In today’s fast-paced business environment, companies are constantly seeking ways to enhance their customer engagement strategies. One critical component of this strategy is the Real-Time Interaction Management (RTIM) engine, also known as marketing technology decision-making engines, next-best-experience engines, or customer engagement engines. These engines play a pivotal role in delivering personalized customer experiences, optimizing marketing efforts, and driving revenue growth. However, businesses often face a dilemma: should they build an RTIM engine in-house, buy an inferior one and customize it, or license an off-the-shelf solution? This blog explores why licensing an off-the-shelf RTIM engine is the smartest choice for large enterprises.
Delivering Value to Customers
Business stakeholders responsible for customer engagement solutions prioritize delivering value to their customers. They aim to optimize customer experience efficiently to achieve high ROI. This means considering all costs associated with the solution, including opportunity costs, and evaluating the solution’s value in terms of revenue generation, customer satisfaction, loyalty, and lifetime value. An effective RTIM engine is essential for achieving these goals.
The Pitfalls of Building In-House
Building an RTIM engine in-house might seem like a viable option for some companies, but it comes with significant drawbacks:
- Higher Costs: Developing an in-house solution often incurs higher costs due to the need for specialized skills, ongoing maintenance, and infrastructure1.
- Longer Time to Market: Custom development can take significantly longer compared to purchasing an off-the-shelf product.
- Complexity and Risk: In-house projects can be complex and risky, with potential for delays and cost overruns.
- Lack of Expertise: Many IT departments may lack the necessary expertise in marketing technology, leading to suboptimal solutions.
- Maintenance and Upgrades: Ongoing maintenance and upgrades can be resource-intensive and costly.
- Integration Challenges: Integrating a custom-built solution with existing systems can be challenging and time-consuming.
- Opportunity Cost: The time and resources spent on building an in-house solution could be better utilized on core business activities.
- Scalability Issues: Custom solutions may struggle to scale effectively as the business grows.
The Advantages of Licensing an Off-the-Shelf Solution
Licensing an off-the-shelf RTIM engine offers numerous advantages that make it a more attractive option for large enterprises:
- Specialized Expertise: Vendors provide specialized expertise that ensures the software meets industry standards and regulatory requirements. This expertise is often difficult to replicate in-house1.
- Reduced Risk: Licensing software from a vendor reduces the risk associated with custom development, including potential delays and cost overruns. Vendors have established processes and support systems in place.
- Vendor Support and Updates: Licensed software often comes with vendor support, regular updates, and maintenance. This ensures that the software remains secure, up-to-date, and compliant with evolving standards.
- Cost-Effectiveness: For certain applications, licensing software can be more cost-effective than building a custom solution. This is especially true when considering the total cost of ownership, including maintenance and upgrades.
- Integration and Modularity: Modern SaaS solutions offer modular architectures and APIs, making it easier to integrate with existing systems and customize as needed. This flexibility allows businesses to tailor the software to their specific needs without starting from scratch.
- Scalability: Licensed software from vendors is often designed to scale effectively as the business grows. This ensures that the software can handle increased demand and complexity over time.
- Innovation and Ecosystem Support: Vendors often have robust ecosystems that provide additional tools, services, and integrations. This ecosystem support can enhance the functionality of the licensed software and reduce redundant technical work1.
- Speed of Implementation: Licensing software from a vendor allows for faster implementation compared to building a custom solution. This speed can be crucial for businesses looking to quickly address market demands and opportunities.
- Focus on Core Business Activities: By licensing software, businesses can focus their resources on core activities rather than diverting them to software development. This can lead to better overall business performance and efficiency.
- Compliance and Security: Vendors often have dedicated teams to ensure that their software complies with industry regulations and security standards. This reduces the burden on the business to manage these aspects internally.
Addressing Pain Points in Marketing and Sales Processes
Any RTIM solution must address key pain points related to improving marketing and sales processes, focusing on data integration, customer journey, and campaign optimization. Here are some of the critical areas that need attention:
- Data Points for Training Models: Understanding the data points available for training models for MQL to SQL conversion, including events, sources, categories, segments, and nurturing activities, is essential.
- Understanding Upsell and Customer Journey: It’s crucial to understand upsell opportunities and customer journey stages to improve upgrades, downgrades, and churn rates.
- Challenges in Data and Process Flow: Companies often face challenges in documenting buying patterns and process flows, with significant delays in onboarding and disparate messaging across different channels.
- Marketing and Sales Treatments: Effective customer engagement involves various treatments, including tickets, events, in-house production, trips, client promotions, emails, premiums, and charitable donations, all managed through Salesforce campaigns.
- Churn Model and Customer Segmentation: A churn model built by the data science team can output monthly churn propensity for customers, helping to identify those who need specific treatments.
- Guided Selling and Next Best Actions: Implementing guided selling with next best actions, using data from platforms like Snowflake, can enhance customer journey stages without relying solely on historical data.
- Operational and Data Integration Challenges: Addressing operational challenges due to disparate actions between brand marketing and field marketing teams, and resolving data integration issues across various systems, is vital.
- Enterprise Architecture and Marketing Automation: Integrating various marketing and sales systems into a cohesive enterprise architecture, with a focus on automating processes and improving data visibility, is necessary.
- Customer Engagement and Dashboard: Documenting customer engagements and aggregating client-level data into platforms like Snowflake, with a dashboard to provide insights and guidance on effective treatments, can drive better decision-making.
- Future Steps and Roadmap: Blueprinting solutions, conducting executive briefings, and scoping sessions to align on the marketing and sales automation roadmap are essential for successful implementation.
The Fine Line Between Customization and Restrictions
When deciding between customizing a packaged app or composing software components, businesses must walk a fine line. On one extreme, highly customizable software components may incur hidden costs, such as maintaining customizations and updating them. On the other hand, licensing components with restricted customizations may limit a company’s ability to differentiate itself from competitors. Striking the right balance is crucial for maximizing value and minimizing costs.
The Role of SaaS Solutions
Software-as-a-service (SaaS) has revolutionized the way businesses approach software customization. Leading commercial off-the-shelf RTIM solutions offer standardized architectures and robust ecosystems, including partners, communities, training, and educational services, to support their integration and use. This makes SaaS solutions a sustainable and cost-effective choice for many businesses.
Conclusion
In conclusion, licensing an off-the-shelf RTIM engine is a strategic choice for large enterprises looking to enhance their customer engagement strategies. The advantages of specialized expertise, reduced risk, vendor support, cost-effectiveness, integration and modularity, scalability, innovation, speed of implementation, focus on core business activities, and compliance and security make it a compelling option. By addressing key pain points in marketing and sales processes and leveraging the benefits of SaaS solutions, businesses can achieve their customer engagement goals more efficiently and effectively.