Jul 2, 2018
Microsoft Dynamics 365 for Marketing has finally launched! It has
been available for purchase since the first of this week. An
awesome platform of modern technology, able to do things not even
possible before. How many eager customers have clamored to jump on
board this revolutionary marketing #FreightTrain of innovation? My
guess...none.
The Product is...
Awesome! Compared to every other Marketing
Automation platform out there, this one makes them all look like
antiques. Microsoft Dynamics 365 for Marketing is a virtual
showcase of everything Microsoft can bring to the table... and most
of that,
only
Microsoft can bring to the table. It is built on the Modern
Dynamics 365 UI, it runs on the Common Data Service, it utilizes
the Custom Control Framework, it incorporates Azure Customer
Insights, it leverages Voice of the Customer and Social Engagement.
It makes all other Email-Centric Marketing Automation platforms
look naked. More than just Marketing on Steroids, it also includes
complete Event Management capabilities. The current list goes on,
and the future roadmap is robust.
Who was it for?
Even the simplest of marketing automation platforms have some
necessary complexity in order to achieve results. Successful
marketing is a blend of Art and Science, and Dynamics 365 Marketing
allows for both. But this ability to blend right brain and left
brain creates some necessary complexity. So, it is not for the
smallest of businesses. Nor is it for a larger business, with very
simple needs. The sweet-spot is the mid-sized business, or a
division of an Enterprise business, think 50-500 employees.
Certainly there will be use cases for smaller or larger businesses,
but this is the wheelhouse. It is also better suited for B2B than
B2C. Fortunately for Microsoft, there are a ton of businesses that
meet this criteria.
The Grain of Sand
"Steve, you seem highly impressed, why don't you think people
will buy it?" Obviously, a tremendous amount of time, energy
and resources were brought to bear by the engineering team in
building this marvel. We have been engaged with this team for over
a year, and have witnessed them methodically craft each aspect of
this product to become the New Standard in Marketing Automation. An
incalculable number of man-hours went into engineering this
marvel... and then an extra 5 minutes was added to determine the
licensing model.
Umm....
So I am not exactly sure how this came about. In one picture in my
head, I imagine an Intern, we'll call him Justin, who is called
into is boss' office and told "
Go figure out a way to license
this new Marketing app, but don't spend too much time on it, you
need to get back to more important things like sorting our partner
list alphabetically". Justin thinks
"Hmm.. marketing...
maybe I will see how the other marketing apps do this". A
quick scan of the marketing apps that show up in the first page of
a Bing search reveals that, many of them are sold based on number
of contacts. That makes sense, and 5 minutes later Justin is
bouncing back into the boss' office. "
Hey boss, I figured out
that marketing app thing, we can base the cost on the number of
Contacts". "Great job Justin! Now get back to something really
important, I want all of the pens in my top drawer arranged by
color, starting with blue... no... red".
The Licensing Model
Microsoft Dynamics 365 for Marketing is available to customers
right now. Like many of the Dynamics 365 products, it is available
as both a standalone application as well as an addon to other
Dynamics 365 products. The standalone version costs $1,500/month,
for up to 10,000 Contacts in your Database. You can add increments
of 5K contacts for an additional $250/month. When purchased as an
addon to an existing Dynamics 365 app, the cost drops to $750/month
for those first 10K contacts, and the same $250/month for each
additional 5K contacts. In both cases you are entitled to send 10
times the number of emails as your number of contacts. Well, this
is indeed a pretty simple to understand licensing model. In fact,
it is one of the simplest licensing models that Microsoft has for
any Dynamics 365 product. It is so simple in fact, that I don't
even need a piece of scratch paper to see that none of my customers
could even afford it.
Contacts vs Contacts
Contacts in competing Marketing Automation Platforms are quite
different from Contacts in Dynamics 365. Yes, both records indicate
a person, but in one case, the only reason the person is there is
to market to them. In Dynamics 365 it is very common that the vast
majority of Contacts in our systems are not being marketed to, and
never will be. CDS promises to add even more non-marketable
Contacts to that database from everything else it connects to, like
ERP. Thousands of Vendor contacts for example. I have hundreds of
Microsoft contacts. You may have customer contacts in your system
that belong to your partners or resellers that you don't market to.
Inactive contacts, deceased contacts, competitor contacts, your own
employees.. the list is really endless. We have Small Business
customers with over 100K Contacts, larger customers could have
millions.
Let's do some math.
Let's say I want to market to 10K people, which is a lot, and I'm
gonna bang them with a message 10 times a month, which is also a
lot. I already have Dynamics 365 Sales, so $750/month is a pretty
good price for me to be this level of annoying! However, I also
have 90K other non-marketable contacts. I obviously can't just
delete them, so I have to apply a force multiplier to my $750
number bringing my cost to $5,250/month. A non-starter. This is the
point where the boss at Microsoft's palm smacks his forehead..
hard.
"Justin, you Idiot!"
I may be fat, but you're ugly, and I can diet.
There is good news here. At least we are not working with a low
cost offering that is actually crap. This is an awesome product...
with a bad licensing model. Thankfully, this is fixable. I am sure
that Microsoft was not counting in their projections that tens of
billions of dollars would come in from this. This is a classic
unintended consequence of a moronic action. Microsoft is not
stupid. Well maybe Justin... and his boss, but everybody else is
very smart. Based on their rising stock value, they clearly know
how to grow a customer base, and also will recognize impediments to
that, like for example an exciting product, that no one is buying.
In fact, the simple fix is already within the solution.
How it should have been licensed?
Remember in the first paragraph, in the litany of features I
rattled off - there was one called "Customer Insights". This is an
Azure Machine Learning Service that is attached to every Marketing
Deployment. What "ultra sophisticated" job does this do? It counts
shit. Okay, it does a lot more than that, but counting shit is one
of the things it does, in order to do everything else it does. What
does it count? Outgoing Emails, Email Responses, outgoing event
invitations, event landing page views, etc. It is counting every
damn thing. Of the multitude of things it is counting, many of
these could be categorized as "Marketing Touch Points". You
can probably see where I am going here. Dynamics 365 Marketing
should be licensed based on the number of touch points. For
example, for $750/month, you get 20K touches, or whatever the math
is that makes sense.
Associating Cost to Value
The current licensing model has no more relation to the value
received, than if Microsoft were to charge based on the number of
hairs on your arm. A "Touch Based" model on the other hand, is
directly tied to the value, at a one-to-one level. I send you a
marketing email, boom, I touched you. I am more than happy to pay
for that. Like cell-phone minutes, Touches should also rollover for
seasonal businesses. Maybe my touches are lighter early in the
year, but in November we blow out all our touches for the Christmas
sale, etc. Touches are also what drive Microsoft's costs for the
service, so they are getting a one-to-one return on their cost. I
will now take a bow... {mic drop}.