Customer Data Platform Guide Reviews Tools to Build Marketing Databases

Raab Associates’ new Guide to Customer Data Platforms is now available (click here to buy).

You may not find that news to be fall-off-your-chair exciting. In fact, you’re more likely to wonder whether the world needs yet another report on anything at all. Fair enough. So before telling you what’s in the CDP Guide, I'll tell you why it exists.

Simply put, marketers need better databases. If you’re a working marketer, you almost surely know this from personal experience. But someone who only read industry news and vendor promotions might think all anyone had to do was to plug in the latest cool application and it would immediately be filled with fresh clean data like water from a tap. Dirty big data is our industry’s dirty little secret.


The problem isn’t new but it is getting worse. As customers interact across more channels, marketers need to not just meet them in every new location but recognize them and carry on a continuous conversation from one touchpoint to the next. Marketers can also become more effective by enriching that conversation with information from external sources such as Web pages, social media, and commercial databases. Both the carrot of better results and the stick of customer expectations are ever-more-urgently driving marketers towards building better databases.

The good news is that plenty of smart vendors have also recognized this need and are trying to help marketers on their journey. I call their systems Customer Data Platforms and define them as “a marketer-controlled system that supports external marketing execution based on persistent, cross-channel customer data.”

If there’s one absolutely critical point in that definition, it’s that CDPs put marketers in charge of building their own database. Taking control is the only way that marketers will ever get the databases they desperately need. It’s why CDPs are so important.

But too few marketers know who the CDP vendors are, what they do, and how they differ. The Guide to Customer Data Platforms is designed to provide this information. If the CDP vendors are tour guides on the path to better data, the CDP Guide is the reviews you read to decide which one you’ll hire. As far as we know, no other study serves this purpose.

Given its goal, the heart of the Guide is the vendor profiles: three to five pages on each vendor, describing capabilities for data management, predictive modeling, marketing campaigns, and message delivery, plus background on the vendor’s technology, clients, company history, and pricing. You’ll want to read those closely when you’re selecting a vendor. But first you’ll have to decide whether a Customer Data Platform is something to consider. Here is some information to help make that judgment.

- CDPs are something new. CDPs are systems that help marketers build and update customer databases, and make those databases available to support marketing programs. That may not sound very new, but most B2B marketing automation products today build very limited databases while most B2C marketing automation products rely entirely on an external data warehouse. The systems that do build databases are designed to be used by IT departments, not marketers. And many CDPs provide predictive modeling or best-treatment recommendations that go well beyond the storage functions of a basic data warehouse.

- You still can’t do this at home. CDPs may be tools for marketers, but that doesn’t mean that marketers build the databases themselves. Rather, CDP vendors provide services that build the database with varying degrees of marketer involvement. The difference is that the marketers work directly with the CDP vendors, instead of relying on IT staff that often has other priorities and an imperfect understanding of marketing needs. This makes it much easier and quicker for marketers to get the database they need.

- CDPs are an outgrowth of existing system types. Most CDP systems were created for a purpose that happened to require the same database-building capabilities as a CDP. These purposes fall into three groups which I discussed in last week’s post, so I won’t repeat them here. They’re work understanding because vendors in each group have a different set of skills, one of which will probably come closest to your needs.

- Convergence is coming. Even though the CDP vendors started with different applications, their shared abilities for identity matching, database management, analytics, and integration will allow them to support more of the same functions over time. As marketers understand the value of their databases more clearly, CDP vendors will be able to focus on selling their data platform features rather than applications the platform supports. Of course, once the platforms themselves are common, vendors will climb the value chain by offering better predictive analytics and cross-channel treatment optimization.

- Details count. CDP features may eventually converge, but for now the systems differ in many small ways that make a big difference. To take one example, nearly every CDP creates predictive models. But some can only predict response to specific promotions, based on who has responded before. Others can do the much more sophisticated analysis needed to predict which offer will best advance a long-term goal such as becoming a new customer. And even among those that model against long-term goals, some can actually estimate the incremental impact of a specific offer and others can just see most common correlations. We found similarly subtle differences in how data is collected (via the vendor’s own Web tags or by importing from other systems), the range of data sources (just marketing automation and CRM or those plus many others), natural language processing to extract useful information from text sources such as Web pages, how much history is kept and how it’s used, program execution, and end-user control. The CDP Guide clarifies these distinctions, but it’s still up to marketers to evaluate which differences will matter in their own business.

The CDP Guide itself contains quite a bit of other useful information, including a formal definition of CDPs, detailed explanations of what to look for in a CDP, and a history of marketing databases starting with the Sumerians (don’t worry, I skipped the boring parts). Again, the goal is to provide one package with everything you need to get started along the path of buying a CDP system.  From there, it's up to you.

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How Raab Associates Converted to ZohoCRM In One Weekend: a B2B CRM Success Story

Raab Associates is really two businesses: the technology consulting practice run by Yours Truly, and a marketing agency specializing in children’s books run by my beautiful and brilliant wife Susan. We keep them largely separate, but I am inevitably involved in her technology decisions. So when her ancient Goldmine CRM system finally crashed last week, we both scrambled to pick a replacement.

From my usual lofty perch in enterprise software world, Susan's requirements seem stick-figure simple: accounts, contacts, opportunities, lists, and mass emails. So our first thought was to find a system that offered those plus some cool new things like social media profiling. But a quick scan of the market showed that none of the neat new systems also offered the basic functions with with enough refinement and flexibility to meet Susan's needs.

This pushed us back to the more standard CRM options.  To my dismay, we found ourselves ruling out one after another for various. I even briefly suggested we reconsider Goldmine, an thought that was quickly rejected.  Eventually we took an unhopeful look at ZohoCRM, which I know as a popular small business system but had never considered particularly advanced. Happily, the system has a very thorough online user manual, so I was able to check it out in detail.

Even more happily, the answers all came back positive as I imagined working through Susan’s basic business processes in Zoho. Build contact lists, check. Mass emails, check. Opportunities linked to campaigns, check. Pull-down status list and callback date on opportunities, check. Custom filters across all field types, check. End-user report writer, check. Multi-field search, check. A bunch of other details that I no longer recall, check check check. Reasonable cost, double check: we would have grudgingly paid a couple hundred dollars a month for a solution, but Zoho’s mid-tier Professional edition costs all of $20 per month with no limits on database size (Susan has about 14,000 contact records – well above the minimum for many small business systems). We may even splurge for $35 per month enterprise edition, which provides some advanced automation features but is probably overkill for most small businesses.  Just call me Diamond Jim.

