THE ON-PREMISE ADVANTAGE FOR MARKETING AND TRANSACTIONAL
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1 BEST PRACTICES IN MARKETING THE ON-PREMISE ADVANTAGE FOR MARKETING AND TRANSACTIONAL New perspectives on insourcing and outsourcing business-critical commercial
2 PUBLISHED BY US Headquarters StrongView Systems, Inc Island Drive, Suite 200 Redwood City, CA P: +1 (650) F: +1 (650) UK Headquarters StrongView Systems UK Ltd. Atlantic House Imperial Way Reading RG2 0TD United Kingdom P: +44 (0) APAC Headquarters XCOM Media Unit 1 15 Lamington Street New Farm Queensland 4005 Australia P: Copyright 2013 StrongView Systems, Inc. All rights reserved. No part of the contents of this publication may be reproduced or transmitted in any form or by any means without the written permission of StrongView Systems, Inc. STRONGVIEW and the STRONGVIEW logo are registered trademarks in the United States, other countries or both. All Rights Reserved. StrongView Systems UK, Ltd is a company registered in England and Wales at 5 New Street Square, London EC4A 3TW. Reg. No VAT # GB Trading Address: Atlantic House, Imperial Way, Reading, RG2 0TD, United Kingdom.
3 Table of Contents 1. INTRODUCTION: THE EVOLVING MARKETING LANDSCAPE 2. INTEGRATION AND RELEVANCY 4. FLEXIBILITY 5. VISIBILITY AND CONTROL 6. DELIVERABILITY 6. COST 8. DATA SECURITY AND PRIVACY 8. CENTRALIZATION 9. RELIABILITY 9. CONCLUSION 10. ABOUT STRONGVIEW
4 Traditional arguments for insourcing or outsourcing marketing and transactional have changed. The debate has evolved to keep pace with changing consumer behaviors, the latest full-featured, on-premise solutions and expanding requirements from marketers for improved control, costs and data security. High-volume senders and firms that need complete control over their data love [StrongView] for its installable platform. The Forrester Wave Marketing Vendors, Q While the pros and cons still exist, they re now being considered in the context of a company s overall customer communication strategy and its plans for leveraging across the enterprise. The benefits of centralizing customer , including tight integration with business data and processes, improved data security and consolidated technology platforms, make insourcing an attractive option for companies looking to improve the quality and effectiveness of their outbound communications. By examining the factors involved with insourcing and outsourcing your marketing and transactional , this whitepaper will help you assess whether a commercial-grade on-premise solution is right for your business. INTRODUCTION: THE EVOLVING MARKETING LANDSCAPE According to industry research, mastering an strategy is an marketer s top concern, and that s not too surprising given that marketing has established itself as one of the most cost-effective and targeted ways to reach customers. Although most companies have adopted marketing as an important part of their overall marketing program, there is a lack of consensus around the best way to manage promotional . Many organizations allocate large budgets to outsource their programs to agencies or multi-tenant service providers (ESPs), while others have chosen to manage their programs in-house by building custom solutions that combine pieces of technology from various vendors. A third choice, commercial-grade on-premise solutions, has now emerged that addresses the shortcomings of multi-tenant ESPs and custom-built installed solutions. Historically, analysts and other industry experts have recommended that both small businesses and Fortune 500 companies alike outsource their marketing efforts unless they had a fully trained, dedicated staff of in-house experts who could successfully manage the scope of an marketing campaign. Today, however, things have changed. 1 The On-Premise Advantage for Marketing and Transactional
5 On-premise solutions have come a long way in a short period of time, allowing companies to reap the benefits of insourcing with fewer resources. The benefits of an on-premise approach (outlined next) have become amplified in the current environment where macro-economic conditions, increased data breaches and the need for improved relevance have real consequences for business. In brief, insourcing with an on-premise solution for outbound commercial can yield the following benefits when compared to outsourcing: With StrongView, we have a committed partner that offers both the technology and strategic services necessary to take our marketing efforts to the next level. Michael Relich CIO at Guess?, Inc. Lower Costs On-premise solutions are typically based on a perpetual license, versus CPM fees charged by outsourced service providers that continuously increase with your campaign volume. With a license-based solution, the more you send, the greater your savings and the faster you achieve ROI. When you factor in extraneous service/account management fees, the savings and ROI are recognized even faster. Greater Relevance Creating relevant messages requires timely access to (and use of) customer data. With on-premise solutions hosted in your network, access to business data and your systems of record is limitless and real-time. With multi-tenant outsourced solutions, integration with internal systems can be inherently complex and error prone, which ultimately limits the extent to which you can leverage your data in order to create more relevant messages. Data Security Transmitting customer data to an ESP that uses the same shared infrastructure across all of its clients