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By Jason Watkins, Principal in Charge, Texas Region, The Alexander Group, Inc.
Reprinted from the December issue of CRM Magazine, this article stresses that one size does not fit all when it come to marketing automation solutions. It’s an updated version of an earlier article by the author with new insights, facts, and figures.
Managers are being led to believe that one-size-fits-all bundled suites are the answer to automating marketing functions. Managers are faced with the challenge of dynamically collecting and analyzing new and existing customer data, developing effective marketing campaigns for targeted markets, and then executing and managing the marketing campaigns.
This is one-size-fits-all mentality is painfully clear when we talk to clients preparing to take on major marketing automation initiatives when niche application might better meet their business needs. The fact is, from a business management perspective, no robust bundled suite exists that is deep in functionality for automating critical marketing processes.
Every day our clients are surprised to learn that there are no dominant players or solutions that meet the needs of all their business and marketing processes. After they launch the initiative, they find themselves in a sea of ever-changing requirement documents and vendor pitches.
Enterprises are often forced to choose between the functionality needed to solve the deepest business problems and the perceived availability of a bundled suite with the breadth of functionality needed to automate their marketing processes.
Depth vs. Breadth
Depth or breadth? That is the question. During the Renaissance, cultured people were expected to know many subjects in the emerging arts and sciences, and to know a few of them very well. From this came the term “Renaissance Man.” Software, sadly, is still in the Middle Ages when it comes to combining depth and breadth.
Regardless, the CRM market topped $3.3 billion in 1999, according to International Data Corporation (IDC), and is expected to continue to grow at a compound annual rate of nearly 30% through 2004, building a market opportunity of $12.1 billion.
Interest in marketing automation applications in particular comes from their ability to produce big jumps in organizational effectiveness. Namely, in customer attainment, retention, penetration, and satisfaction.
To appreciate their complexity, it’s important to consider the key areas impacted by marketing automation applications, including: Content management (e.g., Vignette, Broadvision); Campaign management (e.g., E.Piphany/ RightPoint, Annuncio, MarketFirst, Rubric); Data structuring, extraction, mining and analysis (e.g., Quadstone, SAS, Broadbase, Cognos); Segmentation (E.Piphany/RightPoint); Partner relationship management (Partnerware, Channelwave, Allegis); Call center operations and effectiveness (Clarify, Seibel, Edify, Net.Perceptions/DoubleClick); e-channel effectiveness (Informix, Sagent, Net.Perceptions/DoubleClick); and e-mail campaign development and management (e.g., Digital Impact, Exactis, Responsys, eGain, Kana, Mustang, MarketFirst), to name a few.
Managers must push their folks to think in terms of the firm’s integrated channel strategy, integrated marketing and marketing communication strategy, and the integrated sales strategy. This is particularly critical as the enterprise considers how it will market to its customers and whether deep functionality is needed in a certain area of marketing, or if a broader-reaching suite may serve the company’s needs.
The final decision on marketing automation applications will impact all communication and distribution channels, including direct mail, print, telemarketing, telesales, the e-channel, partnerships, direct and indirect sales. The impact of the marketing automation initiative will be enormous.
To realize the gains a manager dreams of requires a choice: go for the “best of breed” in each key area, or sacrifice functionality. Depth vs. breadth, that is the question.
Not There Yet
Let’s create an illustrative company, ExampleCo. ExampleCo. manufactures and sells optical networking equipment used by most of the major telecommunications and networking companies. They go to market via a direct sales force, indirect partners (VARs, VAPs, ISVs, resellers, consultants), a call center, and, to a growing degree, the Web. Their channels have independent databases, for the most part, and they’ve already installed a top sales and call center automation package.
Energy around a major marketing automation initiative has taken root at the highest levels of the organization. The charge: Tie the databases together then evaluate, select, and implement the right application(s) to realize tremendous gains in effectiveness and revenues.