At this point, we were ready to sign up for the free trial account, which was a simple process and didn’t ask for a credit card. Let me point out that I purposely hadn’t signed up sooner because I didn’t want to waste time exploring a system that I wasn’t pretty confident would meet my needs. Diving in too soon is a classic mistake among software buyers – and, in this instance at least, I actually followed my own advice.  (While I'm patting myself on the back, I'll also point out that we evaluated the software against our actual business process, not an arbitrary feature checklist.  That's another best practice that too few buyers follow.)

We now pulled a small set of test records from Goldmine to test the import function. The online manual guided me through the exact steps necessary, complete with a handy checklist of preparatory tasks.  When I went to load the file itself, I got the first of many delightful surprises: Zoho took a guess at mapping the input fields, based on their names, and got about half right. That’s a pretty sophisticated function and a big time-saver. It’s the sort of refinement you don’t see in a new system because it’s not essential to get the product into market, but gets added after enough users request it and the developers have some breathing room. Zoho has actually been around since 1996 (although CRM came later), so they’ve had time to add a lot of those little helpers.

In any event, the test import worked perfectly the first time out, which was a great feeling of accomplishment. Susan and I played with the system a bit more now that we had some real data in it, and found all sorts of nice little options, like being able to rename objects (she calls an opportunity a “pending record”), rearrange the fields on each screen, change the order of sections, and move fields from one section to another.  Again, none of these is cutting edge, but they’re not always available and make a big difference in making the system more usable.  The interface itself was also highly intuitive – lots of nice dragging to move the fields around, for example. There were plenty of other unexpected goodies that I would have otherwise needed to configure or live without, like automatically listing the associated contacts when you view an account record, and listing the associated opportunities – I mean, pending records – when you look at a contact. And, oh yes, you can control which fields are displayed on those related records.

At this point we were feeling pretty good about actually pulling off the conversion, so I spent all day Sunday manually cleansing those 14,000 contact records to ensure the critical data was populated. Even Zoho couldn’t help with that one. I finished around midnight and had a moment of panic when I saw that Zoho would only import 5,000 records at a time.  But it turned out to accept all three batches without waiting for the first batch to finish, so I was able to submit them and get some sleep.

I woke up bright and early (well, actually, late and cranky), feeling pleased that Susan could start using the system without missing a business day.  Alas, we found that somehow there were twice as many account records as expected. A quick call to Zoho support pointed us to a rollback function that should have cleaned up the problem in a few seconds. Sadly, it rolled back one set of records but not the other (remember, there had only been one import).  I spoke again with Zoho support, who promised to look into it but hadn’t accomplished anything several hours later.  At that point, I realized – duh – that it would take about two minutes to delete the records manually (you can only delete 100 at a time, but it’s three keystrokes for each batch, so you can probably do about 50 batches per minute). Once I figured that out, I cleaned out the old records and reimported everything, and we had a clean set of data.

Susan has been working with the system for the past two days, and I’ve been peeking over her shoulder and poking around a bit myself.  ZohoCRM is certainly not perfect – there are bunch of little things she would like to do, such as preview a template-based email with the variables populated. There are also some oddities like two unrelated sets of email templates, a vestige of Zoho's earlier separate systems for CRM and mass mailings. Those quirks take a bit of getting used to but are far from show-stoppers. There are some other tasks that cumbersome at the moment, but I suspect we’ll be able to automate once we have time to explore those functions. And, yes, there are some things it doesn’t do that Susan would like, such as associating multiple email addresses with the same contact. I wouldn’t exactly say they’re trivial – certainly not to Susan – but she can live with them.

We're generally satisfied with customer support: phone calls aren’t always answered immediately, but after about a minute on hold, a very nice lady picks up the line and offers to take a message. I appreciate the human touch, and, more important, the opportunity to get immediate help if something is truly urgent. We do get callbacks in an hour or two and the agents have been pleasant and helpful, which is about all I can ask. There’s a “how’d we do?” email after each interaction, which is a good sign that Zoho is trying to do a good job.

Bottom line: We’re still in the honeymoon period, so I may find Zoho isn’t really as great as I think.  On the other hand, I proposed to Susan almost immediately after meeting her and that's worked out just fine.  So I'd say ZohoCRM is worth a close look for small business CRM, even for people who think it may be too simple for their needs.

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NICE Buys Causata to Extend Its Customer Experience Management Position

So, there I was around 7:30 Eastern time this morning, sending out reminder notices to vendors I need to interview for an upcoming report on Customer Data Platforms. I received an immediate response from the Kevin Nix of Causata, offering to talk that very morning. This seemed a bit odd – Causata is based in San Francisco, so it was 4:30 a.m. local time and most people need more notice to schedule a call. But I had Things To Do, so I didn't give it much thought. Then, at the end of another call, a participant casually mentioned that Causata had just been purchased by Israel-based NICE Systems.  At first I was struck by the coincidence, and then realized what had happened: Nix was up because he had been talking to the folks in Israel, and he replied because he wanted to discuss his acquisition, not my report. [Insert image of deflating self-importance].

Sure enough, when I did dial in, I was treated to a prepared briefing on why NICE had made the deal.

There’s really nothing wrong with that. NICE is little-known in marketing circles, although I had bumped into them previously when they bought decision management vendor eGlue in 2010. But NICE is a major player in contact center systems, with nearly $1 billion revenue and $2.5 billion stock market capitalization. So I was pleased to connect with them directly and learn a bit more.

The briefing itself was interesting too. It turns out that while NICE still sells primarily to contact center managers, it is working hard to expand to clients in marketing, sales, compliance (it bought Actimize in 2007) and other areas related to customer experience. Its interest in Causata related to all  that, and in particular to that fact that Causata can capture Web interactions in real time and present them with related recommendations to contact center agents and other systems. This pumped me back up a bit, since it can be read as validation of the Customer Data Platform concept that I’ve been developing, which is about exactly this need to make customer data easily available across platforms. In fact, Causata was the original example I used to introduce the idea.

