Customer Experience Matrix

Nimble Adds Social Data to CRM

2012-01-25T21:23:00.000-05:00

I had an intriguing demonstration yesterday from social CRM vendor Nimble. Since “social CRM” could mean just about anything, it’s important to explain what Nimble actually does: it combines traditional contact management with automated access to social media information about those contacts.

That might not sound like much, but in practice it’s pretty darn slick.

Here’s how it works. Say you’re selling a product related to, oh, circuit boards. You can do a Twitter search for messages on that keyword, scan the Twitter profiles and Klout scores of people sending those messages, and push a button to add the interesting people to your contact list. Once you’ve added a contact, Nimble will automatically display their most recent Twitter, Facebook and LinkedIn activity every time you call up their record and let you send them messages through any of those products or by email. This is all done in the same system as traditional contact management activities: tagging contacts, assigning tasks and events, sending and receiving emails, tracking deals, building lists, searching your database, and managing your calendar.

Seamless combination of contact management with social media is a big deal: when I showed Nimble to a colleague who runs a public relations agency, her eyes lit up. From her perspective, having an immediate view of each contact’s social activity saved time, made it easier to tailor conversations to their interests, and let her reach them through their preferred medium. From a corporate perspective, it means the system contains data that salespeople didn’t enter manually – helping to overcome their perpetual complaint that salespeople enter data into corporate CRM systems without getting anything in return.

For the users themselves, Nimble has one more advantage: its lets them stick with familiar communication tools. Integrations are currently available for Outlook, Gmail, Google Calendar, MailChimp email, Wufoo web forms, and HubSpot marketing automation. An open API to import contacts from other sources is due by the end of February.

The email integrations copy messages from the external email systems into the Nimble activity history, where they're available for searches and list selection. The social media and HubSpot integrations also import contacts from those systems, but display messages and other data without storing them. Users do have the option to manually save individual social comments or assign tasks based on them.

Nimble plans to add more functions, including automated processes that could support multi-step nurture campaigns. But the company is focused on combining information from other systems, not replacing them. The relationship with HubSpot is especially intriguing, since HubSpot itself lacks a CRM component, making the two products highly complementary, and both companies target small-to-mid-size businesses. It’s also worth noting that Nimble recently announced $1 million investment whose participants included Google Ventures, which is also a HubSpot investor, and HubSpot Co-Founder and CTO Dharmesh Shah.

A beta version of Nimble was released early last year. The system is currently available in a free personal edition limited to 3,000 contacts and a $15 per user per month multi-user edition allowing up to 30,000 contacts and some other advanced features. Nimble already has more than 25,000 users across all versions and has a network of more than 250 solution partners.

Genoo Adds SEO To Web Site Management and Marketing Automation

2012-01-10T15:16:00.001-05:00

I had an earful last week from Genoo president Kim Albee, who told me that I’ve misclassified her target customers as “micro businesses” (under $5 million revenue) for the past two years. She tells me nearly all of her clients are larger than that. I’ve revised my big list of demand generation vendors to reflect this.

The main cause of my misunderstanding was Genoo’s starting price of $199 per month, which is below any small or mid-size business system. But the lowest price for Genoo with CRM integration is $599 per month, and I consider CRM integration a required feature in a B2B marketing automation product. This is still low for small-to-mid systems but not wholly out of line. On the other hand, I should have been warned by the fact that Genoo doesn’t provide a built-in CRM system, which is pretty much the key defining characteristic of a micro business system.

The good news is the error doesn’t seem to have crimped Genoo’s growth, although Albee tells me it was used against them in several competitive situations. The company now has about 75 clients, compared with around 35 at the time of my initial review nearly eighteen months ago.

The system itself has also grown although the general approach remains consistent. This approach extends beyond most marketing automation products to incorporate full Web content management and marketing services. The most interesting recent enhancements are products for search engine optimization (SEO): “competitive intelligence” runs a multivariate analysis to identify factors that contribute to competitive pages’ ranking; and “content relevancy analyzer” scans high-ranking pages find theme words that search engines will use to determine relevance. The goal in both cases is to recommend changes that will improve search marketing results.

Other enhancements allow deeper visitor tracking, including tracking tags on Web pages not hosted at Genoo; improved customer scoring; progressive profiling; unlimited custom fields on the lead table (Albee said no client has ever asked for custom fields anywhere else); and an expanded Application Program Interface (API) to accept leads from other systems. The February release will add features to capture social media activities and encourage social book-marking. These join a respectable set of social media features already in place, including sharing buttons, share tracking, and traffic reporting.

Albee said the company has also developed anonymous visitor look-up, based on IP address. But internal tests found additional filtering is needed to avoid wasting users’ time, so full deployment is on hold until this can be added.

This concern about users’ time reflects Genoo’s unusually deep involvement with its clients’ marketing programs. Professional services have always been a major part of the company’s offering and constitute its fastest growing line of business. The company is setting up alliances with external consultants to help meet the demand.

Albee also pointed to Genoo’s pricing as a reaction to customer requirements. The model is more complicated than many small business oriented marketing automation systems. It has three product levels and gives users within each level the choice to pay either for emails (with unlimited leads in the database) or by database size (with unlimited emails). The two lower price levels also require additional charges for the SEO tools, which are licensed from an external developer. Free phone support is always included and professional services are always billed separately. There’s also a salesperson access tool billed at $9.95 per month per user. Clients can change their plans each month and are billed for overages on a cost per thousand basis. While conventional wisdom among marketing automation vendors is that buyers prefer a fixed fee and no surprises, Albee said her clients appreciate the flexibility of Genoo’s approach.

Albee said her clients are a mix of small and mid-size businesses, including some divisions of large enterprises. Genoo's low price may have scared off a few buyers who felt a system that cheap simply couldn't be adequate. It's an easy mistake to make, but companies of all sizes who want to combine conventional marketing automation with Web site and SEO should still take a look.

What Really Creates Marketing Automation Success: Data from Gleanster

2012-01-07T13:06:00.000-05:00

Research firm Gleanster released its free “Gleansight” report on marketing automation late last month. I was principal author for much of the document and drafted the survey questions, although I didn’t write the individual vendor profiles or administer the survey. (I’ll also share in the revenues, which come when vendors pay for the names of people who download the report.) Although I’m obviously biased, I do think it’s an excellent product and highly recommend it.

Many readers of the report will be most interested in the vendor profiles and survey-based rankings. But I have my own data on those, so I’m more interested in the answers to the general survey questions. These asked why people implement marketing automation, what challenges they face, and what contributes to success. The survey compared answers from top-performing marketing automation users with answers from everyone else. This gives especially interesting insights (or should I say...GLEANSIGHTS) into the differences between sophisticated users and their less experienced brethren.

Here are some highlights – please look in the report itself for details.

Reasons to Implement: top performing companies listed higher revenue, better leads, and more leads as the most important reasons to use marketing automation. All other companies also listed revenue and more leads in their top three, but their most common answer was decreased marketing costs. By contrast, marketing efficiency ranked fourth among top performers and much lower among all others.

My interpretation is that top performers have learned that marketing automation might make you more efficient but won’t actually reduce your total marketing budget. Other, less experienced companies that expect cost savings will probably be disappointed. If anything, marketing automation will probably increase their marketing spend – hopefully with an even larger improvement in the revenues and leads to compensate.

Value Drivers: Both groups agreed that the two most important predictors of marketing automation success are cooperation with sales and ability to measure return on investment. But the top performers' third item was easy-to-use system while the others chose adequate staff training. This is a really interesting divergence.

The Gleanster people tell me that many of the top performers are now using their second marketing automation system because their first was too hard to use. In other words, this is the voice of experience, and that voice is saying that training by itself can’t overcome a difficult system. Less-experienced companies who are relying so heavily on training may find it's not enough. But let’s not overstate this point: training is certainly necessary for success even if it’s not sufficient. Perhaps the top performers discounted training in part because they already had a lot of it.

Back to the data. Both groups rated having an analytical culture as the fourth-most important value driver, while listing outside help, change management, and organizational resources as the least important.

These answers shed important light on the on-going debates about how marketers should approach their automation deployments. The message is clear: success depends on a marketing department’s own skill level, not on outside resources. A marketing department that pays attention to sales needs, carefully measures ROI, and makes fact-based decisions will succeed with marketing automation just as it probably succeeded without it.. A group that hasn’t mastered those basics won’t succeed at marketing automation no matter how much training, change management, and external assistance it brings to bear.

Challenges: Gleanster didn’t send me responses to this question broken out by top performers vs. all others. For the combined group, the top two challenges cited were data quality and creating content; the next three were poor marketing processes, lack of staff, and selecting metrics. These are all factors controlled by the marketing group. The lowest ranking factors were all the external ones: organizational culture, senior management mindset, lack of IT support, and lack of funding.

This is consistent with the previous answer: marketers create their own success. Marketing automation is just a tool. It will help a well-run department work better but can’t save a poorly-run department from itself. Massive re-engineering isn't necessarily required to deploy marketing automation, but departments that lack a solid foundation need to build one before automation can do them any good.

The Easiest Way to Get Started with Marketing Automation? Answers in the Pictures.

2012-01-05T17:37:00.000-05:00

Here’s more proof that the apocalypse is near: I’ve discovered the “remove background” feature in Powerpoint. This makes it even easier for me to doctor photographs for my presentations. The fabric of reality cannot long survive so much stress.

The immediate subject of my attentions is next Tuesday’s Webinar “Marketing Automation: One Step at a Time”, sponsored by Act-On Software.

The dominant image of this Webinar, and the eponymous white paper (available on the RaabGuide web site), is a high stone wall representing the effort required to deploy a marketing automation system. More specifically, the wall represents the effort of a traditional best-practice approach, which requires reviewing all marketing processes, designing new programs, creating new content, and working out alignment with sales. It’s a high wall indeed, and many companies just can’t climb it.

As I wrote in a post last December, several strategies have emerged to deal with this challenge. Now I’m delighted to be able to illustrate them.