introduces obvious security risks. With on-premise solutions, you control data privacy and limit the exposure of customer data and the potential business and legal consequences of a data breach. Superior Control With on-premise and dedicated hosted solutions, you are able to decide when campaigns launch, objectively measure campaign results and delivery rates, and control your reputation as a conscientious sender. Of course, an on-premise approach is not going to be right for every business, and the sections that follow will highlight several key factors to consider when assessing a solution for marketing and transactional . INTEGRATION AND RELEVANCY Savvy marketers know that delivering messages with greater relevancy and sophisticated targeting maximizes both results and customer satisfaction. Previous analyst research has shown that relevant campaigns increase net profits by an average of 18 times more than broadcast mailings. To achieve this objective, companies must tightly integrate their platform with customer data sources and business systems. Both on-premise and outsourced solutions can enable you to do this; however, the nature of the integration for each approach is quite different and each offers its own set of benefits and challenges. 2 The On-Premise Advantage for Marketing and Transactional
6 Many established multi-tentant service providers offer methods to integrate with your customer data. Still, security and privacy concerns prevent most companies from providing direct access to their data and applications, which means there are extra steps, extra efforts, extra integration points and certainly extra chances for mistakes to occur when trying to integrate and leverage customer data (see illustration below). The transmission of data back and forth is further complicated by the need to map data between the structure supported by the service provider and the structure supported by your internal systems. This synchronization, and the potential problems associated with latency and errors, can have tangible impacts to the business particularly in customer service applications. The latency introduced by synchronization also prohibits true real-time integration for optimizing programs based on customer behavior and preferences. In addition to providing us with realtime access to response data, StrongView s platform offers us more integration capabilities to segment our lists based on individual customer preferences, behaviors and events. Lists & Profiles Database 1 Client A multi-tentant ESP Firewall 6 Data Integration with a multi-tentant ESP Safe Store API or FTP Lists & Profiles Campaign Data ESP Application Database Lists & Profiles Campaign Data 4 Campaign Recipients Clicks, Opens, Compliants, Unsubscribes & Failures Lincoln Barrett Vice President of Guest Marketing IHG (InterContinental Hotels Group) Client extracts campaign data (lists and profiles) from systems of record and places data in "safe store" outside the corporate firewall. ESP collects client s data file from safe store via API or FTP. ESP maps client s data to ESP s data model for use with campaign application. Campaign data (clicks, opens & unsubs, etc.) are collected in the ESP s application/data model. ESP maps campaign data back to client s data model and places on safe store. Client collects campaign data file from safe store and imports data to systems of record. Insourcing offers a different integration model. An on-premise system connects directly to your customer data sources, which eliminates the latency associated with FTPing, mapping or synchronizing data files with a third party. A commercial-grade onpremise solution will provide APIs to directly connect with databases and systems of record (see illustration on the following page), which enables up-to-date targeting and ensures that all the latest response data is readily accessible across your organization (e.g. for interaction with customers at your call center). Tight integration also facilitates the creation of dynamic content for true 1-to-1 communications, such as triggered lifecycle campaigns based on response or purchase data. Once you ve achieved this level of integration, you need to ensure that your system or service provider offers you the flexibility to leverage it effectively. 3 The On-Premise Advantage for Marketing and Transactional
7 Data Integration with StrongView's On-Premise Option Client Campaign 1 Platform & User Application Lists & Profiles Message Studio Database Corporate Firewall Clicks, Opens, Compliants, Unsubscribes & Failures Recipients 1 Client imports campaign data from systems of record into StrongView, and campaign results are transmitted back to systems of record. FLEXIBILITY Large and small companies alike are striving to grow their respective businesses, and that requires having the flexibility to facilitate growth and adapt to changing IT requirements and business needs. has become a business-critical tool for driving that growth, which makes it extremely important to ensure that your deployment solution can evolve to accommodate new streams, integrate with new systems and data sources, scale to support rapid customer growth, and address the increasing sophistication of marketing programs and campaigns. Outsourcing your customer to an established service provider can be an attractive option for managing customer growth, as you can usually upgrade your service level to meet your increasing volumes. However, the inherent shortcomings of outsourcing to a multi-tentant ESP, including