Let’s face facts -- the marketing automation market is large and complex, with over 150 vendors and growing. To aid the initiative, ExampleCo. develops a multi-faceted requirements document that includes business requirements, technical requirements, and user requirements.
During this process, management realizes that the company requires more functionality than they first thought, including: technical assistance to align disparate databases, data mining functionality, content management, campaign management, segmentation capabilities for non-technical users (i.e., marketers), partner relationship management (PRM), additional call center functionality, additional e-channel capabilities, and e-mail marketing capabilities. All of these functions need to interact effectively with the existing ERP system, sales, and call center applications, and the e-channel. ExampleCo. wants it all.
As ExampleCo. begins to move into vendor evaluation, management quickly realize that “complete” marketing automation is claimed by many but delivered by none. The broad bundle simply does not yet exist.
It’s About the Functionality
“Niche” applications may be defined as software deep in functionality in a narrowly defined area of marketing automation. For example, functionality like segmentation and market targeting (campaign management for marketers) is handled well by providers who have built their entire company on one application. These companies, such as E.Piphany, have developed rich and flexible applications that allow non-technical folks to gather and analyze customer data, develop a target for marketing initiatives, develop an offer, develop a campaign, and manage the campaign via the software.
Content management is another example of a critical component in successful go-to-market strategies today. Niche providers, such as Vignette and Broadvision, have established the deep, robust functionality necessary for successful execution in content management.
Similarly, “true” partner relationship management (PRM) offers deep functionality in terms of the partner extranet, including lead routing, establishing partner reporting and metrics, establishing security and access levels based on business rules, and developing and deploying marketing programs with partners.
Although some of the larger players are moving into marketing automation (e.g., ERP providers, CRM providers), the depth of functionality still pales in comparison to the pure application providers. We see the big boys quickly developing modules to expand their reach, but with limited success so far.
Count on this: The larger players will eventually catch up to the “pure plays.” The challenge for the niche application providers will be to continually reinvent themselves and expand the impact of their offerings on the corporation while remaining focused on their core space.
Finding the Balance
All this being said, ExampleCo. is still faced with the marketing automation initiative bought into by the most senior levels of the company. Management still has to choose between depth and breadth. Many decision-makers continue to mistakenly allow the systems needs, or a systems-oriented pitch, to erroneously drive the choice of application in key areas.
Why the disconnect? Business leaders may be led astray several ways:
- They may not always understand the deep functionality that the niche applications provide in critical areas of automation. Many managers don’t recognize the deep functionality they could be sacrificing by overlooking niche applications.
- They are led to believe that bundled systems and applications are the easiest to integrate. This is a myth.
- They may not understand how easily niche applications can be integrated into the CRM and ERP environments. Many niche application providers are programming open systems and/or using Web-based architectures, easing integration pain.
The enterprise must determine which business processes and areas require functional depth, and those which might be well served by the broader bundles. This may best be accomplished by formalizing the requirements documentation for the initiative well in advance of vendor evaluation.
At the minimum, requirements should be developed in three areas:
- Business and strategic needs
- Technical requirements
- User needs.
By involving multiple constituencies in the requirements documentation process, then prioritizing the requirements in terms of level of importance, management can begin to determine those areas that require functional depth.
Marketing automation should be viewed as an opportunity to define, even redefine, critical business processes prior to developing the requirements, and certainly prior to vendor evaluation. Test the depth and breadth of your needs, and see how software solutions, big and small, can help you.
Remember, when David slew Goliath, a rock, inconsequential as it may have seemed, was the perfect solution. Sometimes, less truly is more.
Jason Watkins is Principal in Charge, Texas Region, for The Alexander Group, Inc. The Alexander Group, Inc.® (AGI) is a management consulting firm that helps companies achieve excellence in marketing, sales and customer service execution. We work closely with our clients to increase sales and profits though the effective development and implementation of go-to-market strategies, the deployment of customer contact personnel, and the automation of sales support processes.
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