risks of multi-vendor strategy

The Risks of a Multi-Vendor Customer Engagement Strategy

Marketers are wasting excessive time managing too many vendors.  At least this is what the results of a recent study conducted at the 2014 Direct Marketing Association’s annual conference suggests.  The study shows that 52% of the marketers surveyed use at least six outbound channels in their customer engagement strategy, with 21% of those using more than 10 channels. How are these marketers executing on all of these channels?  Outsourced vendors. In fact, 21% of marketers are spending nearly 15 hours a week just managing and coordinating with seven or more vendors!

While it is a smart strategy to bring in outside vendors to execute on niche technology and service offerings, a less is more approach should be considered to save both time and money while reducing delays and remaining nimble.

Many Vendors, Many Inefficiencies

The top obstacles to accomplishing customer engagement marketing goals cited by survey respondents include their multiple tech vendors and service providers failing to integrate well, the need to consolidate vendors to be able to achieve goals, and too many vendors to coordinate. Other hindrances include:

  • Technology disconnects: When operating with different technologies, much time and added costs are required to integrate, and seldom does information flow back and forth to all parties.
  • Additional human resources: When technologies operate in different formats resulting in errors or the total inability of the output of one system to input to another, human intervention is required, leading to re-entry delays. And data re-entry is another common source of errors.
  • Integration costs: Big brand companies often spend the majority of their time coordinating the activities across all of these disparate vendors, rather than designing the optimal process to support the ideal customer experience.
  • Poor customer service: If an order is handled incorrectly, there is no single source to handle it. The customer likely contacts the call center, but the issue could be with the ecommerce site or with the fulfillment firm. Resolving the responsibility and correcting the issue takes additional time and money, with delays risking the loss of the sale and of the customer’s future business.
  • Delays in strategy shifts: Changes in marketing strategy, such as focusing on a younger age group, means adjustments throughout your marketing strategy, with different language, photos, featured products and services, etc. There are inherent delays in communicating these changes through the different vendors and ensuring that the new marketing effort, from initial contact to fulfillment and follow-up, is integrated and comprehensive.

Align Business Outcomes with a Single Partner

To create personalized and relevant dialogue throughout the entire customer journey, companies must look to employ a single partner who can optimize outcomes not in singular customer contacts, but across all lead generation, lead nurturing, sales and customer support activities.

Here are just some of the ways a company benefits from working with a single customer engagement marketing provider:

  • True measurement: Systems that work side-by-side can be measured for their effectiveness, empowering the company to make nimble investment decisions.
  • Easy management of all those moving parts: How many people should you need to call if you have a question, a creative idea, or if something isn’t working? The fewer the better.
  • Cost savings: Integrated providers are inherently less expensive than paying for premium products from several different vendors. Think of Costco. The retail giant offers high quality bundled items for a lower price.
  • More flexibility: Ability to react to results and shift strategy.
  • Fewer bugs: Integration means there will be few square-peg-in-round-hole scenarios, and less chance for incompatibilities and unforeseen conflicts.
  • More time to spend on customers: Companies that spend less time dealing with integration problems can spend more time engaging customers, building promotions, adding services and delivering on their business goals.
  • Enhanced customer experience: Your ability to bring all of the pieces together in an efficient, streamlined manner will provide a seamless, uninterrupted customer experience.

By using a single provider that combines the essential elements of marketing, from data analytics through marketing, call center, order fulfillment and follow-up, you will achieve a comprehensive customer engagement marketing strategy that will deliver to both your top and bottom lines.



Published by

Pete Schmitt

Peter Schmitt is the Chief Strategy and Innovation Officer of Dialog Direct, where he provides strategy formulation and execution across multiple business units. Pete has a passion for leading ideas through to commercialization, which led him to achieve a successful track record for growing start-ups, managing turnarounds and leading large corporate transformations.

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