Three weeks ago, Intuit shook up the low end of the marketing automation universe by purchasing small business marketing shooting star Demandforce. Last week the action shifted to the high end, where FICO announced its purchase of Entiera, one of the few remaining enterprise class products.
FICO, the company formerly known as Fair Isaac and originator of the influential FICO credit score, first dipped its toe into marketing automation services and software when it acquired DynaMark in 1992. Since then, the company has continued to grow its marketing offerings, through acquisition and internal development. But it sell these largely as add-ons to its core predictive analytics products. FICO statements make clear that Entiera will continue this strategy, both by providing new capabilities for event-triggered to existing clients and by making the full set of FICO products available to smaller companies.
FICO’s backing will certainly allow Entiera to sell to more companies. But, in sharp contrast to the Intuit/Demandforce deal, I see this acquisition as shrinking rather than increasing competition in the relevant market segment. Entiera was one of the few independent vendors still chasing the business of mid-size and enterprise marketing automation buyers. This group had already been reduced with the acquisition of Alterian by SDL last December and of SmartFocus by eMailVision the previous April. Of the firms on my list of B2C options from last September, only a handful (Neolane, Decision Software Inc, RedPoint and ClickSquared are primarily selling marketing automation software. The others are either more oriented to email services (ExactTarget, and I should add Responsys and Silverpop) or have minimal industry presence (MarketingPilot, Pitney Bowes' Portrait Software, Conversen, SmartSource Online, etc.).
In theory, FICO could finance a significant expansion of Entiera’s independent business. With $620 million in 2011 revenue and over $100 million operating cash flow, the company could certainly afford it. But marketing services are clearly just a sideline for FICO. So it’s likely they’ll use Entiera’s technology to support sales of their core analytical products to current customers and perhaps to deliver them more cost-effectively to new customers. That’s great for FICO and for Entiera’s founders. But in a segment where most of the major products are already owned by giant corporations (IBM, Teradata, SAS), marketers now have one less young vendor hungry for their business.
Sunday, May 13, 2012
Sunday, May 06, 2012
What Brain Research Teaches about Selecting Marketing Automation Software
I’m spending more time on airplanes these days, which means more time browsing airport bookshops. Since spy stories and soft core porn are neither to my taste, the pickings are pretty slim. But I did recently stumble across Jonah Lehrer’s How We Decide, one of several recent books that explain the latest scientific research into human decision-making.
Lehrer’s book shuttles between commonly-known irrationalities in human behavior – things like assigning a higher value to avoiding loss than achieving gain – and the less known (to me, at least) brain mechanisms that drive them. He makes a few key points, including the importance of non-conscious learning to drive everyday decisions (it turns out that people who can only make conscious, rational decisions are pretty much incapable of functioning), the powerful influence of irrelevant facts (for example, being exposed to a random number influences the price you’re willing to pay for an unrelated object), and the need to suppress emotion when faced with a truly unprecedented problem (because your previous experience is irrelevant).
These are all relevant to marketing, since they give powerful insights into ways to get people to do things. Indeed, it’s frightening to recognize how much this research can help people manipulate others to act against their interests. But good marketers, politicians, and poker players have always used these methods intuitively, so exposing them may not really make the world a more dangerous place.
In any event, my own dopamine receptors were most excited by research related to formal decision making, such as picking a new car, new house, or strawberry jam. Selecting software (or marketing approaches) falls into the same category. Apparently the research shows that carefully analyzing such choices actually leads to worse decisions than making a less considered judgment. The mechanism seems to be that people consider every factor they list, even the ones that are unimportant or totally irrelevant.
It's not that snap judgments are inherently better. The most effective approach is to gather all the data but then let your mind work on it subconsciously – what we normal folks call “mulling things over” – since the emotional parts of the brain are better at balancing the different factors than the rational brain. (I’m being horribly imprecise with terms like “emotional” and “rational”, which are shorthand for different processes in different brain regions. Apologies to Lehrer.)
As someone who has spent many years preparing detailed vendor analyses, I found this intriguing if unwelcome news. Since one main point of the book is that people rationalize opinions they’ve formed in advance, I’m quite aware that “deciding” whether to accept this view is not an objective process. But I also know that first impressions, at least where software is concerned, can’t possibly uncover all the important facts about a product. So the lesson I’m taking is the need to defer judgment until all factors have been identified and then to carefully and formally weight them so the irrelevant ones don’t distort the final choice.
As it happens, that sort of weighting is exactly what I’ve always insisted is important in making a sound selection. My process has been to have clients first list the items to consider and then assign them weights that add to 100%. This forces trade-offs to decide what’s most important. The next step is to score each vendor on each item. I always score one item at a time across all vendors, since the scores are inherently relative. Finally, I use the weights to build a single composite score for vendor ranking.
