Wednesday, December 03, 2008

Pardot Offers Refined Demand Generation at a Small Business Price

My little tour of demand generation vendors landed at Pardot just before Thanksgiving. As you’ll recall from my post on Web activity statistics, Pardot is one of the higher-ranked vendors not already in the Raab Guide to Demand Generation Systems. So I was quite curious to see what they had to offer.

What I found was intriguing. While last week’s post found that Marketbright aims at more sophisticated clients, Pardot explicitly targets small and midsize businesses (or SMBs as we fondly acronymize them [yes, that’s a word, at least according to]). Actually I don’t know why I find the contrast between Pardot and Marketbright intriguing, except for the implication that marketers can be divided into two simple categories, SMB and Enterprise, and no further distinctions are necessary. The analyst in me rejects this as an obvious and appalling over-simplification, but there’s a sneaky, almost guilty pleasure in contemplating whether it might be correct.

What’s odd about the SMB vs. Enterprise dichotomy is that both sets of systems are quite similar. Pardot and other SMB systems don’t just offer a few simple features. In fact, Pardot in particular provides advanced capabilities including progressive profiling (automatically changing the questions on forms as customer answer them) and dynamic content (rule-driven selection of content blocks within emails and Web pages). The only common feature that’s missing in Pardot is rule-based branching within multi-step programs. Even this is far from a fatal flaw, since (a) users can simulate it with rules that move customers from one program to another and (b) intra-program branching will be added by the end of this month.

What really distinguishes the Enterprise vendors is the ability to limit different users to different tasks. This involves rights management and content management features that seem arcane but are nevertheless critical when marketing responsibilities are divided by function, channel, region and product organizations. Although enterprise marketing programs are more complex than SMB programs, most SMB systems can actually handle complex programs quite well. Conversely, although SMB vendors stress their products’ ease of use, simple things are not necessarily harder to do in the Enterprise products. I’m still trying to work out a systematic approach to measuring usability, but my current feeling is that there are large variations among products with both the SMB and Enterprise groups.

Back to Pardot. It certainly considers ease of use to be one of its advantages, and I saw nothing to contradict this. Functionally, it has all the capabilities you’d expect of a demand generation product: users create personalized emails and Web pages with a drag-and-drop interface; track responders with cookies; look up visitors' companies based on their IP address; run multi-step drip marketing campaigns; score leads based on activities and attributes; and integrate tightly with and other CRM systems. These are nicely implemented with refinements including:

- integrated site search, including the ability to use visitor queries as part of their behavior profiles (something I haven’t seen in other demand generation products)

- different scoring rules for customers in different segments (other systems could achieve this but not so directly)

- auto-response messages tied to completion of an email form (again, this often requires more work in other systems)

- ability to post data from externally-hosted forms via API calls (not just batch file imports) and to forward posted data to external systems

- email address validation that goes beyond the format checking available in most products to include rejecting addresses from free domains such as gmail or yahoo, and validating that the address is active on the specified host

- ability to capture campaign costs by importing data from Google AdWords and other sources

- plug-ins that let the system track emails sent by Outlook, Thunderbird and Apple email clients

This is an impressive list that suggests a thoughtfully designed system. But I didn’t check Pardot against my full list of possible features, so don’t get the impression that it does everything. For example, its approach to revenue reporting is no better than average: the system imports revenue from the sales automation opportunity records, and then assigns it to the first campaign of the associated lead. This is a common approach, but quite simplistic. More sophisticated methods give more control over which campaigns are credited and can divide revenue among multiple campaigns. Nor does Pardot have the refined user rights management and content management features associated with enterprise systems. It also limits database customization to adding user-defined fields to the prospect table. (This is another area where Enterprise vendors tend to be more flexible than SMB systems, albeit with considerable variation within each group.)

The point here is that Pardot, like all systems, has its own strengths and weaknesses. This is why the simple SMB vs. Enterprise dichotomy isn’t enough. People who need specific features won’t necessarily find them in all products of one group or the other. You really do have to look closely at the individual products before making a choice. QED.

One other factor clearly distinguishes SMB from Enterprise systems, and that’s pricing. Pardot’s lowest-price system, $500 per month, may be too constrained for most companies (no CRM integration, maximum of five landing pages, etc.),. But its $750 per month offering should be practical for many SMBs and a $1,250 per month option allows still higher volumes. (Pricing details are published on their Web site – which is itself typical of SMB products.) This pricing is low even among SMB demand generation systems. By comparison, limited versions cost $1,500 per month for Marketo and $1,000 for Manticore Technology, and both charge $2,400 per month for their cheapest complete offering. (Note: other SMB-oriented vendors including ActiveConversion and OfficeAutoPilot also have entry pricing in the $500 per month range, although neither publishes the details.)

The Pardot product began as an internal project for the marketing group at Hannon Hill, a content management system developer. Pardot was spun off about two years ago and launched its product at the end of 2007. It recently signed its 100th client.

1 comment:

Fred said...

Hi David,

Just to clarify, ActiveConversion's entry price is at $250, which includes integration. Our high volume clients pay $750/mo, so we gave $500/mo as an average price, not the entry price.

Thanks, Fred.