Training: The wall is high but marketers can learn to jump higher. What they need is training in the pole vault.

Ease of use: Let’s lower the wall so marketing automation is easier. Apply a jackhammer to knock it down a few feet.

Incremental deployment: Break the deployment process into small, manageable stages. Let’s add a staircase with someone taking baby steps.

Service: Marketers should let specialists do the heavy lifting. The experts can carry them over the wall with a crane.

You’ll be pleased to know that the focus of the Webinar isn’t my new-found graphic capabilities. It’s how to succeed at incremental deployment, the strategy recommended by Act-On. Without giving too much away, the key is starting with the right tasks so you get some immediate benefit and build a foundation for future growth but don’t take on too much at once. Yes, I have some specific suggestions…but you’ll have to tune in to hear them.

CallidusCloud Buys LeadFormix Marketing Automation for $9 Million Cash

2012-01-04T15:01:00.000-05:00

The list of independent marketing automation systems shrank by one yesterday when Leadformix was purchased by sales enablement vendor CallidusCloud for $9 million.

The price is surprisingly low for an established marketing automation vendor. In my VEST report from last July, LeadFormix reported 210 clients, concentrated among mid-size firms, and 82 employees. This would translate to around $7 million revenue, for a price of just over 1x revenue, compared with 4 to 5x revenue in other recent acquisitions. I suspect the actual LeadFormix revenue was considerably lower than $7 million, but, even so, the price may give pause to investors in other marketing automation firms who are hoping for a great payout. But bear in mind that LeadFormix was largely self-financed, so they may have sold at a bargain price because they couldn’t afford to compete with better-funded competitors.

Or maybe these comparisons are irrelevant because LeadFormix was never a standard marketing automation system to begin with. While its feature list covers all the usual marketing automation categories, the company's real focus was always on providing the most useful information to sales people. In particular, LeadFormix infers visitors' “intent” (i.e., interests) and sales stage from the Web contents they choose to view. This is a clever and largely unique approach, although Right-On Interactive does something broadly similar.

LeadFormix combines its behavior analysis with anonymous visitor identification (inferring their company from the IP address), access to external prospect lists and enhancement data, and collaboration with partners and affiliates to share lead access. Indeed, the LeadFormix tag line is “aligning marketing with sales” – something that’s important to all marketing automation vendors, but never their primary benefit statement.

This is why Callidus is a good buyer. Callidus isn’t a sales automation system like Salesforce.com, but it does provide a range of other systems that help sales departments. These include products for hiring, training, collaboration, content distribution, proposals, incentives, quota management, and analysis. LeadFormix will give Callidus another offering for its existing 900+ customers and access to 200 more companies now using LeadFormix. I don’t know whether Callidus will also try to expand LeadFormix sales among "pure" marketers. But even if they back away completely from “marketing automation”, the deal makes sense.

A bit of background on Callidus: it’s a public company with about $80 million annual revenue, no profits, and a $200 million market value. It made at least five acquisitions last year, all software-as-a-service companies selling some type of sales enablement. These include:

Salesforce Assessments (salesperson hiring /assessment) 03/28/11
Litmos (learning management) 06/10/2011
iCentera (on-demand portal software for sales enablement) 07/06/2011
Rapid Intake (collaborative rapid e-learning authoring) 09/08/2011
Webcom Inc. (product configuration, pricing, quoting, and proposals management) 10/04/2011

In short, LeadFormix fits nicely with Callidus from strategic, financial and operational perspectives. Because this is such a unique match, I don’t think the acquisition says much about larger trends in the marketing automation industry. At most, it could be part of the long-expected shakeout as the industry consolidates around a small number of winners. But, while that consolidation is inevitable, it will take more than one deal to show it has started in earnest.

Beyond Marketing Automation: Building a Complete Marketing Infrastructure

2011-12-21T13:09:00.001-05:00

This started as a post about Empathy Logic, a company that merges data from marketing automation, CRM, Web tracking, order processing, social monitoring, and other systems; lets marketers segment and select from this more complete set of data; and sends the resulting lists back to message delivery systems such as email and Web sites.

You might think that Empathy Logic isn’t needed because a marketing automation system is supposed to build that integrated database. But B2B marketing automation products are largely limited to data they generate internally or import from CRM. The B2C marketing automation systems can usually attach to any data structure but rely on some other system to create it. So, yes, there’s a need for a company like Empathy Logic. (Before I change topics, other key points about Empathy Logic are: product is about one year old; uses Pentaho open source software for data integration and business intelligence; runs on the Amazon EC2 cloud infrastructure; and charges $10,000 to $20,000 per month for its services.)

Empathy Logic got me thinking about a topic that doesn’t get discussed much in B2B marketing automation circles: the place of marketing automation in the larger marketing system architecture. B2B marketing automation vendors generally position their systems as a replacement for separate applications including email, forms creation, Web analytics, content management, and reporting. This may leave the impression that marketing automation is the only system a marketing department needs. Marketing automation vendors have little incentive to correct the error, since mentioning integration would only slow the sales cycle. (For more about integration requirements, take a look at our recent workbook on the topic.)

Raab Associates does have its own model of a complete marketing architecture. But before presenting it, let's look at some other opinions. I found three surveys that address the issue.

The most intriguing was published last September by Adobe and Econsultancy. The focus is online marketing (remember that Adobe owns Omniture, Day Software, Demdex and now Efficient Frontier) but the survey is especially interesting because it asked about adoption, value received, and effort required. The original report presented these separately but I’ve combined them in a bubble chart:

This is worth some exploration. You’ll see that marketing automation is at the bottom – meaning it’s the least resource intensive of the technologies listed. But it’s also farther left than most, meaning it’s also among the least effective at delivering profits. (I’m going to assume that “significant impact on the bottom line” meant significant positive impact.) I’m really feeling a bit disrespected here: marketing automation is easy AND ineffective? Maybe the survey-takers are getting poor results because they’re not putting in the necessary resources. Or maybe they're mostly Web marketers who aren't really all that familiar with it.

Either way, the respondents still gave marketing automation a better effort / value ratio than attribution, buzz monitoring and social media management. Maybe they understand those better and see how much work is involved. But campaign management, which I think is email campaigns but might be Web ad campaigns, also rates as harder than marketing automation. Doesn't marketing automation include email and a whole lot more? I have a hard time understanding how email alone could be harder.

This survey also addresses the ever-popular question of adoption. This group reported that 38% were using marketing automation. That’s considerably higher than most estimates but it’s among the lowest rates on the chart. In that sense, at least, it supports the general belief that marketing automation is still in its early stages. I’ve provided the actual numbers below:

If you looked carefully at the previous survey, you probably noticed that a few important applications were missing, such as Webinars. Oops. A survey last February by Act-On Software had a more realistic range of applications.

The Act-On survey isn't perfect for today's purpose: it was sent to small and mid-size business, listed several marketing automation components separately (email, lead nurturing, and lead scoring), lumped all of social media into a single category, and ignored Web analytics entirely. Still, it gives a pretty reasonable idea of the relative utilization of different methods, most of which would involve different marketing systems.

I found a one more survey that listed marketing systems, from the CMO Council in July 2011.

This is by far the broadest list. It includes CRM, call center, master data management, talent (staff) management, ecommerce, and product life cycle systems. That the question describes them all as “marketing automation solutions” gives some idea of how broadly the term is sometimes defined – which I still suspect is a major reason that many surveys show that “marketing automation” has such a high penetration rate. Unfortunately, this survey didn't ask directly about usage.

If we look across all three surveys and add Raab Associates' own research, a reasonably complete set of components for a marketing architecture would include:

marketing database management (data extraction, customer data integration, master data management, database updates)

Web advertising (paid search, banner ads)

Web site management (Web content creation and management, search engine optimization, ecommerce if relevant.

Web analytics and optimization (could be part of Web site management but still largely done by separate systems.)

social marketing (blogs, social media monitoring, social media posting, community management, advocate management)

Webinars (it seems odd to make these their own category but they’re still separate systems and don’t easily fit with Web site management or social marketing)

marketing automation (direct mail, email, mobile, landing pages, web behavior, nurture campaigns, lead scoring, reporting; includes batch, trigger, and event-driven campaigns and real-time interactions)

media buying (for conventional media: TV, radio, newspaper, magazine, outdoor, etc.)

marketing resource management (project management, workflow, content and digital asset management, budgets and forecasts, purchasing, staff management)

analytics (reporting, dashboards, attribution, marketing measurement, predictive modeling, mix optimization – this extends beyond the channel-specific applications like Web analytics)

CRM (not usually run by marketing but so intimately connected with marketing systems that I'd consider it part of the architecture. I'm using CRM as a catch-all term for sales automation, order processing, customer service, loyalty, call centers, and partner management.)

There are many ways to draw this architecture and perhaps I'll return to it another day. My point for now is simply that marketing automation is just one piece of the larger marketing puzzle -- and marketers need to recognize that they'll need to pull data from multiple systems to do a thorough job of managing customer relationships.

Influitive Helps Marketers Build an Army of Advocates

2011-12-19T11:52:00.000-05:00

Marketers recognize the potential reach of social media, but are rightly frightened that they can’t control the message. Most social marketing applications sidestep the issue by focusing on creating communities (Jive, Lithium), monitoring conversations (Radian6, Trackur) and running promotions (CrowdFactory, Nextbee). Marketing automation vendors have mostly worked on making it easy to post and share messages and to capture social data. (See my December 8 post for details.)

Influitive tackles the control issue head on. It applies game-based motivational methods to company advocates. Marketers define “challenges”, such as sharing content, making a referral, creating case studies, or providing a reference, and the system issues points to advocates who perform them. Advocates can accumulate points and exchange them for rewards. Advocates can also earn badges, move through levels, and compare themselves to others on leader boards. The system can also offer games, contests, and direct messages to advocates. These features all give advocates a continuing stream of new reasons to stay active.

