David Raab Article Archive

Telecommunications analysts sometimes refer to POTS–Plain Old Telephone Service, in contrast to the fancy new services now available. In the same way, it’s useful to distinguish Plain Old Campaign Management–the ability to extract file segments, promote them, and analyze the results–from the advanced functions that campaign management software vendors are now adding to their products. Until a couple of years ago, there were so few products that just having Plain Old Campaign Management was enough to make a system interesting. But today, so much campaign management software is available that a vendor needs something more to stand out from the crowd.

But what to add? At one time, industry observers (including this one) spoke confidently of Third Generation campaign management, which would control customer interactions as they occurred. But few systems have actually appeared with that capability, and only a handful of companies have implemented it. So it appears that everyone will not evolve in that direction.

Instead, campaign management vendors have chosen to add many different features. Here are some of them.

- integrated modeling. Predictive modeling has long been a key element in database marketing. Many older products have offered loose integration with third-party modeling software, typically through interfaces that make it easy to extract data for modeling and to import scores or scoring formulas. But newer systems including Recognition Systems Protagona (previously ideas Solution; www.recsys.com) and Unica Impact (www.unica-usa.com) provide model-building capabilities within the campaign management software itself. This allows non-technical users to use model scores in their campaigns with a minimum of effort–although a significant level of skill is still needed to make sure the systems are applied properly. It will be interesting to find how widely these modeling functions are actually used: in the past, vendors with integrated modeling modules have reported that while many prospects asked if they were available, few ended up purchasing them. Everyone else either continues to rely on traditional models generated by professional statisticians, or does without.

- multidimensional analysis. Like modeling, data analysis has always been an important part of campaign management. Early vendors built their own analysis tools, since they used proprietary database engines that could not be read by anyone else. But once campaign management systems moved to standard relational databases, analysis was typically handled in third-party reporting software such as Crystal Reports or Business Objects. As multidimensional analysis tools like MicroStrategies DSS Agent, Oracle Express and Hyperion Essbase gained popularity, campaign management vendors added links to those products as well. (Multidimensional analysis uses data organized into common categories such as time, product, geography or customer segment; it is widely considered the most effective way to let non-technical users do detailed data analysis. It is also often called On Line Analytical Processing, or OLAP.) But integration with the third-party multidimensional software had its limits: segments identified on a multidimensional report usually could not be imported directly as a promotion selection, and changes in the marketing database were not automatically reflected in the multidimensional database. Today, E.piphany (www.epiphany.com) does campaign management directly on a multidimensional data structure, still using a standard relational database engine. This simplifies administration and allows tight integration between the multidimensional analysis and standard campaign management functions. E.piphany also provides extensive functions for transforming operational data into the marketing database–another function that was built into the old proprietary systems, but is usually handled today by third-party or custom software.

- loyalty programs: traditionally, specialized software has been used to run marketing programs that issue rewards for customer purchases. Like conventional campaign managers, these systems work with customer transaction data. But they also need to credit points as they are earned, look up balances, and issue awards. These imply data structures and interface screens that allow direct access by data entry staff, which are significantly different from the structures and interfaces used in a conventional campaign management system. Still, campaign management products including RMS MarketEXPERT (www.marketexpert.com) and STS Open MarketWorks (www.stssystems.com)–both developed for retailers–have modules to provide these functions. MarketEXPERT also has a “marketbasket” module to identify products that are typically purchased together. This is another task that is usually performed by specialized software.

- contact management. By definition, contact management systems allow users to schedule, execute and record one-on-one contacts such as telephone calls or in-store conversations. Like loyalty functions, these require transaction processing technologies that are foreign to standard campaign management architectures. But vendors including AIMS Software (www.aims-software.com) and MarketVision (www.marketv.com) have developed contact management modules that provide these abilities despite the technical challenge.