In theory, the weighting reduces the impact of unimportant factors, setting the weights separately from the scoring avoids weights that favor a particular vendor, and calculating composite scores prevents undue influence by the first or last item reviewed. Whether things work as well as I’d like to believe, I can’t really say. But I can report three common patterns that seem relevant.
- the final winner often differs from one I originally expected. This is the “horse race” aspect of the process and I think it means we’re successfully avoiding being stuck with premature conclusions.
- when the composite scores don’t match intuitive expectations, there’s usually a problem with the weights. I interpret this to mean that we’re listening to the emotional part of the brain and taking advantage of its insights.
- as scoring proceeds, one vendor often emerges as the consistent winner, essentially “building momentum” as we move towards a conclusion. I’ve always enjoyed this, since it makes for an easy final decision. But now I’m wondering whether we're making the common error of seeing patterns that don’t exist. Oh well, two out of three isn’t bad.
Perhaps I could reduce the momentum effect by hiding the previous scores when each new item is assessed. In any event, I’ve always felt the real value of this process was in the discussions surrounding the scoring rather than the scores themselves. As I said, the scores are usually irrelevant because the winner is apparent before we finish.
Still, having a clear winner doesn’t mean we made the right choice. The best I can say is that clients have rarely reported unpleasant surprises after deployment. We may not have made the best choice, but at least we understood what we were getting into.
I guess it’s no surprise that I’d conclude my process is a good one. Indeed, research warns that people see what they want to see (the technical term is “confirmation bias”; the colloquial term is “pride”). But I honestly don’t see much of an alternative. Making quick judgments on incomplete information is surely less effective, and gathering data without any formal integration seems hopelessly subjective. Perhaps the latter approach is what Lehrer’s research points to, but I’d (self-servingly) argue that software choices fall into the category of unfamiliar problems, which the brain hasn’t trained itself to solve through intuition alone.
Lehrer’s book shuttles between commonly-known irrationalities in human behavior – things like assigning a higher value to avoiding loss than achieving gain – and the less known (to me, at least) brain mechanisms that drive them. He makes a few key points, including the importance of non-conscious learning to drive everyday decisions (it turns out that people who can only make conscious, rational decisions are pretty much incapable of functioning), the powerful influence of irrelevant facts (for example, being exposed to a random number influences the price you’re willing to pay for an unrelated object), and the need to suppress emotion when faced with a truly unprecedented problem (because your previous experience is irrelevant).
These are all relevant to marketing, since they give powerful insights into ways to get people to do things. Indeed, it’s frightening to recognize how much this research can help people manipulate others to act against their interests. But good marketers, politicians, and poker players have always used these methods intuitively, so exposing them may not really make the world a more dangerous place.
In any event, my own dopamine receptors were most excited by research related to formal decision making, such as picking a new car, new house, or strawberry jam. Selecting software (or marketing approaches) falls into the same category. Apparently the research shows that carefully analyzing such choices actually leads to worse decisions than making a less considered judgment. The mechanism seems to be that people consider every factor they list, even the ones that are unimportant or totally irrelevant.
It's not that snap judgments are inherently better. The most effective approach is to gather all the data but then let your mind work on it subconsciously – what we normal folks call “mulling things over” – since the emotional parts of the brain are better at balancing the different factors than the rational brain. (I’m being horribly imprecise with terms like “emotional” and “rational”, which are shorthand for different processes in different brain regions. Apologies to Lehrer.)
As someone who has spent many years preparing detailed vendor analyses, I found this intriguing if unwelcome news. Since one main point of the book is that people rationalize opinions they’ve formed in advance, I’m quite aware that “deciding” whether to accept this view is not an objective process. But I also know that first impressions, at least where software is concerned, can’t possibly uncover all the important facts about a product. So the lesson I’m taking is the need to defer judgment until all factors have been identified and then to carefully and formally weight them so the irrelevant ones don’t distort the final choice.
As it happens, that sort of weighting is exactly what I’ve always insisted is important in making a sound selection. My process has been to have clients first list the items to consider and then assign them weights that add to 100%. This forces trade-offs to decide what’s most important. The next step is to score each vendor on each item. I always score one item at a time across all vendors, since the scores are inherently relative. Finally, I use the weights to build a single composite score for vendor ranking.
In theory, the weighting reduces the impact of unimportant factors, setting the weights separately from the scoring avoids weights that favor a particular vendor, and calculating composite scores prevents undue influence by the first or last item reviewed. Whether things work as well as I’d like to believe, I can’t really say. But I can report three common patterns that seem relevant.
- the final winner often differs from one I originally expected. This is the “horse race” aspect of the process and I think it means we’re successfully avoiding being stuck with premature conclusions.
- when the composite scores don’t match intuitive expectations, there’s usually a problem with the weights. I interpret this to mean that we’re listening to the emotional part of the brain and taking advantage of its insights.
