Businesses that want to get closer to their customers are pursuing goals that seem to be at odds: improving customer service while also reducing call-center volumes and costs. To accomplish both, many businesses are transforming their conventional call centers into multichannel contact centers that support telephone, E-mail, the Web, and wireless. This provides customers with more service options while reducing the number of calls that customer-service representatives handle by phone.

Businesses that have implemented multichannel customer service are also looking to their contact centers to help generate revenue. The contact center is a logical place to capture relevant customer data, and businesses that can effectively obtain this data can use it to drive cross-selling, up-selling, and promotional initiatives through the contact center itself rather than by direct mail or bulk E-mail campaigns.

For instance, when a banking customer transfers funds between accounts, either over the phone or via the Web, the financial institution should be able to present the customer with an offer for overdraft coverage. Customers would get personalized offers geared to their stated preferences, transaction history, account status, or navigational patterns.

As contact centers play an increasingly critical role in customer interaction, many businesses are seeking tools to generate new revenue during such interactions with established customers. Marketing-automation technology typically is used in marketing or sales departments to conduct data analysis for segmenting customers or prospects, and to design, launch, and track campaigns that are based on this information. But the technology also has applicability within the contact center.

In a contact-center environment, established customers initiate interactions and have relationships with the company. It makes sense to offer these customers targeted products and services in real time via customers' chosen communication channels. For businesses with marketing-automation applications for analytics and campaign management in their marketing and sales departments, it makes sense to push these capabilities down to the contact center. Such technology can give contact-center agents the ability to offer recommendations and promotions of new products and services to specific customers in real time.

Many businesses have implemented customer-relationship management applications, such as those from Kana, PeopleSoft, and Siebel Systems, to bring effective multichannel customer-service capabilities into the contact center and to address the new complexity inherent in giving contact-center staff and customers access to customer-centric information through these channels. Most businesses that have already invested in CRM systems logically look for marketing-automation capabilities within these systems. But most of today's customer-service offerings lack the sophisticated capabilities provided by standalone marketing-automation products.

At the same time, many marketing-automation offerings aren't designed to handle the unique requirements of contact centers, which center on real-time interaction. So, for now, businesses that want to use marketing automation in their contact centers face the prospect of integrating their existing customer-service systems with marketing-automation products from vendors such as Protagona, Unica, and Xchange.

The technical challenges of supporting multiple channels are significant. Unlike phone or Web-based customer service, E-mail interactions don't happen in real time. Wireless interfaces are far different from standard Web pages, forcing businesses to present different information and actions to customers using wireless devices. In all cases, the customer-service technology should capture all relevant details about a customer interaction, giving customer-service representatives a complete view of the customer's interaction history across all channels.

Customer-service software works well for capturing, managing, and responding to customer contacts, though it doesn't inherently provide comprehensive, real-time analysis of those interactions for use in multichannel marketing campaigns. Many businesses invest in E-mail and Web-marketing campaigns, but most of them lack the analytical capabilities to use contact-center data to effectively target their campaigns to profitable customers. Potential customers often are deluged with unsolicited and unfocused E-mail promotions that haven't been personalized, are easy to ignore, and may be more irritating than informative.

For effective contact-center marketing, agents must be able to capture new customer data and update customer-profile and segmentation information within a marketing-automation application. At the same time, they need this data to recommend appropriate products or services. Phone agents often use scripts provided by the customer-service software to respond to customer problems and inquiries. The same scripts can be enhanced through marketing-automation applications to prompt the agents to recommend products or services.

