So we know now the marketing technology landscape is jam-packed with 947 vendors. At least that.
Now as a digital marketer you have to figure out what to do with it. How do we weed out the pretenders from the contenders?
"Digital marketers must guard against getting seduced by the shiny new object," said analyst Richard Fouts, vice president at Gartner for Marketing Leaders. "While a new vendor’s approach might sound hugely exciting, you have to relax a bit and evaluate things, that while seem mundane, are hugely important."
Today, we start the first article in a short series examining ways to approach the thickly-settled marketing software vendor space.
Avoid the Hype
Today, it's not hard to find hype around a new idea that promises to generate new revenue or reduce costs. New tools. New capabilities. Products that Give you, the digital marketer, a better way to sell your product, consolidate marketing functions or collaborate and engage more closely with customers.
Sounds great, right? Well, it could be. "There’s some very innovative work going on out there," Fouts said, "and I don’t think any vendor deliberately tries to be phony."
However, watch for overselling. It's common, Fouts said, especially for those vendors that are in early embryonic, emerging stages where the hype is in high gear.
"The best ways to protect yourself in these situations is through reference checking or peer to peer conversations with marketers that are testing a vendor’s technology," Fouts said. "Or conduct a pilot. Even if you have to pay for a pilot phase, spending a fixed amount of dollars to prove the application’s ability to solve your problem -- is always a good practice before you put something into production.
Questions to ask regarding your potential vendor:
- Does the vendor understand the market?
- Do they have a valid underlying business proposition?
- Do they have a plan to keep innovating?
- Are they financial viable?
- Do they have the product and service capabilities to manage a product portfolio, its quality, distribution and service plan?
Has the senior management team worked together before? "This is another critical attribute digital marketers should look at -- but is overlooked -- because digital marketers don't think to ask," Fouts said.
Are Vendors Too Much Alike?
Yes and no, Fouts said. When the market matures, they do start looking the same. In the digital marketing space, marketing automation vendors, many who focused on automated lead nurturing, traversed this scenario, Fouts added.
"Once the automated lead nurturing technique proved itself and the payoff became evident, more vendors jumped in," Fouts said. "Sure, they had different products, but they all followed the same fundamental principles and built similar functionality on similar architectures. When the market matured and become crowded, it started to consolidate. Adobe acquired Neolane. Oracle bought Eloqua. Salesforce acquired ExactTarget."
Best In Class Offerings
Large vendors with money can invest in new technologies and techniques. Or, often, they acquire a vendor that shows promise – and they build on its capabilities (i.e. Oracle/Responsys). Fouts cites SAP’s acquisition of KXEN as an example, or IBM’s acquisition of Tealeaf technologies, which built on IBM’s aggressive moves to become a serious player in real-time marketing.
And don't forget universities -- innovation havens.
"A great example is Narrative Science, which came out of Northwestern," Fouts said. "A study by Sequoia Capital shows that Stanford alumni create nearly $3 trillion of economic impact each year, much of from the technology sector."
Before Vendor Selection ...
Before you're even going down Vendor Ave., build a marketing plan and ensure it reflects an execution path for fulfilling the CEO’s vision for growth.
Is the vision market penetration -- selling more existing products to existing customers? Or perhaps it's market diversification -- selling new products into new markets full of new buyer types.
"Once you know your goals and strategy, you start looking at vendors that are well positioned to help: whose offerings lend themselves well to your specific marketing strategies," Fouts said. "If you’re a digital marketer pursuing market penetration, you’re building on the loyalty of existing customers. You want higher wallet share in your existing customer base."
Larger, more mature consumer marketers should look at vendors that can help build deeper customer engagement through content marketing, targeted advertising, advocacy marketing or technology that helps you retain customers through predictive analytics.
"Marketers looking to engage thousands of existing customers more deeply -- through better retention programs -- follow a much difference technology acquisition path than those looking to diversify," Fouts said. "The technology you evaluate is a function of your marketing goals, and the unique strategy you employ to achieve those goals."
Title image by johnkworks (Shutterstock).