A recent article in DM News entitled, “E-mail service providers break the mold” got me thinking about how ESPs have been evolving, adding features sets and functionality, that are beginning to close the gap between the ESP platform and the marketing automation platform.
The evolution of the ESP is to be expected given the changing marketing landscape and shifting customer expectations. The further we move away from batch-and-blast and move toward one-to-one marketing, the more we have to take into account that one-to-one is not as simple as a really targeted and timely message. It means the platform by which it’s delivered too, for example via mobile or a social networking site.
In addition, most top tier ESPs offer drip and triggered email streams and have built-in web analytics or integration with a web analytics platform, two capabilities that begin to bridge the gap with marketing automation software. I predict lead scoring will be next. ESPs are recognizing that they must do and offer more in order to compete with marketing automation solutions like Eloqua, Marketo and Pardot. Marketing automation is like a big tool, a dashboard that gives marketers access to all kinds of information about what prospects are doing when, and where they are in the sales cycle. To evolve into that kind of tool, ESPs will have to offer lead scoring.
Even with their evolution and growth, email is still the core competency of ESPs. Email is—and always will be—the thread that ties everything together. You need an email address to log in to LinkedIn. You get an email when someone contacts you via Facebook. It’s the email that leads to the landing page that provides the web analytics. As the DM News article points out, ESPs are adding other services like database and mobile marketing. Next ESPs will need really need strong lead scoring capabilities, which might mean developing or buying a robust lead scoring solution and being able to tie that back to CRM systems.
Marketing automation excels at lead nurturing before passing those leads along to sales, so those leads are of a higher quality and more likely to result in customers. Compared to the core competency of an ESP(email as thread), marketing automation does a better job of pushing people through the sales pipeline, with more intelligence, more automation and—as a result—more relevance. Marketing automation isn’t only for customer acquisition, however. Used properly, it’s just as good for customer retention.
In short, marketing automation is sales and marketing focused, while your typical ESP is more marketing focused. But down the road maybe an ESP will buy a lead-scoring company. If that’s the case, how would it be different from a marketing automation tool?
There is still one major difference, however, and that’s ease of implementation. With an ESP, you can start with email and add on more functionalities as needed. You choose the right ESP for your program, use it properly and you’re good. This ease of implementation lowers the barrier compared to a marketing automation platform.
If you choose a marketing automation tool, you’re gaining lead scoring and marketing sophistication. You’re also signing up for a lot of work upfront in order to use it properly. You have automation rules to set up, processes to define, and more…much more. A recent comment from a colleague drove this point home. She was tardy in replying to an email, and when she did reply, she explained her company is moving to a marketing automation software that had her “frazzled.” As she put it, “It’s a fantastic move, but as with anything the implementation is slowing me down a bit.” At the same time, she recognized the benefit of the solution, stating that the result will be streamlined processes and more qualified leads for the sales team.
In my opinion, due to the complexity and sophistication, a marketing automation solution is overkill for many (or even most) companies. You need to progress to the point where you really need that kind of functionality, so you’re likely better off starting with an ESP anyway.
Can ESPs evolve to the point where they offer the sophistication of a marketing automation solution without losing the simplicity of their implementation? Or will ESPs eventually be some version of a marketing automation software, with all its complexity and benefits?
We even see the need for bridging the gap at our own company. Although we resell almost a dozen ESPs, we also partner with Marketo and Pardot to offer their marketing automation solutions to our clients. No matter what happens with the gap, whether it shrinks or disappears altogether, I believe this trend is a good thing overall. The increased competition will only continue to raise the bar for everyone and it’s our clients and their customers who will ultimately benefit.
– Marco Marini