2002 Mar 01
Kana Kana Marketing
David M. Raab
DM News
March, 2002

Times are genuinely tough for marketing software vendors, but things may not be as bad as they seem. New products and companies continue to appear, and even the less successful existing companies tend to retrench or be acquired rather than fail outright.

But while the total number of vendors may not have fallen, the market has clearly consolidated in terms of share. Buyers, concerned about the long-term viability of small firms, have increasingly chosen to purchase from the handful of large companies whose survival seems more certain. As a result, these vendors account for an increasing share of the total market. Smaller vendors are reduced to fighting over the few clients whose specialized needs are not met by the more popular systems.

The new emphasis on vendor resources has led to a stunning rotation in industry leadership. Specialists like Xchange, Protagona and Unica–companies with arguably the most sophisticated campaign management products available–have been shouldered aside by larger firms whose primary business is in other areas: Siebel Systems (sales automation and call centers), SAS Institute (data analysis) and NCR Teradata (databases). Even vendors whose roots lie closer to marketing, including E.piphany and Chordiant, get most of their revenue from analytical and operational software.

In other words, today’s leading vendors of marketing software are not marketing software specialists. Can such firms provide products that truly meet marketers’ needs? Somewhat surprisingly, it turns out they can–for the simple reason that every vendor (except E.piphany) purchased a sophisticated marketing system as part of its strategy for entering this market. These systems, and the staff that accompanied them, have given these firms the resources needed to provide adequate solutions. You can be an expert without being a specialist.

Kana Marketing (Kana, 800-737-8738, www.kana.com) fits the new industry pattern: it is marketing software from a firm that gets most of its revenue from customer interaction systems. The Kana campaign manager was originally developed by Rubric and the analytical tools by Broadbase. Rubric was purchased in 1999 by Broadbase, which in turn was purchased by Kana in 2001. Given this chronology, it is not surprising that the campaign manager and analysis components are well integrated, but connections to Kana’s modules for Internet and telephone customer service are still quite limited.

The campaign management portion of the system, now Kana Marketing Automation, has been refaced and reengineered since Rubric was reviewed here in April 1998. But it retains the same basic approach, which is to execute sequences of interactions with individual customers. The sequence is defined by setting up a set of tasks, called a work plan, on a graphical flow chart. Tasks can send messages or surveys, receive responses, branch on user-defined rules and customer data, wait for an event or period of time, or direct customers to a different work plan. One set of linked work plans could theoretically shepherd a customer through the entire cycle from lead acquisition to retention, but users are more likely to set up independent work plans for specific purposes. While the system does not automatically coordinate messages across different work plans, users could achieve some control by setting up a master campaign. This would assign customers to work plans in a priority sequence and limit the total number of work plans a customer can enter.

External systems can assign customers to work plans in real time through calls to the Kana Marketing application program interface (API). Alternately, users can assign customer segments to work plans and execute them as one-time or recurring batch processes. Segments are defined as a tree of nested rules and queries. The Kana Marketing query builder is quite powerful, allowing aggregates, relative dates, set unions and exclusions, and “not having” clauses. Queries can access any data mapped to the system’s metadata layer, although most queries will run against data imported to the system’s own structures. This is done using extensive data extract and transformation functions originally developed by Broadbase.

The internal data structures are a mix of conventional transaction tables, including a customer interaction history, and aggregated cubes used for analytical processing. The standard design includes about 15 data cubes and 80 prebuilt analytical reports. A multidimensional analysis tool lets users manipulate these reports or create new ones, display results as tables or graphs, and create segment definitions by highlighting cells in a report. Integrated data mining functions also let users run affinity, cluster, induction or sequencing models and use the resulting rules to create marketing segments. Although Kana Marketing does not include predictive modeling and scoring, an adapter is available for the Sightward predictive modeling package.

Work plans can output flat files, email messages, or real time posts to a Web site. Outbound email functions, another Rubric legacy, are fairly complete. The system includes a text editor that can create personalized emails and surveys, using rules to display different contents for different recipients. It can also embed Web address links in the email text, track responses to those links, return an encrypted customer ID to tie the response to a specific individual, and capture the reasons that undeliverable messages were returned. Email and Web replies are posted to the system database as they are received, allowing real time reports on campaign results.

Advanced email response, such as generating replies to text messages, is handled routing replies to the Kana Response module. Integration with other Kana modules is mostly limited to batch imports of their data. Kana plans much tighter integration, based on the J2EE platform, by the middle of next year. This will include shared data models, work flow and business rules.

The system provides a reasonable set of marketing administration functions, including worksheets to capture budget and actual costs, a campaign calendar, and project management to assign and track tasks.

Kana Marketing runs on Oracle or SQL Server databases, any Web browser that supports Java applets, and Windows 2000, Sun Solaris or HP-UX application servers. Pricing starts at $250,000 for the Marketing Automation module without Analytics. Versions of the system have been installed at about 100 companies.

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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.

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