Specifically, Blue Martini Relationship Marketing supports customer-loyalty programs by letting customers know when they're close to receiving premium benefits. Also, the software identifies marketing opportunities throughout a customer's lifecycle, from first contact to point-of-sale and returns. Certain marketing-related tasks are also performed automatically whenever a customer interacts with a company.

"There's a lot of opportunity to better optimize interactions with customers," says Michelle de Haaff, director of product management at Blue Martini Software. "This product is the next generation of our campaign management application, and allows organizations to go from batch-and-blast to really managing the customer relationship." Blue Martini Relationship Marketing is aimed at the software vendor's strongholds in retail and manufacturing, especially among Global 1000 companies. Enterprise licenses cost around $250,000.

One of the marketing-automation software's key selling points is its ability to integrate with CRM, SCM and ERP applications through a Web services interface, pre-built adapters or Tibco's enterprise application integration software. Haaff is quick to point out that hooks into ERP is vital to the software's success, considering customer events can occur within an ERP system. "Say a customer places an order directly into an ERP systems, and the accounts receivable shows that the customer is past due," Haaff says. "We may want [the marketing-automation software] to automatically trigger a dialogue."

Giga Information Group expects that demand for marketing automation will double from $350 million in 2001 to $700 million in 2005. What's driving the market? Just look at the numbers. The $350 million that companies collectively spend on licensed software for marketing-campaign management and customer analysis is less than half of the $800 million companies spend on e-mail marketing outsourcing, not to mention the multi-billion database marketing market, Giga reports.

"We see large companies that need coordinated consumer marketing across multiple communication channels -- email, direct mail, phone, Web -- are starting to look seriously at bringing marketing automation in house," says Erin Kinikin, vice president of e-business applications and strategies at Giga. (For disclosure purposes, Blue Martini is a Giga client.) "They've used outsourcers but can't get the response time and the multi-channel interactivity they need to recognize an opportunity on the Web, and then go after it before the customer moves onto something else. Most of the interest is in financial services, insurance, airlines, telecommunications, and retail."

While Blue Martini Software is capitalizing on the multi-channel marketing push, focusing primarily on the retail market, it's not alone in planting a flag in this space, says Kinikin. In fact, Blue Martini Software is a newcomer, joining companies like E.piphany, Unica, Chordiant, MarketFirst and Protagona. Even CRM giants Siebel, PeopleSoft and Oracle are weighing in.

And the race is heating up, says Kinikin. "The challenge is that marketing automation is a huge area with a lot of different product requirements, such as budgeting, program planning and complex multi-step campaigns," she says. "Blue Martini has to demonstrate that it can extend its retail footprint to marketing, and then that it can compete outside of retailing in the broader marketing automation market."