You are right about the industry consolidation, it is only a matter of time. I can speak for my company, Sitebrand, that we both provide a tool for marketers to personalize their website experiences for their visitors as well as use quite a number of tools you have listed ourselves, especially personalization, CRM, email and lead automation.

To me, it is a natural extension that customer experience is going to be become the adoption driver when your relationship with your prospect starts when you don’t even know anything about them. A combination of personalization with lead management enables marketers to dynamically change emails, landing pages and even the whole corporate website into a personal conversion between your prospect and your company. That is not to say it will happen soon, I do not foresee the general adoption of personalization/lead management software until marketers believe there is a clear ROI and it is a proven technology. Until the big boys such as Saleforce, Unica etc. build/partner or acquire the smaller vendors like Marketo, MarketBright, Sitebrand etc this is not going make it to main street to borrow a “Crossing the Chasm” metaphor.

Regards,
Eric Hollebone

1) Price matters and ESPs have the best price/support model. In addition to low per email costs, support includes help that lead management vendors typically would need to bill extra for. This can be 5-10x from a LMV and still not be as good.

2) Deliverability matters and even larger vendors like Eloqua have a hard time keeping up to a dedicated ESP that have dozens of people who are expert in this. ESPs also have long-time relationships with ISPs and resolve email issues quickly. I also agree with Mac, that ESPs are being used in other ways (eg messaging and PR), and dislodging them means disruption to other email activities as well.

3) ESPs have developed great loyalty and retention strategies. Even though it’s not technically difficult to switch to a LMV, tell that to someone who loves their ESP.

Although I certainly agree LMVs add a lot of value to email, and is much better than plain email there is a conundrum there, which is why we work with ESPs instead of against them.

As for consolidation, there certainly will be, especially for those who do not have a path to profitability as Mac states, but notsomuch based on whether you’re an ESP or LMV in my opinion.

Vertical Response claims 40,000 customers now. Also they can easily add lead management functionality for customers by adding ActiveConversion, so there is no functionality (or ROI) gap for their B2B customers. This negates the argument that customers need to ‘upgrade’ to Marketo, Eloqua etc.

Hope that helps. Fred.

Mac: I know that several lead management vendors have dedicated people for deliverability. I wonder where the difference in deliverability comes from. Totally agree with your thoughts about consolidation!

I expect that there will be a big consolidation in the ESP and lead management business.

The big ones will gobble up lots of the little ones, like Silverpop did with Vtrenz (Now Silverpop’s Engage B2B).

Many of the little ones, especially those that never reached profitabilty, won’t survive the economic downturn. Investors for additional rounds are harder to find these days.

Regards,
Mac McIntosh
mcintosh@sales-lead-experts.com

Based on what I’ve learned from a couple of my clients, they use the ESPs because they are also using the ESPs for everything else (non-lead management related).

Also it appears that using a Tier One ESP gives you the advantage of deliverability of your email by a company that has a team of people working to keep the email channel open with ISPs, corporate gateways and email hosts like gmail, hotmail, etc.

For example, Eloqua’s emails wind up getting blocked by my ISPs spam filter. Emails from ExactTarget’s customers don’t.

Regards,
Mac McIntosh
mcintosh@sales-lead-experts.com

At Act-On we provide our customers with either option, through a Pro Edition (as low as $15/month) that offers basic email and forms capabilites so companies can get started. When they need more advanced lead management/ automation they can upgrade to the Enterprise version and get lead scoring, website visitor tracking, crm integration, and behavioral filtering etc without having to learn a new system.