How many times have you heard sales people complain "our marketing needs to be better"? The role of the CMO is probably the most thankless job in the modern organization: the executives expect great branding and messaging to be propelled through all the optimal channels to market to maximize awareness and, ultimately, increase sales. And the marketing department rarely gets credit when things go well (that goes to sales), but always bears the brunt of the blame when revenue goals are missed. What's more, it's always really tough for marketers to get budget approved to support the campaigns their organizations need to create awareness, educate their market and drive new sales activity. Justifying the marketing ROI is probably the hardest calculation to produce in any organization.
When I was a young business studies student, the great Philip Kotler defined marketing simply as "Satisfying customers' needs and wants profitably". I'd go even further - it's about "Satisfying customers' needs profitably while successfully managing the expectations of the sales function". To this end, HfS analyst Reetika Joshi has been taking a deep look at how leading service providers are trying to help CMOs today...
Getting actionable insights from an integrated marketing optimization platform
In 2013, our research shows three secular changes challenges challenging the success of the modern CMO:
» Analytics and the big data movement is gaining momentum with the need to now look beyond traditional web analytics and siloed projects, towards comprehensive marketing analytics that optimize all marketing activities, be it inbound or outbound.
» Mobile and the real estate value of the second screen: While addressing mobile in the past meant optimizing websites and emails to suit mobile formats, marketeers now need to rethink seriously the best ways to integrate mobile devices as important marketing channels as part of overall strategy.
» Social marketing and the fall of paid traditional media: Beyond simply increasing social presence, the next step is to think of innovative new ways to drive user-generated content creation and sharing, making campaigns more personal, identifying and appealing to social ‘influencers’ and tracking the impact social has on overall marketing effectiveness.
Every CMO has had countless discussions about the best way forward to tackle these mega-trends in marketing to get ahead of the competition. At HfS Research, we see two overarching marketing optimization challenges for organizations:
1) Crafting an integrated campaign strategy that works in the real world
Marketeers have an increasingly complex marketplace in which to make campaign decisions. From selecting the marketing channels in which to operate – both traditional and new media, to the modes of engagement and messaging for each channel, the frequency and sequence of channels to be tapped, and finally, the methods of evaluating and optimizing these marketing efforts in near-real time. Traditional campaign management often ignores the importance of these factors to realizing fully the potential of changing customer preferences and engagement models. There is thus a strong need for rethinking and measuring the effectiveness of the integrated modern marketing campaign strategy.
The sense of urgency towards an integrated campaign strategy can be explained when we bring up three short letters hounding CMOs today – ROI. IBM’s CMO Survey reveals that 86% of marketers claim their CEO demands more marketing ROI today than ever before. This inextricably links marketing with the need for more accountability, tracking, data mining and smart analytics that can prove, beyond reasonable doubts, where the marketing dollars should be spent to maximize ROI.
Analytics can be leveraged to improve campaign strategy (and ultimately ROI gains) by optimizing timing, messaging, etc. For example, analysis of customer PoS data and channel responsiveness (email/SMS, etc.) could reveal which channels are the most effective to target certain groups.
2) Finding the muscle to get execution right
Campaign execution is the logical flip-side of the coin when it comes to optimization challenges. The key issues are two-fold:
i) Achieving the right balance of technology to support effective campaign management, and
ii) Acquiring the right talent to revolutionize siloed marketing functions.
When it comes to technology, there is frequently an immense fragmentation of tools and platforms that not only make integration expensive, but also slow down decision-making during campaign execution. Getting actionable insights from an integrated marketing optimization platform, and accordingly making the right recommendations to customers, is the Holy Grail for marketers today.
Where technology is up to speed (in cases where marketing and IT are on the same page), the other execution challenge lies with departmental siloes and lack of talent. Where before there existed departments such as TV, direct marketing and PR working discretely to push outbound messaging, there now needs to be a combined and synergized effort of online and offline tactical elements to drive inbound marketing. Additionally, the types of skills marketing professionals need are changing. Successful marketers today not only need to be able to practice core marketing principles and have sound knowledge of their markets, but also weave in skills such as: content marketing and writing skills that are relevant and flexible (e.g. blogging vs. SMS), technology know-how for enabling tools, technologies and applications, digital and social media prowess to be able to select and nurture only the most relevant online marketing channels, an understanding of analytics and KPI metrics to make business decisions, and a healthy dose of curiosity to try new things (e.g. engage the customer in a new/unconventional way). Having said that, specializations in these areas will continue to evolve as companies start to integrate them seriously into marketing operations. This brings up the challenge of attracting and retaining specialists that are already in high demand. As an example of the specialized talent gap, McKinsey & Company forecasts an annual shortage of 200,000 data scientists by 2020.
Sensing the scale of these challenges, ambitious CMOs have started to make drastic changes to their strategies for future growth. External partnerships are is one such key lever that is on the rise – companies are leveraging third party providers for tools and platforms expertise, marketing analytics support, marketing consulting and multi-channel customer engagement, among others.
At HfS Research, we have strived to present business cases and best practices that highlight how different marketers are trying to cope with evolving/maturing marketing channels and consumer habits. In our recent case study based research, we present the experience and learning of one such company, a large US-based discount footwear retailer, that engaged with Infosys on an ambitious marketing optimization project to address the key challenges discussed above. With the help of the provider on both campaign strategy and execution, the retailer used an omni-channel, analytics-powered campaign optimization solution and was able to reduce its media costs, gain a unified view of its customers, and experienced a 5% campaign response lift, potentially impacting $3MM+ in 6 month revenue flows. Read more about this case experience here.