Come Together, Right Now, Over Me: Companies Get Acquisitive About the Customer Experience

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Come Together, Right Now, Over Me: Companies Get Acquisitive About the Customer Experience

By Paula Bernier, Executive Editor, TMC  |  January 15, 2014

Unifying all the different pieces of the customer experience so businesses can better understand their customers; offer them assistance as needed and via the communication media they prefer; and reach out to customers and prospects with timely and targeted messages, is no easy task. But, increasingly, that’s what many of the big players in the customer experience arena, and software in general, are trying to do.

Just look at some of the recent acquisitions we’ve seen on this front by some of the big names in tech.

Adobe last year purchased by Neolane, which Gartner has labeled a visionary in integrated marketing management, multichannel campaign management, and CRM lead-to-revenue management, and Satellite, a company that offered tag management technology to help marketers with analytics and media tracking across websites.

Microsoft this January bought cloud-based customer service software outfit Parature.

Oracle within the time span of just more than a year has snapped up BigMachines, Compendium, Eloqua (News - Alert), and Responsys.

And in 2013 acquired e-mail service provider ExactTarget, which itself had previously ingested marketing automation vendor Pardot.

IBM (News - Alert) and SAP, both of which also have CRM offerings, are other well-known names that have been expanding their scope related to customer experience.

IBM was early to the action on this front, acquiring enterprise and cloud-based marketing software outfit Unica back in 2010. And SAP recently has been promoting its concept of Precision Retailing, which leverages geofencing and other triggers, and SAP’s own HANA application and database platform, to better target campaigns at mobile users.

“Customers are more connected and better informed than ever before,” says Bob Stutz, corporate vice president of Microsoft Dynamics CRM. “Organizations are looking for business solutions that can strengthen their ability to connect with customers on their own terms, using whatever device and whatever channel they prefer.”

Microsoft is responding to that new customer requirement by pairing its CRM solution with Parature’s ability to support a wider array of channels (including mobile devices and popular social media sites like Facebook (News - Alert)) for customer care and engagement.

"The CRM market is accelerating rapidly worldwide and the outlook has never been stronger,” Larry Augustin, CEO of SugarCRM, tells CUSTOMER magazine. “The recent deals continue to validate that CRM is the fastest growing sector in enterprise software, and without a doubt, it's an exciting time. The market is ripe for innovation and we expect to see this level of activity continue as more and more companies are investing in next-generation customer engagement technologies and long-term customer initiatives. Nearly every company across every business sector is looking for innovative, affordable ways to connect and engage deeper with customers across its organization.

“Retaining customers is far more profitable than acquiring new ones, so organizations looking to deploy successful CRM initiatives are starting to focus on more personalized customer support and satisfaction – as opposed to just sales force automation,” adds Augustin. “And CRM systems are becoming even more prevalent as customer service tools become more aligned with the changing nature of the individual customer in the era of mobile and social technologies."

Indeed. Even those CRM companies with a more than comfortable market share, such a CRM giant, are moving to address these changing trends.

As illustrated above, many of these acquisitions – including the ones by – involve the purchase of marketing automation organizations. As previously reported in the November issue of CUSTOMER magazine, CRM and marketing automation are closely related. Lori Wizdo, principal analyst at Forrester (News - Alert) Research, says marketing automation involves managing the pipeline to revenue – starting with attracting the right kind of traffic, engaging that traffic, and then converting it to sales. CRM, meanwhile, addresses the back end of the process, she says.

“There will be more consolidation,” Wizdo predicted in her conversation late last year with CUSTOMER.

She was right.

The 103,000 mid and large sized businesses in the U.S. spend $1.3 million annually collectively on content creation, says Toby Murdock, CEO of Kapost, which sells a content marketing software and content platform. That means if just 3 percent of that goes to content marketing software, the market opportunity exceeds $4 billion annually.

