Vendor Selection Best Practices, Predictive Marketing Explained, Content Marketing Integration, and Other New Papers on Raab Web site

I've just gotten around to posting a  bunch of new white papers in the Resources section of the Raab Guide Web site.  Ordinarily you would need to register to view these, but I spent the whole afternoon putting this together, so I want as many people as possible to see them.  Here you go:

• Technology Evaluation Best Practices describes the challenges that marketers face in selecting the right systems and lists best practices to follow for success.

• What Matters Most In Selecting Marketing Automation explores survey results that highlight common errors when buying a marketing automation system and offers recommendations for how to avoid them.

• Why Modern B2B Marketers Need Predictive Marketing explains why predictive modeling has become essential to B2B marketers and describes specific applications.

• Defining Your Marketing Technology Strategy presents a framework for coordinating your marketing systems and links to an online tool that analyzes your current situations and recommends how to improve your systems.

• Content Marketing Integration Workbook provides a set of checklists to help marketers understand how to integrate content marketing with their other marketing programs at the strategic, operational, and technical levels.

• Questions to Ask When Selecting Your Customer Data Platform helps marketers to understand what a CDP is, whether they need one, and what specific questions to ask vendors when trying to pick the right system.

• The Customer Data Platform describes an emerging class of products that combine marketing database management, centralizing treatment decisions, and integration with execution systems.

BlueConic Selects Targeted Messages Using a Cross-Channel Marketing Database

This blog has mentioned BlueConic in passing a couple of times but never quite gotten around to reviewing it in detail. Until now.

The delay may seem surprising, since BlueConic qualifies as a Customer Data Platform, a type of system I’ve been arguing will play an increasingly central role in marketers’ futures. For those of you who haven’t been paying close attention, a CDP is defined as a

• marketer-controlled system that
• supports external marketing execution based on
• persistent, cross-channel customer data.

This definition distinguishes CDPs from traditional marketing automation products, which do their own execution, and from real-time interaction managers, which lack persistent data stores. CDPs are important because few marketers have been able to build adequate cross-channel databases and because connecting those databases with execution systems has been difficult. The databases and connections are needed because today's customers expect personalized, coordinated treatments across all channels.  Call it the “Amazon fallacy”: customers believe that since Amazon.com can give them highly personalized treatments, so can everyone else.

Anyway, back to BlueConic. The system has two main capabilities, which are to maintain customer profiles and to deliver targeted messages. The profiles can be based on data imported from other systems via batch processes or APIs or captured by BlueConic itself.  It does this with “listeners” that can read data from forms or monitor behaviors via Javascript tags on Web pages, emails, and other media. “Listeners” can also create interest rankings and scores based on user behavior. All of these become available as attributes on the customer profile, which in turn can create customer segments and drive targeted messages.

The messages are delivered by what BlueConic calls “dialogues”, each of which sends a single message to a single location (email, text message, section on a Web page, etc.) to a specified customer segment.  Messages tailored to customer interests would require creating a separate segment for each message.  Similarly, presenting a sequence of messages would require a separate dialogue for each step in the sequence.  If a customer is eligible for several dialogues at once, the system currently relies on an optimizer to pick best-responding option and will soon let users create rules to further guide the results. There is no built-in predictive modeling but the optimizer can continuously test alternative messages within a dialogue and automatically deploy the winner. Users can also apply a frequency cap to dialogues to limit the number of times any customer sees the same message.

BlueConic’s integration features are more extensive than its decision management. The system can capture data entered into forms even if the form ise not submitted. Users can insert message contains into an existing Web page without writing HTML code. Profiles capture  customer identifiers provided by other systems and are automatically merged when two profiles are linked to the same external ID.  Data is exchanged with other sources and execution systems via REST APIs. There are standard integrations with Twitter, Facebook, and Salesforce.com, as well as a system development kit for integration with mobile apps. The underlying data store is Apache Cassandra running on Amazon Web Services, which is highly flexible and scalable at moderate cost.

Integration and data management are what make BlueConic most interesting from a CDP perspective, since those are the core CDP functions. A “pure" CDP would provide only those services while leaving decision management and message delivery to other systems. I expect “pure” CDPs to appear, but most marketers prefer a broader solution, like BlueConic, to assembling the components for themselves. Pure CDPs will become more attractive as integration becomes easier through more standard APIs and connectors, a promise that cloud-based systems often make but are just starting to deliver.

BlueConic’s pricing is already data-centric: fees are based on numbers of profile and channels, not interactions or messages. Prices start around $1,000 per month although most clients pay more. Current implementations are mid-size and enterprise firms in B2C industries including retail, publishing, financial services, utilities, telecommunications, sports and travel. The system has about 70 current customers and is sold both directly and to partners such as ad agencies, other software vendors, and marketing service providers.