Classifying Marketing-Automation Vendors
CRM suite vendors
Amdocs/Clarify J.D. Edwards Onyx Oracle PeopleSoft	Pivota SAP Siebel Systems Talisma	Companies offer customer-service, sales-automation, and marketing-automation applications. Some are ERP vendors with strong data warehousing and data mining. Products have very basic analytic capabilities. Campaign design and execution are limited to certain channels and typically don't include real-time Web or contact-center campaigns.
CRM suite vendors with marketing-analytics focus
Chordiant E.piphany Kana		Companies focus on marketing automation, with comprehensive marketing analytics and campaign-management components.
Marketing-automation vendors
Annuncio Applix Aprimo MarketFirst Net Perceptions	Protagona SAS Institute Teradata Unica Xchange	Companies offer standalone marketing-automation products. Offerings include marketing analytics and campaign-management components in the same product suites.
Marketing-analytics vendors
Acxiom Brio Business Objects Cognos Data Distilleries	Hyperion Harte-Hanks Informatica MicroStrategy	Product capabilities are exclusively for marketing analytics (e.g., data warehousing, data-mining, and reporting tools). Marketing-automation vendors partner or integrate with these vendors for functionality that their own products don't provide. DATA: DOCULABS

Marketing-automation offerings must meet a number of key requirements to drive marketing within the contact center. Among the highest priorities are:

• Marketing analytics: The ability to capture data from multiple channels and sources, store it in a common data model, and use predictive modeling to perform analytics and customer segmentation.
• Campaign management: The ability to design campaigns and schedule and execute them across channels, including print, phone, E-mail, and the Web--and to track their effectiveness.
• Real-time analysis and decision making: The ability to analyze stored and real-time customer data, and to use the data to deliver specific promotions or offers in real time.
• Integration with third-party systems: The ability to mesh with other CRM components, such as customer service and sales-force automation, and with other business systems and infrastructure components, such as ERP, E-commerce, and content-management systems, as well as portals and enterprise application integration.

Dozens of vendors claim to offer marketing-automation capabilities, but relatively few are able to address these key requirements or to provide them within a contact-center environment. Today, the categories of vendors that offer the best marketing-automation products for contact centers are marketing-automation specialists whose systems offer analytics and campaign-management capabilities, and CRM suite vendors whose marketing-automation components can integrate with their customer-service elements (see chart, above).

Doculabs recently completed a formal evaluation of several marketing-automation products in these two categories, paying special attention to how well they addressed high-priority customer-service requirements. The following describes the capabilities these products can offer businesses that want to implement marketing automation in their contact centers.