“When Oracle, the world’s No. 3 software provider, makes an acquisition in a segment, it is a clear sign that the need is clear and growing for that segment,” Murdock adds.

Oracle has made not one, but a handful of acquisitions in the marketing automation segment.

The third quarter saw Oracle buy both BigMachines and Compendium. BigMachines offers cloud-based solutions that enable sales people to more easily generate quotes and pricing for their customers. Compendium offers cloud-based capabilities that enable companies to more easily create, monitor and promote their mobile and other online content.

Those two deals came in the wake of Oracle’s acquisition of Eloqua, another cloud-based marketing automation outfit, which the company announced plans to buy in December 2012. Then, almost exactly a year later, Oracle moved again on this front, making a grab at Responsys. Oracle executives Thomas Kurian and Kevin Akeroyd in a December letter to their customers and partners wrote: “The addition of Responsys will extend Oracle's Customer Experience Cloud, which includes the Oracle Sales Cloud, Oracle Commerce Cloud, Oracle Service Cloud, Oracle Social Cloud and the Oracle Marketing Cloud. By bringing together Responsys and Oracle Eloqua in the Marketing Cloud, for the first time CMOs that support industries with B2C or B2B business models will be equipped to drive exceptional customer experiences across marketing interactions and throughout the customer lifecycle from a single platform.”

Delivering a multifaceted cloud-based customer experience solution is the strategy of Adobe and as well.

Adobe in mid January announced new functionality to Adobe Campaign (the rebranded version of the campaign management product Neolane had offered), and integration between that solution and Adobe Experience Manager, both of which are part of the Adobe Marketing Cloud.

New aspects of Adobe Campaign allow marketers to deliver large volumes of campaigns, offers, data, and interactions with an enhanced real-time marketing infrastructure; more easily create and customize local campaigns; use transactional messaging to complete or confirm orders and deliveries; and support the German language. And, as mentioned, Campaign is now integrated with Experience Manager, which enables marketers to create, manage, and optimize online experiences.  

Interestingly, Adobe comes at marketing automation from a different angle than many of the other players in this market, which have led with contact center and/or CRM solutions. Adobe, as you probably already realize, is best known for its computer software such as Acrobat, which is practically ubiquitous on user PCs worldwide.

Patrick Tripp, senior product marketing manager at Adobe Campaign solution, tells CUSTOMER magazine that gives Adobe a more intimate understanding of the creative side of marketing.

Adobe’s acquisition of web analytics, measurement and optimization business Omniture – for a whopping $1.8 billion – back in 2009 was an early move in this new direction. 

Some criticized Adobe for the price of that deal. Whether or not that particular deal was worth its weight is to be determined, but what is clear is that the value of customer experience solutions such as analytics, automated marketing, CRM, and multichannel or omnichannel service solutions is on the rise. As Tripp notes, it’s becoming clear to just about everyone that a one-size-fits-all approach just doesn’t work with today’s consumers – who are much more connected, informed and particular about what they want, how they want it, and when and through what channels they want it delivered.

Steve Kraus, senior director of product marketing for CRM Solutions at Pegasystems (News - Alert) adds: “What I am consistently hearing from leading customer service organizations is they need to become more agile and more simply engage with their customers regardless of channel or device. They are laser-focused on increasing employee productivity and simultaneously reducing customer effort. They are tired of spending their precious time and money stitching together applications that should ‘just work together’. They will no longer tolerate integrating a CRM company’s solutions for them and the related time to deploy, cost to maintain, missed requirements translations and ultimately results in more training, lower productivity and disappointed customers.

“The leaders of customer-facing organizations want to capture their business goals, best practice procedures, and policies directly into a working application, one that engages their customers and employees in an intuitive manner,” he adds. “And as they get feedback from their employees, customers and the systems themselves they need to rapidly and continuously adapt. As regulations change and new products come to market they need to support those new requirements without missing a beat, something they cannot do if that requires a new customization or changes in multiple applications.”

Edited by Blaise McNamee
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