But enough about me, at least for the moment. The idea of NICE expanding to become an all-channel, all-department customer experience vendor immediately raises the question of how they’ll compete with all those other omni-everythings approaching from digital marketing (Adobe), B2B CRM (Salesforce.com), and general enterprise systems (Oracle, SAP, IBM). The contact center world has actually been a font of decision management systems, most notably Chordiant (now part of Pegasystems) and Infor Epiphany. So it’s certainly possible that they will be another source of competitors converging on the market for integrated customer experience management solutions. Like the CRM and Web content management vendors, the contact center firms start from a strong customer and financial base, making them formidable contenderss in what will surely be a long battle for high stakes.

I haven’t formed a solid opinion yet on how NICE in particular or contact center vendors in general are likely to fare in this new arena. But they are definitely something to factor into future assessments.

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Venntive Adds Communities to Small Business Marketing Automation and CRM

It has taken me some time to form a clear picture of Venntive. It is clearly “all-in-one” sales and marketing software for small business, combining marketing automation, CRM, and ecommerce along the lines of Infusionsoft and Ontraport (formerly OfficeAutoPilot). It also includes full Web site management and social media monitoring and posting, but those are natural extensions for sales and marketing.  More puzzling was Venntive’s decision to include a full accounting system and a community management features such as private discussion forums, Wikis, events, and custom fields for groups within its database. The other micro-business systems have avoided accounting, presumably because they saw little value in trying to displace Intuit QuickBooks. And community management – well, that just doesn’t have much to do with how most small businesses operate.

The hint at an answer – a giant flashing neon sign, actually – was in Venntive CEO Lydia Sugarman’s description of its client base, which my notes recorded as “chambers of commerce, schools, Boy Scout troops, coaches, law firms, financial advisors and associations”.

You can be certain that this is the first time “Boy Scout troops” has come up as a category of marketing automation users. But Venntive makes perfect sense once you consider their needs.  A scout troop has many subgroups that need to communicate among themselves: how better to manage that field trip to the National Duck Stamp Museum?  They also have simple finances and simple Web sites. Venntive’s pricing model – starting at $25 per month for up to 1,000 contacts, with unlimited email – also fits a small organization without a big prospect list, since it would pay about that amount for basic email and Web hosting.

In fact, Sugarman said the custom fields for groups were originally added to track Boy Scout merit badges – although they’re now used more often for things like dealer certifications.

Venntive's scouting heritage notwithstanding, I want to make clear that it is suited for much larger organizations.  Venntive offers the full set of “all-in-one” system features, meaning it can serve the full set of “all-in-one” clients: those coaches, law firms, financial advisors, and others that Sugarman mentioned, plus online retailers, service companies, and small manufacturers. In fact, Sugarman said most of the company’s clients are B2B not B2C marketers.

One problem with writing about a system like Venntive is evaluating its huge number of features.  In some alternate universe where sleep is optional, I would have explored each function in depth before writing about it. But things don’t work that way on my little corner of planet Earth.  The best I could do was take a whirlwind tour of the system and capture some screenshots. Based on that limited research, I came away impressed with the sophistication of the features as well as their scope.

Let’s start with the group functions, since groups are such a key component of Venntive. At the simplest level, a group is just a list. People enter groups in the usual ways: email or form response, user-defined filters, conversion events, list import, or manual assignment. Entry can trigger an email, assignment to a drip campaign, or sales agent notification. So far pretty normal. But groups also support those community and collaboration features.  Members can share discussion forums and Wikis and be assigned rights such as access to specified information about each other. Each group can also have a parent organization, member log-in, physical location, custom fields, and its own settings for email, event, and drip campaign practices. Beyond membership organizations, those group functions could support all sorts of peer-to-peer communications, arguably making Venntive just the thing for cutting-edge, community-driven marketing.

Looking at the other functions:

- emails can be built on user-customizable system-provided templates, on imported templates, or from scratch.  They can include social sharing buttons, surveys, event links, contact data, or dynamic content selected by embedded if-then rules. Completed email can be previewed and spam scored. The system can automatically assign recipients to different groups based on their response (read, click, forward, or take a survey).

- surveys are built from a list of independent questions.  This means all answers to the same question are automatically placed in the same data field, regardless of where the question is asked. That’s the right way to do it, at least in my opinion.

- events can be either physical or on-line. The system stores details about the location, captures registrations, collects fees, offers multiple options for reminder emails and text messages, and reports on actual attendance after the fact.

- CRM goes beyond the basics (contact attributes, activity history, calendar reminders) to track opportunities and sales quotes, allow searchable tags for segmentation, and store files associated with a contact. Standard integration with RapLeaf let users add demographic, interest, and purchase data from external sources by matching on email address.

- lead scores are created in two ways: conventional user-created scoring rules, and automated predictive modeling. There are two conventional scores, one for activities and one for demographics.  The demographic score is based on contact attributes, while the activity score incorporates contact activities (email, Web, event, survey, purchase, and social behaviors) plus salesperson activities (sent an email, left a messages, etc.).  Activity values can be set to decay as time passes, which is one hallmarks of advanced lead scoring. While there's just one pair of conventional lead scores, users can have as many predictive model scores as they want.  Each score predicts visits to a different Web page, typically representing a stage in the purchase process. The system automatically looks at the demographic, activity, and CRM data to build a model formula and score the contact records.

- campaign features in Venntive are uncharacteristically limited.  Users can set up a sequence of emails, but there is no branching based on response and emails are the only action a campaign can control directly.  Users gain a bit more power from the ability of email response rules to assign contacts to different categories.  But this is still far from the process automation that adds great value to other micro-business systems. 

- Social media support includes keyword searches and alerts; real-time or scheduled posting to multiple Twitter, LinkedIn and Facebook accounts; and detailed tracking of results. This is a reasonable set of features for a small business system.

- The Web site builder is much more robust.  It supports pages, blogs, member sign-in, stores, coupons, advertising, support tickets, and tracking via Google Analytics. Users can assign point values to specific pages for use in lead scoring and can see a list of who visited each page. Venntive hosts the Web site for its clients, but clients can assign their own Web address to hide this.

- Financials include account tracking, journal entries, receivables management, and reporting. Invoices are automatically added from CRM and Web orders and funds can be collected via PayPal. The system can also integrate with QuickBooks.