- as scoring proceeds, one vendor often emerges as the consistent winner, essentially “building momentum” as we move towards a conclusion. I’ve always enjoyed this, since it makes for an easy final decision. But now I’m wondering whether we're making the common error of seeing patterns that don’t exist. Oh well, two out of three isn’t bad.
Perhaps I could reduce the momentum effect by hiding the previous scores when each new item is assessed. In any event, I’ve always felt the real value of this process was in the discussions surrounding the scoring rather than the scores themselves. As I said, the scores are usually irrelevant because the winner is apparent before we finish.
Still, having a clear winner doesn’t mean we made the right choice. The best I can say is that clients have rarely reported unpleasant surprises after deployment. We may not have made the best choice, but at least we understood what we were getting into.
I guess it’s no surprise that I’d conclude my process is a good one. Indeed, research warns that people see what they want to see (the technical term is “confirmation bias”; the colloquial term is “pride”). But I honestly don’t see much of an alternative. Making quick judgments on incomplete information is surely less effective, and gathering data without any formal integration seems hopelessly subjective. Perhaps the latter approach is what Lehrer’s research points to, but I’d (self-servingly) argue that software choices fall into the category of unfamiliar problems, which the brain hasn’t trained itself to solve through intuition alone.
Wednesday, May 02, 2012
Intuit Buys Small Business Local Marketing Vendor Demandforce: There's a New Gorilla in Town
Intuit last week announced an agreement to acquire local business marketing vendor Demandforce for $423.5 million. That’s a hefty sum for a company with a reported revenue of $37.5 million, although it has been growing at a blistering pace – more than doubling last year – and now has over 35,000 customers. Still, the move makes perfect strategic sense, giving Intuit a stronger foothold in the marketing side of its small business customer base. (Intuit dominates the market for small business accounting with five million Quickbooks users.)
Demandforce focuses on local service businesses like dentists and auto body shops. It’s not a typical marketing automation vendor, since it provides appointment management, referrals, reviews, social campaigns, local advertising, post cards, and search marketing in addition to email. Its most direct competitors in the marketing automation world would be Infusionsoft and HubSpot, although neither has the same depth of appointment-related features. The price point of $200 to $300 per month is also similar to those systems.
Because the micro-business segment is pretty distinct from the rest of marketing automation, the impact of the Demandforce acquisition will initially be limited to its direct competitors. Within that group, Intuit’s penetration and clout should make it an immediate superpower – with the caveat that the accountants who are Intuit’s primary connection with its customers are not likely to sell them marketing services. Still, Intuit should be able to expand its network of channel partners fairly quickly. The local marketing business is a huge opportunity that hasn’t had a dominant player. I can claim some bragging rights for having suggested nearly two years ago that Intuit might take this role.
The more interesting question for the rest of the marketing automation industry is whether Intuit will move beyond Demandforce’s current target customers. In the short term, probably not: the opportunity is large enough to keep them busy for quite some time. But local marketing involves more than small businesses, so Demandforce has a natural growth path in that direction. A modest functional expansion could also make Demandforce competitive at the lower end of the standard B2B marketing automation world, where products like Act-On, Marketo Spark, and Genius contend. From there, it could creep upwards. Again, that’s down the road but it does put a ceiling on the pricing and growth prospects of companies currently serving those segments.
It's also worth considering the financial aspects of the deal. On the one hand, the $400+ million price – more than 10x revenue – has to be heartening for other marketing automation vendors contemplating an exit. But Demandforce is far from typical. It is already larger than all but a handful of marketing automation companies, is growing faster than anyone of similar size, and has made all this progress on a mere $11.8 million of investment. It also offers benefits that are more clearly defined and easier to deliver than marketing automation provides to larger companies. And the very fact that Intuit is now playing in the industry will make it harder for others to grow – especially if Demandforce moves quickly. Given all these advantages, it’s not clear other vendors will come close to duplicating the terms that Demandforce received.
Demandforce focuses on local service businesses like dentists and auto body shops. It’s not a typical marketing automation vendor, since it provides appointment management, referrals, reviews, social campaigns, local advertising, post cards, and search marketing in addition to email. Its most direct competitors in the marketing automation world would be Infusionsoft and HubSpot, although neither has the same depth of appointment-related features. The price point of $200 to $300 per month is also similar to those systems.
Because the micro-business segment is pretty distinct from the rest of marketing automation, the impact of the Demandforce acquisition will initially be limited to its direct competitors. Within that group, Intuit’s penetration and clout should make it an immediate superpower – with the caveat that the accountants who are Intuit’s primary connection with its customers are not likely to sell them marketing services. Still, Intuit should be able to expand its network of channel partners fairly quickly. The local marketing business is a huge opportunity that hasn’t had a dominant player. I can claim some bragging rights for having suggested nearly two years ago that Intuit might take this role.
