Why your CMO may spend more money on the cloud than your CIO

People usually equate CRM applications with enabling their sales team, but it could become the integration point for dozens of related processes.

Perhaps it is the innate spin-control voodoo persuasion skills of anyone involved with the marketing function, but it seems pretty clear that Salesforce.com's whopper $2.5 billion acquisition of marketing software company ExactTarget  will signal a turning point for the entire cloud marketing automation software space.

It's hard to remember a time when we didn't equate CRM applications with the sales team.

But if you stop to think about the actual name of the category (customer relationship management), it's clear that a zillion other processes that contribute to that cause have been left out of the equation: everything from marketing campaigns to billing and invoicing to financial management or even just sales insights. Hence the thriving Salesforce.com eco-system, as well as strategic relationships that many Salesforce consulting partners are forging to help integrate other capabilities for their customers. Bluewolf's strategic alliance with FinancialForce, announced earlier this week , is just one example.

Actually, it probably won't surprise you at all to hear that Bluewolf is just one of several cloud integrators who reached out to me with all sorts of enthusiastic comments about the forthcoming union disclosed by Salesforce.com earlier this week. Offered Eric Berridge, co-founder and CEO of Bluewolf :

"What marketing departments need to do is nurture customer relationships. What they're prepared to do is collect database contacts. Companies know they need to shake up the status quo, but they're not sure how — and the ongoing consolidation in the market is adding to this uncertainty. With marketing spending set to surpass IT's in the next four years, this is one of the most urgent challenges in the enterprise. The good news is, with this latest acquisition, Salesforce.com has all the tools it needs to crack it."

It was barely a year ago that Salesforce acquired Buddy Media (and before that Radian6), which is also part of the company's so-called Marketing Cloud strategy — along with ExactTarget. Making all this stuff work together will still take substantial customization and integration services and expertise and it won't happen overnight, hence the rather positive feedback from Salesforce.com partners. (Not to mention that it helps these integrators deepen their relationships with existing customers.) The foundation is in place, now they can help build on it. And there was much rejoicing.

Said Nara Balakrishna, vice president of marketing and strategy at Appirio :

"As technology budgets move to the CMO and marketing becomes more data-driven, Salesforce could become the system of record for all customer interactions. Since interactions touch current and future revenue, CRM has the potential to become more central to a business than current transaction systems of record."

I recently interviewed another big services company in cloud marketing technology, Magnet360. Much of the work that it does, not surprisingly, is helping to link all the interaction data that companies gather from the sales team, marketing campaigns, Web site visits, social media and customer service conversations, said managing partner Matt Meents.

One of his clients, a large consumer products company, is using these integrated cloud services to track cross-channel commentary about its overall brand and specific products, to help drive launch decisions. "A lot of marketing organizations aren't aware of the neat things that have been done on the Salesforce.com platform," he said.

You know that site that Starbucks uses to collect ideas for new services or get feedback on test ideas, My Starbucks Idea? It's a Force.com community.

Magnet360 typically gets involved in four different sorts of engagements:

  • Ensuring that a solid CRM systems is in place to "track customer touch points"
  • Creating branded sites, communities and portals where companies can engage with their customers (and prospects)
  • Channel management systems that help with lead nurturing and scoring
  • Campaignment management services that help link sales activities to social conversations

One big reason that Magnet360 clients choose the cloud for their marketing automation strategy is the speed at which they can act to get what they need, without jumping through hoops with the IT department or getting in line behind 10 other priorities. "People are used to taking nine months to get some of these things to happen. We can get some of these things up in six weeks, as opposed to that long lead time," Meents said.

The other, maybe even more important reason, is that marketing teams finally have an automated way to track the value and impact of specific interactions and adjust their campaigns accordingly.

And that is why your company's chief marketing officer (CMO) may soon be spending as much, if not more, than your CIO on cloud services, as Salesforce.com CEO Marc Benioff has predicted.

Updated June 7 to clarify Appirio quote.