- There’s also project management, a media library, SMS messaging, and print integration. And probably other things I haven’t mentioned.

Given the depth of its features, Venntive’s interface is reasonably straightforward. But there's a lot to learn and users will need help.  Each screen include buttons for on-demand videos explaining individual functions. There are also video tutorials and non-video explanations (using a technology called "text") for users over age 30.

Pricing of Venntive is based primarily on the number of contacts in the system, starting at $25 per month for 1,000 contacts. A system with up to 25,000 contacts would be $200 per month. There are some additional fees for extra users, Web analytics, SMS messaging, and external data. Users can send unlimited emails.

Venntive was launched in 2006 and is nearing its 1,000th client.

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Adobe Buys B2C Marketing Automation Leader Neolane: One Gap Filled, But Where's CRM?

Adobe today announced plans to acquire Neolane, the largest remaining independent B2C marketing automation vendor (excluding email-focused providers like Responsys and Silverpop). Price was $600 million, which is roughly in line with the 8x revenue paid for ExactTarget and Eloqua recently.  (Neolane announced $58 million revenue in 2012 and has been growing around 40% per year, which would yield about $80 million 2013 revenue.)

The deal is not particularly surprising. Adobe was on everyone’s list of potential buyers, and Neolane was ripe for acquisition or an initial public offering. It reinforces suspicions that Adobe was the mystery bidder for ExactTarget mentioned last month by Salesforce.com.  Indeed, my take on the ExactTarget deal explicitly mentioned an Adobe/Neolane possibility. That frankly didn’t take much insight, but I’ll brag a bit more about having pegged Adobe as needing to add marketing automation as far back as this post in 2009 and again in 2010.

Neolane is more of a mid-tier solution than an enterprise product, which may be a slight mismatch with Adobe.  I’d say that reflects a lack of enterprise systems available for Adobe to purchase, more than any particular desire to target the mid-market.

Predictable or not, this deal does fill a gaping hole in Adobe’s marketing cloud. It still doesn’t put Adobe on equal footing with Oracle, Salesforce, SAP or Microsoft, since they all have major CRM platforms which Adobe does not. Adobe obviously has a leadership position in content creation, although I’ve never felt that does much good in selling customer management systems. (To be more precise, content creation COULD give Adobe an advantage if it very tightly coupled auto-personalized marketing treatments with content creation, but that doesn't seem to be happening.)

More important, Adobe also has an unmatched position in Web analytics, Web advertising, and Web content management. In fact, adding Neolane gives it a profile very similar to IBM, which also has strong Web and marketing automation products but not CRM (and which also shares Adobe’s digital-is-everything mono-vision).

Come to think of it, the contrast still comes down to the dueling strategies I described in 2011: Web-plus-marketing automation (Adobe and IBM) vs. CRM-plus-marketing automation (Oracle, Salesforce, SAP, Microsoft). Everything will eventually converge Web-plus-CRM, with marketing automation baked in so deep you can't see it.  But that’s still some way off, except arguably for Oracle, which has all the pieces but hasn’t fully integrated them. In the meantime, we’ll see which approach is more popular – and what becomes of the stand-alone marketing automation vendors who are caught in between.

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HubSpot Releases Social Inbox and Reveals So Much More

I spent yesterday afternoon at HubSpot’s “Open House” in Cambridge, MA, during which they briefed the community on their business progress, introduced their new Social Inbox, described their  approach to marketing and sales alignment, explained their “culture code”, and answered questions.

The most concrete news, Social Inbox, extends existing HubSpot features by more fully integrating social media monitoring and response with the HubSpot interface. The Social Inbox presents a list of Twiter posts by user-specified individuals or containing specified key words. Users can drill into each post to see a complete profile of the poster. The big deal in HubSpot’s eyes is the profiles include all information the HubSpot database about each person, and are even color-coded with the sales lead stage. The data includes Web and email behavior captured directly in HubSpot, data imported from Salesforce.com, and whatever else the system has available. Users can respond directly, forward a post to someone else, or add the poster to a HubSpot campaign. The system can automatically alert users to new Tweets as they happen or on a regular schedule.

HubSpot said they couldn’t find any other product that combines this type of social monitoring with access to such deep profiles. I can’t immediately think of one either, although it might exist. Either way, uniqueness is less important than the value provided, which is considerable.

What’s ultimately more interesting, however, is that Social Inbox is aimed at managing one-on-one interactions between users and individual contacts.  This sort of contact management is quite different from HubSpot’s traditional focus on attracting inbound traffic or even from conventional marketing automation.

The new features came up again later in the day, when the audience asked several pointed questions about whether HubSpot would eventually add a full CRM capability. This caused by far the most discomfort of any topic addressed by a management team which provides itself on transparency. Answers ranged from a coy “we think about a lot of things” to a fairly definitive stream of conscious listing of the arguments against adding CRM.  The currently dominant line of thought seems to be that HubSpot already provides adequate features for clients who want light contact management, while adding full CRM features would only lead to a losing battle with Salesforce.com. Unstated but hovering in the background was the fact that Salesforce.com is an investor in HubSpot and might some day consider buying them to expand its own marketing scope. CRM would make HubSpot less attractive to Salesforce, since it would create a set of redundant features that need to be supported or removed.

But the most fundamental reason that HubSpot management seems genuinely disinclined to add CRM is that they see HubSpot’s mission as transforming marketing. There’s a distinctly messianic gleam in CEO Brian Halligan’s eyes when he says this and the vision is no doubt shared widely across the company. In fact, it’s arguably more surprising that HubSpot has overcome its marketing focus to introduce the contact management features already in place. My take is that customer needs – another HubSpot mantra – have driven the system in this direction despite management reluctance. The system has a will of its own.

Admittedly, I’ve been arguing this for a long time: the need for integrated customer treatments will eventually lead marketing automation, CRM, and Web content management to become a single system, or at least to share a common customer database. HubSpot’s current vision of highly personalized data-driven marketing is consistent with this. The current vision is also quite different from the original HubSpot vision of attracting traffic through huge volumes of great (but not personalized) content. But the new vision is a logical extension of the original: once you’ve attracted people and start to learn their preferences, the more you’re able to make targeted content recommendations. And, the more content you have available, the more you need those recommendation to point people at the right materials.