The more interesting question for the rest of the marketing automation industry is whether Intuit will move beyond Demandforce’s current target customers. In the short term, probably not: the opportunity is large enough to keep them busy for quite some time. But local marketing involves more than small businesses, so Demandforce has a natural growth path in that direction. A modest functional expansion could also make Demandforce competitive at the lower end of the standard B2B marketing automation world, where products like Act-On, Marketo Spark, and Genius contend. From there, it could creep upwards. Again, that’s down the road but it does put a ceiling on the pricing and growth prospects of companies currently serving those segments.
It's also worth considering the financial aspects of the deal. On the one hand, the $400+ million price – more than 10x revenue – has to be heartening for other marketing automation vendors contemplating an exit. But Demandforce is far from typical. It is already larger than all but a handful of marketing automation companies, is growing faster than anyone of similar size, and has made all this progress on a mere $11.8 million of investment. It also offers benefits that are more clearly defined and easier to deliver than marketing automation provides to larger companies. And the very fact that Intuit is now playing in the industry will make it harder for others to grow – especially if Demandforce moves quickly. Given all these advantages, it’s not clear other vendors will come close to duplicating the terms that Demandforce received.
Wednesday, April 18, 2012
Marketo Buys Crowd Factory, Silverpop Buys CoreMotives, and Other News from Pardot, Neolane, Act-On and OfficeAutoPilot
With its usual fanfare, Marketo today announced the acquisition of social marketing campaign company Crowd Factory.
Crowd Factory is a certified cool product, which is probably reason enough for Marketo to buy them. But what I find intriguing is how little the two businesses overlap. Marketo is primarily focused on business marketing, and in particular lead generation, nurturing and analytics. Crowd Factory has some B2B clients but is clearly aimed at large-scale consumer marketing. Campaign types listed on its Web site include refer a friend, social sweepstakes, polls and voting, flash deals, group offers, and intelligent share buttons. Few would be considered relevant for most B2B campaigns.
Indeed, Marketo already had a reasonable set of B2B social marketing features. Here’s the chart I built last December in a post comparing social marketing features across the industry.
The yellow boxes represent capabilities added by Crowd Factory (although actual integration of the two products will probably take some time). As you see, Crowd Factory doesn’t fill many gaps. Rather, it adds B2C features that might will enable Marketo to penetrate a new set of accounts.
But it’s not fair to let Marketo get all the attention. Other vendors have also extended their products recently. These include:
Silverpop announced it had purchased CoreMotives, which adds marketing automation capabilities within Microsoft Dynamics CRM. The company also announced plans to integrate Silverpop’s flagship Engage system with Dynamics CRM. The CoreMotives acquisition is quite interesting, since CoreMotives creates a merger of CRM and marketing automation (which I’ve long predicted) rather than the now-standard model of separate systems for each. The deal might be seen bet-hedging by Silverpop, although I suspect it’s more a way to penetrate smaller accounts too small to buy a separate, sophisticated marketing automation or email product.
Pardot added features for search marketing. These are keyword monitoring, which tracks the user’s site rank in Google and Bing, and competitor monitoring, which captures metrics such as Google PageRank, inbound links, and indexed pages. Data comes from several sources. This is an important enhancement and part of larger trend for marketing automation vendors to move beyond email and landing pages.
Neolane announced new features to identify anonymous Web visitors based on prior email interactions and to use external catalog data in dynamic offers. Not as sexy as a social marketing acquisition but useful nevertheless.
Act-On Software added dynamic content, progressive profiling, new survey components, search engine optimization meta-tags and source tracking, and performance reports. These are mostly catch-up features but the search engine optimization piece again shows the industry’s movement in that direction.
OfficeAutoPilot expanded its professional services offerings – another industry trend – and improved its tools for building forms and creating emails. They also announced the ability to purchase sky banners – you know, those things towed by airplanes – but that was just an April Fool’s joke. Pity.
Crowd Factory is a certified cool product, which is probably reason enough for Marketo to buy them. But what I find intriguing is how little the two businesses overlap. Marketo is primarily focused on business marketing, and in particular lead generation, nurturing and analytics. Crowd Factory has some B2B clients but is clearly aimed at large-scale consumer marketing. Campaign types listed on its Web site include refer a friend, social sweepstakes, polls and voting, flash deals, group offers, and intelligent share buttons. Few would be considered relevant for most B2B campaigns.
Indeed, Marketo already had a reasonable set of B2B social marketing features. Here’s the chart I built last December in a post comparing social marketing features across the industry.
The yellow boxes represent capabilities added by Crowd Factory (although actual integration of the two products will probably take some time). As you see, Crowd Factory doesn’t fill many gaps. Rather, it adds B2C features that might will enable Marketo to penetrate a new set of accounts.