This is a strikingly simple concept – but I think it’s brilliant. An army of advocates can be a tremendous resource, but without a way to attract, nurture and direct them, they’re less an army than a random mob. Influitive lets marketers gradually strengthen advocate relationships by posing challenges that require increasing levels of commitment.

Influitive founder Mark Organ describes the process as an "advocate development funnel" whose ultimate goal is "social nurturing" by advocates who provide personal references to potential buyers who are also their professional peers. While these ideas are intriguing, I suspect they're not really necessary. The practical benefits of systematically managing advocates are probably obvious to marketers who have been struggling to regain control over their social media presence .

My thumbnail description doesn’t cover the important technical features that make Influitive practical. These include controls over how challenges are issued (who is eligible, date limits, quantity limits, etc.), managing awards, and API-level integration to pull profile data (LinkedIn), record completed challenges (Quora, Twitter, Facebook, LinkedIn) and announce completed challenges (Salesforce.com Chatter). The company plans additional API connections with Jive, ZenDesk, and other systems.

One caveat in all this is the legal and ethical issues regarding rewards for advocates. Ardath Albee wrote about this recently in some detail. Since Eloqua is an Influitive client, I asked Eloqua VP of Content Marketing Joe Chernov (who also co-chairs the Word of Mouth Marketing Association's member ethics panel) how they use it without breaking any rules. His answer is worth printing in full:

We neither give rewards, nor have we ever given rewards, in our use of Influitive. We give badges and thank-you's … in other words, we show our appreciation in the form "social currency." But we give no cash, no prizes, no compensation. If the Influitive platform reaches a point that it can hardwire disclosure into the testimonial across all media channels, then we'd consider material incentives in certain circumstances. But it's my fundamental belief that marketers think they need to offer valuable perks, but if a client truly is an advocate, then the person is often entirely willing to help … for nothing in exchange but gratitude.

In other words, it's quite possible to use Influitive without violating disclosure standards. The product supports this with automated disclosure options, which can be made mandatory if a company wants. Naturally, this doesn't guarantee all clients will be equally scrupulous.

Influitive is currently in beta. Pricing is free up to 20 active advocates, and then starts at $500 per month, growing at roughly $20 per advocate per month. It has 16 customers, about half above the 20 advocate minimum.

Marketing Automation Interface Should Focus on Customers, Not Campaigns

2011-12-15T19:50:00.000-05:00

Several vendors have shown me their new campaign management interfaces recently. All were refined, attractive, and thoughtful. Each had subtle features that appeal to a connoisseur: floating tool pallets! Fly-over icon labels! Dynamic menus! Curved lines! But they’re all still basically the same flow charts that Frank Gilbreth (of Cheaper by the Dozen fame) introduced in 1921 and we've seen in marketing systems for more than 20 years.

Now, I’m not saying marketing automation vendors should find a new approach just because I’m bored with the old one. But the truth is that the old way doesn’t work: every experienced developer I’ve ever spoken with has told me they’ve found users get confused when flow charts grow past a handful of branches. That’s true even though users themselves design campaigns by drawing a flow chart on a whiteboard. If you watch that process closely, you’ll see that (a) users themselves have trouble when their diagram gets too complex and (b) they can’t make much sense of it when they come back the next morning (assuming the whiteboard wasn’t erased).

Developers have taken two approaches to this challenge. One is to add features that help manage complexity – all those floating pallets and pop-up menus. These do help but it’s like Chaos Theory as explained in Jurassic Park: piling complexity on complexity eventually ends in a catastrophic collapse. The other approach is to simplify the experience by removing capabilities such as multiple branches and recursive loops. The extreme version of this is interfaces that define each campaign as a single sequence of steps, with no branching at all. This is certainly comprehensible but it can prevent marketers from doing what they want.

Something more radical is needed. Developers must think outside the flow chart. One way to start is to consider interfaces they’re already using in other systems.

touch screen. Dragging and poking at a flow chart with your fingers instead of a mouse wouldn’t be much of an improvement, although it would help. Creating splits by stretching an icon until it breaks into pieces might be kinda fun. Scaling up or down the way you zoom into online maps – and having the level of detail adjust automatically – would definitely be an improvement. But I’m guessing there are some more dramatic alternatives that avoid the flow chart altogether. Think about your favorite touch screen apps and see what comes to mind. How could you design a marketing campaign with Angry Birds?

voice activation. I have no interest in speaking the same commands I could type. But a system that understands voice commands has natural language capabilities to infer what I need based on context and past experience, and thus save me the work of defining the details explicitly. (Think IBM Watson on Jeopardy or iPhone Siri.) If you think about the primal whiteboard scenario, what really happens is the marketers say “let’s add a split here” before drawing it – so a natural language approach could be a big time saver by skipping the drawing step altogether. Or the system might actually ask questions and make suggestions that lead the marketer through the design process: Who is your target market? How many reminder emails do you want? Might I suggest you add a reward: here are the best three to consider.

virtual reality. The biggest problem with flow charts is they are inherently two dimensional. This means that intersecting branches must visually overlap, which is very confusing. Could a virtual reality interface let marketers follow each path independently, like walking down a street or flying through a forest? This comes closer to simulating the customer’s experience – perhaps the marketer could be pelted with messages as she passes through (I’m thinking of monkeys throwing fruit), and toss them back as a response. Or, imagine a road map that traces the customer's physical journey through both the real world and cyberspace, with marketing messages presented as billboards and interactions as conversations with passersby. Or could you map the customer journey itself – a trip through the funnel – with a similar presentation of billboards and conversations? Think of a child's board game like Candyland or, perhaps more appropriate, Alice's trip down the rabbit hole.

data visualization. Think of all those cool illustrations you’ve seen of social networks, molecular structures, Web behaviors, economic trends, geospatial data, manufacturing processes, and who knows what. Why can't marketing systems do better than flow charts and pie graphs? How about a three-dimensional campaign diagram that you can rotate and zoom on three axes? Or a six-dimensional view using height, width, depth, color, size, and shape, with a slider for time? Some of these might be hard to interpret but even a flow chart takes some training to understand. I'm certain that creative design can pack more information into a simpler package.

games and simulation. Could a marketing campaign sprout like a tree, growing more complex over time and bearing customers as fruit? Simulation games use simple rules and a few user choices to create elaborate cities, empires, and organisms. Some already let users run model businesses. More advanced versions of those programs could use rules derived from your customers' actual behavior to test alternative campaign designs and pick the ones most likely to succeed. The campaign details would be built by the system, so the interface becomes less important, although marketers would still need to review everything before deployment. These designs would be inserted into the matrix of existing programs, so the system could model each program’s incremental impact on the full customer lifecycle and on other program results. This leads directly to the Holy Grail of Marketing Optimization (which might make a fine multi-player quest game, come to think of it).

multiple views and viewpoints. Most of today's marketing automation systems already let administrators control which features are available to which users. But everyone with access to a given feature usually sees the same thing. The one exception is that salespeople are given wholly separate interfaces tailored to their needs. But this approach should be carried over to other personas within the marketing department – the CMO’s view of campaigns is radically different from the marketing operations person’s, and they should not be looking at the same flow chart. Even the same user might want different views at different times, depending on the task at hand.

customer perspective. I’ve already touched on this but it’s worth more attention. There’s a strong argument that the fundamental notion of separate marketing campaigns should be replaced by integrated customer treatments across all channels and life stages. The flow chart interface is based on the individual campaigns, and becomes impractically complex precisely when campaigns are expanded to accommodate too many contingencies. A customer-centered approach would develop rules for each situation rather than stringing together rules for many different situations. Those rules would be simpler because they dealt with a narrower range of conditions. They could also be spread between campaign logic and dynamic content logic, and many might be replaced altogether by predictive models that choose the highest-value treatment. The explosion of channels and contacts has made integrated customer treatments essential. Marketers need a fundamentally new interface designed to provide them.

Marketing Automation Skills are Scarce: Vendor Strategies to Close the Gap

2011-12-13T17:41:00.001-05:00

The marketing automation industry continues to grow quickly, with many vendors announcing their client bases have more than doubled in 2011. But there’s also a growing realization that many marketing automation systems are used for only simple tasks – often no more than email, landing pages, and CRM integration. For example, LoopFuse found that nearly twice as many used email and web landing pages as lead scoring.

Even more worrisome are increasing reports of user dissatisfaction – not enough to stop people from using the systems, but perhaps enough to prevent them from expanding their deployments or recommending marketing automation to their friends. Act-On Software recently reported that 40% of marketers are dissatisfied with their campaign management program.

Surveys, like this one from IBM, show many obstacles to successful deployment. But the ultimate problem is staff skills: marketers who know how to use their systems and understand their benefits can make a compelling case for investments in programs, integration, technology, data, process change, and whatever else is required.

Marketing automation vendors are painfully aware of these issues. They've taken a range of approaches to addressing them. I've seen four distinct strategies:

training. This is the most direct approach: if users don’t have enough skills, then teach them. I’m using “training” in a broad sense to include all types of preparation before deployment: these include marketing planning, process change, content development, metrics definition, and organizational realignment as well as actual training in system use. This is the traditional strategy for B2C marketing automation and at B2B firms large enough to afford substantial pre-deployment investments. It’s also the preferred option of most industry consultants (myself included) because it provides the strongest platform for future success. Among B2B vendors, Eloqua is the poster child for this approach. (And I should note that many vendors are supporting the Marketing Automation Institute's training program too.)