- profitability analysis. Bank marketers have a particularly difficult time measuring product and customer profitability. One reason is that much of their cost is related to the services consumed by a customer–for example, a customer who visits a branch three times a week might cost ten times as much to serve as a customer who conducts a single ATM transaction. Gathering this data from operational systems can be a major development project, which many banks extend to include their own profitability measurement system. Other banks use third-party profitability software or rely on an external service. But bank marketing systems including Centrax Marquis (www.marquismcif.com) and Acxiom Solvitur CIMS (www.acxiom.com) also offer detailed profitability reporting when the necessary data is available. The Acxiom product, which uses technology from data analysis software vendor Information Advantage, also extends beyond traditional campaign management to provide users with personalized “portals” to access a variety of marketing-related messages, data and reports.

- personalized e-mail. Traditional campaign management systems generate lists of customers to be sent promotions. These lists might include information for personalized letters. But most systems are not built to print the letters themselves because such work is usually done at external vendors with specialized equipment such as high speed printers. Personalized e-mail could be handled the same way, by having the marketing system just provide information to feed other systems. But many companies manage their e-mail internally, so it is less likely that an external vendor will be needed to produce the final electronic communication. Campaign management vendors including Ceres (www.ceresios.com), Prime Response (www.prime-response.com) and Recognition Systems (www.recsys.com) have developed products to generate the personalized e-mails directly. Prime and Recognition can also help generate personalized Web pages, although neither can quite do the task by itself.

- other functions. Vendors have extended campaign management in still other directions, including work flow (tracking tasks such as copy writing and budget approvals), promotion calendars (showing all promotions planned during a specified period), optimization (picking the best promotion for an individual), integrated mapping, automated job execution and, of course, real-time interaction management. Some of these functions are quite popular–for example, nearly every system today has a scheduler to execute campaigns automatically. But most of the additional functions are needed by only a small set of customers, depending on their industry, sophistication, or business strategy. So it seems that while Plain Old Campaign Management is no longer enough, there are many alternate approaches that may lead to vendor–and client–success.

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.

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.

Newspaper editors have a name for it–MEGO, for My Eyes Glaze Over. It describes topics that may be important, but are so abstract, arcane or otherwise removed from the daily lives of their readers that nobody will pay attention to them. Global warming, the Whitewater affair, and international finance are classic examples. Most people’s common sense approach is to ignore such matters until their immediate significance becomes apparent.

New computer industry buzzwords rank high on the list of MEGO topics. So while the term “Enterprise Information Portal” has been floating around for some time, most readers of this column probably have not given it much thought. Those who bothered to explore a bit probably decided that it was mostly a new label for existing end-user query and report distribution tools, brought together on a common starting screen. Since many vendors would gladly relabel their products to borrow some of the excitement generated by Internet “portals” like Yahoo!, no further explanation seemed necessary.

As it happens, this jaded view doesn’t quite do justice to “Enterprise Information Portal” (or “business portal”, as it is less formally known). The concept does have some substance, in that it extends beyond the traditional row-and-column databases of a conventional data warehouse to include unstructured data such as spreadsheets and text. It makes an implicit promise to somehow organize these unstructured sources so they can be searched efficiently. It further promises to incorporate external data sources, such as information on the World Wide Web. Like its Internet namesake, the business portal provides a single access point to all these varieties of information. And, at least in theory, it offers to correlate information from separate sources so it can be combined and compared in meaningful terms.

In short, the vision here is nothing less than one grand system that unifies all information everywhere. The IT community has a peculiar affinity for such panaceas, despite a long history of past failures. This alone is grounds for skepticism about the ability of business portals to come anywhere close to meeting their promises.

But there are more specific concerns as well. Since the purpose of a business portal is to integrate structured and non-structured data, it must at a minimum provide all the integration capabilities that a data warehouse applies to structured data alone. But as any data warehouse or marketing database veteran will attest, developing and maintaining the processes to consolidate data from disparate sources is by far the greatest technical challenge faced in warehouse projects. Developing analogous capabilities for unstructured data can only be more difficult still. In fact, it has so far been attempted primarily with techniques derived from “artificial intelligence”, a field that is itself notorious for failure to translate scattered initial successes into reliable, enterprise-scale solutions. This does not bode well.