HubSpot Jumps into the CRM Marketplace

Hell probably didn’t freeze over today but there might have been a light frost: after years of rejecting the option, HubSpot today announced it will offer a CRM system.

The news was the climax of the founders’ keynote at the company’s annual Inbound Conference, which has yet again doubled to reach 10,000 attendees. Audience response was predictably enthusiastic, since CRM features have been much desired by HubSpot users and resellers for years. The system itself offers standard CRM features – contacts and company records, calendar management, emails, activity logging, tasks, deal tracking – combined with automated population of company and prospect information from Web sources and Twitter activity. There’s also a neat feature that finds existing relationships between a company and email accounts within the user’s own address book and other address books (presumably of co-workers) who have granted access. Another feature goes a step further and provides finds data on other companies that are similar to a current prospect. The goal of all these features is to find useful relationships and information while minimizing manual research and data entry by sales reps.  HubSpot hopes this will encourage adoption of CRM by sales reps who have rejected it because it took too much work for too little value.

The product looked quite nice, although I think most of the features are already available in other CRM systems or add-ons. Having them easily available in a single product is convenient, but what’s really interesting is the integration of CRM with HubSpot’s marketing features and underlying database. This provides a combined sales and marketing system that’s quite unusual for mid-market companies. The approach is standard in systems for very small businesses, such as Infusionsoft and Ontraport.  But that’s a different market, and one which HubSpot managers make clear they don’t want to target (although I’m sure HubSpot has many such businesses in its current customer base).

Even more unusual for the mid-market, HubSpot is offering the system for free: initially to its current customers, and to the rest of the world some time next year. The free version will have some limits, likely related to features and database size, although the company hasn’t decided on the details. This follows the model of HubSpot’s current sales enablement system, Signals, which provided some behavior tracking and itself is being expanded and renamed Sidekick. HubSpot said it already has 100,000 Signals users, who greatly outnumber the 11,500 customers of its flagship marketing system.

The business strategy behind the new system is fascinating if you’re interested in that sort of thing. It’s a continuation of HubSpot’s transition from a purely marketer-focused focused company (remember that started as a tool to attract search traffic) to one that serves all customer-facing departments. This gives it access to the CRM market, which is much larger than marketing automation and would get even bigger if HubSpot succeeds where existing mid-market CRMs have failed. For a company that wants to keep growing, movement from marketing into the adjacent CRM space is probably irresistible. Can a HubSpot service offering be far behind?

Of course, there’s an obvious risk of HubSpot losing focus as it shifts to serving a broader range of users. But the alternative is being stuck in a marketing system space that is itself adding new requirements well beyond the current standard marketing automation features, such as integration with paid advertising and Web experience management. It might soon be easier to stay competitive with other CRM systems than to meet the full needs of omni-channel, integrated marketers.

It’s hard to imagine HubSpot actually abandoning its marketing users, but that might be an option that company’s managers are keeping open by developing a new base in the CRM industry. The analogy that HubSpot leaders used more than once was Apple creating the iPod as a separate business serving a much larger audience than the MacIntosh computer. Their intent seems to be that the broader business would introduce the brand to new companies who would then buy the original product. But it has surely occurred to them that if the new business is hugely successful then it will be much less painful should the original business shrivel away.

(Just to clarify: HubSpot will continue to integrate with Salesforce.com and other CRM systems; in fact, it announced several new integrations during the same keynote.  HubSpot managers said only one-third of their clients currently integrate with a CRM system and about two-thirds of those, or 20% of the total, integrate with Salesforce.com.  HubSpot's goal is to serve people not currently using CRM, not to take sales away from existing CRM vendors.)

Update - September 17

I’ve now had a bit more time to digest this news. My basic opinion hasn’t changed but some doubts have crept in. Freemium hasn’t worked well in either the marketing automation or CRM markets, probably because succeeding with both types of system take serious commitment from a client, whereas the whole point of freemium is to allow casual trials. CRM also takes some serious customer support, as HubSpot managers are fully aware, which makes it harder to justify economically. Perhaps HubSpot could convince its partners to handle some of the support for freemium customers in exchange for access to potential new customers. Tom Sawyer would approve.

Nor, now that I think about it, is the combination of marketing automation and CRM so uncommon among small to mid market marketing automation systems. It’s true that most of those products are more like basic contact management than true CRM, with the specific distinction being whether they track opportunities (deals) as an independent object: HubSpot CRM does this while I think most of the other CRM-within-marketing automation options don’t. The distinction is probably important because it means there’s a good chance of people starting to use HubSpot CRM without HubSpot marketing automation, which of course is exactly HubSpot’s goal. But, again, the risk here is that HubSpot CRM will attract smaller businesses than HubSpot really wants as it tries to move closer to the middle of the market.