But not everyone can afford through training and preparation for a marketing automation deployment. The remaining strategies are designed to help those who cannot.

ease of use. Simple systems let marketers get started with minimum preparation. This is by far the most popular strategy among vendors, presumably because it increases sales by placing the fewest demands on buyers. It's applied by Marketo, Pardot, Act-On Software, Genius, Net-Results, and many others. It’s also the most popular strategy among buyers, judging by how many installations never grow past the basic functions. But the approach is also probably the reason for high dissatisfaction: marketers must find they face a much steeper learning curve than they expected to use their systems' fully. For long-term success, vendors who take this approach must ensure that their clients keep growing after the initial deployment.

automation. Instead of training marketers to do hard things or making those things easier, automation has the system do them instead. This is a much less common strategy, in part because it's technically demanding and expensive to execute. It's also a partial solution at best, since no one thinks marketing can be fully automated. Still, it's being applied to lead scoring (creating the actual scoring formulas automatically, instead of asking users to define them); to content selection (letting the system predict which content a visitor is likely to want); and to contact frequency (letting the system determine how often a lead should be contacted). HubSpot is following this approach most aggressively although others are also applying it in places.

full service. This strategy argues that it’s ultimately more efficient for the vendor to do complex marketing automation tasks than to teach marketers to do the tasks for themselves. That’s not as crazy as it sounds: marketing automation tasks like setting up a new program are often complex, rarely required, and quick for a well-practiced expert. So buying a couple of hours or days of service each month really does save time and money. It also gives access to more expertise than a small marketing department could ever build internally. As you might expect, this approach is most common among at the small business end of the marketing automation spectrum: Genoo, MakesBridge, and OfficeAutoPilot are good examples. But it seems to be creeping upstream: LeadLife, Treehouse Interactive, and Manticore Technology apply it to larger customers.

Although I’ve associated specific vendors with each strategy, the reality is that most companies apply a mix of several. This violates the classic strategy rule to select one clear goal and focus all resources on reaching it. But a mixed approach probably makes sense for marketing automation, where a tactical choice like making your system easier can support several strategies and where different buyers may need different treatments.

This doesn’t mean that vendors can get away with being sloppy. The market is too competitive and marketing automation is too complex to succeed despite poor execution. It’s also likely that a dominant approach will emerge within each customer segment.

But even then, one size won’t fit everyone. Both vendors and buyers will still need to match the deployment strategy to the buyer’s situation.

Social Media Features in Marketing Automation Systems: Who Does What?

2011-12-08T18:17:00.001-05:00

Social media is arguably overhyped as a marketing trend: it gets well under 10% of marketing budgets (different surveys have figures from 3% to 8%) and results are questionable (it was rated the least effective content marketing tactic in a recent MarketingProfs study). But social is clearly growing fast and has great potential. So marketing automation vendors are understandably eager to support it in their systems.

I recently took a quick tour of vendor sites to see what social features they’re offering. Results are summarized in the table below. I need to stress that I’ve only credited vendors for features they list on their site. I strongly suspect that the data is incomplete, especially for basic features that are so common the vendors simply don’t bother to mention them. (Note: the table has been updated after the original post based on vendor feedback, so it's a bit more reliable than it was originally.)

The features fell into four broad categories:

• Basic posting and sharing: the most common features and the simplest level of social media marketing. As I wrote above, most vendors probably have most of them even though the chart doesn’t show them.

• Social media monitoring: watching social media for mentions of the company or other topics and responding when appropriate. Plenty of third party applications can do this, so providing it within the marketing automation system is mostly a matter of convenience.

• Importing social data: loading social data into the marketing automation database so it can be used for segmentation, analysis, and sharing with salespeople via CRM integration. This is harder than monitoring since it requires linking social identities to marketing leads and connecting to the social system’s API.

• Social platform integration: using native features of the social platforms by writing to their APIs. This can be tricky for the marketing automation vendors to build but it lets their clients take greater advantage of social media possibilities.

Looking at the chart as a whole, what stands out is the sheer variety: once you get past the basics, no features are common enough to consider them standard. This contrasts sharply with mature categories like email, landing pages, and nurture campaigns, where dozens of features are shared by most systems. The reason is obvious – social media is still very young – but the disparity still provides interesting insights into what different vendors feel are most important to their clients.

The variety also illustrates that a great number of social media applications are possible (with plenty more to come). Naturally, the vendors will borrow features from each other, so we can expect some convergence over time.. A standard set of features will emerge as the industry figures out what’s really important.

The list below presents each vendor with a brief explanation of the table entries. Links on the vendor names go directly to the vendor Web page or press release that described their social media capabilities. In cases where the data came from different sources, I've put the link on the items themselves.

Neolane
- posting: central panel to post tweets and Facebook updates
- sharing: place sharing buttons on emails
- tracking: measure clicks on links in system-generated posts.
- Facebook forms: use forms within Facebook pages and apps to gather customer permissions
- social sign-in: use social media sign-in services to replace marketing automation forms
- personalized Facebook ads: display different ad versions on a Facebook page based on the user’s profile, including both Facebook and non-Facebook data

Marketo
- sharing: place sharing buttons on landing pages
- tracking: measure visitors from the shared pages
- load Twitter feed: connector to load Twitter conversations to lead profiles and use the conversations in campaign rules

Eloqua
- sharing: place sharing buttons on emails and other marketing materials
- social sign-in: use social media sign-in services to replace marketing automation forms
- Klout segmentation: add Klout scores to lead profiles and use them in campaign rules
- show Twitter feed: let salespeople see a lead’s Twitter posts on their Profiler dashboard

IBM/Unica
- social monitoring: use CoreMetrics Social to find social media mentions of company

Aprimo
- posting: manage blog posts with review process and SEO recommendations
- sharing: place sharing buttons on email and microsites
- tracking: integrate with third party web analytics to track social referrals
- monitoring: integrate with third party social listening tools for monitoring

Pardot
- posting: central panel to schedule and send social messages
- load social profile: use Qwerly to import social media profiles and add to marketing automation lead profile
- show social profile: show social profile data in CRM

Silverpop
- posting: send posts to Twitter, Facebook, LinkedIn and/or RSS feeds along with email sends
- sharing: place sharing buttons on email
- social sign-in: use social media sign-in services to replace sign-in forms
- Facebook forms: add registration forms to Facebook and blogs
- badges and buttons: embed buttons and badges in email for Facebook, Twitter, Foursquare, StumbleUpon, XING

Act-On Software
- tracking: embed trackable links in system-generated posts
- social prospecting: find relevant social conversations and send to in-box; send template-based responses

SalesFusion
- sharing: place sharing buttons on email and landing pages
- tracking: embed trackable links in system-generated posts and online documents

TreeHouse Interactive
- sharing: place sharing buttons on email and landing pages
- tracking: embed trackable links in system-generated posts
- Facebook forms: build advanced forms that can work within Facebook pages

Net-Results
- load social profile: find data about visitors on Jigsaw, Linkedin, Twitter and post to marketing automation lead profile

Genius
- tracking: embed trackable links in personalized web promotions and chat messages

Loopfuse
- social monitoring: use Collecta realtime search to find social media mentions of company

HubSpot
- posting: send social media messages and blog posts
- sharing: place sharing buttons on blog posts and other content
- social monitoring: find social media mentions of company and respond
- Facebook forms: build ‘welcome’ app to capture leads on Facebook page

LeadLife Bundles Services with Marketing Automation

2011-12-07T19:08:00.001-05:00

LeadLife released a completely rebuild version of its marketing automation system last month.
The new system features a cleaner interface and revised capabilities that reflect what LeadLife has learned about the needs of small to mid-size companies since its original product launch in 2008. This involves a careful balance between complexity and power.

The best example of this balance, and the most notable change in the system, is campaign design. LeadLife originally used a linear sequence of steps, while the new system uses a branching flow chart. This is a somewhat unusual choice for a small business-oriented system, whose clients tend to find flow charts difficult to work with. But LeadLife – like many other marketing automation vendors – found its clients tend to design campaigns as flow charts. It therefore chose to build the flow chart interface but to exclude the more confusion-inducing features, like the ability to send leads back to previous steps in the same flow or to start new flows in the middle.

On the other hand, the system does include some features not usually found in small business systems. These include rule-driven, dynamic content blocks within emails, which LeadLife found many clients applied fairly easily. The system rule-builder also combines power with simplicity: for example, rules can reference specific links within an email (powerful) and the system automatically presents a list of links within the specified email (simple).

Probably more important, LeadLife has also bundled marketing services with its software. For example, vendor staff will design the campaign flows for the client, further reducing the risk that the flow chart will cause confusion. Vendor staff will teach the client best practices such as building several small campaigns instead of a single complicated one.

Services are provided with every level of the product, including the lowest price of $750 per month. Specific options include marketing strategy, content creation, design, lead nurturing campaigns, lead process definition, and analytics. Most are performed by LeadLife’s internal staff although copywriting and design may be sent to subcontractors.

Bundled services are LeadLife’s solution to the skill gap that keeps so many companies from adopting marketing automation or using it fully. Other companies have taken a similar approach. Still others have tried alternatives including keeping the system very simple, providing extensive training to use more complex systems, and using automation to handle complicated functions. Although most vendors apply them in combination, their emphases do vary. It's not clear which choice will prove most effective -- but a lot of money is riding on the outcome.

Back to LeadLife. The scope of the new product includes typical marketing automation functions: campaigns, email, landing pages and forms, lead scoring, behavior tracking, CRM integration, sales alerts, segmentation, and reporting. Reports and some other features are still a work in progress but the basics are in place. LeadLife is migrating its existing 70 customers to the new system over the next few months. The system is sold on a month-to-month basis (no long-term contract) and prices are based on email volume and services. Clients at all levels get the full set of system features.

SDL Buys Marketing Automation Vendor Alterian for $107 Million

2011-12-06T21:40:00.001-05:00

So, it turns out that while I’ve been obsessing over vendor selection workbooks, our friends at marketing automation vendor Alterian up and got bought last week by language technology vendor SDL for about $107 million. Why didn't somebody tell me?

I’m most familiar with SDL as a Web content management vendor, although their financial statements show that just over 75% of their revenue comes from manual and automated language translation. The company had more than $300 million revenue last year and is nicely profitable.

