The question seemed so simple, so reasonable: What more do I get as I pay more for a campaign manager? But there was no simple answer. The campaign manager you buy for $100,000 looks a lot like the one you buy for $350,000 or $1,000,000. True, vendors often charge more for larger customer bases or more powerful servers, but comparisons across different vendors for the same size system still can yield differences in the hundreds of thousands of dollars.
Some of the price differences are more apparent than real. In a competitive situation, the more expensive campaign management vendors have sometimes offered their systems for less than half the list price. In an era when venture capitalists or financial markets willingly fund losses of firms in hot markets, vendors need not squeeze the maximum revenue from each sale.
Still, it's generally accurate that prices for established high-end campaign managers from vendors such as Xchange Inc., Prime Response and Recognition Systems (Protagona) start at around $350,000. These are roughly equivalent products. While each has its strengths and weaknesses, they all support the full range of traditional campaign management activities complex segmentations, multistep campaigns, sophisticated champion/ challenger testing and detailed response analysis. Today, most also provide some form of e-mail campaigns, near real- time response and integrated statistical modeling.
The real question is: What would the marketer give up and how much would he save if he didn't buy a top-tier system? He has four major options. The first option is discussed here, and subsequent columns will cover the other three options.
Generic Query Tools. Products such as Business Objects, Brio and Cognos Impromptu can all be used to generate reasonably complex queries, which are the true core capability of a conventional campaign manager. After all, the purpose of these systems is ultimately to generate lists, which are nothing more than sets of records selected by a query. Although marketers have traditionally wanted their campaign managers to generate the sorts of complex, ad hoc queries that tie SQL in knots, the reality is that most of today's high-end campaign management systems do little better at this than generic SQL-based query tools. (An earlier generation of campaign managers, using proprietary databases and non- SQL query languages, were much better at complex queries; but the market chose openness over query power.) Marketers have found that they can live with the compromises needed to execute complex selections within the confines of standard SQL, such as precalculating key aggregates and splitting a query into several steps. Even random selections, the one non-SQL function that nearly all high-end campaign managers have made a point of providing, can be reasonably simulated in SQL-only systems through tricks such as assigning a random number to each customer or selecting on quasi-random values such as the last digit of a ZIP code.
What would a marketer give up by using a generic query tool alone? Two things, really. The first is the set of functions involved in defining and executing multisegment, multistep campaigns. A standard query tool executes one query at a time. For a marketing campaign that might have dozens, hundreds or even thousands of segments, this means at least one query per segment. The time and computer resources needed to execute each of these against the underlying marketing database may be unacceptable. Additionally, the human effort needed to ensure each segment definition is correct would be impractical. A sophisticated user might make things more efficient through clever use of tags and temporary tables, but most marketers lack the inclination or skills to do this. A high-end campaign manager, by contrast, provides a marketer-friendly interface that lets the user specify how the segments relate to each other and figures out for itself how to execute this plan as efficiently as possible. (Some of the high-end systems are considerably more efficient than others, but all at least offer a simple interface that removes from the marketer the burden of trying.)
The second function missing from a simple query tool is response analysis. All campaign managers provide automated features to store a customer's promotion history, match promotions against later responses and report on the results. Again, the campaign managers vary widely in the details of how they do this, but all of them include a framework to manage the process. By contrast, the buyer of a general purpose query tool would need to design and implement this process from scratch. Even more than complex segmentations, this is something that clearly must be done by IT professionals.
The cost of building a response analysis system must be counted against any savings that result from purchasing a generic query tool. The savings themselves are likely to be substantial: a standard query tool might cost anything from $1,000 to $10,000 per user with prices tending to the lower end of that range. Since most campaign management systems have only a handful of real users, many firms could buy the necessary software for well under $50,000. For companies with limited needs for campaign complexity and response analysis, this could yield a considerable savings even after the higher development and operating costs are taken into account.
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