data integration, cost and data security, ultimately limit your flexibility and ability to take advantage of new market opportunities. With traditional outsourced solutions, you are locked into the finite capabilities and integration options available with your ESP s platform - which is further complicated when it s shared with other clients. Even though insourcing your deployment with a commercial on-premise solution gives you the flexibility to adapt to these changes, some companies are hesitant to adopt this approach because of the perceived IT resource requirements. In reality, there are on-premise solutions that exist today that require only portion of a single IT resource for ongoing system management. If you lack the IT resources entirely, be sure to choose a vendor that offers the option to host the solution for you or manage it remotely. Furthermore, you should also ensure that the on-premise solution you chose has an open architecture that will allow you to easily tie into future business applications and provide a clear and simple approach to scaling in response to future needs. 4 The On-Premise Advantage for Marketing and Transactional
8 VISIBILITY AND CONTROL We have much better visibility into our mailings, which enables us to react more quickly than were able to before and that has led to greater customer relevancy, improved conversions and increased revenue. Brad Cundall Customer Marketing Manager Hayneedle.com service providers that offer an on-premise option are seeing increasing interest from marketers who currently outsource their programs, but who are now looking to gain greater control over their campaigns, results and reputation as a legitimate sender. While control is one of the core benefits of an on-premise solution, marketers must choose a vendor that provides them with the tools necessary to achieve it. Accurate, real-time reporting is one of the most important tools for an marketer. The ability to capture customer response data in real-time and make that data actionable can be the difference between a highly successful campaign and a mediocre one. Full-service outsourced providers may offer expertise in marketing, but they aren t likely to be as familiar with your business as you are. Furthermore, the people assigned to your account are also serving other clients, which can introduce delays that prevent you from taking advantage of market opportunities as they arise. It s also not uncommon for there to be a lot of account management turnover, which restarts the learning curve all over again all of which diminishes your control over the effectiveness of your programs. Self-service outsourced provider models give you more control, but you are at the mercy of their reporting data model, which may not align with the metrics that you have determined for your business. These outsourced solutions often employ a proprietary black box system of processing reporting data such as opens, clickthroughs, unsubscribes, and bounces, with no real assurance or confidence of accuracy. In fact, a previous research from the Experienced Council found a pervasive lack of standardization around industry metrics, which makes it difficult to know whether you re in agreement on the key performance metrics mentioned above. The same lack of standardization impacts bounce management. Many marketers are so focused on click-through rates that they gloss over the important details around failures and the reasons behind them. Managing bounce data effectively reduces complaints and strengthens your ISP sender reputation all directly impacting the top line of any serious program. However, you need to have confidence in the bounce data before you act on it. Relying on an outsourced provider puts this important process in someone else s hands. You are also limited by their internal capabilities, resources and responsiveness. The decentralized nature of the standard, multi-tenant ESP model also makes it very difficult to control the consistency and frequency of all sent from your organization. Bringing your marketing in-house gives you complete control over the success of your programs. Real-time reports enable you to act on events as they happen, such as online purchases, address changes and requests for information. Insourcing also gives you the power and flexibility to control technical factors that affect scalability, integration, reliability and accessibility. Equally important, this approach allows you to take control of your sender reputation, which is a key component for maximizing deliverability. 5 The On-Premise Advantage for Marketing and Transactional
9 DELIVERABILITY Since switching to StrongView, we ve seen a significant improvement in the consistency and deliverability of our daily sales alerts, which are a primary driver of purchases. Dave Atchison Vice President of Marketing zulily effectiveness relies heavily on an organization s ability to deliver mail to the inbox. According to Return Path, nearly a quarter of legitimate messages never reach the inbox. 