Alterian hasn’t been doing so well lately, with about $55 million revenue for the past year and cash-basis loss around $6 million. Management has also been in flux: CEO David Eldridge resigned in April, a new CEO Heath Davies was named in July, and president and co-founder Michael Talbot resigned in October. The company was nearing the end of a 100 day restructuring plan that dropped its headcount from 440 to 260. It had also taken several red-flag accounting actions including restating revenue, changing its revenue recognition policy, and taking large asset write-downs.

You math whizzes out there will have already noted that the purchase price is just under 2x revenue, compared with the 5x-ish prices paid a year ago for Unica and Aprimo. Whether this puts a damper on the prospective valuations of other marketing automation vendors is hard to say: Alterian was obviously struggling, and its main business model was to license its software to marketing service providers rather than selling it directly or via Software as a Service. On the other hand, Alterian did have some SaaS components to its business, notably SM2 social media monitoring (formerly Techrigy).

Alterian also had a bold vision of extending beyond traditional campaign management and analytics to include marketing resource management and web content management as well as social media. I’d still argue the strategy was correct, but that Alterian didn’t have the financial resources or market clout to execute it. Certainly its costs got ahead of its revenue: at 440 employees on $55 million revenue, it had just $125,000 revenue per employee, compared with the $200,000 I consider standard (see my post from last January on revenue ratios -- even at that time, when Alterian had just 370 employees, it was already below par.)

SDL’s chairman is quoted as saying that “The marketing analytics, campaign management and social media were the big attractions” of Alterian, so presumably the company will keep those businesses. The content management piece, about 27% of Alterian sales, will presumably be merged with SDL’s much larger Web content management business.

The big question for the marketing services providers who are Alterian’s primary customer base is how SDL will treat them, since they are not SDL’s current core clients. That’s more than a little scary, especially given the dearth of alternative mid-priced marketing automation systems for consumer marketers. (See my list of B2C vendors from September and my discussion of the differences between B2B and B2C marketing automation from October.)

On the brighter side, I can argue that the Alterian acquisition supports my long-standing contention that marketing automation and Web content management will eventually coalesce into a single system. Any gloating is restrained by the fact that Alterian had already combined the two and didn’t succeed. But this probably just shows that deep pockets will be needed to pull off the combination in a world where the competitors are heavyweights like IBM, Oracle, Adobe, SAS and Teradata.

Assess Marketing Automation Vendor Services Before You Buy - Another New Workbook

2011-12-06T12:41:00.001-05:00

I wrote yesterday about our new workbook for marketing automation cost estimates. Today I’ll describe the other one: evaluating vendor services. Both are available free at the Raab Guide Web site.

The problem with services is simple: you won’t use them until you’ve already bought the product. So the trick to evaluating them is to ask lots of questions in advance to understand whether they’ll meet your needs.

Of course, there are two parts to that mission: building a clear picture and knowing what you need. In terms of what you need, vendors offer three types of services:

deployment: help with setting up your system
support: help in operating your system after it’s deployed
account service: help in growing your business.

Different companies have different needs in each area. Buyers must understand those needs to know what they want a vendor to provide. I've written extensively about needs analysis in other posts and workbooks, so I won’t repeat those discussions here.

Similarly, the new workbook assumes you know what you’re looking for. It focuses on how to get it by providing suggestions for who to talk to, what to ask them, and how to interpret their answers. Each service types involves talking to different people:

for deployment, talk to:

deployment staff to understand their skill level, typical projects, and project management methods
sales staff to understand deployment services and pricing
references to understand the types of services provided and the quality of work

for support, talk to :

head of support to understand services, staff qualifications, training, and reward systems
front-line support staff to understand the kinds of problems they handle, internal systems that help manage their work, and how they’re motivated
sales staff to understand support services and pricing
references to understand service levels and satisfaction

for account service, talk to:

head of account services to understand staff qualifications, measurement methods, and whether they have “success managers” separate from “account managers”
account manager to understand their skills, training, workload, and objectives
head of training to understand the kinds of training available, who delivers it, and if they understand how customers use the system
head of professional services to understand the quality and scope of services
head of partner relations to understand the types of partners and the company's investment in building a partner ecosystem
sales staff to understand the types of account services and pricing
references to understand the scope and quality of account services

The workbook offers dozens specific questions in each of those areas. I suppose you could just send each company the list and get back written answers, but you’ll get much more value from telephone and personal interviews. These let you listen to the replies and ask follow-up questions to drill into topics of interest. You probably won't need to ask every question to every person; the first few answers will often be enough to give a good idea of how the company does things in each area.

New Workbook: Estimating the Cost of Marketing Automation

2011-12-05T14:02:00.001-05:00

We released two more vendor selection workbooks last week, both sponsored by Eloqua and available for free on the RaabGuide Web site. One is about estimating the cost of a marketing automation system and the other is about evaluating vendor services.

The cost workbook was a particular challenge because the subject is so complex. After much thought, I came up with four cost categories:

direct system costs: the actual price paid for the marketing automation software itself. This is where most buyers focus their analysis, but it’s a tiny fraction of the value at play. Background research for the workbook suggested that automation costs are from 1% to 5% of an average marketing budget. This means that the direct system cost is pretty much insignificant compared with the marketing budget it will help to manage. To put it another way: even a small improvement in the other 95% to 99% of marketing costs can easily pay for a marketing automation system.

operations costs: other costs related to running the marketing automation system, such as staff time and costs of related systems. Most of these are marketing operations costs, and there may be others in sales and IT. You’re already incurring many of them, so the analysis has to identify how much they’ll increase or decrease as a result of marketing automation. This is really hard since it takes a detailed understanding of your current processes and how they'll change. But the stakes are high: operations costs are about 25% of a typical marketing budget.

marketing program costs: the expenses for specific marketing programs, such as advertising, trade shows, email, etc. These are the other 75% of the typical marketing budget. Marketing automation can reduce these costs substantially, both through reduced waste and through shifting funds to more effective programs.

revenue: many marketers shy away from building revenue gains into their marketing automation calculation, but revenue is ultimately the reason for their investment. From an analytical perspective, it’s important not to double-count revenue gains (assuming the same marketing budget) and cost savings (from a lower marketing budget). It's also important to recognize that revenue isn’t 100% profit. The workbook describes how to do this. To keep things in perspective: marketing costs are under 10% of revenue at most firms, meaning that direct marketing automation are under 0.5% of revenue.

Analyzing all four items in depth is a big job. The good news is you don’t usually need to assess them all at once.

building a business case for marketing automation needs only a rough estimate for direct system costs, since they’re so small compared with the revenue, marketing program costs, and operations.

comparing marketing automation systems lets you focus on the system costs and changes in marketing operations costs, since those may vary considerably from one product to another. The impact on program costs and revenues should be about the same unless you're considering systems with widely different capabilities. But hopefully you identified your needs earlier in the process, so you'll only be comparing similar systems once you reach the final evaluation..

It's useful to understand these cost categories, but the real work is gathering the details for each component. This is where the workbook comes in: it lists of specific items to consider, so you have a framework to help ensure your analysis is complete. This is important: to take a real-world example, one of my consulting clients recently received quotes from two marketing automation vendors, one of which included email delivery and one of which did not. Recognizing the difference made it easy to prepare a true apples-to-apples comparison, but we could have easily missed it until later the process if we had not used a formal framework.

Fabulicious Workbook Helps Assess CRM Integration Features of Marketing Automation Systems

2011-11-30T20:11:00.001-05:00

CRM integration is a fundamental feature of marketing automation. Pretty much every system can send leads to Salesforce.com, but capabilities vary significantly once you start looking for more. Sadly, most marketers pay little attention to these nuances until they've already selected a product. Then they learn they hard way what they should have asked.

In hopes of avoiding these mistakes, Raab Associates has just published a workbook on assessing integration capabilities before you buy. The workbook lays out the types of integration, types of issues to consider, how to understand your needs, and how to assess vendor capabilities. It then gives ten pages of checklists with specific features to consider. the topic. The workbook was sponsored by SalesFusion, although they didn't influence the contents.

This is an inherently dry subject, so I made the workbook as entertaining as I could. In fact, I may have exceeded the bounds of good taste: the topic allows a surprising number of double-entendres if you work at it. If you’re planning to buy a marketing automation system, be sure to download it from the Raab Guide site (free with registration) and take a look.

Even better, attend SalesFusion's December 6 Webinar on the topic (register here). I won’t be presenting but you'll get great information and a copy of the new workbook.

Marketing Automation Vendor Selection: Summing Up

2011-11-19T12:40:00.001-05:00

It’s time to wrap up this series of posts on marketing automation vendor selection, which were based on my November 10 Webinar with Neolane (replay available here). I’ve summarized them in three commandments.

Forget the Past. Marketers have been doing such a bad job of selecting systems that they should forget their old approach and start from scratch. I described the old methods in the first two posts of the series, The Seven Deadly Sins of Marketing Automation System Selection and Marketers Do a Bad Job Selecting Marketing Automation Systems.

Remember the Future. The paradox is intentional: you can’t remember the future because it hasn’t happened. This uncertainty itself is what you need to remember. I gave my own ideas about what the future might hold in Marketing Vendor Selection: Trends You'll Need to Support.

Change the Present. This is the only thing you can change. If you make the right choices, the future will take care of itself. I gave advice on improving the selection process in Vendor Selection: Writing a Good Requirements Document and Marketing Automation Selection: Finding a Future-Safe Vendor.

Believe it or not, there’s much more to be said on this topic. You’ll find a helpful (and free) vendor selection workbook in the Resources section of the Raab Guide site. I’m also working on four more workbooks on specific aspects of vendor selection, which should all be published over the next month or so. So stay tuned and good luck.

Marketing Vendor Selection: Trends You'll Need to Support

2011-11-18T16:59:00.001-05:00

As I wrote yesterday, no one knows exactly what we’ll want from our marketing automation systems in the future. But it's still worth taking a guess at what looks likely. Here are some trends I expect will be important.

