Do You Need A Full Service Email Service Provider vs. A Marketing Service Provider?

Speaking before thinking is something that drives our PR firm Clarus crazy.   

A great case is the interpretation of some comments I made about the consolidation brought on by list companies buying email service providers.   Here is an example:

....As expected, the responses came quickly concerning e-mail software concern ExactTarget's co-founder and chief marketing officer, Chris Baggot's contention in last week's Magilla Marketing that e-mail service bureaus have too much employee overhead to survive. Al DiGuido, president of e-mail service provider Epsilon Interactive said Baggot's idea was an example of "very old thinking" and that software can't replace expertise when it comes to interpreting raw data....

My comments were construed to say that I was an advocate of eliminating people and letting software do all the work.   This is absolutely not my position at all.   

My contention in the case above was that I don't need my email service provider to be the sole source of those services, and those revenues are vulnerable to more nimble software solutions that can put powerful tools into marketers hands.

The strength of software (ESP's, CRM, Web Analytics...not to mention Multi-variant testing and dynamic web sites) is to provide ton's of data back to marketers that help in the decision making.  With great insight available through this data, coupled with easy to use software tools that allow execution of that data;   what happens is a much more level playing field for all marketers.  It makes for better marketing generally and lowers costs significatly.

The reality is that there are tons of great, creative and skilled marketers out there.  ExactTarget alone has over 350 licensed agency partners that provide fantastic services for their clients.

The availability of easy to use software is what enables many of these firms to become experts in email marketing.   What I'm saying in this story is that you don't need to source (necessarily) email marketing professional services from your email software vendor.   

I guess the closest example might be with Google.  They create great software and around them there are literally thousands of agency's that have become experts on the medium of search.  It's a data driven practice that mixes some art with a lot of science.   Although there may be some special cases, for the most part, there are plenty of people who can provide really expert services and deliver fantastic results for their clients.  The same is true for Web Analytic's.  None of the main Web Analytic's players drive much revenue from professional services.

The ExactTarget model is to provide the best software in the world that is sophisticated yet easy to use.  By opening our software platform up to literally thousands of users, our clients can choose the best way to execute as part of their overall strategy: through agency partners, by themselves or leveraging our internal resources. 

Usually, this results in a lot more effective marketing and at a lot lower cost.

Comments

[Geoff]

Thanks for the clarification - you really didn't need to go into such detail. Most in the industry understood and agrees with you. Al is being defensive. Look at his comment on your thinking e.g., "very old thinking."

Tell us Chris, from initial concept to today, how many years did it take to become the largest ESP and what is your year over year growth rate?

If your kind of thinking is wrong, then I guess I don't want to be right.

Geoff

[Tim Whelan]

I agree with the idea of e-mail software, but the emphasis on analytics is over the hill. With online customer approval ratings at an all time low maybe the way we rely on analytics should be examined a little closer.

It has gotten to the point where management is so dependent on these programs that what use to be reasonable decision processes are biased by the use and interpretation of such data.

Field and customer feed back and real time analytics of real customer experience models have taken a back seat and common sense has been thrown out the window and replaced with misplaced policies and flawed management decision models that are highly if not entirely influenced by inaccurate and misleading analytics.

The analytics and there consistancy very with each provider and are rarely deliver consistent informative data, even the definition of such data very across the industry. CRM is notably known for the same such inconsistencies along with a host of other solutions along with its failures. The way we gather and interpret such data is usually inconsistent with business processes and existing customer support systems that are responsible for delivering the defining customer experience(s) and brand promise. Considering all these systems are designed by IT technocrats without business functionality, input or compatibility in mind this really shouldn’t be a surprise to anyone.

The more we rely on the analytics environment to drive business decision making the more we erode the path to customer loyalty and retention. They should be used only as a support tools in the management process.

[Jeffrey]

Chris, I think you dont understand that many of these companies need the help of agencies since email is a very specific world and the expertise is greatly needed especially for those just first starting email marketing programs and campaigns.

Yes, you have impressive growth, but do you really think sofware is the most important aspect of email marketing? With the saturation of email in people's inboxes, you need to stand out and that comes in the form of relevancy, copy and creative. how does your software help with those? Just because your software can do them does not mean people know how to do them or help them structure it to their business objectives.

Professional services are always going to lend more value over software or you would not have 350 agencies relying on your expertise - software.

[Kevin]

Chris, Thanks for your post. As a web based service, we relentlessly focus on creating software designed with our *users* in mind. As we continue to develop software that 'even our parents could use', we can continue to drive the complexity away from the user to the machine. It is this steady progression that expands the pool of 'experts'. I see it happening everyday with our own clients. The key is focusing on the user..."What can we do as software designers/developers to make our clients superstars in their own job?".