• Chordiant's Marketing Director 3.2. This campaign-management tool is geared to companies that have a data model, warehousing environment, and mining environment already in place. For contact centers, the product captures phone data and integrates with Siebel's contact-center software through a SiebelLink adapter toolkit. The product also integrates with Chordiant's contact-center software, Intelligent Customer Interaction Management. While the product offers average marketing-automation capabilities, its integration with Siebel, a market leader in contact-center software, positions it for a large segment of the contact-center market. In addition, businesses looking to implement an integrated contact-center and marketing-automation solution from a single vendor may want to consider Chordiant's products.
• E.piphany's E.piphany Marketing. This product offers a comprehensive set of marketing-analysis capabilities that focus on marketers who rate ease of use and analytical results ahead of the ability to create their own models and sophisticated analysis. For contact centers, the product lacks out-of-the-box integration to any third-party offerings. But E.piphany Marketing data can be incorporated into E.piphany's customer-service platform, E.piphany Service, for telemarketing and customer-service-agent recommendations. In addition, unlike most products that use preset "if-then" business rules, E.piphany Marketing provides a learning algorithm that adds precision to the targeting of promotions and offers, based on transactional and contact histories. While E.piphany Marketing requires customization to work with third-party contact-center products, E.piphany provides an integrated approach to marketing automation in contact centers where E.piphany Service is implemented.
• MarketFirst's MarketFirst 3.1. This product provides strong campaign-management capabilities, but the company is still in the process of developing robust analytics. While the product lets users create simple and branching scripts for use by contact-center agents, businesses will have to integrate separate analytics, contact-center, and campaign-management environments. Companies that implement MarketFirst will get robust campaign-management capabilities, but integrating these capabilities with contact-center and marketing-analytics products will require a large commitment of resources.
• Protagona's Ensemble 5. Ensemble provides a comprehensive set of marketing-analytics features designed to be used with a customer's own data-model environment for effective modeling and segmentation. Ensemble creates simple scripts for use by contact-center agents but offers no integration with contact-center products. Thus, Ensemble is well-suited to companies that require strong marketing analytics and campaign-management capabilities within a contact center and that are willing to dedicate resources to resolving integration issues.
• SAS's Enterprise Marketing Automation 2.1. True to its heritage, the SAS offering provides comprehensive marketing analytics and campaign capabilities for businesses that have a technically sophisticated user base. While Enterprise Marketing Automation provides robust and complex analytics, the product doesn't offer special features for executing campaigns within contact centers and isn't particularly suited for use in contact centers.
• Teradata CRM 4.02. For businesses with Teradata database environments, Teradata, a division of NCR Corp., provides comprehensive marketing-analysis tools and multichannel campaign-management capabilities. The product lets users create simple telephone scripts for use by contact-center agents, and it provides integration with Siebel's sales and contact-center software. For contact-center environments, Teradata CRM is a strong marketing-automation product for companies that have Siebel installed in their contact centers, but it requires custom integration with any other contact-center software.
• Unica's Affinium Suite 2.0. Affinium provides sophisticated marketing analytics and campaign-management capabilities. The product can read data from any available database to adapt to any enterprise environment. In addition, Affinium provides a proprietary integration component to allow for real-time data capture from a contact center. With robust marketing-automation and integration capabilities, Affinium is well-suited to contact centers. Yet the product doesn't include the ability to create scripts for contact-center agents.
• Xchange's Xchange 7. This product packages best-of-breed components that provide a comprehensive set of easy-to-use marketing analytics and campaign-management capabilities. For contact centers, it integrates with Siebel's contact-center software to capture contact data for use in marketing analytics and campaigns. But it doesn't support creation of telephone scripts for contact-center agents. Xchange 7 is a good fit for businesses with less-experienced marketing staff that want a product to deliver extensive marketing-automation functionality to multiple marketing channels, including the contact center.

During the product evaluation, two major trends became clear. First, while customer-service technologies and marketing-automation technologies historically have been separate categories, the vendors in these areas are expanding into each other's territory, through partnerships or acquisitions. Second, marketing-automation technology has a long way to go to address key requirements for real-time analysis and decisioning.

Because of businesses' growing emphasis on customer service as a means of generating revenue, marketing-automation capabilities are becoming critical. So, customer-service vendors are rapidly incorporating marketing automation's analytics and campaign-management capabilities, and integrating them more tightly with their service capabilities to support marketing campaigns across a variety of channels. As a result of the increasing demand for analytics--and the general lack of support for analytics within the contact center from CRM suites--some marketing-automation vendors are developing integration with customer-service vendors to round out their own offerings. Examples include Xchange's and Data Distilleries' integrations with Siebel for analytics and decisioning, and Unica's marketing alliance with the PeopleSoft 8 CRM suite to bring marketing automation into the PeopleSoft CRM environment.

The real-time analysis and decisioning capabilities of most marketing-automation products are immature. When evaluating marketing-automation products, businesses need to be aware that vendors may claim to offer real-time analysis and decisioning but really offer only preset business rules that make promotion recommendations based on previously captured and stored data.

In general, the focus of the marketing-automation vendors is on the Web channel and not on the contact center. But businesses now realize that their E-commerce sites are just one of many customer touch points, so they're looking to do real-time analysis and decision making across all channels, not just for the Web.

Overall, we expect that investments in marketing-automation technology will increase rapidly as businesses, driven by poor market conditions, shift the focus of their call centers to revenue generation. Marketing-automation vendors are just beginning to explore their potential in the contact center, just as businesses are only beginning to understand the value of deploying marketing-automation applications across the enterprise to capture and analyze all customer data.

Bill Chambers is a principal analyst, Gaurav Verma is a senior analyst, and Bob Anders is a technical editor at Doculabs (http://www.doculabs.com), an industry analyst and consulting firm. You can reach them at info@doculabs.com.