But it’s not fair to let Marketo get all the attention. Other vendors have also extended their products recently. These include:
Silverpop announced it had purchased CoreMotives, which adds marketing automation capabilities within Microsoft Dynamics CRM. The company also announced plans to integrate Silverpop’s flagship Engage system with Dynamics CRM. The CoreMotives acquisition is quite interesting, since CoreMotives creates a merger of CRM and marketing automation (which I’ve long predicted) rather than the now-standard model of separate systems for each. The deal might be seen bet-hedging by Silverpop, although I suspect it’s more a way to penetrate smaller accounts too small to buy a separate, sophisticated marketing automation or email product.
Pardot added features for search marketing. These are keyword monitoring, which tracks the user’s site rank in Google and Bing, and competitor monitoring, which captures metrics such as Google PageRank, inbound links, and indexed pages. Data comes from several sources. This is an important enhancement and part of larger trend for marketing automation vendors to move beyond email and landing pages.
Neolane announced new features to identify anonymous Web visitors based on prior email interactions and to use external catalog data in dynamic offers. Not as sexy as a social marketing acquisition but useful nevertheless.
Act-On Software added dynamic content, progressive profiling, new survey components, search engine optimization meta-tags and source tracking, and performance reports. These are mostly catch-up features but the search engine optimization piece again shows the industry’s movement in that direction.
OfficeAutoPilot expanded its professional services offerings – another industry trend – and improved its tools for building forms and creating emails. They also announced the ability to purchase sky banners – you know, those things towed by airplanes – but that was just an April Fool’s joke. Pity.
Sunday, April 15, 2012
B2B Email Benchmarks: Answers Vary Widely
One of the things I’m enjoying about my new role as head of analytics at Left Brain DGA is being closer to hands-on marketing than I was as a consultant. This leads to different questions than I used to get, including the ever-popular “what’s a reasonable response rate for our emails?” That one came up last week and led me to review my files on industry benchmarks. Without giving away any deep secrets, I thought I’d share the results.
I found five relevant studies dating back to 2009. Taking the oldest first:
Silverpop International Email Marketing Benchmark Study, 2009
This one doesn’t break out results by mailer type, so it’s probably dominated by business-to- consumer marketers. But it does distinguish gross opens from unique opens, which are significantly different. It also shows median as well as average results, in addition to top and bottom quartiles. This is a good reminder that there's a very substantial range of variation in different marketers' performance. The difference between the medians and averages is also something to bear in mind when looking at the other surveys, which only report averages.
Silverpop is also the only study to give both bounce and unsubscribe rates – the others give one or the other.
Here is the U.S. data from the Silverpop report.
MailerMailer Email Marketing Metrics Report, 2011
I just discovered this one and am impressed. It goes beyond simple reporting to analyze the impact of delivery day and time, number of links, subject line length, and personalization (some surprises here). The repoort breaks out results for several categories, of which the most relevant are probably Computer, Consulting, Large Business and Small Business. (I’ve added a simple average to use later.)
In general, this study shows substantially lower open rates than other studies, somewhat higher click rates, and higher bounce rates. I’ve calculated the click-to-open rate, which isn’t necessarily the result you’d get if you looked at the actual average. But it’s worth having as a point of reference.
Here’s some detail from the study itself (you'll have to click on this to make it legible). The business categories account for two of the four highest open rates and are all in top half of the click rates.
Eloqua Marketing Metrics Outlook 2011
You’d expect Eloqua to put out a good study on this topic, and they deliver. The best-in-class, average, and laggard classifications illustrate the huge gap between even average performers and best-in-class. They also reinforce the point, illustrated in the Silverpop data, that medians are significantly below averages because of high-end outliers. Not to go all stat-geeky on you, but that really matters if you're looking for a benchmark that reflects "typical" performance.
Arguably all Eloqua clients would be relevant to marketing automation users, but the most relevant for true B2B would include Manufacturing, High Tech, and Business Services:
Across all categories, Manufacturing has the highest open rate and is tied for second highest click-through, but the two other "true" B2B categories rank at the bottom. The combined averages for the three are just slightly below the average for all categories.
Epsilon Email Trends and Benchmarks Q42011
Epsilon is another industry stalwart, publishing regular quarterly reports. But they only provide one category for B2B Products and Services, plus another for Business Publishing. The open rate for that category seems pretty high compared with other studies, although the click rate is largely in line.
Comparing Business Products with other categories, both the open rate and click rate are in the middle of the pack, each ranking sixth highest of 13 categories.
Epsilon also provides an intriguing breakdown within each industry of results by email type (acquisition, editorial, marketing, research, and other). The figures for marketing emails in the Business Products category (19.2% open rate, 2.7% click rate) are considerably lower than the category total (27% and 4.4%), but I can’t make sense of the numbers: marketing accounts for 88% of the industry volume, so they just shouldn't be that far apart. (More formally: if you combine the message type figures in a weighted average, the result does not equal the category total.) I’ll assume the group totals are more reliable than the detail.
