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Marketing Management Systems, Part 3

  Article published in DM Direct Newsletter
January 14, 2005 Issue
 
  By David M. Raab

Editor's Note: Part 1 of this three-part series appeared in the January issue of DM Review. Part 2 appeared in 1/7/05 issue of DM Direct. David Raab is a monthly DM Review columnist writing on marketing management systems. This series will help you learn what to evaluate in your search for marketing management software.

Let's circle back to the question posed at the start of this series: what defines a marketing management system?  As we've seen, there are five reasonably distinct applications: project management and content management, which are included in nearly every system claiming the marketing management label; and marketing planning, execution, and evaluation, which are much less common.  What's intriguing is that most of these applications are specialized versions of systems used throughout an organization.  Certainly there are many generic project and content management systems, and the marketing planning process is not so different from planning for other departments or an entire organization.  The simpler forms of evaluation, using things like scorecards and key performance indicators, are also basically the same as general business performance measurement.  Similarly, some elements of execution are essentially purchasing management software.  Only the more advanced evaluation and execution functions seem truly unique to marketing.

This leaves both vendors and users to struggle with determining when it makes sense to deploy a specialized marketing management system, and when generic corporate systems will suffice.  One benefit of marketing management systems is that they closely integrate functions that are performed by separate, largely unintegrated corporate systems.  Another is that the marketing management systems are already tuned to the special needs of marketing departments.  In both cases, this means less customization to gain a advanced capabilities.  Since large, sophisticated marketing departments have the greatest need for these capabilities, and can most easily afford them, they are one prime market.

Ironically, companies at the other end of the spectrum - those so unsophisticated that they lack even generic project or content management systems - are strong candidates as well.  In their case, the marketing management system has no existing competitor, so it can easily be purchased for standalone departmental use, assuming the price is reasonable.

Between these extremes lies a much grayer area.  Marketing departments will need to carefully assess the cost of adopting existing corporate systems to their needs, compared with the cost of purchasing a separate marketing management product.  Their analysis must also include the cost of isolating marketing from the rest of the company, or of forcing marketers to work with separate departmental and corporate systems for things like planning and project management.  It goes without saying that corporate politics will play a role as well.

In the long run, it seems unlikely that marketing management systems will find many buyers in this middle ground.  Competitive pressures will lead general purpose project and content management vendors to build in support for marketers' unique needs as these become more clearly defined.  General technology trends are making it easier for separate systems to work together, so the tight internal integration of marketing management components will be a less compelling advantage.  And ever-broader adoption of project and content management systems will mean fewer and fewer marketing departments lack an existing corporate standard as an alternative solution.

At the same time, vendors already providing systems to marketing departments will find marketing management a natural add-on to their products.  It gives them something new to sell existing clients, a way to attract new clients, and a point of differentiation from competitors.  Most of the major campaign management vendors have already added some degree of marketing management for exactly these reasons.  Unica built its own; Doubleclick purchased SmartPath; NCR and SAS both allied themselves with Aprimo.  Vendors of customer relationship management systems, which already offer a broad range of functions, may find it even easier to add marketing management to their mix.

In other words, marketing management is classic example of a young software market.  There are many small, pioneer vendors providing specialized solutions.  They are finding initial success selling to firms with desperate needs for their particular capabilities.  But the industry will consolidate as larger vendors buy the specialized products to extend their product lines, or simply add features to their existing products by learning from the specialists.  Some of the specialists themselves may grow big enough quickly enough to compete in the larger market as general purpose suppliers.  Others will successfully retreat to niches at the high or low end.  Most will quietly vanish through mergers, acquisitions and the occasional outright collapse.

Since this is a classic young market, all of the standard recommendations apply.  Be willing to grab early advantage by using these products, but expect rapid change.  Make sure to choose vendors you are confident will be around in the future, or whose products you can support yourself should they be orphaned.  Pay close attention to product quality, since competitive pressure may lead some vendors to release products before they are fully tested.  Be sure the current release is adequate to your needs, since future enhancements may never actually appear.  Find out whether your existing software suppliers plan to expand into this area, and assess whether their initial release is likely to be good enough and soon enough for your needs.  Dress warmly.

...............................................................................

For more information on related topics visit the following related portals...
Database Marketing.

David M. Raab is President of Client X Client, a consulting and software firm specializing in customer value management.  He may be reached at info@raabassociates.com.

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