Home Blog What is the budget for a Customer Data Platform?(CDP)

What is the budget for a Customer Data Platform?(CDP)

What is the budget for a Customer Data Platform?(CDP)

Scal-e has just been listed in two reports by the Forrester International Research Institute : “Now Tech: Customer Data Platforms, Q4 2021”  Asia Pacific (APAC) report, and “Now Tech: Customer Data Platforms, Q1 2022” world report. The marketing & technology French Blog Martech.cloud took advantage of the launch of the new Scal-e website to organise an interview.  

Scal-e´s CEO Christophe ALVES spoke with the Martech.cloud about the company since its takeover in 2018, he discussed Scal-e´s strategy, the evolution of the market, its team and his vision of the company’s future.

This article is the first of a series of 5 entries published throughout 2022. Find the links to all the articles at the end of the page at the end of the summer.

And what is the budget for a CDP?

Christophe Alves : The license costs €1000/per month. As for the implementation part, contrary to what some companies say, there is no minimum of €100,000 to set up. 

This of course depends on several factors: the number of data sources, the quality of the data, the number of alphabets (associated with different languages), and the number of data servers that need to be set up to comply with the various regulations, etc. It also depends on the type of project: for example, projects we manage live or in editor project mode, this means we manage 80/90% of the whole project, the remaining 10% being the client load. We have implemented tailor-made CDP projects for a few tens of thousands of euros with flows and connectors to different import and export data sources. 

However, I think the cost analysis is a bad analysis.

Martech.cloud : You mean, that you prefer to think about the ROI than the budget necessary to implement a CDP for example? 

Christophe Alves : Not necessarily.  

All the brands I have come across spend more of their communication budget on Meta, Google, Twitter, Tencent, Alibaba, etc. Than they invest in tools allowing them to capitalize on their relationship with their customers. I’m not saying that we should no longer use these networks to acquire new customers. But is it normal for a brand to continue to invest such budgets to obtain information about their own customers? 

Why pay X times more for information on a customer? By unifying all this data in a CDP or enriching this information via a loyalty program, we can demonstrate an ROI in a few weeks/months, by avoiding spending X times the same budget for the same contacts.

Martech.cloud : In summary, what you are saying is that just by rationalizing advertising costs, a brand gains by centralizing and unifying its customer knowledge in a CDP?  

Christophe Alves : Exactly.  

Now, we tend to view this as a positive side effect.  

To build our ROIs, we prefer to make a comparison between the average basket of the brand and the monthly cost (CPM) to manage 1000 customers in Scal-e. 

Martech.cloud : Can you give us an example of the average basket compared to the CPM of the Scal-e platform to calculate the ROI?

Christophe Alves : Recently a brand told me they had no budget to launch this project. Its smallest product represents a basket of €1,500. The monthly CPM we offered him was 24 euros!  

Meaning that, if out of 1,000 customers Scal-e generated 1 additional deal every 62 months, due to our targeting, personalization and recommendation capabilities, the customer would be reimbursed on their investment!   

Knowing this type of product can be sold several times a year. In my opinion, it costs more to do nothing than to do something.  

Martech.cloud : And if the customer has several types of products?  

Interesting question. Nothing prevents you from doing this calculation on the product with the smallest average basket to follow its ROI.  

To go further, it is interesting to add the acquisition costs. Brands with several products can compare the acquisition costs by product range and the associated average baskets. For example, some brands play on the fact of being able to acquire a low-cost customer on a product, even if this product represents a low average basket, but use these customers to offer them a range of products on which the average basket is higher!  

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