Signup.to The UK Email Marketing Benchmark Report 2012
Finally, we have a study from Signup.to in the UK. I’d question its relevance to the U.S. market, but the 2009 Silverpop study showed similar figures for both. It includes figures for B2B Sales, B2B Service, Industrial/Manufacturing, and IT. These vary pretty widely, especially for open rates.
Compared with other categories, the business emails get somewhat above-average response:
What Does It All Mean?
Within each report, open and click rates B2B categories tend to be in the middle or above average. But the over-all ranges vary substantially from one report to another: at the extremes, MailerMailer open rates range from 7.1% to 17.6%, while Epsilon ranges from 14.2% to 35.6%. Without understanding the reasons for these variations, it's hard to select a single reference point as a benchmark. The best I can suggest is to throw out the outliers, which would leave Eloqua and Signup.to. I'd also tend to favor the Eloqua figures because they are based on the "average" performers, and therefore are closer to a median rate. (You'll remember that averages tend to be higher than medians, because a handful of very high performers distort the results).
That said, the table below shows the average figures for each survey (which, you'll remember, themselves hide significant variations within each report). I’ve calculated an average of averages, excluding Silverpop since it didn’t break out B2B from B2C. As it happens, the averages fall somewhere between the Signup.to and Eloqua figures. So, if you forced me to propose benchmarks for B2B email performance, I'd say those numbers are as good as any.
I found five relevant studies dating back to 2009. Taking the oldest first:
Silverpop International Email Marketing Benchmark Study, 2009
This one doesn’t break out results by mailer type, so it’s probably dominated by business-to- consumer marketers. But it does distinguish gross opens from unique opens, which are significantly different. It also shows median as well as average results, in addition to top and bottom quartiles. This is a good reminder that there's a very substantial range of variation in different marketers' performance. The difference between the medians and averages is also something to bear in mind when looking at the other surveys, which only report averages.
Silverpop is also the only study to give both bounce and unsubscribe rates – the others give one or the other.
Here is the U.S. data from the Silverpop report.
MailerMailer Email Marketing Metrics Report, 2011
I just discovered this one and am impressed. It goes beyond simple reporting to analyze the impact of delivery day and time, number of links, subject line length, and personalization (some surprises here). The repoort breaks out results for several categories, of which the most relevant are probably Computer, Consulting, Large Business and Small Business. (I’ve added a simple average to use later.)
In general, this study shows substantially lower open rates than other studies, somewhat higher click rates, and higher bounce rates. I’ve calculated the click-to-open rate, which isn’t necessarily the result you’d get if you looked at the actual average. But it’s worth having as a point of reference.
Here’s some detail from the study itself (you'll have to click on this to make it legible). The business categories account for two of the four highest open rates and are all in top half of the click rates.
Eloqua Marketing Metrics Outlook 2011
You’d expect Eloqua to put out a good study on this topic, and they deliver. The best-in-class, average, and laggard classifications illustrate the huge gap between even average performers and best-in-class. They also reinforce the point, illustrated in the Silverpop data, that medians are significantly below averages because of high-end outliers. Not to go all stat-geeky on you, but that really matters if you're looking for a benchmark that reflects "typical" performance.
Arguably all Eloqua clients would be relevant to marketing automation users, but the most relevant for true B2B would include Manufacturing, High Tech, and Business Services:
Across all categories, Manufacturing has the highest open rate and is tied for second highest click-through, but the two other "true" B2B categories rank at the bottom. The combined averages for the three are just slightly below the average for all categories.
Epsilon is another industry stalwart, publishing regular quarterly reports. But they only provide one category for B2B Products and Services, plus another for Business Publishing. The open rate for that category seems pretty high compared with other studies, although the click rate is largely in line.
Signup.to The UK Email Marketing Benchmark Report 2012
Finally, we have a study from Signup.to in the UK. I’d question its relevance to the U.S. market, but the 2009 Silverpop study showed similar figures for both. It includes figures for B2B Sales, B2B Service, Industrial/Manufacturing, and IT. These vary pretty widely, especially for open rates.
Compared with other categories, the business emails get somewhat above-average response:
What Does It All Mean?
Within each report, open and click rates B2B categories tend to be in the middle or above average. But the over-all ranges vary substantially from one report to another: at the extremes, MailerMailer open rates range from 7.1% to 17.6%, while Epsilon ranges from 14.2% to 35.6%. Without understanding the reasons for these variations, it's hard to select a single reference point as a benchmark. The best I can suggest is to throw out the outliers, which would leave Eloqua and Signup.to. I'd also tend to favor the Eloqua figures because they are based on the "average" performers, and therefore are closer to a median rate. (You'll remember that averages tend to be higher than medians, because a handful of very high performers distort the results).
That said, the table below shows the average figures for each survey (which, you'll remember, themselves hide significant variations within each report). I’ve calculated an average of averages, excluding Silverpop since it didn’t break out B2B from B2C. As it happens, the averages fall somewhere between the Signup.to and Eloqua figures. So, if you forced me to propose benchmarks for B2B email performance, I'd say those numbers are as good as any.