Social Media. The first wave of marketing automation features for social media is now several years old. These included making it easier to share emails and Web pages, tracking shares through embedded URLs, and monitoring social media conversations. The second wave is just starting. It includes more sophisticated features for working within social media platforms, such as delivering forms and personalized ads within Facebook, using social sign-on to capture more data, and building more detailed profiles based on activities, consumption, connections and influence. Beyond the execution technology itself, these features will require substantial increase in analytical horsepower to make sense of the results.

Mobile. Many marketing automation vendors have added mobile interfaces for the marketers and salespeople who work with them. But the focus is now shifting to marketing campaigns that are delivered by mobile.. The first change is to create standard materials in mobile-friendly formats. But this will soon be followed by more profound adjustments for touch screens, shorter view times, QR codes, special-purpose apps, gamification, social interactions, location awareness, and other mobile-specific possibilities. Third party developers will probably pioneer these capabilities, so look for marketing automation vendors who are good at integrating with outsiders and, eventually, have the money to acquire their technology.

Video. Plenty of video is used already in marketing promotions. It's particularly useful as a way to generate lots of content at relatively low cost. But marketing automation vendors haven’t built many special features to make video easier to use. One big need is better tagging to make video more search-friendly; others are better upload and content analysis to support user-generated content. This may be another area where marketing automation vendors rely on external developers rather than pioneering for themselves.

Benchmarks. This is a hot topic among vendors, both because clients love benchmarks and because there are now enough clients to supply sufficient data. Benchmarking requires standard definitions to allow comparisons across program types, funnel stages, responses, and industry groups. It also needs ways to present the information so marketers can easily understand it. Eventually, benchmark systems will start making recommendations on what to try next – although I've yet to see that happen.

Testing. Too few marketers have a rigorous testing program, and, perhaps for that reason, most marketing automation vendors have focused their energies elsewhere. This may be changing, as marketers see simple and effective testing in other areas like Web landing pages and paid search. Speaking as someone who trained in traditional direct marketing, where testing is an absolute religion, I can only hope so.

Automation. Let’s face it: most marketing automation today is still pretty darn manual. The automation I'm talking about here is having the system make choices so marketers don’t have to. Think about lead scoring, where the traditional approach is for a team of people to sit around a table and negotiate a set of scoring rules. An automated approach would eliminate that by using techniques like regression analysis to derive the formulas directly from the data. Other automated applications could be matching contents to user behavior and choosing the optimal timing for campaign messages. This type of automation is a way to overcome the skill shortage that has slowed the growth of the automation industry. In that sense, it’s an alternative, or at least a supplement, to better training (creating more skilled people) and easier interfaces (making the few skilled people more productive). Delivering this automation requires major investments in statistical technology, standardized definitions, and process monitoring to avoid the “sorcerer’s apprentice” problem of uncontrolled execution.

External data. Marketing automation systems are increasingly gathering data from external sources like social media, list compilers, and online behavior tracking. They’re also moving past CRM to tap other internal systems like accounting, manufacturing and order processing. This poses a major challenge for some marketing automation vendors, who didn't design their system for sources outside of CRM. It requires more flexible data models, APIs for smooth data exchange, and often a substantial increase in total data volume. More complex data also implies much higher implementation and maintenance costs, making marketing automation tougher to sell.

Pay per Result. This is the ultimate extension of external data: instead of buying information, marketers can just buy qualified leads directly. It's also another way to compensate for the skills shortage. Of course, some pay-per-lead programs have been around for years. But as marketers use them more aggressively, the marketing automation systems will need to get better at merging their inputs, identifying duplicates, estimating the value of new names, and analyzing long-term results.

Analytics. Many marketers claim they want better analysis but few have made the investment. Perhaps this will finally change as data becomes more widely available, CEOs press for clearer return on marketing investments, and the exploding complexity requires better measurement to keep marketing under control. We’re seeing two specific applications: revenue analytics that look beyond marketing to track the entire customer life cycle, and optimization to allocate resources across the many different marketing opportunities. Both require substantial investments in new data structures, reporting tools, visualization, dashboards, information distribution, and user management. Marketers who are serious about analytics need to look closely at which vendors have created the necessary foundations and will continue build on them.

No one vendor will be top of all these trends and neither will any one marketer. My advice is to pick the areas you feel are most important and study what each prospective vendor can do in them today and has planned for the future. Beyond that, take a look at yesterday’s suggestions on finding a future-safe vendor, and pick one you feel reasonably comfortable will adapt to whatever tomorow may bring.

Marketing Automation Selection: Finding a Future-Safe Vendor

2011-11-17T10:34:00.001-05:00

Marketers can do a better job of picking their marketing automation vendors if they roll up their sleeves and try. I wrote yesterday about building a requirements document to define the features you'll look for. But you also need a company that supports your long-term success. Here's how to identify a “future-safe” vendor.

Past innovations: a history of advanced thinking shows the vendor understands marketers’ needs and suggests they'll adapt well to the future. But it's not just about being first: no one company has all the good ideas. You also need to be sure the vendor is a fast follower, so its clients will quickly benefit from new ideas invented by everyone..

Flexible technology: no one can predict exactly how marketing automation will be used next. This means you need a system that can easily adapt to unexpected requirements. Look for APIs to coordinate with other systems and a database that supports custom objects. These are still surprisingly rare in B2B marketing automation systems.

Training and support: will the vendor help you to try existing features and proactively train you when they add something new? Both are important if you’re going to get the most from their system. To assess service, ask how support staff are trained, managed, and incented, and talk to existing clients.

Educational services: will the vendor help you learn about marketing practices in general, beyond training on their system? Vendors are in a unique position to see what’s new and what’s working across the industry, but only some take advantage of it. The good ones have programs to train client staff on marketing basics and on new tricks as the industry evolves. Some vendor provide benchmarks to make it easier to identify strengths, weaknesses, and opportunities.

Vertical expertise: how well does the vendor understand your industry, and do they have a particular concentration of industry clients? It’s true that marketing automation is pretty similar across different industries, but each still has its nuances. A vendor who specializes in your industry is more likely to add specialized features your industry needs. Training, support and education are also more likely to be industry-relevant.

Financial strength: it's not enough to just survive. A vendor needs resources to enhance its product and adapt to unexpected developments. Financial strength can also come from size, profitability, outside investment, or a large corporate parent. So define it broadly, but do take it into consideration.

Corporate culture: look for a match between your own company and the vendor. Some of this is based on size and style: big, systematic clients work best with big, systematic vendors. But you also need a vendor with pride in innovation, flexibility, and client success.

It's harder to identify vendor characteristics than particular system features. But features come and go, often in ways you can’t predict. Picking a future-safe vendor is an important part of ensuring your long-term needs will be met.

Vendor Selection: Writing a Good Requirements Document

2011-11-16T14:02:00.001-05:00

My last two posts (not counting this morning’s detour into Marketo-land) described common errors marketers make when selecting marketing automation systems. How did we come to this?

I see two reasons:

Marketers are like everybody else. Remember all that yammering about how today’s buyers do their own research, don’t talk to sales until late in the process, and get their information from social media rather than experts? Today’s marketers buy that way too. So the carefully structured, professionally managed selection process is a thing of the past.

Marketers are marketers. This means they’re facing more change and a less clear future than other types of buyers, and they’re less experienced with purchasing technology. It’s no wonder they can’t define their requirements as well as someone buying a new accounting system.

But all is not lost. Marketers can do a better job of system selection if they try. Specifically, they can do two things: improve the selection process itself and look beyond features to assess the vendors. This post will focus on the selection process and the next will talk about judging vendors.

As I’ve already written more than once, the key to sound selection process is a good set of requirements. These should be packaged into a formal requirements document so you have them all in one place, easily organized and available to share with vendors. But don’t think you’re writing the document for vendors. Instead, imagine you’ll submit it to the Chief of the Prussian General Staff, who just might slice your ear off if you do a less than thorough job.

Here's what he'll be looking for:

Background: a general description of your business, including the products, company size, and industry characteristics. This gives a vendor an idea of your key issues and what sort of solution would be appropriate. Remember: a solution that’s too sophisticated for your needs can be as ineffective as one that’s too simple.

Marketing process: describe your current methods for customer acquisition, relationship development, and retention. Include a channel-by-channel breakdown of your major marketing programs, with the volumes, spending and results for each. Your goals are to define the scope of your required solution and to help prioritize different capabilities.

Existing systems: describe the current marketing systems, including the technology, how they’re used, and known problems. This provides additional context for judging the scope of change that’s desired and what’s needed to achieve it.

Project objectives: only now are you ready to state your goals for this project. You’ve waited this long because the objectives only make sense in light of your current situation. The goals you state here should be as specific as possible, so you can later check that proposed solutions address them.

Data sources: describe the internal and external systems that will feed your marketing automation platform. A simple marketing automation deployment might integrate only with CRM. But more complex scenarios could include inputs from Web analytics, order processing, point of sale, accounting, and elsewhere. Present this information in a table with record counts and transaction volumes so it can be used to size and price your solution.

Required functions: this translates your project objectives into specific system requirements. These include data preparation as well as marketing execution. They wouldn’t generally extend to non-functional requirements like vendor background and pricing, although you could include them here if you’re concerned you’ll forget about them otherwise. Even though these are functional requirements, don’t be too specific in how things should work: you want enough flexibility for each vendor to showcase the best way to use their system. This part of the document is where you're most likely to need outside help: it takes an expert to know what functions are implied by each project objective.

Use case scenarios: here’s the place to get specific. Pick several key processes, such as specific marketing programs, and describe in full detail how you want them set up. This would include segmentation rules, content creation, processing logic, CRM integration, lead scoring, and any other tasks required to run the program. You’ll later ask the vendors to demonstrate how they would perform those tasks.. The key is to define real projects for your business, not vendor-chosen examples that showcase their strengths and bypass their weaknesses.

These same elements should appear in pretty much any requirements document. What will differ is the degree of detail: I’ve written some requirements documents that are three pages long and some that are thirty. The right scale depends on the complexity of your situation. But even a simple requirements document is well worth the trouble, both to clarify your own thinking and to communicate that thinking to potential vendors.