This brings HubSpot right back to contact management, because the same data used to recommend marketing content can, and should, be used to recommend treatments during personal interactions. It’s possible to simply push recommendations to an external CRM platform, but setting a connection for each point of contact quickly becomes a lot of work. The temptation to eliminate that work by building an integrated CRM system is hard to resist.  As I say, the system has a will of its own.

Incidentally, there is another way to look at this. The traditional view sees marketing as making automated contacts, while sales and service use human agents, supported by CRM, for individual interactions. This is why CRM seems foreign to a marketing system. But the automated-vs-human division is no longer so clear cut. Social media marketing is mostly done by humans through one-on-one messages, while many sales and service interactions are automated. In this view, HubSpot needs contact management features even if it rigorously restricts itself to serving marketers alone.

The problem with this approach is that it denies sales and service the benefit of HubSpot’s data and customer understanding – a terrible waste of corporate resources. So this view also pushes HubSpot towards a unified marketing and CRM system, or at least a database and recommendation engine that’s accessible by both HubSpot and a separate CRM. I swear I didn’t mean to end up here, but this does lead to the Customer Data Platform I’ve been discussing over the past few weeks. I don’t think HubSpot management wants to move in that direction, or even that they necessarily should.  But these things have a will of their own.

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Lattice Engines Automates All Steps in Prospect Discovery

There’s nothing new about using public information to identify business opportunities: it’s why lawyers chase ambulances and bankers phone lottery winners. But the Internet has exponentially grown the amount of data available and made it easily accessible. What’s needed to fully exploit this resource is technology that automates the end-to-end process of assembling the information, identifying opportunities, and delivering the results to sales and marketing systems.

Lattice Engines was founded in 2006 to fill this gap. The system scans public databases, company Web pages, and selected social networks to find significant events such as title changes, product launches, job openings, new locations, and investments. It supplements this with data from the clients' own systems including customer profiles, Web site visits, and purchases. It then looks at past data to find patterns which predict selected outcomes, such as making a first purchase, buying an additional product, or renewing. It uses these patterns to identify the best current prospects for each outcome, and makes the lists available to marketing systems or sales people. The sales people also see explanations of why each person was chosen, what they should be offered, and recommended talking points.

Each of these steps takes significant technology. Lattice Engines currently monitors Web sites of five to 10 million U.S. businesses, checking daily for changes.  The system’s semantic engine reads structured texts such as management biographies and press releases, extracting entities and relationships but not trying to understand more subtle meanings such as sentiment. Clients specify blogs to follow, which receive similar treatment. The company also monitors Twitter, Facebook company pages, Quora, and LinkedIn profiles of people within each sales person’s network. Additional data comes from standard sources such as business directories and from special databases requested by clients. Information from all these sources is loaded into a single database available to all Lattice Engine clients.

Lattice Engines also imports data from the clients own systems, although of course this isn’t shared with anyone else. Again, there’s some clever technology needed to recognize individuals and companies across multiple sources. Lattice Engines doesn’t try to link personal and business identities for individuals.

All this information is placed in a timeline so that modeling systems can look at events before and after the target activities. The models themselves are built automatically, once users specify the target activity, product, and time horizon. Users can then build a list of customers or prospects, have the model score it, and send high-ranking names to marketing or sales for further contact. Results can be exported to a marketing automation system or appear within the sales person’s CRM interface. Lattice Engines is directly integrated with cloud-based CRM from Salesforce.com, Microsoft Dynamics, and Oracle, and via file transfer with SAP CRM. Users can export lists to Excel and Marketo, with connectors for Eloqua and other marketing automation systems on the way.

The net result of this is a single system that performs all the tasks needed to exploit the wide range of information available about customers and prospects.  Marketers could theoretically use separate systems for each step in the process, and integrate the results for themselves.  But few really have the skills to do this.  And, in most cases, it would be more expensive than purchasing a single system like Lattice Engines.  It's particularly helpful that Lattice Engines supports both prospecting and customer management -- further reducing the need for multiple products, and further encouraging cooperation between marketing and sales departments. 

Pricing for Lattice Engines starts at $75,000 per year and grows based on the number of data sources and sales users. Client data volume doesn't affect the cost, since Lattice Engines’ own databases are vastly larger than any client data. The company has close to 50 deployments, nearly all at large B2B marketers including Dell, HP, Microsoft, ADP, and Staples.

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Salesforce.com Announces Site.com Web Site Management: Will Marketing Automation Features Follow?

Salesforce.com yesterday announced the launch of Site.com, an enterprise-class Web site management system. The news didn’t seem to get much attention, perhaps because Salesforce.com itself pretty much buried it. But Salesforce.com VP of Product Management Anshu Sharma did post a detailed explanation of the rationale on a Salesforce.com blog.

My original reaction was “I told you so”, since I’ve been talking about the convergence of CRM and Web site management for years. (Here’s a piece from 2009.)  Sharma’s reaches a similar conclusion although he puts it in a larger context of social media (people expect to interact with a company Web site like they interact on social media), cloud,  and mobile computing (marketers need content that can be presented on all types of devices). So far so good, especially since multi-channel content is another trend I’ve been toying with for some time.  (Not that I'm bragging or anything.)

Just to clarify my argument, the case for convergence between CRM and Web site management boils down to the fact those are the two main systems that companies use to interact with consumers. The move closer as Web sites capture more individual-level information and present more personalized treatments. And, as the two giants converge, the marketing automation industry stands between them like a mushroom, waiting to be crushed or gobbled up (if giants eat mushrooms).

Some of that gobbling has already begun.  Web site management vendor SDL purchased Alterian last November and sales enablement vendor CallidusCloud bought LeadFormix in January. Ironically, speculation about Salesforce.com itself buying a marketing automation system had pretty much died down since last August’s Dreamforce conference, when the firm made it pretty clear they didn’t have plans in that direction (notwithstanding their earlier HubSpot investment).

That’s why I was greatly intrigued by Sharma’s statement that the transformations created by social, cloud and mobile technologies “can only bear long-term fruit and deliver on the full promise of a 'digital marketing platform' when marketing and IT are a true partners.”

 That’s the first Salesforce.com reference I can find to a “digital marketing platform”.  It certainly implies something that includes marketing automation functionality. Maybe the reason Salesforce.com decided not to purchase marketing automation system because they figured same functions would evolve organically from a combination of CRM and Web site management. That’s probably correct, although it would take longer than adding those features directly.

