Oracle scored points in its ongoing battle with Salesforce.com for primacy in the CRM world. Personally, I am not sure it matters much because the two companies’ approaches to CRM are so different. Coke or Pepsi? Harley-Davidson or Honda? Who knows? At the end of the day, it’s about helping a customer realize a vision of customer outreach. Today for Sony-Ericsson the answer was Siebel.
What’s interesting about the selection is that it plays so well to Siebel’s strengths. Over the last five years and under the wing of Anthony Lye, Oracle has carefully managed a customer base of some of the world’s largest companies as they grapple with what to do in the face of increasing complexity brought on by cloud computing and social media.
They’ve done a lot, not simply upgrading Siebel and incorporating new technologies but they’ve gone a step further and analyzed how Siebel customers would interact with their customers in the years ahead. The answers were surprising and inspiring. One big take away from Siebel’s thinking is the importance of conventional B2C marketing.
The result has been a sophisticated product and a business process they call clienteleing (not sure about that spelling). With it, a vendor representative uses analytics and customer history to make intelligent recommendations. The result is marketing in action or customer experience management and it matters to companies that have hundreds of thousands or even millions of customers.
The product works well on conventional computing devices as well as mobile and gives a vendor selling consumer devices an edge, especially in an age of product line extension. Simply put, there are so many choices and options today that a vendor can use the automation help.
Marketing has made huge strides in the greater marketplace during the CRM era but one knock against it is that marketing products are largely still separate, third party add-ons. The integrated solutions have done great service and are very useful. But tight integration between advanced marketing products and the rest of a customer record — an Oracle specialty — might have pushed the deal over the line for Oracle. I expect we’ll hear more from Oracle as it potentially builds out a niche in this kind of marketing automation.
A long time ago I wrote a white paper about how on-demand technology would change business. The paper covered all of the ideas you’d expect including lowering costs and improving access to on-demand applications. But there was another part of the paper that speculated that if technology was that easy to come by then the next thing to look for was enhanced service based on the technology.
In other words, technology access would cease being a gating factor in executing business processes. Replacing technology as a gating factor would be having the smarts to use it optimally. I envisioned that service companies that had operated more or less locally would, or at least could, become national or global by selling their expertise based on the on-demand technology. The computer and telephone enabled public relations firms to become national in scope, but a bit more is required for a marketing services company or a design company for example.
It has taken a long time and it seems what happened first and what I had not fully foreseen was the globalization of applications based on platform technologies. Right now, Salesforce appears to be the most successful practitioner of that art. But now we appear to be at the beginning of an era when business services will become global or at least national based on the consolidated expertise of some organizations.
Judging by some of Sage Software’s recent actions, that globalization might be taking off at the SMB end of the spectrum. Recently, Sage announced new marketing services for its ACT! customers. The first service will be email marketing available on-demand. Now this may not seem to be a very big move since there are many independent email marketing providers already on the market like Constant Contact, ExactTarget, VerticalResponse and many others (you get 36 million hits on Google).
But don’t lose sight of the bigger picture. With a three million user installed base in North America that has many marketing needs beyond email, Sage is poised to build a services engine that could eventually rival its software business. This would be a very smart end run around the company’s own business model limitations. To be precise, Sage sells its products exclusively through a reseller channel. The resellers deliver product, customization and advice leaving slim pickings for Sage beyond the license revenue.
The primary way Sage grows in this model is through product sales and by recruiting new partners. But no market is infinite and the market of resellers is relatively small compared to the market of end users. You see where I am going. There is nothing prohibiting Sage from offering services based on the products it makes and the installations that its partners effect. As a matter of fact, offering this kind of service, which only makes the end customer more productive, should drive demand for the products themselves. Looks like a smart and virtuous circle to me as well as a new kind of on-demand service.
I believe the era we are entering will be constraining for many companies in several ways, not the least of which is transportation. As fuel prices resume their rise with the recovery, companies will need to find ways to take travel costs out of their value propositions. That should mean a need to enhanced marketing as in, how can we use marketing rather than face time to close more deals?
The answer to that question goes beyond email marketing and probably beyond the meager efforts that so many SMB companies now use to sell their products. Centralizing key services that can be delivered at scale via the Internet will enable SMB’s to continue to compete in select markets against larger competitors. It is also a growth market and who doesn’t like that?
We are all junkies for leading economic indicators. Whether it’s the first spring swallow or an uptick in orders for semi-conductor fabrication gear, we love to call the start of a new movement, if only because it signals the end of something more prosaic.
So it is now at what appears to be the end of a bad recession and the beginning of a new economic cycle. The aforementioned semi-conductor sector has done its thing along with house prices and general real estate activity is picking up.
But what about the trailing indicators — those things that take their time going down when the economy hits the skids? A notorious lagging indicator is always employment. Companies cut jobs as a last resort in the early stages of a downturn and cautiously re-hire after the first indicators of recovery are in full bloom.
Newspapers and TV talking heads meanwhile wring their hands about a “jobless recovery” as if the economy is spring loaded and able to bounce back with the seeming alacrity and speed of a toy. They are always surprised at employment latency and the headlines hardly vary from recovery to recovery.
I have my own economic indicator that I watch with guarded optimism at this time of a recovery and fright when the economy seems to be going south. It is marketing spending and a corollary is the number of people I know in marketing who are out of work and having difficulty finding it.
In late 2007 I began hearing whispers of a housing bubble getting ready to burst and through early 2008 the whispers turned to shouts but marketing spending seemed to be on pace. Later analysis showed that the recession actually began around the same time as the whispers but marketing spending was resilient. I recall having lunch with an already out of work CMO in May 2008 and we were musing about the arc of the economy that year.
“Do you think things will pick up in the second half (of 2008)?” he asked.
“I don’t know,” I said not wanting to deflate him. “I think we’ll see when we know about marketing spending after July first.”
My idea, which I explained to him, was that the marketing money being spent at that point was loaded into budgets that had a more or less calendar year cycle. The real test, coming after July first, would be whether companies with June 30 year ends would be as bullish or with six months more perspective, they might pull in their horns. The distinction is important for our industry because so many companies in the technology sector have June 30 year-ends, thus their marketing spending renews on July first.
At the time, my reading of the tea leaves advised caution because I had not seen the typical run up to a new spending year in the second quarter of 2008. In other words, fewer companies were asking for quotations, planning programs and the like. I was right. The second half of 2008 was slower than the first half and a lack-luster summer gave way to a wild autumn ride on Wall Street that erased doubts about the economy’s direction as well as untold fortunes and more than a few marketing jobs in the technology sector.
The first indicators of renewal have, indeed, been spotted both economy-wide and in the tech sector. I know of at least one out of work mid-level marketing person who got a job offer last week and several senior people now consulting so there’s that (highly unscientific, I know). But I still have not seen a general if cautious uptick in marketing spending plans. This would be the quarter for that to happen if companies are intent on starting the new year with any momentum.
Marketing costs money even in today’s highly automated and socialized marketing world. There is still time to make plans for early next year even if they get delayed and the first harbingers of revival lead me to think that we are about to see the first tentative steps. Those chip makers and house builders can’t all be wrong.