Still more worrisome, the most scalable approach to organizing unstructured data involves automated processes that develop classification schemes based on similarities in document contents and usage. This is the exact opposite of data warehouse methodologies, which require careful analysis and planning by human beings. To expect that radically different methods will independently produce compatible classification schemes seems unreasonably optimistic.

In short, complete fulfillment of the enterprise portal vision requires that the vendors solve two of the most difficult problems in data management–consolidation of structured data and organization of unstructured data–with the additional constraint that the solutions must be mutually compatible. Since the vendors themselves must realize that success defined in these terms is highly unlikely, it is reasonable to ask whether they are actually pursuing more modest goals and whether the resulting products still offer something of value.

The answer to the first question is a clear yes; the answer to the second may be in the eyes of the beholder. Portal vendors with their roots in structured data, such as Information Advantage (www.infoadvan.com) and Sqribe Technologies (www.sqribe.com), focus on delivering personalized reports and analyses created with their traditional tools. Portal vendors with roots in unstructured data, such as Viador (www.viador.com) and Autonomy (www.autonomy.com), focus on creeating personalized lists of articles that are classified using their automated content analysis techniques. (Some vendors oriented to unstructured data rely on human editors to classify content and assign keywords. But this gets costly when volumes are large.)

The common thread that unites the two sets of portal vendors is the ability to create personalized Web pages that list information relevant to an individual. This of course requires a mechanism for individuals to specify their interests. Not surprisingly, the mechanism tends to be structured for structured-data portals and freer for unstructured-data products. In structured-data portals, users often are asked to select the specific reports, analyses or alerts they want to see. In unstructured data portals, users may define areas of interest in their own words or even have the system monitor their activities and adjust its selections automatically.

Both sets of vendors generally promise to incorporate both structured and unstructured data. After all, this is part of the fundamental portal concept. In practice, this usually involves some stretching to accommodate whichever data type is outside the vendor’s primary domain. For example, a structured-data system might create a database of standard keywords to provide access to unstructured text; users would then subscribe to a keyword the same way they subscribe to a report. An unstructured-data system might classify reports based on textual descriptions and the distribute the underlying tabular reports based on the results. At best, these approaches provide a loose integration between structured and unstructured data.

Still, personalized lists are the key capability that distinguishes portal products from earlier applications of the underlying technologies for data analysis or text classification. The true value of these personalized lists is difficult to assess. In many ways, they represent a less aggressive version of earlier “push” technologies that sent messages to individuals when relevant information appeared. Despite great initial excitement, “push” technology has not been a major market success. One might suspect that, ultimately, users prefer to decide for themselves when to turn their attention to different parts of their job, rather than having a system present data for all possible tasks simultaneously. If this is true, the success of business portals may ultimately have less to do with the actual presentation of the lists than with the quality of the data analysis and classification tools that lie underneath.

Eyes glazed yet? Readers who have made it this far are probably wondering what business portals really have to do with relationship marketing. The true answer is, not a heck of a lot. But some vendors have suggested that portals might somehow replace traditional marketing systems, so it’s worth understanding enough about portals to deal with this topic should it arise. If you find yourself in this situation, bear in mind two key points:

$ the real value of a portal system lies in the underlying applications. So if you’re offered a portal system that includes a campaign manager or customer analysis functions, you need to assess the quality of those tools themselves. What’s important about a door is what’s behind it.

$ portal systems are mostly built for data access, not operational execution. So while a portal might be useful for a marketing manager or analyst, it would not usually replace a campaign manager or customer contact solution. Although a portal could theoretically provide access to such systems, they would most likely be distinct products, unintegrated with other portal functions. Any claims to the contrary should be examined very closely.

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.