The recent acquisitions by Salesforce.com and SAP are illustrative of the massive land grab happening by software and service providers trying to own customer experiences and data at a deeper level, something I refer to as “the race to the middle.”
In acquiring ExactTarget, Salesforce is taking a leap into customer-facing marketing communications, beyond the previous focus on sales support and customer service. The acquisition of hybris by SAP gives it the ability to move beyond customer relationship management to the point where consumers make the transaction, which, in many ways, is the starting point for relationship management.
Other software providers, such as Adobe Systems, have similarly made this shift through the Adobe Marketing Cloud, which brings together customer analytics with Web experience management and the rest of the digital experience ecosystem. (Note: Adobe is CMO.com’s parent company.)
As consumer expectations for seamless experiences increase, the technology and processes used by marketers to meet those expectations are struggling to catch up. Delivering the relevant, timely, and personalized content consumers expect requires tight integration of customer data, the technology distribution ecosystem, marketing/experience delivery, and analytics. In all of this complexity, the simple truth is that the vendor that owns the interactions with the customer (and the associated data) wins.
Inevitably, this movement will have a significant impact on how marketing organizations build strategies, work with internal and agency teams, invest in technologies, and engage their customers.
Marketing Will Get What It Asked For, But Will It Know What To Do With It?
We often have clients ask us to help integrate different tools–from commerce engines and content management systems to Web analytics and social monitoring tools. Without these integrations, brands are often flying blind, with little ability to map customer behavior and deliver relevant content across channels.
Naturally, software vendors are scrambling to build or buy an integrated suite of solutions that can support an integrated approach to demand generation and marketing operations. Commerce and marketing will become more tightly integrated, and marketing teams will have a better handle on demand generation, lead management, campaign effectiveness, etc. However, substantial barriers are present to making this a reality.
First, most businesses are already heavily invested in a variety of software platforms, which are deeply entrenched. The staff knows how to use them. IT has cobbled together and built on top of old systems. Half of the business units use one platform and half use another. Second, each of the existing platform vendors is likely vying for a bigger piece of the pie. So business intelligence vendors are trying to break into the CRM game, while email service providers try to manage cross-channel campaigns. This causes confusion and internal fighting as each department attempts to become the cornerstone of what needs to be a companywide initiative. Last, responsibility for technology investments will have to continue to shift from IT toward marketing, as all customer touch points are brought together under the marketing umbrella. For some businesses, figuring this out will be a challenge.
To overcome these obstacles, marketers need to know that “all-in-one” integrated platforms will still not do everything for them. They need the processes in place internally to pinpoint the best customer segments, evangelize their needs, generate content, hand off leads to sales, systematically track effectiveness, etc. With the marketing operations process in place, it becomes easier to look at existing systems and determine the right mix to meet the customer needs that you have defined. In some cases, maintaining multiple systems might still make the most sense. In others, eliminating redundant tools to streamline your own process and ensure delivery to customers is the best solution. If the entire technology strategy is based off of your customer needs, then you can build a good case internally for why a decision is made. It’s not a subjective opinion. It is best for the customer.
Software Vendors Will Do It All, But Not Necessarily For The Same Customer
While there are still clearly many niche marketing technology vendors (and there always will be), the trend is that the big, enterprise-level systems are being brought together into just a few, very comprehensive offerings. When all platforms do all things, differentiation will be dependent on cost, time-to-market, integration between solutions, and depth of features across the suite.
The reality is, most marketing organizations are complex, with different goals and needs across units. Some will have small budgets. Some will have specific needs for advanced features. And none of them will have a lot of time for migration or implementation. So the businesses that will invest in a comprehensive suite offered by IBM, SAP, Adobe, or Oracle are the ones that have:
- Strong integration and collaboration between teams driven by a very customer-centric business model.
- A stakeholder in place who can make a significant business decision that sticks across business units in marketing.
- Enough visibility across different teams to understand each group’s needs.
- Robust marketing operations and technology skill sets within the marketing team.
For many businesses, there will be a need for smaller tools that are “best-in-class” if the companywide solution is inadequate (too expensive or time-intensive) or nonexistent. Fortunately, most smaller products know their bread is buttered by the larger vendors whose platforms are being used by many global brands. As a result, there are often easy integrations and, eventually, these tools will be consumed and folded in.
Agencies And Service Providers Will Choose Sides And Add Capabilities
Work that was once left for systems integrators is being brought to marketing agencies that fundamentally understand the marketing operations side of the business. We will continue to see agencies enhance technology capabilities and start to roll individual services or channel-based marketing solutions into comprehensive stories about lead-to-revenue management and life-cycle marketing. This is due to the fact that marketers themselves are going to have the technology in place to be able to deploy more automated programs. This is also driven by the fact that the vendors that many agencies are deeply entrenched with are making their solutions more robust and trying to sell bigger, more comprehensive deals.
Agencies, in turn, are adding capabilities to sell through the bigger story that vendors want to bring to market. This is a win-win for vendors and agencies, both of which want a bigger piece of the marketing budget and the ability to be a more strategic partner.
Last, we will see agencies choosing sides more selectively in the vendors they work with. Training a team in a full software suite takes substantial resources, and it will be difficult being a great implementation partner for more than one big enterprisewide suite.
And Consumers Will Benefit Through It All
The complexities for brand marketers, software vendors, and agencies will likely simplify and enrich the lives of consumers. We are all ultimately trying to get closer to the customers; as long as we keep their needs in the center of our decision-making, we will all be more successful.