When it comes to building a loyalty program, many businesses face the critical decision of whether to build a solution in-house or opt for a ready-made, market-tested platform. While the idea of creating a custom-built program might seem appealing at first, especially when it comes to saving on licensing costs, the reality is that a DIY approach often comes with hidden pitfalls.
The loyalty, promotions and personalisation world is rapidly changing, and many organisations are contemplating how to best leverage exciting new technologies and opportunities that are arising in the space.
Great sales people know that when it comes to deploying an enterprise software solution, the value lies not just in what it does, but in how it can dramatically reduce an organisation’s total cost of ownership (TCO) compared to building an in-house solution.
For those weighing the “build versus buy” dilemma, here are eight reasons why a pre-built, fit-for-purpose loyalty solution is often the better choice.
1. The time and resources to build come with hidden costs
One of the biggest misconceptions customers have when it comes to building a solution in-house is that it will be cheaper. The prospect of saving on licensing costs is attractive to businesses and this is often reflected by technology decision makers when they look to deploy.
However, going down the in-house route often means months – sometimes years – of development time. As teams undertake a solution build, it’s not uncommon for companies to need to invest heavily to shore up their resources; hiring additional developers, training existing staff, and paying for costly software tools and development environments.
The initial build is just the beginning. What follows is the ongoing costs of refining and updating the solution as new technologies and threats emerge. Off-the-shelf solutions come out of the box ready to go with the latest features and updates. By choosing an existing product, organisations can leverage that provider’s team of experts who live and breathe the solution every day.
2. Maintenance and security present challenges
Maintaining a homegrown solution is like trying to hit a moving target. It’s not just about keeping things running smoothly; it’s about adapting to a constantly changing landscape of security threats and technological advancements. Customers often underestimated the sheer volume of work involved in keeping their solution up-to-date and secure.
And it’s not just the work; it’s the specialised knowledge needed to understand and implement the latest security protocols. Established and trusted solution providers will have this already.
For example, digital marketing platform Eagle Eye AIR invests 5 per cent of its revenues back into security every year. This investment delivers a return on security up to five times higher than the same investment made by an enterprise retailer running a single program on their own homegrown solution.
3. Opportunity costs and time to market
The concept of opportunity cost in another conversation that regularly comes up among teams contemplating building their own tools. Building a solution in-house doesn’t just tie up financial resources—it also ties up the time and energy of skilled staff.
Every hour that a team spends on development is an hour not spent on strategic initiatives that could be driving a business forward.
Extended development cycles can be a big trap that cause organisations to miss crucial market opportunities. Technology moves quickly, and the market could potentially move on before the build is complete, blunting an organisation’s competitive edge.
With an out-of-the-box product, organisations get a ready-to-deploy solution that gets them to market faster. That speed translates into immediate benefits, whether it’s staying ahead of competitors or quickly responding to customer needs.
4. Indirect, intangible costs that add up
When organisations build in-house, they are not just paying for development and maintenance. They are also absorbing the costs of project management, internal meetings, testing, and troubleshooting.
There’s also the morale and productivity impact on teams. Nothing drains energy faster than endless debugging sessions or feature roadmaps that never seem to get shorter. It’s easy for teams to get bogged down in the minutiae of development, losing sight of their core competencies and what truly drives value for their customers.
All these indirect costs are minimised when choosing a turnkey solution. Robust, supported platforms allow teams to focus on what they do best – serving customers and growing the business. This not only saves money on development and maintenance; it also preserves team energy and creativity for the tasks that matter most.
5. Lack of expert support and continuous innovation
The value of having access to expert support and continuous innovation can’t be overstated. When building a solution in house, it falls on the development team to handle every challenge that comes their way. If something breaks or if there’s a need for a new feature, developers are on the hook to figure it out. This often leads to burnout and frustration, especially when resources are stretched thin.
With a professional, prebuilt solution, support teams are there to assist whenever help is needed. Regular updates and new features will also mean the best tools are always available.
6. Budgeted costs can spiral quickly
Let’s face it: one of the most appealing aspects of deploying a market-ready product is the predictability of costs. With an in-house solution, costs can spiral out of control quickly. Unforeseen challenges, feature creep, and the need for additional resources can blow budgets wide open.
Starting with a seemingly reasonable development budget, only to arrive in a financial quagmire months down the line as costs blow out, is a very precarious position for solution buyers to be in.
Commercial products offer clear and predictable pricing structures. This not only makes budgeting easier but also allows organisations to plan finances with confidence, knowing that the investment will yield a strong return without the risk of unexpected costs.
7. Steers teams away from business objectives
Ultimately, the most compelling reason to choose an off-the-shelf solution over building an in-house solution is that it allows teams to focus on core business objectives. Every business has a unique mission, and time and resources are best spent pursuing that mission, not getting bogged down in building and maintaining complex solutions.
Freeing up teams to focus on what they do best, whether that’s providing exceptional customer service, innovating new products, or expanding into new markets. Is often far more preferable to organisations than having teams locked up in long development cycles.
8. The final 10 per cent takes 90 per cent of the time to get right
According to Melanie Mitchell, computer scientist and Professor of Complexity at the Santa Fe Institute argues that “the first 90 per cent of a complex technology project takes 10 percent of the time and the last 10 per cent takes 90 per cent of the time”.
Just because some teams have exceptional product owners, product managers, engineers and more, all of whom might be capable of building a bespoke solution for loyalty, promotions and personalisation, it may not be the best use of their time.
However, building that sort of technology is the core focus of the right solution provider. Finding an expert in all the aspects that constitute that last 10 percent will be a game-changer.
Reducing total cost of ownership
The decision to deploy a ready-made solution versus building an in-house solution can often confound technology decision makers, but the benefits of doing the former are clear. Choosing the right packaged loyalty, promotions and personalisation solution not only reduces total cost of ownership for an organisations, but also positions them for long-term success.
When it comes to loyalty and personalisation suites, many customers make this choice with Eagle Eye AIR and thrive because of it. The peace of mind, the reduced costs, and the ability to stay agile and competitive in a fast-paced market are all powerful advantages to benefit from.