Saturday, April 14, 2012
Infusionsoft Revamps Its Interface, Adds New Campaign Builder, Web Analytics and Lead Scoring
Infusionsoft introduced its latest release earlier this month. This included a full revamp of its customer interface, a new campaign builder and shopping cart, and new capabilities for Web analytics, lead scoring, and lead source reporting.
Stated so plainly, this doesn’t sound like much. But Infusionsoft says it’s the biggest release in company history and I've no reason to doubt. A new interface and campaign builder are big projects.
Both represent significant improvements over previous Infusionsoft editions. The interface is cleaner, organized around tasks rather than data objects, and lets users customize their menu of top-level functions. The campaign builder now supports branching flows, timers, and multi-step sequences with a smooth drag-and-drop interface. The shopping cart is also significantly more powerful. Lead scoring (nicely executed), Web analytics, and lead source reporting all fill major gaps in the product.
That said, this is still an evolutionary release for Infusionsoft. In part, this is because the company is careful not to overwhelm clients with too many changes. More fundamentally, it reflects Infusionsoft's steady focus on solving the same problem for the same customers: helping businesses with under 25 employees run their marketing, sales and e-commerce more efficiently. This lets Infusionsoft understand its customers' needs deeply and build systems that meet them. The company conducted more than 500 interviews in preparing the new release.
Infusionsoft still has a ways to go. The new release adds some missing marketing features but doesn’t incorporate social media, blogging, or Web site management. These are common needs for small businesses, so I’d consider them gaps in the product. The system also lacks dynamic content, custom data tables, and sophisticated user rights management – but those are more relevant to larger firms than Infusionsoft’s target customers. Split testing is also missing – and even though few small businesses do it, I'd argue it belongs in the product, because they should.
Infusionsoft also reported that it continues to grow nicely. The company now has 8,500 customers, 30,000 users, and expected revenue of $40 million in 2012, up 50% over $26 million in 2011. It is expanding its service offerings, app marketplace, and network of consulting partners – a critical resource for small businesses that often have little in-house marketing talent. Pricing on the new release remains unchanged, with full-featured versions starting at $299 per month.
Stated so plainly, this doesn’t sound like much. But Infusionsoft says it’s the biggest release in company history and I've no reason to doubt. A new interface and campaign builder are big projects.
Both represent significant improvements over previous Infusionsoft editions. The interface is cleaner, organized around tasks rather than data objects, and lets users customize their menu of top-level functions. The campaign builder now supports branching flows, timers, and multi-step sequences with a smooth drag-and-drop interface. The shopping cart is also significantly more powerful. Lead scoring (nicely executed), Web analytics, and lead source reporting all fill major gaps in the product.
That said, this is still an evolutionary release for Infusionsoft. In part, this is because the company is careful not to overwhelm clients with too many changes. More fundamentally, it reflects Infusionsoft's steady focus on solving the same problem for the same customers: helping businesses with under 25 employees run their marketing, sales and e-commerce more efficiently. This lets Infusionsoft understand its customers' needs deeply and build systems that meet them. The company conducted more than 500 interviews in preparing the new release.
Infusionsoft still has a ways to go. The new release adds some missing marketing features but doesn’t incorporate social media, blogging, or Web site management. These are common needs for small businesses, so I’d consider them gaps in the product. The system also lacks dynamic content, custom data tables, and sophisticated user rights management – but those are more relevant to larger firms than Infusionsoft’s target customers. Split testing is also missing – and even though few small businesses do it, I'd argue it belongs in the product, because they should.
Infusionsoft also reported that it continues to grow nicely. The company now has 8,500 customers, 30,000 users, and expected revenue of $40 million in 2012, up 50% over $26 million in 2011. It is expanding its service offerings, app marketplace, and network of consulting partners – a critical resource for small businesses that often have little in-house marketing talent. Pricing on the new release remains unchanged, with full-featured versions starting at $299 per month.
Friday, March 30, 2012
Survey of Surveys: Budgets and Process are Main Barriers to Marketing Technology Success
I recently gave a Web presentation comprised almost entirely of slides from different surveys. This was a bit of an experiment and, sad to say, it didn’t seem terribly successful. I did weave the slides into a nice little story line – marketers know they need better technology, poor data is the root of their problem, and we know how to solve this – but even that wasn’t enough. Pity.
Still, preparing the slides gave me a chance to scan the surveys in my archives, which was entertaining in its own little way. Many surveys ask similar questions, which gave me some choices during my preparation. But I didn’t look carefully at how they compare.
Today I’ll do that. I’ve chosen one of the most popular questions: what are the barriers to marketing technology adoption? I have versions of this from seven different surveys within the past year.
