Analytics

Should you build or buy your consumer analytics platform?

Discover why many savvy eCommerce brands are choosing to buy their consumer analytics platforms off the shelf.

It's no secret that the greatest consumer insights are rooted in data. Netflix dominates the video streaming industry because it uses data to figure out exactly which movies and shows its users prefer; Spotify dominates the music streaming industry because it uses data to understand its customers’ audio tastes; Amazon dominates eCommerce because it uses data to get a precise pulse on people’s shopping preferences. And emerging consumer brands likewise need data to understand their customers. But, unlike these established players, early-stage companies don’t always have the resources or infrastructure to leverage their customer data at scale. So they have to ask themselves: When looking for a consumer analytics platform, is it better to build your own or buy one off the shelf?

The same scrappy mentality that motivates entrepreneurs to start their own companies in the first place might tempt them to build their own platforms. But many soon realize that it’s not worth it. When you’ve already built a customer base and run several successful marketing campaigns, the last thing you want to do is wade through volumes of historical data trying to retrofit it all into a workable data infrastructure.

That’s why the savviest companies often go the buy route. Building a consumer analytics platform in-house takes time, money, and deep data chops. Buying one delivers all the data science capabilities you could ever need in a fraction of the time at a fraction of the cost.

Why building a consumer analytics platform in-house is a sunk cost for most companies

Ambitious — if a little misguided — companies with robust tech stacks often set out to build their consumer analytics platforms from scratch. And building does make sense in certain situations. If your annual recurring revenue exceeds $100M and can easily absorb the costs or your data needs are especially complex, then you may want to go forth and build.

But most growing companies don’t find themselves in either of these situations. When they try to build their consumer analytics platforms in-house, they face the following obstacles:

Building can take months — with no guaranteed returns

Building a consumer analytics platform in-house means making a long-term commitment before you even know if it will bear fruit. In fact, it generally takes six months and $500K in building costs before you can get enough usable data to confirm if your efforts are working. But with internal KPIs to hit and investors to answer to, growing companies often need to show ROI faster than the building process permits.

Our team recently worked with a brand that was once in this situation. After investing extensive time and money into their platform, they ended up with copious amounts of raw data and no bandwidth to interpret it. Unable to extract any value from the platform, let alone show ROI to stakeholders, they decided to switch paths and buy instead.

Although the brand made the right decision in the end, the journey to that conclusion was costlier and more time-consuming than it needed to be.

No matter how you’re using your consumer analytics platform — whether it’s to increase retention, drive subscriptions, or simply improve your internal dashboarding — chances are you’re leaning on it to shore up your growth efforts. But it might not be able to do everything at the rate you need it to.

Recruiting (and retaining) best-in-class data talent is a tall task

Finding that perfect data scientist might seem like the solution to your building needs, but sourcing and nurturing data talent is an uphill battle in eCommerce. Unlike tech, eCommerce doesn’t have an inherent data culture, and making a lone data hire could force you to alter the fabric of your company to create one. This path forward can both alienate your existing employees and cause unnecessary friction between teams.

Plus, any time you onboard a new employee, you’ll not only need to acclimate them, but also find enough full-time work to justify their salary — which isn’t always feasible for smaller companies.

While building a consumer analytics platform may not be enough work for one person, it somehow spans the skill sets of four unique roles. In fact, a fully realized solution typically requires the combined expertise of a data scientist, a data engineer, a database architect, and a data analyst. So, unless you can find that one unicorn data scientist who does it all (spoiler alert: they don’t exist), your new hire will likely still leave you with some serious knowledge gaps.

Finally, there’s no guarantee that you'd even be able to retain whomever you take on. After all, Meta, Apple, and Google are always beckoning with better stock options, better perks, and much-coveted bragging rights.

