Build or Buy a Customer Data Platform: How should Financial Marketers evaluate this?

Marketers in the financial services sector has been seen many a times confused when it comes to build or buy a customer data platform. It is quite difficult for them to evalute the entire process without knowing in-depth information about it. So, lets get dive into the differeneces, pros and cons for buy or build customer data platform

Factors to consider before Buying or Building a Customer Data Platform:

1. CDP capabilites and requirements are a financial marketer is looking for.

2. Availability of Resources and Technology

3. Time to market: How urgent it is for a company to implent a CDP 

Bonus points,

If,

a company (<9% of revenue) spent on marketing should Buy CDP and 

(>15% of revenue) spent on marketing should consider Building a CDP in-house.

For Buying a CDP,

• Only The cost for the subscription will be charged for buying CDP platform.

• The total cost of ownership (TOC) is lower as you will be paying monthly or yearly. The cost to buy a CDP can range from $100,000 to $300,000 annually.

• (Time to market constraints) Release timings will be accelerated as you will be using ready-to-deploy CDP from an experienced provider.

• The bought CDP will come with expert support for both IT and marketing divisions.

 Time taken to buy a CDP is 4-5 weeks which is subjected to integrations.

Some pros for buying,

-You can have access to the best vendors in the respective industry.

-You can be dependent on the vendor for the roadmap vision.

-You don't need much of IT development. 

and cons,

-The process of evaluating a vendor is lengthy.

-Vendor dependency is the major drawback.

-Predefined functionality doesn’t cover the 100% requirements.

For Building a CDP,

• Building CDPs require the full range of IT development roles, large development teams

• The costs to build and maintain a CDP in-house can be significantly more (in the range of numbers)

• No subscription fees involved also the upfront costs will be less

• (Time to market constraints) Release timings will be slow as you will be dependent on the in-house team for new features. Even the large enterprises can get up to 4-6 months or more depending on the integrations.

Some pros for building,

-You will have the advantage of full ownership of the code.

-Road map vision is completely dependent on the organization.

-You can customize the software based on the business.

and cons,

-Additional expenses would be required for maintaining the systems.

-Risk of technology being outdated.

A CDP has become a crucial digital tool for marketers to manage customer data. According to a recent report, the global customer data platform market is expected to reach $3.3 billion by 2023. Marketers need to evaluate buy or build cdp properly. As companies scramble to implement a CDP, the buy vs. build factor is a major roadblock.