David Raab Article Archive

One of the great barriers to wide-spread adoption of relationship marketing is the scarcity of marketers who know how to do it. For industry visionaries, this is a cause of mild frustration, though also a bit of benefit–after all, if everybody knew how to do it, who would listen to their speeches? But for software developers, lack of qualified users for their products is a matter of life and death.

So it shouldn’t be surprising that a number of vendors have recently decided to try to solve this problem themselves. Their approach is not to create more trained marketers–while many software firms have always done training on a small scale, they are not equipped to deliver it in bulk. Rather, and perhaps inevitably, the vendors’ preferred solution is to build the necessary skills into the products themselves. This takes the form of solution “templates” that lay out the steps a skilled marketer would take to execute a particular type of project. Once the system is hooked up to the right data, all the user has to do is make a few judgements based on conveniently-presented information. The hard work of structuring the process and knowing what to look for is handled by the system itself.

The argument for this approach is simple enough: most marketers follow roughly the same process for similar projects, so building this process into a template will save them work, speed implementation, and help ensure a quality result. Another argument–that the templates will let unskilled marketers do work they could not otherwise perform by themselves–is often left unspoken, for fear of insulting potential buyers. Training wheels may be helpful, but they are still embarrassing.

Over the past few months, companies including E.pipahny (www.epiphany.com), Broadbase (www.broadbase.com) and Rubric (www.rubricsoft.com) have all announced template offerings. These range from sets of prepackaged reports to the entire cycle of developing, executing and evaluating particular types of marketing programs. Prices vary widely, from E.piphany’s $250,000 per solution, to free with purchase of the underlying system. This variation reflects widely divergent assessments of the true value these templates provide.

Why should their value be in doubt? One concern is the assumption that most marketers follow similar processes. The objection to this assumption is that while the processes may indeed be broadly similar, they differ enough in the details that significant customization will always be required. This means that the system must be flexible enough to allow easy customization, which in turn suggests that the real value is in the ability to build custom templates, not in the prebuilt templates themselves. By this logic, users who are willing to buy the underlying system will not pay much extra for templates to run on it, since they expect to change them anyway.

Consider an analogy with personal computer spreadsheets: while there is some market for prebuilt spreadsheets to perform specified functions, today most people just buy the spreadsheet software and build their own. Perhaps significantly, the market for prebuilt spreadsheet templates was much larger when the technology was new and relatively few people were experts in things like spreadsheet formulas and macros. If the analogy holds, the market for prebuilt relationship marketing templates will also shrink over time. The analogy further suggests that the most successful products will be that that make it easiest to build custom templates, not those with the best prebuilt templates. If this is true, vendors who have focused their strategy on selling prebuilt templates may be in for a rough ride.

The second objection to templates is that they don’t really enable unskilled marketers to do sophisticated work. The obvious analogy is to power tools: the finest equipment in the world will not allow an unskilled carpenter to produce fine cabinets. To some extent this objection is valid–the real value of good tools is that they increase the productivity of skilled workers, whether in the wood shop or in relationship marketing. To achieve quality results with unskilled labor requires a much more thorough restructuring of the production process, in ways that remove the need for skill itself–think division of labor and moving production lines. This sort of restructuring is beyond the power of a prebuilt template. Still, unskilled workers can sometimes produce good results if they are given detailed instructions, and good tools do make it easier to learn. So while templates cannot really substitute for skilled marketers, they probably can help unskilled ones perform a few new tricks.

The strongest objection to templates is the issues they don’t address: the development of the underlying technical and organizational infrastructures. Most of the technical work in developing a relationship marketing system lies in building the marketing database itself, which means developing extraction, cleaning, consolidation and update processes. And, whatever the technical challenges, the issues of business process and organizational change are greater barriers still. So making execution a little easier for marketers, which is all the templates can hope to do, doesn’t really bring a company all that much closer to a successful relationship marketing implementation.

Of course, no one claims that templates solve the infrastructure problem, so it would be unfair to criticize them for not doing so. Still, templates are often presented as things that enable firms to implement a relationship marketing strategy. This makes it important to acknowledge that they are far from a complete solution. Templates’ value must be judged in this more complete context.

So, how much are prebuilt templates worth? The answer will depend on the template and the situation–templates are more valuable when they lead users through unfamiliar processes, and in situations when few skilled marketers are available. But in general, a system’s facilities to help users build their own templates will be more important than any prebuilt templates themselves. And, from a broader perspective, a system’s ability to help with the larger technical and organizational issues will be vastly more important than all template-related features combined. Neither vendors nor buyers should lose sight of this reality.

David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.