A gloomy economic outlook and increasing cost-cutting means that marketers are under pressure to increase the effectiveness of their campaigning without increasing costs. Software as a service (SaaS), however, can offer businesses a fast and hassle-free way of getting the results they need.
Things are changing. We are in a recession; customers are worried about what their spending and businesses are looking at ways of cutting costs. But despite this, marketing challenges haven’t changed at all – they’ve just become far more intense. For businesses to survive in this difficult situation, they need to retain their existing customers while attracting new ones. The only way they can do this is to deliver relevant and timely communications. This puts organisations in a tricky position, forced to find a balance between the impact of their marketing and the cost. More and more businesses are looking to marketing solutions offered as software as a service (SaaS), software implemented and externally hosted by a third-party vendor, as a way to improve the effectiveness of their marketing, while ensuring costs stay manageable.
One of the fundamental challenges facing SaaS (and articles about SaaS) is that it means different things to different people. The most commonly accepted definition is that SaaS is software that is deployed on a vendor’s infrastructure, and that allows clients’ free, remote access to all the functions of the deployed software. I’d take the definition further than that, though, and specify that true SaaS is a single instance of software supporting multiple clients that pay for what they use.
The key to keeping and winning customers, particularly when they are likely to be tightening the purse strings, is to know more about who they are, what makes them stay and how to get them to spend more. Large, untargeted campaigns are not going to get good results, and certainly won’t reduce costs – businesses need to be intelligently targeting their customers, enriching the quality of their data by analysing the results of campaigns and communicating through a range of different channels. The only way of doing this is to use dedicated marketing software. Because of the need to minimise spend, businesses may be wary of deploying new software. Although in-house solutions can be tailored to meet specific company needs and are, therefore, very effective, there is an implementation process, and the company may not want to invest the time and money required to integrate the new software into its IT system. The most immediate benefit of SaaS is that because it is externally hosted, it’s ready to go almost instantly. Rather than having to wait for IT to ensure everything’s synched up and working, the marketers can get access and take complete control right from the outset. As a result, the business starts seeing a return on investment quickly. What’s more, the vendor handles upkeep, making operational costs significantly lower.
So with all the benefits that SaaS offers, why doesn’t every business use it? One reason may be that businesses are reluctant to hand responsibility for their data to a third party. But outsourcing is a well trodden path for marketers – businesses often have third parties hosting their databases, so doing the same for marketing software isn’t a huge leap of faith. The important thing is that organisations go with a vendor with experience, a good reputation and a successful track record – in short, someone they can trust.
Another common concern lies with the flexibility of SaaS applications. Hosted software has a reputation for being rather vanilla – all marketing solutions offer standard, basic functions. The argument goes that once the solution is deployed, it cannot be further customised. This is not entirely true. Investing further in the solution means both it, and the applications used to access it, can be tailored to better fit the specific requirements of the business.
While the benefits of SaaS are many, it’s important to note that the approach is not for everyone. SaaS for marketing is still a young market, and although vendors are aspiring to continually supply more and more functionality through SaaS, it’s still often more effective for an organisation to work with a vendor that can support hosted software and data, accessed via the web, or for it to host the entire solution in-house itself. For example, despite the advantages that SaaS offers, an in-house application still offers more control than an outsourced one. Ultimately, SaaS will be right for some businesses, and not appropriate for others. It is important for each organisation to examine their specific needs closely before making the decision.
Many organisations are adopting SaaS delivered software for digital and email channels, combining cost effective software access with a low cost communications channel, and paying for what they use. This growth is helping more and more marketers see the benefits of SaaS and serves to inform them of the pros and cons of the approach. Vendors are rapidly developing solutions to meet the requirements of companies across all channels. These will continue to mature over time, so many companies will prefer to work with a vendor that provides a smooth migration path between in-house, hosted and full SaaS delivered marketing applications that can match the solution to the company.
Although a developing approach, marketing software as a service is offering an effective approach to achieving marketing excellence at minimal cost. And with the recession still lurking, it’s something well worth thinking about if you want to win more customers and keep them for longer.
Author: Chris Underhill, CEO of smartFOCUS