One of the questions that The Relevancy Group gets asked constantly is whether it makes more sense to build home-grown solutions to support email marketing programs and the database management and analytics that support these programs, or to outsource these to SaaS vendors -- whether they are MSPs, ESPs, or data analytics providers. Of course, there is the third option of on-premise solutions, but for the purposes of this discussion we'll put them together with the SaaS solutions. (For an interesting look at our most recent research on this topic among marketing executives conducted in partnership with Express Analytics, you can download a free whitepaper here.)
In our research and in our work with our clients, we have come across companies that are happy with their home-grown solutions, and we've come across companies that are happy with their SaaS solutions. Conversely, we've found companies that are unhappy with each type of approach. The difference is in the depth of dissatisfaction -- companies unhappy with their home-grown solutions tend to be very displeased. And while companies whose SaaS solution makes them unhappy are likely to switch to another SaaS provider, companies unhappy with a home-grown solution tend to replace it with an outsourced solution.
What leads to such a depth of grief at some of the companies that have built home-grown solutions? Let's take a look at three reasons why a home-grown solution might make you cry. And in the interest of full disclosure, while at Acxiom, I did have a major client that decided to take its email marketing in-house. The IT department had everything under control. Millions of dollars and three years later, the company was back.
Home-grown solutions are like a maximum security prison -- easy to get into, hard to get out of
In the early development days of a home-grown solution, everybody is happy. IT has sprung into action (after all, the department was the biggest proponents of home grown), budgets are flush, and executive management is committed and fully supportive of the effort. Dreams of savings and competitive advantage -- while yet to be realized -- are still viewed as attainable.
But then, sometimes things go awry. Key supporters in IT move to other jobs, budgets get squeezed, development takes longer than planned -- which you most likely predicted. Suddenly it's now the problem of you -- the marketing person. And the train has left the station. No one who originally supported the plan is going to be willing to pull the plug. The possibility of a bad outcome is not enough to stop the effort. Until you have actual evidence that this was not a good idea for your company, the home-grown solution stays right where it is.
If you make a bad decision when choosing an ESP, the decision to switch is much easier to make than if you've set up a home-grown solution. You're not going to switch to a different home-grown solution. You're going to have to reevaluate your entire approach.
There's a big difference between calling IT and calling an ESP
Of course, not every home-grown solution crashes and burns during the development stage -- many get up and running as planned. But we all know that at some point in time technology always fails. If it's 6 a.m. on a Saturday morning and you have a system failure, who would you rather be dialing -- a vendor with a dedicated account manager on your business whose job it is to keep you -- the client -- happy? Or your company's internal help desk? I don't know about you, but I'd rather call someone who saw me as a valued customer rather than a problem to be dealt with because I need a fix right now.
Maybe there's some new functionality that you would like to see added to the solution. If it doesn't already exist in your ESP's platform (because it has 80-100 other clients asking for new features all the time), it can quickly muster the internal resources to custom build it for you. On the other hand, if it's your IT department you're calling, you're going to go to the end of the queue. By the time the team gets started building the new functionality for you, you'll be retired and living in Costa Rica. Why? IT has moved on to the next big internal project. You're old news, and frankly not all that interesting any longer. Whose idea was it to build this thing anyway?
Your company's superstar now works at an ESP
Let's face it: In most companies' marketing organizations, people rarely make email marketing their career. They do it for a few years and then move on to other roles in the marketing department. And the one person on your team who really knew his or her stuff got hired away by an ESP and was made a senior strategist -- working with your biggest competitor. The same thing is likely to happen to the next superstar who comes along. If the person truly loves email marketing, he or she is going to see that their future lies with the ESPs -- not with you.
There's simply no comparison between the experience of people working at ESPs -- and related vendors and most marketing organizations -- when it comes to email marketing, database management, and analytics. These are folks who have made this work their career, and the breadth of client experience they have across various industries cannot be matched by anyone on your internal team. That's not a knock against your team; it's merely the truth.
Whether you are an enterprise or a mid-market company, one of the biggest challenges to marketing organizations with home-grown solutions is a lack of access to the right resources to meet their marketing needs. You'd obviously much rather be told, "I've set up abandoned cart emails for 10 other customers," than hear, "Well, there's a first time for everything." Enthusiasm is not a substitute for experience. And from a cost perspective, it certainly is more efficient to pay for these resources only when you need them -- rather than having people on staff internally.
This only represents a short list of the reasons a home-grown solution might bring you to tears. I'm sure those of you living in that world today could add several more reasons. Remember: Not everyone with a home-grown solution is unhappy. Every company is different -- different objectives, different markets, and different people. There are instances where a home-grown solution is the best approach. Just make sure you think it through very carefully in advance. Bring this column to any meetings your company might have to discuss going home grown.
Chris Marriott is the vice president of services and principal consultant at The Relevancy Group.
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