Technology research company, Forrester, just released its 2011 Wave report on the best U.S. Database Marketing Service providers.  I know that there are many hours of customer interviews and research that go into these reports, so I’m not in a position to agree or disagree with their findings.  However, I do think it is important for businesses who are considering outsourcing their database marketing to know what their options are.

First, let me define my version of database marketing service provider.  These companies provide services to take your customer data across all of your data silos, compile and aggregate this data into a single database, and provide campaign, access, measurement and reporting tools to help you achieve greater success in your business.

In the Forrester report, they are profiling companies that are primarily targeting enterprise accounts.  So, they want to speak with companies that are their customers or potential customers.  Companies like Proctor & Gamble, Visa, Marriott, and Nike.  These are large, complex database marketing solutions.

If I were a CMO of a large Fortune 100 organization, I would certainly feel comfortable taking Forrester’s advice and sending an RFP to the top three companies profiled in their report.  For CMO’s outside of the large, enterprise companies, there are many alternatives across the database marketing spectrum.  If you are looking for a database marketing service provider, here are the key elements you should consider:

1. Budget–A typical marketing database developed by companies detailed in the Forrester Wave report will be at least $1,000,000 annually.  If your budget is under 7 figures for your marketing database solution provider, you can find suitable, less expensive options.

2. Expectations–What are your expectations for your marketing database?  Do you want a tool that will allow your marketing team to more easily access reports and information so that they can make better strategic decisions for your company?  Or do you want to outsource the entire marketing function including marketing strategy, execution, measurement, campaign management and reporting?

3.  Complexity–How complex are your marketing campaigns?  Are you running 50 or more test cells on a weekly or monthly basis across multiple channels?  Or are you running a handful of campaigns monthly?  Again, if your campaign management needs are more basic, you will be overpaying for a complex campaign management tool.

4.  Features–What features are important to you?  Are you looking for a campaign management tool or a reporting tool or both?  Marketing databases can be like video cameras.  You can get a ton of options on a video camera (lighting, settings, timers, night-vision, etc.) but if all you want to do is record, zoom and playback and get a clear, beautiful shot—you can make a great video with a Flip camera for a fraction of the cost.  Similarly, many well-meaning database marketing providers will offer too many features, too much complexity, and too much overhead which can cause budget shortfalls, missed timelines, and subpar performance.

5.  Timeline–Can the company meet your timeline?  I have sat across from CMO’s of large organizations six months to a year after they engaged their database marketing provider and they still can’t pull reports from their “new” system.  Or they can’t access their customer or marketing data for campaigns.

Finally, beware the reference.  If you ask a company for references, they will certainly give you the names and phone numbers of clients that will say good things about them.  You need to find customers not on the reference list and speak with them.  Some companies display a “brag” list with logos of many of their customers.  Call some of these companies and see what their experience has been.

I’ve worked with and for most of the companies profiled in the Forrester Report and they all are worthy of their placement in the report.  But, if you just send an RFP for a marketing database to the top 3 or 5 companies according to Forrester, you are likely missing out on a solution that could work far better for much less money.  Go further than the Forrester report, do some additional homework and you will be rewarded with the best solution for your organization.