1 As ISPs increasingly rely on engagement and sender reputation as the principle criteria for filtering your mail, generating clicks and maintaining a positive reputation have become primary factors in the success of a company s programs. Sender reputation is based on a number of factors that are tied to your IP addresses, including list hygiene, volume, mailing frequency, engagement and recipient complaint rates. Therefore, if you build a positive reputation with an service provider on their IP addresses, it is important to make sure that your reputation can follow you when you eventually switch providers. Furthermore, because ESPs send on behalf of numerous customers, you should know whether or not they assign separate IP addresses for each client. Many ESPs share IP addresses across clients, which means that their ability to deliver on your behalf will only be as good as that of their least reputable customer. Generally, they charge their customers an additional fee to have a dedicated IP address. Another key factor in managing deliverability is to deliver in a way that meets ISP delivery parameters, such as throttle configurations and number of connections. Not all service providers regularly update their sending parameters to align with ISP requirements, so if you re working with an ESP, you will want to verify that they have a process for making these updates. The right commercial-grade on-premise solution will include frequent software updates to keep you in compliance with current ISP requirements, so you are always sending at the optimal rates for accepted delivery. Managing your in-house with an on-premise solution allows you to control all of the factors that affect your sender reputation, and manage them accordingly. A commercial on-premise solution should provide you with sophisticated bounce processing and the ability to feed that information directly back into your database for ongoing list hygiene. An ESP with an on-premise deployment option will also offer a range of deliverability services to assist with whitelisting, feedback loop processing and ISP remediation, alleviating your team s responsibility for day-to-day management. This provides you with all the benefits of a single sender reputation without the added burden of managing it yourself. COST When weighing the costs of insourcing programs against outsourcing, the primary points of comparison are license fees versus CPM fees, various services fees and the resources required to use the system in either scenario. These costs should then be looked at in the context of volumes in order to determine the effective return on investment, and the time period required to achieve that ROI. 1 Return Path, Global Deliverability Benchmark Report, March The On-Premise Advantage for Marketing and Transactional
10 The on-premise approach typically involves a one-time license fee for use of the product, and a recurring support fee for technical support and access to new versions of the product when they are released. With this approach, you can send as much mail as the system is capable of processing for the license purchased. With an outsourced service provider approach, you typically pay a fee (CPM) for every 1,000 s sent, so the more you send, the more you pay. When comparing these two models, it becomes clear that you achieve a break-even point with the on-premise model based on the volume of you send, such that every you send beyond that point is effectively free. Furthermore, the more that you send, the faster you achieve breakeven/roi compared to that of an outsourced service provider approach. It is not uncommon for a business to achieve breakeven with their on-premise solution within a matter of months. A popular misconception with on-premise solutions is that they are difficult to maintain and require significant technical/it resources. As stated previously, onpremise solutions have come a long way in a short period of time, making them relatively easy to implement and maintain. For example, the average StrongView implementation requires a fraction of a single IT resource to maintain the system. Having said that, companies do not always have the IT resource or space to maintain an on-premise solution. For this reason, as stated previously in the Flexibility section, it is important that you choose a vendor that can offer both dedicated hosted or onpremise deployment options. Cost Comparison of On-Premise Solutions vs. Multi-tenant ESPs Proprietary In-House Multi-tenant ESP Commercial In-House 7 The On-Premise Advantage for Marketing and Transactional Scalability Visibility/Reporting Real-time Delivery Optimized Delivery Dynamic Content Performance Control/Data Security Poor Integration Inferior Reliability Fair Flexibility Good Technology Ease of Deployment Excellent Ongoing Cost Key Implementation Cost Cost
11 DATA SECURITY AND PRIVACY StrongView has enabled us to centralize all of our on one platform, which has improved our deliverability, control and efficiency. Greg Martz Director of Marketing Operations The Motley Fool With their strict data regulations, financial services and healthcare industries started the trend towards on-premise solutions, but recent data security breaches have caused businesses in all industries to now consider this option. Protecting that data has driven companies to require that marketing solutions be brought on premise to ensure the same security due diligence as other internal business applications that run behind their firewall. Companies that choose to outsource their marketing run risks by relinquishing control of their customer data to their vendor s internal data security policies, which may not be as rigorous as their own. In fact, a survey from the Ponemon Institute found that 54% of marketers would consider insourcing to protect customer information. 