In any event, the combination of CRM and Web site management gives Salesforce.com an integrated database containing all the information needed for effective marketing automation. Building marketing automation features to exploit that information then becomes a lot easier than building a complete marketing automation system.  This applies whether the system providing those features comes from Salesforce.com or an AppExchange partner, and it means the barrier to entry is lower than ever.  In short, the Site.com announcement is big news for the marketing automation industry, whether people recognize it or not.

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ExactTarget and Eloqua Stake Their Claim To Centralized Customer Management

You probably saw ExactTarget’s June 13 announcement of its strategic partnership with Marketo and Eloqua’s June 21 announcement of its new AppCloud marketplace for connectors with other systems. So did I. But it took a little while to connect with the vendors to get the details, so I’m only now ready to write about them.

Both announcements shared a theme of integration between core marketing platforms and other marketing systems. That Eloqua sees itself as the center of a marketing infrastructure isn’t surprising, although it does show how far we've traveled from the once-common view of marketing automation as an auxiliary to the sales automation “system of record”. ExactTarget’s aspiration to a central role was less expected, since its original and still primary business is email delivery. But ExactTarget has added mobile, Web pages, and social in recent years. They've been pulling these together with an “Interactive Marketing Hub” in beta since last September, which is now used by 500 of their 4,000 clients. The IMH, as we cognoscenti call it, combines ExactTarget's email, mobile, Web pages, Web visitor tracking, and social media with external touchpoints as well as Salesforce.com and Microsoft CRM.

The IMH sports a slick user interface with a very nice dashboard showing real-time updates of summary statistics for each channel. It also provides a central marketing calendar of campaigns across the channels. The underlying database can be simple lists, as in traditional email system, or a proper multi-table structure acting as the primary marketing database. As Captain Planet used to say, The Power Is Yours.

It’s perfectly sensible for ExactTarget to move in this direction, since it otherwise risks being pushed to the unprofitable edges of the marketing world as a commodity email engine. In fact, the real head-scratcher was why ExactTarget would deal with Marketo if it had ambitions to occupy the same central turf. (Marketo’s motivation is obvious: to gain broader distribution.)

ExactTarget’s answer was refreshingly honest: IMH lacks key B2B marketing automation features including lead scoring, advanced segmentation, and multi-step campaigns. The campaign engine will be improved before IMH's official launch this September, but other specialized B2B features probably won’t be added. ExactTarget also sees Marketo as the first of many partner applications for IMH, further clarifying that they see it in the central position.

Eloqua’s AppCloud is obviously modeled on Salesforce.com’s AppExchange and other application stores. The goal is for third parties to extend the value of a core platform by building tools that enhance it. In Eloqua’s case, most of the initial applications are connectors with other systems for Webinars, social communities, messaging and data acquisition. These will be joined over time by apps that add functionality within Eloqua itself. The AppCloud is an extension of Eloqua’s earlier Cloud Connector initiative, which provides APIs for external systems to access Eloqua data and functions. Basically, AppCloud makes it easier to find and deploy those connectors.

I did ask Eloqua how AppCloud relates to its Revenue Performance Management positioning. This felt like a pretty clever question until I later saw it was addressed in the AppCloud press release. Oh well. The answer came smoothly enough: AppCloud makes it easier to gather the activity data needed for Revenue Performance Management analysis. That makes sense, although AppCloud implies a more active integration with external systems than simply reporting against them.

Both the ExactTarget and Eloqua announcements reflect a strategy of positioning their products as a company’s primary customer management system. If you recall my post last week on Adobe and Oracle announcements, those firms also wanted to place themselves at the center of the customer management universe. So does pretty much everyone else.

Obviously they all can’t win this game. At the end of the day, I’d still put my money on the big CRM systems as the logical central repository for customer data. But I do believe that many auxiliary systems will continue to feed data to the central system and somehow coordinate treatment decisions with it. Connectors created to service ExactTarget, Eloqua, and others will make it easier to integrate the peripheral systems with whichever product ends up in the middle. So it’s all good.

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Treehouse Interactive Refines Its Features and Targets Larger Firms

Summary: Treehouse Interactive has been slowly enhancing its marketing automation system with features that appeal to experienced users. Its new clients are larger firms and half are switching from another marketing automation product that they found inadequate. This might foreshadow attrition problems at other vendors.

It’s been nearly two years since my last review of Treehouse Interactive. Here's an update.

The big news is, well, that there’s no big news. Treehouse has been quietly but steadily growing its business (up 30% this year), improving its product, and attracting more demanding clients. One telling statistic is that about half its new customers are replacing an existing marketing automation system – a sure sign that Treehouse offers features that only an experienced marketer will realize are missing from other products.

A bit of background: Treehouse started in 1997 with the Sales View sales automation product. It added Marketing View marketing automation in 1999 and Reseller View partner management after that. Its marketing automation system offers the usual range of functions: email, Web analytics, landing pages, multi-step campaigns, lead scoring, CRM integration, ROI reporting. The greatest divergence from industry norms is Treehouse contacts always enter campaigns by completing a form. Other systems select campaign members with rules that can access a broader set of data.

In addition, Treehouse originally required all subsequent campaign steps to execute the same actions on the same schedule. This is considerably more rigid than the branching capabilities built into most marketing automation products. Treehouse has since enabled imported data to trigger campaign actions, and promises behavior-based triggers in the near future. See my original post for more details.

Treehouse’s developments since that post have largely played to its strengths. I’ll group these into themes, with the caveat that I’m combining enhancements introduced at different times in the past year and a half.

- form integration. Treehouse has continued to expand how clients can use its forms, which were already more powerful than most. The system can now generate HTML code to embed forms within external Web pages, allowing users to create standard Javascript or Facebook-compatible non-Javascript versions, or both. It can also post form responses using HTTP Send commands, which can send data to GoToWebinar (replacing GoToWebinar’s own registration forms) or to other systems such as product registration, CRM and customer support. The HTTP Send avoids API calls or Web Services, although Treehouse offers data exchange through Web Services as well. The system also has an “instant polling” feature to embed surveys within any Web page.

