAA was able to access data in real-time and drive initiatives around fraud detection, cross-channel intent communication, and customer experience — even helping USAA assist their members during the Covid-19 pandemic. 

Building the Business Case

A huge hurdle when pursuing the right tech is putting together the business case. Take it from Brad Herndon of Accenture:

“To be totally honest, nothing tech-based is ultimately cheap. So the way we typically frame up the business case is to say from operations through activation — what are the costs, how am I going to use this, and what channels and what teams are going to benefit?”

While marketing is a primary use case for a CDP, other departments within your organization can also benefit from tearing down data silos, gaining a more complete customer view, building stronger customer relationships, and avoiding project-specific custom integrations. As CDPI notes in their whitepaper, it’s important to take a business-value approach to the build vs buy decision and assess not only development cost but revenue impact, business user impact, support cost, upgrade cost, opportunity cost (of both resources and time), and risk associated with each. 

Bottom line, Tealium is here to help drive this business value of a CDP.

“What Tealium has done is they’ve created a marketplace that’s very fascinating,” says Salinas. “There are integrations with third party applications like adobe analytics, Google ads… there’s personalization, social apps, Facebook integrations with aws… all that’s fascinating because it’s a very minimal effort to get those integrations up and ready. And the support, care, feeding, and maintenance around that is definitely a whole lot less than building this ourselves.” 

Ultimately, Build v Buy is a Hybrid Decision that Takes you from Good to Great

Obviously, a CDP is a mixed bag of components. Think of it like your dream house– you could build brand new construction from the ground up, or you could buy an existing house and make it your own by painting, adding on, remodeling, or upgrading a few bathrooms or a kitchen. There’s no simple choice between building everything or buying everything, as long as you make a move towards progress.

Ask the right questions, and hopefully you’ll get the right answers. And be sure both business users and IT collaborate on the decision so that everyone has all the information, considers all scenarios, and identifies uncertainties about future needs. It’s normal for brands to struggle when choosing between building and buying a CDP, but the payoff for a well though-out CDP is rewarding. 

As Salinas of USAA puts it, “It was awesome to see our first DEMO that we did at a town hall, where in one window we were clicking and navigating through our website, and in another window, we would see those interactions coming in real time. Not in 15 minutes, not in 30 seconds, but within less than a second of a click happening on our website….And that’s going from good to great.”

For more great insights into how to approach your decision on whether to build or buy your CDP, read Build or Buy Your CDP? Choosing an approach that’s best for your business

Listen to USAA and Accenture’s entire session from Tealium’s Digital Virtualocity 2021, then continue exploring more Tealium customer resources on www.tealium.com.  

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