Deciphering raw data can be a nightmare for internal teams

When your data is scattered across Shopify and several cloud data platforms, setting up each integration (and ensuring it doesn't break) takes endless time and upkeep. Data ETLs like FiveTran can assist with this process, but even if you can use them to gather your data, there’s no guarantee you’ll be able to create models you can actually use. Combining these tools into a full-service solution isn’t like ordering a Blue Apron meal kit and heating it up; you still have to prep the ingredients and find a way to fit them together. Like a master chef, you need extensive knowledge and an expert touch.

To ensure you aren’t left with raw ingredients (or, in this case, raw files), you’ll need a dedicated data scientist or engineer on staff to calculate the metrics and transform them into digestible models. Without a way to reliably visualize all your disparate data and assemble it into high-level customer insights, your consumer analytics platform won’t be of much use to your team.

Put simply, you shouldn’t attempt to build a consumer analytics solution in-house unless you’re prepared to constantly maintain it.

Segments Analytics is your bridge to actionable consumer insights

We know building a consumer analytics platform from the ground up is both a major up-front expenditure and an ongoing maintenance headache. But what if there were a way to get all the benefits of building without any of the drawbacks?

Enter Segments Analytics, a low-lift, low-commitment tool that you can test drive for as long (or as little) as you want — with zero maintenance.

As a mini, no-code consumer analytics solution, Segments provides you with all the data expertise you need to refine your marketing strategy and all the tools you need to execute it. Unlike Klaviyo and other email platforms, it helps you understand and target your customers on an exceptionally granular level. And, with our Enterprise Plan, you even have on-demand access to one of our in-house data scientists whenever you need it. Best of all, everything is neatly packaged into a comprehensive, user-friendly experience.

The cherry on top? It only takes a matter of days to start seeing the ROI you need to start crushing your KPIs and wowing your external partners. Customers previously at their wits’ end have been delighted to discover the savings and short-term ROI that our platform immediately delivers.

Take a look at some of the benefits they’ve enjoyed since onboarding:

Bespoke segments that don’t require any coding

Our bread and butter is dividing your customers into bespoke groups to target with tailored marketing campaigns. Whether you want to see where your customers fall across twelve lifestyle categories or create your own customized segments, we have you covered. In fact, our customer segmentation tool lets you find and build any segment you want in just a couple seconds using 100% natural language.

Ready-made analytics

What’s more, our best-in-class analytics dashboard translates your customers’ most granular actions into digestible insights — without requiring you to corral your data across dozens of platforms. Maybe you want to dig into product and lifecycle journeys, or perhaps you’re looking for an executive summary of how you’re tracking toward each metric. Either way, our platform will tell you what you need to know.

Unlimited access to a seasoned team of data scientists

With Segments, there’s no need to invest in an internal data team right out the gate. You can grow first and worry about establishing an internal data culture later. Our stacked lineup of data scientists knows the Shopify ecosystem inside and out and has already built the segments and analytics infrastructure for you. And, if you ever have any questions about our data or need bespoke models built, immediate support is just a Slack message away.

By doing the heavy data science ourselves, we free up your marketers and analysts to focus on big-picture initiatives — like building winning marketing campaigns that drive lasting growth.

Support at every growth stage

You might think you won’t need Segments past a certain stage of scaling, but our platform is actually designed to grow with you. And let's face it: You’re only going to need more analytics assistance as you acquire more customers and, by extension, more data.

The skincare brand True Botanicals is a case in point. After experiencing explosive growth, they knew they needed to up their analytics game to better understand their broadening customer base. But it didn’t make sense for them to start from square one when they’d established all their infrastructure with Segments Analytics.

So they didn’t. Although they’ve recently hired their own team of data analysts and started to do more work in-house, they’ve also begun to collaborate with the Segments Analytics team on more ambitious data projects. Now, Segments Analytics works with the True Botanicals data team to customize everything to their precise specifications — from reports and dashboards to data intake, storage, and subscription tools. Segments Analytics has even helped True Botanicals set up a full database with Google Cloud Platform. The partnership doesn’t forestall True Botanicals’ growth efforts or replace its team; it fortifies them.