- CRM synchronization. When I last wrote about Treehouse, it had just added Salesforce.com integration. It has since added a connector for Oracle CRM On Demand. It has also improved its CRM integration to synchronize data in real time, show Treehouse events within the CRM interface, and allow salespeople to add leads to campaigns and remove them. CRM integration is handled through forms that map fields from one system to another. These forms also contain update rules (controlling when data from one system replaces data in the other) and action rules (specifying when to take actions such as sending an email or updating a list subscription). The action rules are particularly significant in the context of Treehouse’s forms-based campaign design, since they provide a way to modify lead treatments that isn’t based on the original form entries.

- Web analytics. The system now builds separate Web activity profiles for individuals (whether identified or anonymous, so long as they have a cookie), for all individuals associated with a company, and for companies identified via IP address but lacking an associated individual. An individual’s lead score can be based on both individual and company Web behaviors. The system has expanded its referral reporting to track results by the exact referring URL. The CRM integration can now capture the search phrase and other referral details for leads imported from Salesforce.com Web to Lead forms: this required special processing since Salesforce.com embeds the information within a text string.

- download and document management. Treehouse can now tie multiple downloads to a single request form. It can list the leads that downloaded a specific document (a feature Treehouse says is unique, although I can only confirm that it's rare), as well as counting total downloads and downloads by unique leads. Downloads are now part of contact history along with emails, campaigns, purchases, click-throughs and form actions. The system also maintains a library of available documents. These can be stored outside of Treehouse so long as there’s a tag for Treehouse to call them.

- social media integration. Marketing messages can include a button that lets recipients create social media messages with an embedded URL. The messages will be sent under the recipient’s own identity in systems including Facebook, MySpace, Twitter, LinkedIn and Digg. Although many demand generation vendors now offer some type of social sharing, Treehouse introduced this feature back in May 2009. Emails and forms can also include a forward-to-a-friend button that allows recipients to enter several email addresses at once.

- other advanced features. These include fine-grained access permissions, split and multivariate testing, easy addition of new tables linked to contact records, and support for non-Roman languages such as Chinese. All are features particularly relevant to larger or more sophisticated clients.

Treehouse pricing has changed a bit since my original post, now starting at $749 per month for up to 7,500 contacts in the database. This is still firmly in small business territory, although Treehouse’s advanced features really make it a better fit for more sophisticated marketers, who are usually at larger companies. The company is a particularly good fit for channel marketers who can benefit from its Reseller View system.

Treehouse now has nearly 200 total clients, of which more than half use Marketing View. This makes it one of the smaller players competing for mid-to-upper size clients, a particularly crowded niche. But the firm is self-funded and profitable, and it's selling on features, not cost. So I'd expect it to be a reliable vendor, even if someone else eventually dominates its segment.

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Genoo and Act-On Software Add Social Marketing Features

Summary: Two low-cost demand generation systems, Genoo and Act-On Software, have added unusually advanced social marketing features.

A few weeks back, I wrote about social marketing features from consumer marketing automation vendors. Naturally our friends in the business marketing space have been adding such features as well. I got details from two of them last week.

- Genoo, which offers a solid demand generation system for a rock-bottom $199/month, has placed a particular focus on capturing contact information from social interactions. People who comment on a Genoo-hosted Web page or subscribe to a Genoo-originated RSS feed can be loaded into the system as contacts and these activities can factor into their lead score. I don’t recall seeing either feature in any other demand generation system, although I haven't checked carefully.

Genoo also offers “share to social” badges for messages delivered by its system. These embed a unique ID to link any resulting Web visits back to the original sharer. This feature is not unique – Genius.com and smartFocus do something similar – but it’s still pretty unusual. However, the value is so obvious that I expect many other vendors will soon follow. Genoo can also assign lead score points for social media sharing.

I expect to post a more comprehensive review of Genoo in the next week or two.

- Act-On Software is another low-cost system, starting at $500 per month. It has made several important enhancements since my review in March 2009, notably multi-step campaign sequences and bi-directional integration with Salesforce.com.

To the current topic, it has also added a “Twitter Prospector” to reduce the labor required to mine Twitter for leads. This lets users define multiple search queries and see each result in separate columns. To screen out marketing pitches, the system can exclude tweets with embedded links. Users can reply to selected tweets through corporate accounts, drawing on a library of standard messages. This reduces the risk of inappropriate replies. Users can also forward a tweet to someone else for review or comment.

Act-On will also string together related tweets to give a sense of the on-going dialog. Web site visits driven from Twitter are flagged in the activity history of individual leads and in general Web analytics reports, although Act-On does not tie them to the originator like Genoo. It does add the Twitter ID of known visitors to their lead profile when possible.

Providing a library of standard replies to Twitter messages is not unique (see my December 2009 review of Spredfast for something similar). But it’s an unusual feature for a demand generation system, which typically defers to CRM for managing interactions with individuals. Act-On originally developed the feature for its own use, so perhaps there's no deep significance to its choice. It's also worth considering that the next logical step -- fully automated replies to social messages -- would almost surely fall within the normal scope of marketing and demand generation. (I'm not sure automated responses are such a great idea, but they will ultimately be the only way to manage the volume of messages presented in social media. So it's more a question of how to do them effectively than whether to do them at all.) What we see here is still more blurring of the boundaries between the demand generation and CRM systems, a trend I fully expect to continue.

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Should Demand Generation and Sales Automation Be Separate Systems?

I’ve been focusing (obsessing?) recently on the idea that the boundaries between marketing and sales are breaking down because leads now interact with both departments throughout the purchase cycle. This is clearly inevitable: if nothing else, leads still visit your Web site (controlled by marketing) even after they are “turned over” to sales. More fundamentally, the very idea of a lead being “turned over” is now obsolete: today the buyers are in control; neither department ever owns them in the first place.

The sheer volume of interactions also means that sales can’t cost-effectively handle every contact, even for the highest-priority individuals. Rather, salespeople must focus on what only they can do – provide nuanced, personal service – and delegate other tasks to resources that can handle them more cheaply and often more quickly. In many cases, those resources will be automated systems that are run by marketing. (Yes, sales could duplicate those systems for itself. But buyers would still sometimes enter through marketing-run channels, so marketing and sales would still need to coordinate. Remember, the buyer is in control.)

