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Business owners are one step closer to mastering the art of developing and maintaining customer relationships.
This is, in large part, because of the power of technology. Software available today makes it possible for companies to build more extensive and more accurate profiles. These advanced programs also let company executives distinguish between new visitors and return visitors on Web sites. For savvy business owners who capitalize on the latest that technology has to offer, all of this translates into a gold mine.
The technology means each customer can be identified individually, making it possible to calculate each customer’s lifetime value. Having access to this level of information means companies can hone their marketing strategies and more precisely target their retention or acquisition efforts.
Despite the awesome capabilities of the technology, business owners are finding information technology limitations in terms of making the initial capital investment. If an owner does make the investment, there also is an inherent commitment to continually upgrade the software just to stay current. This is no easy – or cheap – task, especially considering the mile-a-minute pace of technology. As a way to get around the dilemma, business owners are increasingly outsourcing their technological needs with application service providers.
The method is a way for business owners to reap the benefits of the latest in technology without breaking the bank while making the investment.
The way an ASP works is that software programs are accessed over the Internet. Basically, instead of having to wire individual computers with specific software, another company takes care of the installation and maintenance of the computer programs.
Business owners who use ASPs understand that their expertise lies in their company’s core capabilities. Yet they are still proactively fostering the noncore portion of business, namely business development and retention, by using an ASP in database marketing efforts.
An online direct marketing ASP will allow access to Web-enabled customer relationship management tools without the burden of purchasing expensive software or causing massive data overlays. The advantages of this approach also include reduced time to implement, reduced need for expensive support personnel and access to real-time modeling and scoring tools.
ASPs provide across-the-board benefits to business owners. Contracting with ASPs means companies can avoid the process of finding, hiring and training an internal IT staff. The role of ASPs is to purchase, develop and lease applications for things such as e-mail, enterprise resource and customer relationship management.
The bottom line is that owners and managers who use ASPs realize a huge cost savings in terms of initial investment alone. This is because ASPs charge users only a fraction of the cost of building the technological and data collection infrastructure, including not only computer equipment, but also expert personnel who manage all the information. The growing trend of using ASPs can largely be attributed to their ability to enhance the capabilities of business and to adapt to company needs.
There are primarily three types of companies at the forefront of ASP usage. They include companies on a fast growth clip that are moving too quickly to rely on traditional software; companies that need high-end software, but do not have the budget to purchase it; and companies with vast operations where global expansion is a part of the overall plan.
The ability to tap into a huge database and get the management expertise needed to go with it is a good part of the ASP appeal for small and mid-sized companies. While owners and managers can make their companies act “big” with the ASP capabilities, they can do so without maxing out lines of credit, and thus maintain their cash flow flexibility. For start-ups and small to mid-sized companies, this is especially important because having the liquidity of cash makes it easier to cope with the normal ups and downs of business cycles. What’s more, owners have to go diving in the shallow labor pool for qualified workers.
For large companies, using ASPs to manage their customer databases promotes efficiency with a fast turnaround of information. Ultimately, this speeds up the time-to-market process for goods.
And because the ASP is independent, the interpretation of information is unbiased.
While signing on with an ASP has many benefits, it is crucial to hire a company with the capabilities to meet company goals. This means knowing the provider has enough power to handle a volume spike from 100,000 e-mails to 3 million e-mails after the launch of a new marketing campaign. Besides providing continuous uptime for companies signing on, an ASP provider also needs to provide a confidentiality agreement. Looking over the agreement will help in assessing how secure company data will be and how customer privacy will be maintained.
If the basic idea behind ASPs seems familiar, it is because companies have used some variation of it for years, dating back to the 1960s. Back then, the method was called “time share” computer.
Kurtis Ruf is vice president of sales and marketing at Ruf Strategic Solutions, Olathe, KS, which uses client/server technology and relational databases to produce decision support tools.