Bigger Isn't Better: Why Enterprise Firms Have Trouble With Email

It sounds illogical, but enterprise companies have a harder time doing email than smaller businesses, partly because they can’t move their data to a marketing cloud vendor. That’s the view of Roger Barnette, CEO of MessageGears, a company that offers a hybrid database-cloud solution.

In a survey, MessageGears found that showed mid-market firms are more likely than enterprise outfits to adopt cloud-based, SaaS/hosted email services. For insights into this problem, Email Insider interviewed Barnette, who joined MessageGears last year.

Why is email more difficult for enterprise companies?

It all comes down to customer data. A few things are happening simultaneously. One is that customers and prospects are expecting tailored and contextually relevant communications from the companies they buy from. It could be an email or text, or on mobile or on a computer, but it takes information and logic and data science to do it. What makes it difficult for large enterprises is the volume of data and the number of sources it comes from, combined with heightened sensitivity around personally identifiable information.

How do you define an enterprise marketer?

For us, it would be a large B2C company. It’s about the number of customers. You could be a large B2B business and have 5,000 customers versus 5 million for a B2C company. It’s almost exclusively B2C.

Why do smaller companies have an advantage?

There are a lot of really great tools and solutions for small businesses. MailChimp comes to mind. And if you’re a mid-market or B2B firm, then Salesforce can be your single source of truth — your customer database. Your data is right there.

And enterprise companies can’t do this?

The largest enterprises keep their data behind a firewall in a local marketing database, or in a CRM system or a data warehouse — all different flavors of the same thing. And there’s security compliance concerns about shipping PII outside the firewall, so they keep it local. That’s a big part of it. But mostly it’s the quantity of data, the number of sources that prevent them from using an off-the-shelf marketing cloud enterprise system.

Why can’t these enterprise players move to the cloud?

The process of taking even some portion of this massive complex, and ever-changing set of data to the cloud is a costly, time-consuming endeavor. What I’m talking about is 5% or less of email marketers. But cloud-based software doesn’t work for that group. It’s a little anti-intuitive. They’re frustrated, don’t know there’s another way to do this.

Where does MessageGears fit into this?

Our product addresses that issue. MessageGears is based on a hybrid cloud solution. Our email campaign management solution sits locally next to your data. All of the limitations and problems of IT go away. It looks like it’s in cloud, and we keep our deliverability services in the cloud.

Are people adopting your product?

Yes, we work with a variety of national brands like Expedia, Orbitz and Ebates. But we don’t win 100% or our pitches. Some people just have a whole workflow around their current vendor. And some marketers don’t have a close relationship with their IT department. Our solution works best in situations where marketing and IT work in partnership.

Are you saying that enterprise marketers can’t do email?

No, they can. They do get to the one-to-one level of messaging, often with some pain. A lot of companies have developed internal email tools and will use SendGrid or SmartPost to send the emails. But all of the email solutions offered by the major firms that cater to this group — Oracle, Salesforce, IBM, Epsilon — are cloud-based. And all of the features they have are predicated on having access to the customer.

It sounds daunting. Why is it such a problem?

They feel that the solution they have may not be perfect, but it’s the devil they know. Then there’s the budgetary issue — a guy at a large hotel chain told me he has to get the budget to change vendors.  He’s right — it’s time-consuming and expensive. But our solution is much cheaper.

Does the privacy issue affect this?

Yes. We have a client, a national brand launched earlier this year, that was on the marketing cloud solution. One of their marketers went to the IT department  and said, ‘I need more data in my cloud — I can’t segment against this data field.’ But IT is security conscious, and they decided that this data cannot leave their firewall. They had just been certified as being compliant with SOC2 security standards.

What else is happening in email marketing?  

The trend is toward omnichannel marketing.  Marketers not only want to send this message to their customer in email form, they want to take the same message and put it into a banner ad and pick up the phone and call them.

Anything else?

Wearable technology is another piece of it. It gives you a contextual device for you to communicate with your customers. If they’re reading your message on a watch versus a phone, an iPad or a  laptop, you’re in a completely different context.

What about MessageGears? Will it acquire or be acquired?

We’re not looking to be acquired. We feel that there’s a massive opportunity in catering to the unique needs and challenges of enterprise marketers, and we expect to continue to grow and be a major player in this space. We probably will make some complementary acquisitions along the way. 

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