However, price is far from the only consideration. In this past quarter, we have won more than one deal against a high-end competitor when they cut their price to match ours. So what gives?

It all comes down to the suitability of the solution to the capabilities and expectations of the line-of-business buyer. Act-On has been built from the ground up to be intuitive for marketers, rather than catering to the requirements of database administrators and IT staff.  We continue to maintain a laser-like focus on the needs of the line-of-business buyer even as we continue to expand our functional footprint.

So when one of our high-end competitors chooses to cut their price to match ours in order to win  the business, it is a bit like SAP cutting their price to win a deal against Intuit. Cutting the price of the service does not change what it is, and what is required to be able to use it.

Pontifex: Latin for “bridge builder”.  Etymology: from pont-, stem of pons, “bridge” plus -fex, -ficis, root of facere “to make”.

Bridge-building is very much the business we find ourselves in.

On this side of the chasm: e-mail marketing. Big market (Forrester estimates $3B to $4B). Widely adopted. Best practices and success metrics are widely accepted. Pricing is pretty stable.

On the far side: online marketing automation. Small market (around $200M?) populated mostly with true believers and early adopters. Very attractive when viewed from afar by the e-mail marketing crowd, but many conflicting claims from vendors and no clear best practices. And expensive!  The general perception is that marketing automation is pretty complex to implement and operate.

We are proving every day that this does not have to be so.

We do this by going to market with an “All-In-One” marketing platform that starts with a very strong e-mail marketing system.  Our customers typically start with e-mail, and evolve pretty quickly to the point where they are using more and more tools in the Act-On platform to manage more and more of their online marketing programs and channels. Pretty soon, they have made it all the way over to the other side, with automated programs for lead nurturing, scoring, behavioral targeting and more.

Since our price represents a very slight premium over what customers are used to paying for e-mail marketing, they feel like they are getting a great deal for their money. When combined with our month-to-month pay-as-you-go model, this is proving to be a very disruptive price benefit proposition. We are bringing a whole new class of customers into marketing automation!

My theory: when a marketing/sales lead gets disqualified for one reason or another, it likely winds up in Jigsaw. When a sales person loses a deal, all the deal contacts are worthless, right? Why not get a $1 credit for each by uploading them to Jigsaw? If a lead comes across that is totally unqualified, same thing!

I am convinced that this profit motive is behind the dynamic growth of Jigsaw (vis a vis Plaxo, for example).  Another proof (if one is necessary) that psychology is more important than technology.

I remember reading a post by Michael Arrington of TechCrunch a few years ago, titled “Jigsaw is a Really, really Bad Idea“. Clearly, this did not hurt Jigsaw. And now the purchase by Salesforce.com puts the Good Housekeeping Seal of Approval on this whole business.

The problem is that unless you are a celebrity (or a well-known brand), you are simply not likely to get hundreds of thousands of real followers who are truly interested in your tweets. So how do you build your Twitter audience?

Don’t focus on quantity. Steer clear of  the many Twitter tools that help you build your following quickly. Most of them take advantage of the Twitter ethos (“I am following you, please follow me”) to build your followers. The inevitable result is a lot of  ”low-value”  followers, including Twitter spammers, self-promoters and even automatons (like @starbucks) that auto-follow anyone who follows them. Such followers are not ideal targets for you, since they are not likely to be active or responsive to your marketing messages.

Focus instead on quality.  Use tools (like our Act-On Twitter Prospector) to find people actually interested in the kinds of things you plan to promote. Offer them something of real value (for example, white papers, e-books, how-to guides and invitations to helpful seminars). By an amazing coincidence, Act-On can help you set up and stage these offers and then to track the uptake/conversions from your tweets. Just remember that a carefully cultivated audience of 1,000 can beat a list of 10,000 Twitter followers anytime when it comes to driving traffic.

We have also run into many, many companies that have signed up for marketing automation systems costing thousands of dollars per month — and are just using them to sending e-mail!