Marketo Raises Another $50 Million: Where Does the Money Go?

2011-11-16T11:09:00.001-05:00

Marketo this morning announced a new $50 million funding round, almost exactly one year to the day after raising $25 million in November 2010. In accompanying commentary, the company also revealed its 2010 revenue was $14 million, that it expects 140% revenue growth in 2011 (meaning about $34 million), and that it has about $70 million remaining of its total $107 million raised to date.

All this new information begs for an update of the analysis of Marketo’s finances that I prepared last year. I won’t go into the same details, but the key figures for 2010 and 2011 are:

This is good news, in that Marketo has managed to increase the all-important Revenue per Client figure by 20%, from $24,900 to $30,900. As I wrote last year, this is a critical problem for the company. (By comparison, arch-rival Eloqua will earn about $70 million this year on 1,000 clients, or $70,000 per client.)

Ah, but there’s a fly in that honey. Remember that Marketo said it has $70 million cash on hand? (Actually, it said “in excess of $70 million” but we’ll assume the excess isn’t large.) Well, last year at this time it had raised $57 million and spent $20 million, so it had about $37 million. That means the company burned about $17 million in the past year. ($37 million + $50 million = $87 million; if $70 million remains then $17 million was spent.)

That $17 million cash loss in 2011 compares with $7 million I estimated that Marketo lost in 2010. (Marketo has never confirmed this figure, although they’ve never offered an alternative, either.) If total costs equal the reported revenues plus cash loss, the company’s costs actually grew even faster than its client count, and, thus, both cost per client and loss per client increased substantially:

Now, Marketo would surely point out that much of the added expense related to sales and marketing costs to acquire new clients (and, thus, future revenues), so “loss per client” isn’t an important measure. There’s some truth to that. But Marketo has said that it earns back the acquisition cost in less than one year. So that loss per client seems awfully large even allowing for future revenues and timing differences.

Something doesn't add up here. Marketo began the year with 140 employees and ended with 240, for an average of 190. Using my rule-of-thumb $200,000 per employee, this gives $38 million in expected costs. That would put them close to break-even (a good thing), but it raises the question of why actual costs were $51 million. In particular, was the $13 million difference spent on recurring operational costs (suggesting continued margin problems, at least until growth slows), or a one-time outlay like payments to early investors or staff.

I have no way to know, and Marketo isn't talking, other than to point out that people with access to the answers chose to invest $50 million. The rest of us will learn more when Marketo files for its initial public offering, which they said could happen in 2012. I’m looking forward to it.

Marketers Do a Bad Job Selecting Marketing Automation Systems

2011-11-15T13:00:00.001-05:00

I presented my Seven Deadly Sins of Marketing Automation Software Selection during last week’s Webinar with Neolane. (To replay the Webinar, click here.) If you’re wondering how many companies actually commit those sins, the sad answer is: a lot. Here are some statistics.

About half of buyers consider only one system, I’m told by various vendors. Some may have known exactly what they needed in advance, but most are just buying the first system that seems to do what they need. And it’s a safe bet they haven’t analyzed their requirements well enough to understand those needs correctly.

66% of buyers base their selection process on meetings within marketing. This isn’t bad in itself, but many don’t talk to anyone else. You do also have to wonder how other 34% make a decision if they’re NOT talking to anyone in marketing. (This and the following figures come from the CMO Council study “Driving Revenue Through Customer Relevance”, which I analyzed in detail last year).

42% of buyers rely on online research. Again, not a bad source in itself, but far from sufficient. The real problem is comparing this figure and the previous 66% to…

25% of buyers consult with in-house IT. Think about that: 75% of CMOs are making a major system investment WITHOUT consulting their IT group. This would be fine if most marketers were experts at technology acquisition. But they’re not. Software-as-a-Service makes it possible for marketers to purchase and deploy a marketing automation system without help from IT, but that doesn’t make it a good idea.

19% of buyers do a formal needs assessment and Request for Proposal (RFP). Again, this means the other 81% are buying a system without a formal buying process. Maybe some are just skipping the RFP, which isn't always needed. But I know from my own experience that plenty of marketers don’t do a needs assessment either. That's a big problem: you can't make a sound choice without one. Remember: when you don't know where you're going, any road will take you there.

25% do a pilot deployment. A pilot isn’t essential if you’ve run a good selection process. But for the vast majority of marketers who haven't run a good process, a pilot is their last line of defense before buying the wrong system. That so few run one means the most are buying blindfolded and hoping for the best. Let’s just say that this is not a good idea.

The Seven Deadly Sins of Marketing Automation System Selection

2011-11-07T13:22:00.000-05:00

I’ll be giving a Webinar this Thursday on evaluating marketing automation software, sponsored by Neolane. Part of the content will be a list of Seven Deadly Sins of Marketing System Selection. I thought that was worth a blog post of its own. So here goes.

1. Ignoring Users. Selection teams often don’t take the the time to understand how future users of the system do their jobs today. The justification may be that everything will change anyway, or that every marketing department has similar needs, or that the users themselves don’t know what they need. The cost of skipping this step is that you don’t learn about existing business processes and user skills. This means you don’t identify what processes need to be changed and what training your users will need. The immediate result is you can’t factor those items into your vendor evaluation. Longer term, your deployment will take longer since you’ll have to stop to gather this information before you can proceed.

2. Lack of Purpose. It’s frightening how often I ask someone how they expect to use their new marketing automation system and am told they don’t know. Buyers who don’t set business objectives have no way to judge what the system should do or to measure its success after the fact. Ideally you’ll have specific, quantifiable goals in terms of numbers of qualified leads, costs, and revenue created. But even general goals like supporting Webinars or running nurture campaigns are enough to give useful direction. Remember the old saying: “When you don’t know where you’re going, any road will take you there.”

3. No Requirements. Even marketers who know what they want often don’t translate those desires in specific system requirements. This is probably the most common sin of all. Formal, written requirements provide a framework to prioritize your needs, explore them with vendors, and make a complete, consistent assessment of what you learn. Without written requirements as a reference, your project can easily descend into chaos: something that made for great medieval artwork, but in real life is no fun at all.

4. Talk Only to Leaders. Buyers often limit their consideration to a handful of vendors who are anointed as industry leaders by analysts or simply gain the most attention in social media. The theory seems to be that the most popular products do the best job of meeting a broad spectrum of needs, and are thus most likely to suit the buyer. It’s an argument that only makes sense to people who don’t know their actual requirements. Think of it this way: would you only consider three best-selling automobiles (Ford F-150 pickup, Chevy Silverado pickup, and Toyota Camry)? Of course not, because you have specific requirements that those products probably don’t meet. Chances are you also have a few marketing automation needs that less popular systems actually perform best. You won’t know unless you look.

5. Let the Vendor Drive. Marketers who don’t know what they want often rely on the vendors to tell them what’s important. At best, the salesperson takes the time to understand your business and demonstrates how her system can best meet your needs. But that’s not the same as defining the best solution. More likely, the salesperson will hand you a list of what her system does best and hope you evaluate everyone else against it. It’s true that some salespeople will walk away from a deal if it’s a poor fit, but now you’re relying on the kindness of strangers – and you remember how that worked out for Blanche DuBois. (Poorly.)

6. Focus on Functions. We all love our bells and whistles, and salespeople love to show them. But functionality isn’t the only thing you need to consider in a vendor. In fact, given that most systems can meet your basic needs, functions may not be the most important differentiator. You also need to consider how well the vendor will train and support you, whether their underlying technology can meet your present and future needs (there’s those pesky requirements again!), their familiarity with your industry, and how likely they are to remain in business. It's harder to answer these questions than sit through a demo, but they’re critical to your project’s success.

7. Work Without Experts. This is the Original Sin from which all others flow. It takes expertise to define objectives, gather requirements, screen the vendors, and run a smooth process. Marketers, like B2B buyers everyewhere, are increasingly trying to do it all without help – and most of them don’t have the time or skills to succeed. If you’re among the have-nots, see whether your IT department or procurement team have the skills to help. If not, find an external expert who specializes in marketing automation systems (for example, Raab Associates). Chances are, their fee will be less than the value of the time you’d spend doing the work for yourself. More important, you’ll end up with a better decision sooner, greatly increasing the final return on your marketing automation investment.

B2B and B2C Marketing Automation: Understanding the Differences

2011-10-18T20:25:00.000-04:00

As you might have guessed from my recent list of B2C marketing automation systems, I’ve recently been spending some time helping consumer marketers to select vendors. This is more a return than a departure: although I’ve written mostly about B2B systems for the past few years, my earlier work was largely in consumer marketing. Like any traveler, I’ve returned home with some new perspectives. Here are some observations

- consumer marketers have to build databases; B2B marketers don’t. You can file this under “things so obvious that it feels stupid to even mention them”, but it’s still an important difference. In setting up a consumer marketing system, the primary discussion is always around where the data will come from and how it will be managed. This accounts for most of the work and most of the cost. By very sharp contrast, B2B marketers rely primarily on their CRM system (that is, Salesforce.com or a competitor) as the primary data source, and complement that with information captured directly by the marketing automation systems’ own landing pages and Web tracking tags. The CRM integration can be set up in days, if not minutes, and next to no time is spent worrying about the marketing database design or update processes.

On the whole, this situation is an advantage for B2B marketers, since they can direct their attention to other issues and can start using their systems almost immediately (for simple tasks, at least). But it also means that B2B systems are much less flexible than B2C marketing automation systems, since the B2B systems are built around a fixed data structure that is derived from the CRM data model. Only a few B2B vendors can add custom tables to systems and I doubt any could accommodate a fundamental departure from the core CRM data structure.

The main practical implication of this is that consumer marketers would have a hard time using a B2B system. (So do the largest B2B marketers, who also need specialized data structures and update processes.) This is frustrating for consumer marketers, who see the huge variety, slick features, and attractive pricing of the B2B systems. Some B2C systems offer similar features and pricing with the same Software-as-a-Service business model. But the total costs are still higher because someone has to build and maintain the underlying database.

