Salesforce not buying what they need with ExactTarget, even for $2.5 billion

Salesforce buys ExactTargetYou can’t build a mansion around an outhouse and you can’t build real-time customer engagement by putting an email and campaign management tool on top of a CRM database. It doesn’t work like that. The business of interacting with prospects and customers is a real-time game that requires the ability sense and respond in ways and at speeds that simply be can’t be managed by those platforms as they exist today. On top of that, loyalty has become the permissioning that drives the mobile revolution. Loyalty is conspicuously missing in the Salesforce + ExactTarget equation.

ERP and CRM won’t do it

But Benioff knew that he had to do something. The best evidence that Salesforce saw a problem comes from the rumor that they competed with SAP for ExactTarget. It’s not surprising to hear that. SAP is in the exact same place…they’ve built an enormous, mostly-monolithic ERP that isn’t ready for the marketing campaigns and customer engagement that will be the required of any platform within 1-2 years. Neither CRM nor ERP are flexible or nimble enough to meet the need.

Sure, they’ll compete with IBM’s Unica and Oracle’s Eloqua, but they’re missing the bigger picture of what the marketplace needs. Here’s why:

  • Speed’s not there – These are enormous companies ‘carrying’ a customer base that is fundamentally database-driven. Sure, SAP has HANA in an effort to show their real-time capabilities, but that doesn’t fundamentally make them a real-time platform when so much is still database-driven. Salesforce, with its primary focus on the sales funnel, has never had to play in the here-and-now and I’d argue was mostly a cost-savings replacement for Siebel, not a way to take a business to the next level. Speed is a problem for both companies.
  • Loyalty is missing – Loyalty is the de-creeping factor of today’s customer engagement management. Without loyalty, a brand lacks the permissioning that makes it OK to send offers and otherwise engage with consumers in personal ways. Loyalty sets up a customer’s preferences for time and place of message delivery as well.
  • Offers aren’t enough – Because loyalty is the granting of permission and a symbiotic relationship, it means brands can carry on conversations with their customers and deepen engagement. ExactTarget as an offer engine is only a piece of the equation of engagement, but not nearly the largest piece.

It makes sense that Salesforce bought ExactTarget but at the same time, it isn’t going to make them an on-demand, real-time marketing platform. They started from the wrong perspective as a SaaS-based CRM to be able to integrate a rapidly expanding number of data sources, sense and respond to a kaleidoscope of customer and business conditions, and perform complex, customized logic in the moment.

A collection of our writing on this topic can be found here. Enjoy.

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Categories: Marketing, Real-time

Author:Chris Taylor

Reimagining the way work is done through big data, analytics, and event processing. There's no end to what we can change and improve. I wear myself out...

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4 Comments on “Salesforce not buying what they need with ExactTarget, even for $2.5 billion”

  1. June 5, 2013 at 7:37 am #

    Chris, I agree with both your main points: companies ultimately need real-time customer engagement systems, and Salesforce doesn’t get that with ExactTarget. You also get credit in my book for being the only commentator I’ve seen who makes this point (myself included, although I swear the thought did occur to me).

    BUT, it’s far from clear that the market (i.e., buyers of marketing software) is ready for this. Few companies have adopted the existing real-time interaction management systems, while many are still buying the older, batch-oriented products. So I think the acquisition gives Salesforce what it wanted, which is a serious way to penetrate marketing departments. If they’re smart, they’ll later extend their systems to support real-time interactions, even though this could require substantial architectural change. And I do think they’re smart.

    • June 5, 2013 at 1:22 pm #

      Well said, David. While it may not seem the market is headed in this direction, I’ve seen several places in grocery and other retail where the infrastructure pieces are being put in place right now.

  2. June 5, 2013 at 8:09 am #

    So what then is your solution? What would enable this “speed” and connection to loyalty? I don’t see this acquisition as much different from ORCL buying Eloqua. Both will have to do major rework to truly get the MA platform tightly integrated into the CRM. It’s just signaling the battles to come as marketing is getting more and more budget for big ticket platforms.

    If we are truly looking for “speed”, then we should probably move towards the customer experience, and that means moving to the web CMS systems. But the CMS systems, without a solid connection to the customer data, lack the intelligence… and without a solid MA platform to build the intelligence… you get my point. it’s all interconnected.

    So, give they own the CMS platforms, do a players like Adobe, IBM, or Sitecore have better positions in this? Integrated to CRM is fairly trivial now-a-days…

    As an Eloqua, SFDC, Sitecore customer, the hardest bit is the CMS to MA. THAT is the area ripest for integration and consolidation and for a single player to make a game changing move. IMHO.

    Consider the can of worms opened.

  3. June 5, 2013 at 1:26 pm #

    I would say IBM, SoftwareAG, Oracle and TIBCO all have the advantage of integration, in-memory data grids, rules, events and workflow.

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