The immediate implication of this is that marketing and sales must work together to ensure that every lead is treated appropriately in both marketing and sales systems. Today, this is accomplished by synchronizing data between demand generation and sales automation systems. But that is inherently complex. The obvious (or perhaps simple-minded) solution is to skip the synchronization and have marketing and sales work on one shared system.

This isn’t a new idea: indeed, “marketing, sales and service” have long been the three components of Customer Relationship Management products. But marketing was always the weakest link, and, typically, was pretty much separate when you looked under the hood. There was a sound technical reason for this: sales and service are operational systems with a transactional data architecture, while marketing databases are structured for analysis. But this distinction is less important given the power of modern databases, particularly at the relatively low volumes of most business-to-business marketers.

In fact, the division between demand generation and sales automation today is probably more a reflection of organizational divisions than technical imperatives. But as the two departments become more intertwined, this will increasingly be an anachronism that presents an obstacle to success.

So are independent demand generation systems doomed to be assimilated into larger CRM products? If so, the obvious but unspoken threat looming over the industry (“the elephant in the room of Damocles”) was always Salesforce.com, which is the main data source for most demand generation products. That particular, um, shoe may have dropped, according to a BNET article yesterday from Michael Hickins (Marketing Automation Next For Salesforce.com)

Whether Salesforce.com would really do this, how quickly they would move, and whether they would build or buy are all intriguing questions. But regardless of what Salesforce.com does in the short term, it's worth asking whether independent demand generation systems really have a long-term future.

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Accenture Paper Offers Simplified CRM Planning Approach

As I’ve pointed out many times before, consultants love their 2x2 matrices. Our friends at Accenture have once again illustrated the point with a paper “Surveying and Building Your CRM Future,” whose subtitle promises “a New CRM Software Decision-Making Model”.

Yep, the model is a matrix, dividing users into four categories based on data “density” (volume and update frequency) and business process uniqueness (need for customization). Each combination neatly maps to a different class of CRM software. Specifically:

- High density / low uniqueness is suited to enterprise packages like SAP and Oracle, since there’s a lot of highly integrated data but not too much customization required

- Low density / low uniqueness is suited to Software as a Service (SaaS) products like Salesforce.com since data and customization needs are minimal

- High density / high uniqueness is suited to “composite CRM” suites like Siebel (it’s not clear whether Accenture thinks any other products exist in this group)

- Low density / high uniqueness is suited to specialized “niche” vendors like marketing automation, pricing or analytics systems

In general these are reasonable dimensions, reasonable software classifications and a reasonable mapping of software to user needs. (Of course, some vendors might disagree.) Boundaries in the real world are not quite so distinct, but let's assume that Accenture has knowingly oversimplified for presentation purposes.

A couple of things still bother me. One is the notion that there’s something new here—the paper argues the “old” decision making model was simply based on comparing functions to business requirements, as if this were no longer necessary. Although it’s true that there is something like functional parity in the enterprise and, perhaps, “composite CRM" categories, there are still many significant differences among the SaaS and niche products. More important, business requirements different greatly among companies, and are far from encapsulated by two simple dimensions.

A cynic would point out that companies like Accenture pick one or two tools in each category and have no interest in considering alternatives that might be better suited for a particular client. But am I a cynic?

My other objection is that even though the paper mentions Service Oriented Architectures (SOA) several times, it doesn’t really come to grips with the implications. It relegates SOA to the high density / high latency quadrant: “Essentially, a composite CRM solution is a solution that enables organizations to move toward SOAs.” Then it argues that enterprise packages themselves are migrating in the composite CRM direction. This is rather confusing but seems to imply the two categories will merge.

I think what’s missing here is an acknowledgement that real companies will always have a mix of systems. No firm runs purely on SAP or Oracle enteprise software. Large firms have multiple CRM implementations. Thus there will always be a need to integrate different solutions, regardless of where a company falls on the density and uniqueness dimensions. SOA offers great promise as a way to accomplish this integration. This means it is as likely to break apart the enterprise packages as to become the glue that holds them together.

In short, this paper presents some potentially helpful insights. But there’s still no shortcut around the real work of requirements analysis, vendor evaluation and business planning.

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Accenture Study Underlines Need to Measure Customer Service Technology Impact

Accenture released an intriguing study (registration required) earlier this week contrasting the views of high-tech executives and their customers regarding after-sales support.

Perhaps the most substantive finding was that while 74% of the executives who implemented new customer self-service systems believed they now had higher customer satisfaction, only 14% of their customers rated their experience as “much better”. Twenty two percent actually said service had gotten worse.

This is intriguing for two reasons. First, it shows that customers just don’t find service technology all that helpful. Specifically regarding online self-service, only 11% said it was a priority. (The highest priorities were solving problems completely [69%] and quickly [65%].) Maybe that isn’t really a surprise—plenty of people don’t like self-service tools, particularly for technical issues where a simple FAQ is unlikely to be helpful. I suspect most companies really know this, but implement them anyway to save money.

Which brings us to the second point. That companies think satisfaction has increased even when it hasn’t, suggests they aren’t bothering to measure it. I suppose this isn’t really a surprise either, but the optimist in me never quite wants to accept what a truly miserable job most firms do at customer management and how little they truly care.

The same issue appears in another gap uncovered by the study: 75% of executives feel they provide “above average” service while 78% of customers feel their service is “at or below average”. Yes, humans have a well-known tendency to overestimate themselves, but such delusions can only persist if they don’t bother to measure actual performance. Apparently, the great majority of executives aren’t bothering.

Taken together, these two factors (customer dislike of self-service, and company failure to measure results) hint that investment in self-service systems may actually be value-destroying. If the systems make customers feel service has gotten worse, they will be more likely to leave, and if companies don’t measure this, they’ll never know about it. In addition, self-service systems may not even save money, since people must eventually speak to a human to get their problems resolved anyway. (To the first point: the press release accompanying the study states that 81% of customers who rate their service satisfaction as “below average” plan to purchase from a different supplier in the future. To the second point, the study reports that 64% of customers had to access service channels two or more times to resolve their issue.)

All of this just reinforces the conventional wisdom that you have to measure the impact of a CRM project, and the only measure that matters is the impact on customer behavior (dare I mention…lifetime value?) But since so many people keep ignoring this most basic of principles, I guess it needs repeating.

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