- B2B systems include landing pages and web behavior tracking; most B2C systems don’t. It’s technically possible for B2C systems to offer these features, and some do. But many B2C products leave them out. I’d guess the reason is B2C marketers more often have the capabilities available from other sources, such as a Web content management system or Web analytics product. We can probably expect more B2C systems to add them as vendors see that marketers like having them integrated with their primary system.

- B2B systems are cheaper. B2B marketing automation systems start around $750 per month, or under $9,000 per year, and a typical B2B installation probably runs under $30,000 per year. By contrast, it’s pretty much impossible to imagine a B2C system that costs less than $50,000 per year. As I mentioned earlier, that’s really frustrating for B2C marketers.

- B2C deployments are easier. This might spark some debate. But B2C marketers don’t have to deal with marketing-sales alignment, can usually measure results directly, and are often already running the same types of campaigns they expect to run with marketing automation. This means there’s less need for process reengineering, program design, content development, and the other changes that often trip up B2B marketing automation projects. Of course, the exception is building that new marketing database, which I’ve already noticed is much harder for B2C. But the need for the database is obvious from the start and plenty of experts are available to help. So I’d say the risks of a failed deployment are much lower for B2C.

These are simply the differences that pop out as I look at consumer marketing systems with fresh eyes. Further thought might reveal others. What’s intriguing is that B2B marketers, often considered less sophisticated than their B2C cousins, may actually be more advanced in some ways. It’s worth putting aside the old attitudes and considering what each group can learn from the other.

Marketo Spark Targets Small Business Marketing Automation

2011-10-11T17:31:00.000-04:00

Marketo today announced the launch of Spark, a new brand aimed at small and mid-size business. Functionally, Spark is pretty much identical to the standard Marketo system. Exceptions are advanced features including revenue cycle reporting, email deliverability assistance, API access, fine-grained user rights management, and the Sales Insight salesperson application. Most of these aren’t of interest to small business, and several involve additional charges even for Marketo’s regular packages.

So the news here is price. Spark starts at $750 per month with no annual contract, compared with Marketo’s $2,000 per month minimum and annual contract for its full-featured Professional Edition. Marketo has discontinued its $1,200 per month Small Business Edition, which lacked some features now included with Spark.

In other words, this is a price cut. To me, it looks like a reaction to the success of other low cost small business systems, including HubSpot, Act-On Software, and Pardot. (HubSpot and Act-On have similar pricing to Spark, while Pardot runs a bit higher.) Some of those firms are actually growing at a faster rate than Marketo, although on a smaller base. Spark should help to blunt their momentum while increasing Marketo's own client total -- a closely watched metric, regardless of the associated revenue per client.

Whether Marketo actually makes any money at Spark's price is questionable. It really depends on the sales and support costs, and Marketo doesn’t appear to have changed how those are delivered to keep them down. Other small business specialists have designed sales and support models that are not as staff-intensive as traditional approaches. By contrast, Marketo is stressing that Spark includes services to help clients take advantage of their systems.

Of course, Marketo could have lowered its entry price without creating a new brand. So why bother to launch Spark?

One reason may be to avoid cannibalizing sales of its other, higher-priced editions. But, let’s face it, any sentient buyer will notice that Spark is out there. I think the more important reason is that Spark lets Marketo address small businesses separately from larger companies. The two groups do have different needs and neither wants a system designed for the other. Spark lets Marketo position itself as a small business specialist when selling to small businesses, without alienating big-business marketers who would consider a small business system an unsuitable toy.

This is a delicate game. For one thing, "small business" means different things to different people. Small business specialists like Infusionsoft and OfficeAutoPilot actually serve a different market -- one that I label "microbusiness" and put at under $5 million revenue. Those products have a different configuration from Spark, HubSpot, Pardot, or Act-On. Specifically, Infusionsoft and OfficeAutoPilot have starting prices around $300 per month and offer built-in shopping carts and CRM. (Other micro-business specialists like Genoo and MakesBridge also have a sub-$500 monthly price, but no CRM or shopping.) Although Spark is not aimed at the micro-business market, some people may not recognize the distinction.

Nor it is clear that the Spark brand will be enough let Marketo play in both the small and mid-size business segments ($5 to $500 million revenue, by my definition) and the big business segment (more than $500 million revenue.) Nearly every other marketing automation vendor focuses on one or the other. The main exception is HubSpot, which is also trying to add larger clients without losing its small business base -- and facing some positioning challenges of its own.

Spark also poses a financial challenge. Marketo has said it will earn around $30 million revenue in 2011, and will have an average of around 1,100 clients. That comes to about $2,500 per client per month, a figure Marketo has been striving to increase. A large number of Spark clients at $750 per month would dramatically reduce its average. The profit margins, if any, will surely be lower as well, again dragging down the corporate average.

Now, this is all interesting stuff, but does it matter to anyone who isn't a Marketo investor? Probably not. Spark may push prices a little lower and may put a small crimp in some competitors' growth rates. It may also give small business marketers another fine set of resource materials to complement those from HubSpot and others. But the bottom line is that similar capabilities were already available at a similar price point from Marketo and others. Spark just doesn't change much.

Beanstalk Data Adds Service to the Marketing Automation Recipe

2011-10-10T22:28:00.000-04:00

Exploring a new marketing automation system is like biting into a bonbon: part of the fun is you never know what you’ll find inside.

Thinking in those terms, Beanstalk Data is a tasty morsel. It provides all the basic B2B marketing automation functions: mass email, landing pages and surveys, behavior tracking, lead scoring, nurture campaigns, and CRM integration. And it adds just enough spice to leave a pleasingly distinctive flavor.

Regarding the basic features: email, landing pages, surveys, and behavior tracking do indeed seem pretty basic. Nothing wrong with that; Beanstalk is targeted at small to mid-size businesses for whom basic is just fine.

Lead scoring is also done the usual way: by assigning points to lead attributes and behaviors. But unlike most vendors, Beanstalk typically builds the scoring rules for its clients rather than leaving the clients on their own. The company starts with a standard set of rules that it has found work well for most clients. It then modifies them and changes the thresholds that trigger actions such as sending a lead to sales. It can also combine the scoring rules with custom database queries to further refine how they trigger system activities.

Nurture campaigns are laid out on an unusual Excel-like interface with one row per step. That's fun, but the actual functionality is again pretty basic: each step executes in sequence, with no branching or filters to treat different leads differently. Leads enter a campaign by meeting conditions defined in a filter, which can be built within the system interface or written in SQL. The campaigns can run once, repeat automatically at user-specified intervals, or be triggered by standard events or custom SQL queries.

Campaign steps do support an unusual variety of output formats, including email, list exports, text messages, Facebook posts, digital printing, call center, and Web posts to external systems. Steps can also change data within the Beanstalk database and schedule calls in the CRM system.

Speaking of CRM, Beanstalk has existing connectors for Salesforce.com, NetSuite and Leads360. It can synchronize data with other systems using batch imports and exports or via Web services. Beanstalk itself provides basic CRM features including call notes, task reminders, opportunity tracking, and drill-down to a lead’s contact history, behavior history, score history, campaign history, and link history. But the company stresses that these features are only intended for clients with a couple of CRM users; it does not intend to provide a comprehensive CRM solution for larger organizations.

The system also provides above-average flexibility in the data model, allowing unlimited custom fields and supporting multiple values within a single field. The multi-value feature is a way of storing data that would otherwise need a separate table.

If you’re a true connoisseur of marketing automation systems, references to multi-value fields, SQL triggers, export via Web posts, and import via Web services may have you thinking that Beanstalk is more technically advanced than your average marketing automation product. This is probably true, but with one big caveat: most of those capabilities are not directly exposed to clients. Instead, the Beanstalk staff does much of the program set-up and database customization.

This is partly the result of the system’s heritage – it was originally built by printing and marketing services company – and partly because Beanstalk has found that most clients lack the skills or inclination to do the work for themselves.

Beanstalk sees its marketing services as a major point of differentiation. The company is not exactly a marketing agency, but will help its clients to define strategies and develop creative in addition to setting up marketing automation programs. But clients aren't required to use Beanstalk services. They are welcome to work with outside agencies or do this work for themselves.

This approach places Beanstalk firmly in what I’m coming to see as one of three camps for dealing with the shortage of marketing automation skills among marketers. The Beanstalk camp argues that marketers should build substantial marketing automation plans in advance, either by themselves or with help from a marketing automation vendor, agency, or consultant. I’d say most marketing automation vendors take this view.

The second-most common approach is to make marketing automation systems so easy to use that marketers can start by doing simple things with little advance preparation. The theory is that marketers will later advance to more sophisticated features in their own good time.

The third camp argues that automation can let marketers run advanced programs without ever learning how to manage the details.

I pretty much agree with the first camp but am not dogmatic about it. It’s possible that each approach may work for some companies. It’s also true that the approaches are not incompatible: vendors who stress the need for planning still aim to make their systems easy to use and to introduce automation where possible. So it’s more a difference of philosophy and positioning than technology. But I'd still say that difference is significant, particularly in the expectations it sets for clients and in the likelihood of long-term client success.

Anyway, back to BeanStalk. Although it just hit my personal radar, the company was founded in 2007 and launched its product in 2009. It has somewhere between 50 and 100 clients, mostly small to mid-size B2B marketers and some in higher education. Pricing is starts at $1,500 per month for a complete marketing automation system, although clients who want just email and lead scoring can start for as little as $600 per month. Agency services are extra.

The company also has a loyalty system marketed under the Beanstalk Loyalty label. This uses the same core technologies but integrates with retail Point of Sale systems to capture purchase information about individual customers. It then uses that information to deliver targeted offers and coupons via email, text messages, and direct mail. It also supports social media check-in at the retailers via Facebook or FourSquare.