I’m also reconsidering my fundamental premise that the CRM business is fundamentally more attractive than selling to marketers. If memory serves, CRM software revenues are estimated at $3 to $4 billion, which is bigger than the $1 billion for marketing automation but not by such a huge margin. Nor is CRM especially profitable: like marketing automation, it suffers from a glut of competitors because it is fundamentally easy to enter. So it’s a good thing that HubSpot sees CRM as the gateway drug to marketing systems, not a profit center of its own.

Or, perhaps more cleverly, they see CRM as a gateway to establishing themselves as a platform vendor at new clients. HubSpot hasn’t used that term very much, but they did stress that the CRM and marketing system use the same database and are accessed through the same APIs. In this view, HubSpot CRM would build a database that allows HubSpot to sell other, future applications at the companies that install it. These could be HubSpot’s own applications or third party apps sold through its marketplace. That might be a better long-term strategy, since the explosion of marketing technology will make it increasingly unlikely that HubSpot alone can provide a full range of marketing and sales functions – even though HubSpot so far has been more aggressive than most at trying to provide core capabilities (marketing automation, Web content management, and now CRM) all by itself. Repeat after me: the suite is dead.

However things play out, the new CRM product gives HubSpot several options it lacked before.  For that reason alone, it still strikes me as a good move.

Marketing Foundations Analysis Tool: Gap Analysis, Recommendations, and Benchmark for Your Marketing Systems

Way back in January, I began working with SAP on a set of worksheets to help marketers assess their customer management systems. The much-evolved fruits of that effort were released today as the Marketing Foundations Analysis Tool, a fully automated system that asks users a series of questions about their current systems, marketing programs, and company background, and returns recommendations for system changes and how to manage the transition. Survey-takers will also be shown how their current systems compare with everyone else who answered the questions.

The key insight powering this project was that there are relatively few types of marketing programs and systems.  That may not sound very important (or surprising), but it means the problem is simple enough to address with a relatively small amount of user input and business logic.  Specifically, it's practical for a survey to ask marketers which programs they want and what their current systems look like.  From there, it's fairly easy to specify the system capabilities required to run each program, to aggregate these into a consolidated set of requirements, and to compare the requirements with existing capabilities for a gap analysis.  This can be combined with information about the company to generate recommendations for what to do next.

In fact, if anything surprised me during this project, it was how much information could be derived from a relatively small amount of user input. The Analysis Tool asks about:
- nine types of marketing programs, ranging from customer profiling to real time interactions to loyalty programs to marketing measurement.  Users specify whether they currently run each program, want to run it in the future, or have no interest.

- thirteen types of customer-facing systems, ranging from email and Web sites to display ads, retail point of sale, and customer account management. These are rated on a spectrum of integration capabilities, from being totally isolated to allowing real time interactions.

- seven types of shared customer data processes, ranging from single customer view to predictive modeling to treatment selection to advanced analytics. Each process is rated on different capabilities, such as calculating scores for predictive modeling and handling unstructured data within the single customer view.

That's it -- just 29 items, although some do have subitems.  Based on those inputs, the Analysis Tool produces recommendations covering:

- general architecture (integrated suite, shared customer data platform, or application-based) and change strategy
- industry-specific issues to address, such as regulatory concerns
- opportunities to improve business results by running more marketing programs
- coordinating changes to marketing programs with changes to systems
- changes to customer-facing systems (over-all and whether to keep, enhance, or replace individual systems)
- changes to shared customer data processes (over-all and process-by-process)

That's a lot of information, and it doesn't even include the benchmark comparing your answers to everyone else's.  Not bad for free.  Thanks, SAP!


So how does this all work?  To peel back the covers just a bit, the recommendations are made by first classifying results into general categories such as “few active applications” or “mostly simple systems”, and then applying rules to select pre-written answers.  For example, a company with "few active applications" and "many desired applications" is told:

Assessment: Your company is running relatively few current marketing applications but wants to add many more. This could be a challenge given your relatively limited experience.

Recommendation: Prioritize the new applications so you don’t make too many changes at once. Start with applications that require relatively little change but also offer significant rewards. These should add capabilities that will also be used for subsequent new applications. Measure results carefully and prove success before moving on to make more changes.

Obviously I’m biased, but I think that level of advice is specific enough to be useful. It can’t replace the insight of a human analyst who can assess the situation in more detail and may see connections that simple rules will miss. But it certainly provides a starting point for discussions and a base of data to work with. Well worth a ten minute investment of your time.

Again, you can try the tool here.  You can take it anonymously and view the results on screen, or give SAP your email and have them send you a copy of the report.  Either way, give it a shot and let me know what you think.