What is doubly wasteful about this is that marketing automation vendors (with one notable exception ) are just not that savvy about e-mail, especially when compared to  e-mail marketing companies like Responsys.

For us, the “marketing automation” world view is much too narrow. Instead, our “All-in-One Marketing Platform” approach (which includes  an e-mail marketing capability that is second to none) is proving to be appealing to a very wide range of companies:

• Our customers get everything they need and they feel like they are getting a great deal. Just take a look at the testimonials here and here.

• We do not force fit our customers into our automation framework. Instead, we fit into (and help automate) the ways in which they already work. Here is a great example.

Little wonder then that we had a fantastic 2009!

In contrast, Act-On allows them to take a “toe in the water” approach and ease into marketing automation at their own pace.

Our customers often start off with e-mail campaigns, the bread and butter of e-marketing. Pretty soon, they use our website visitor tracking to follow the activity of their prospects coming from their e-mail campaigns. Then, they start setting up forms and landing pages to capture website signups. Then they start looking into webinars.

In the background, Act-On automatically builds the unified database that tracks all the online activity (web page views, e-mail opens, collateral downloads, etc.) necessary for real insights into prospects’ implicit buying behaviors. Once our customers see the power of behavioral targeting, they are ready for lead scoring and automated nurturing programs. In other words, full blown marketing automation!

Start with a fantastic value proposition: enterprise class all-in-one e-marketing at an SMB price point. Next, focus on de-mystifying and simplifying marketing automation for smaller marketing groups and departments. Finally, make it easy to consume, with month-to-month contracts, no setup fees, and no termination fees.

We tell our prospects: Don’t just read the menu, go ahead and try the product for yourself. (It’s amazing how much of a stumbling block this is for many of our competitors.)

So the recipe is pretty simple but it is working really, really well for us. We are looking at a fantastic quarter.

The government should seriously think about a similar program to let hapless marketing departments out of their long term contracts with vendors pushing dated technology.

These older systems contribute directly to global warming, since (a) they cause marketers to boil over in frustration and (b) they often feature inefficient application architectures running on older, power- hungry servers.

What’s not to like here?

The ideas behind “inbound marketing”  are hardly new: develop useful and compelling content, publish it on your website or blog, and use SEO to raise your search engine ranking so that potential customers find your content.

This “build it and they will (eventually) come” ethos has a bit of a chicken-and-egg problem. You need to build your brand before customers start coming around regularly. But to build your brand, you need customers.

New companies looking for customers  need a healthy dose of outbound marketing to get started.

In the context of Twitter, this means going out and finding people tweeting about the kinds of things you have to offer, and letting them known that you exist. (The inbound approach is about building a following, easily done if you are already a celebrity like Ashton Kutcher.) Your prospects may end up finding you. But in the meantime, you need to go out and find them.

Hubspot appears to have realized this as well, with their recent announcement about adding outbound marketing (like e-mail) to their inbound marketing platform.

For B2B companies (like ourselves), the answer is a resounding Yes!

The vast majority (something like 97%) of visitors to your website are anonymous.  Act-On  website tagging now makes them a lot less anonymous, by using their IP address to try and find the name and address of the organization that owns that IP address. You don’t have to wait for the next day either, this happens in real time.

We have been running this on our own website for the last 3 months, right alongside our Google Analytics tags. (We do not see this as a replacement for Omniture, WebTrends or Google Analytics, which provide crucial reports and insights for marketing. Rather, it is a real-time website presence detector.)

As expected, this capability has been a godsend for Sales.  They see their prospects coming back and checking out our website, and this helps them better prioritize their outbound activities.

More unexpected has been the impact on Operations and Customer Support. One example: our Ops team was in the process of  upgrading our ISP relationships with Hotmail, Yahoo et al.  The whole process suddenly felt a lot less opaque when we found both Microsoft and Yahoo checking out our privacy policy pages during this process.

We started to roll this out to our customers a couple of weeks ago, and the response so far has been overwhelmingly positive.