2 Controlling all aspects of sending and processing in-house allows you to avoid the legal pitfalls of sharing personal information with a third-party service provider. By implementing an on-premise solution, sensitive customer data (including names, addresses, financial profiles and other data) can remain in your secure internal databases, which helps mitigate legal exposure and facilitates regulatory compliance. Sharing customer data with an ESP may require you to modify your online privacy policies and, in some cases, await your customers approval before sharing this information. The transmission of sensitive data also represents a potential security risk and poses challenges if the data needs to be readily accessible for compliance or legal review. CENTRALIZATION Studies have shown that nearly two-thirds of companies have more than one department that is responsible for customer-facing , increasing the volume and frequency of messages landing in your customers inboxes. This lack of coordination and decentralization often leads to over-mailing subscribers and messages that lack a consistent tone in branding and style. As volumes continue to rise, the need for marketers to reign in this chaos becomes increasingly important to stand out from the clutter. Companies must implement controls over contact frequency and relevance in order to effectively serve their customer base. The operational efficiencies and cost savings of centralizing on a single platform also benefit the company s bottom line. In order to effectively centralize customer acquisition, retention, service-based , alerts and notifications, across the enterprise, businesses must consider the integration and cost factors involved. As specified earlier, the inherent features of the traditional outsourced model make it a cost prohibitive solution for centralizing cross-departmental streams. For that reason, coupled with integration and data privacy concerns, a commercial onpremise solution is the logical choice for an effective centralization platform. 2 Ponemon Institute, Marketing & Privacy Survey, May The On-Premise Advantage for Marketing and Transactional
12 RELIABILITY The reliability of your commercial platform is core to your business, as is a primary conduit for driving sales and delivering services to customers and prospects. Any downtime can have a devastating effect. The delay of an marketing campaign can cause a marketing team to miss an optimal buying cycle. Worse yet, the inability to deliver transactional can damage your customer relationships and drive expensive phone calls to your call center. With StrongView, we have overcome the limitations of our previous outsourced solution across all the key metrics: cost, campaign performance and reliability. Sally Chapman Direct Marketing Manager Flight Centre Limited For businesses that use an unreliable custom-built solution, outsourced solutions may appear to be attractive, as they can provide you with a more reliable infrastructure for delivery. However, the inherent cost, data integration and privacy challenges of the outsourced approach remain and are likely to be more impactful for a business that is already enjoying the benefits of managing their in-house. A proven commercial-grade on-premise solution offers the highest reliability to ensure the continuity of your transactional and marketing programs. Look for a solution that supports redundancy and high-availability configurations for maximum fail-over protection. CONCLUSION Selecting the right marketing and transactional technology for your business comes down to identifying a solution that will enable you to drive revenue and customer satisfaction with an eye towards your company s bottom line. Traditionally, companies have been prone to outsource in the absence of an effective commercial on-premise alternative, or because they didn t have the resources or expertise to manage their deliverability and technical operations in-house. However, the introduction of enterprise-grade on-premise solutions is causing companies to reevaluate their current deployment model. StrongView is helping drive this trend with comprehensive solutions and proactive services that provide an attractive alternative to outsourced providers. Our commercial-grade systems offer the same features and functionality of a hosted provider, with greater control, relevance, data security and cost-savings over your marketing programs. For more information on StrongView s on-premise deployment option, we encourage you to visit StrongView s website ( or give us a call at The On-Premise Advantage for Marketing and Transactional
13 ABOUT STRONGVIEW StrongView is the cross-channel marketing software provider that gives enterprise marketers a stronger view of how to acquire and engage customers across , mobile, social, display and web. Combining the strongest technology and proven marketing know-how, StrongView provides enterprise marketers unparalleled insight into how to deepen customer relationships and maximize results. The platform is offered as either SaaS or on-premise, allowing companies to deploy StrongView s technologies in the manner with which most fits their needs. Based in Redwood City, CA, and backed by leading venture capital investors, StrongView has been helping global brands in retail, travel, finance, entertainment and online services overcome the limitations of other marketing platform providers for more than a decade. For a stronger view of marketing go to and follow us at and StrongView Toll free U.S. +1 (800) Toll U.S. +1 (650) Toll U.K. +44 (0) info@strongview.com 10 The On-Premise Advantage for Marketing and Transactional
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