Of course, each survey uses different terms. To make the comparison, I collapsed the various answers into a few reasonably-distinct categories, committing a certain amount of shoe-horning along the way. I then recorded where each answer ranked in each survey, compiled the results, and did a crude ranking with a combination of mathematical wizardly and body english. (Multiple answers for the same survey indicate I placed several questions into the same category.)
Results are below. I've shaded the first ranked answers in orange and the second and third ranked answers in yellow.
My first observation was the sheer inconsistency of the answers. Budget issues emerged as a clear number one, but they reached that rank on just four of the seven surveys and ranked quite low on the other two that included them. The second-ranked item (marketing process) was never listed first; it ended where it did because it had the most twos and threes. No other item was ranked first more than once or in the top three more than twice.
Things made a bit more sense when I looked at the survey audiences. Winterberry and Forrester were specifically about online marketing, Gleanster and Marketing Sherpa were B2B surveys, and IBM and the two CMO Council studies were of general marketers. Since most B2B marketing is also online, it makes sense to look at the first four as one group and the other three as another.
Now we see some interesting consistencies:
• Budget isn’t much of an issue for the online and B2B marketers, but dominant for the mixed marketers.
• Marketing process and marketing staff skills are major concerns for online and B2B but rarely mentioned by the mixed marketers.
• Senior management support, and to a lesser extent IT support and technology capabilities, are significant barriers for mixed marketers but don’t slow down the online and B2B groups.
• Metrics, organizational silos, and the economy are cited occasionally by both groups but don’t seem to be major issues for either.
So there’s a fairly coherent picture after all.
• Online and B2B marketers are struggling to keep up with a rapidly changing marketplace, meaning their biggest problems are people and process. The importance of their work is obvious enough that budgets and senior management support are generally available. They have the technical savvy and independence to avoid issues with IT support and organizational silos.
• Mixed marketers, working in traditional channels, still struggle with budgets, metrics, and senior management. They have mature marketing organizations, so process and skills are in place, at least for traditional programs. They do struggle more with IT, technology, and organizational silos, because they lack their own technical skills and have limited clout in the organization.
• Everybody says they care about metrics but it's rarely a top priority.
Or at least that’s my take. I’ve displayed the actual surveys below – if you reach other conclusions or spot any other patterns, let me know.
Still, preparing the slides gave me a chance to scan the surveys in my archives, which was entertaining in its own little way. Many surveys ask similar questions, which gave me some choices during my preparation. But I didn’t look carefully at how they compare.
Today I’ll do that. I’ve chosen one of the most popular questions: what are the barriers to marketing technology adoption? I have versions of this from seven different surveys within the past year.
Of course, each survey uses different terms. To make the comparison, I collapsed the various answers into a few reasonably-distinct categories, committing a certain amount of shoe-horning along the way. I then recorded where each answer ranked in each survey, compiled the results, and did a crude ranking with a combination of mathematical wizardly and body english. (Multiple answers for the same survey indicate I placed several questions into the same category.)
Results are below. I've shaded the first ranked answers in orange and the second and third ranked answers in yellow.
My first observation was the sheer inconsistency of the answers. Budget issues emerged as a clear number one, but they reached that rank on just four of the seven surveys and ranked quite low on the other two that included them. The second-ranked item (marketing process) was never listed first; it ended where it did because it had the most twos and threes. No other item was ranked first more than once or in the top three more than twice.
Things made a bit more sense when I looked at the survey audiences. Winterberry and Forrester were specifically about online marketing, Gleanster and Marketing Sherpa were B2B surveys, and IBM and the two CMO Council studies were of general marketers. Since most B2B marketing is also online, it makes sense to look at the first four as one group and the other three as another.
Now we see some interesting consistencies:
• Budget isn’t much of an issue for the online and B2B marketers, but dominant for the mixed marketers.
• Marketing process and marketing staff skills are major concerns for online and B2B but rarely mentioned by the mixed marketers.
• Senior management support, and to a lesser extent IT support and technology capabilities, are significant barriers for mixed marketers but don’t slow down the online and B2B groups.
• Metrics, organizational silos, and the economy are cited occasionally by both groups but don’t seem to be major issues for either.
So there’s a fairly coherent picture after all.
• Online and B2B marketers are struggling to keep up with a rapidly changing marketplace, meaning their biggest problems are people and process. The importance of their work is obvious enough that budgets and senior management support are generally available. They have the technical savvy and independence to avoid issues with IT support and organizational silos.
• Mixed marketers, working in traditional channels, still struggle with budgets, metrics, and senior management. They have mature marketing organizations, so process and skills are in place, at least for traditional programs. They do struggle more with IT, technology, and organizational silos, because they lack their own technical skills and have limited clout in the organization.
• Everybody says they care about metrics but it's rarely a top priority.
Or at least that’s my take. I’ve displayed the actual surveys below – if you reach other conclusions or spot any other patterns, let me know.
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