Cracking the Code on Marketing and Sales Alignment

The dynamics of the 21st Century are forcing businesses of all sizes and types to be able to react quickly and decisively to rapidly changing business and competitive conditions and changing customer demands. The more agile a company, the faster it can respond to market dynamics and develop new products and processes, recognize new opportunities, and redeploy resources accordingly. The degree of agility may be the difference between being a market leader instead of an also-ran. Agility requires proactive planning, business intelligence, alignment and collaboration among all the key functions to make the right decisions and turn opportunities into a competitive advantage. One of the key alignment issues facing many companies is the alignment between Marketing and Sales.

Marketing and Sales Alignment Remains Elusive

The issue of marketing and sales alignment isn’t new. Most marketing and sales people have been in organizations where marketing has been known to accuse sales of not following up on leads and refusing to track leads through the sales cycle and sales has been known to accuse marketing of not providing viable qualified leads. This misalignment is often attributed to a variety of factors, such as different goals, different timelines, and different psychologies. Market dynamics such as commoditization, the Internet, mobility and virtualization and changing business models only compound the problem. Companies attempting to resolve the issue often approach the problem by trying to tighten the alignment of marketing activities within the sales cycle, improving coordination around lead generation, and increasing sales force participation in the marketing process. Sadly these attempts often fail. Regardless of various approaches taken by companies to address this issue, the lack of alignment and collaboration between marketing and sales persists. Both organizations need to change for the organization to succeed.

 From Transactional to Customer Centricity

To achieve greater alignment, both organizations need to decide together which market segments offer the best opportunities and deserve the highest priority. Today’s buyers are more sophisticated and today’s buying processes are more complex. The transactional approach of marketing generating qualified leads that sales then brings to a close is an outdated view. The transactional approach is what permits marketing and sales to operate as independent silos. This results in Sales immersing itself in the latest training, engaging in calling on customers and focusing on post-sale efforts and Marketing focusing on implementing various campaigns and 2 coordinating a variety of tactics.

A Customer-Centric Approach Offers Hope

Customer Centricity requires a company to look at the world through the eyes of the customer, what they want from you, what they expect from you, what they can count on from you. One way to become more customer-centric is to move from looking at the world from a selling perspective to taking a customer relationship lifecycle perspective. Taking a customer relationship lifecycle approach provides an avenue for alignment by focusing both organizations on the same set of outcomes – creating, keeping and growing the value of customers. The customer relationship lifecycle begins the moment a customer appears on the radar screen, moves into the lead-sales funnel, emerges as a customer and engages in a variety of experiences that result in them becoming an advocate. The customer relationship lifecycle provides insight into which customers provide the greatest values to your company. As result, the company can create a set of common metrics for both organizations which will help ensure alignment. Customer relationship management metrics include buying related metrics such as recency frequency and quantity; cost related metrics such as gross amount of money spent on acquiring and retaining the customer through marketing dollars, resources spent generating each sale, and post sales service and support; and customer value related metrics such as the duration or longevity of that customer’s relationship with your business, the referral rate, and share of wallet. Establishing a common set of customer-centric metrics facilitates alignment and collaboration and provides both organization with customer-oriented vocabulary and set of priorities.

Does Alignment Matter?
While no one can offer any guarantees, aligning Marketing and Sales makes good business sense and ultimately impacts the bottom line. A study conducted by Aberdeen on sales effectiveness with more than 200 executives from the executive, sales, marketing and IT management functions study found that companies that had strong collaboration between these two functions achieve a higher sales effectiveness. For many companies, this additional boom in sales more than justifies making the effort.

Need to Engage and Connect With Prospects and Customers? Marketing Automation to the Rescue (Maybe)

Today, a suitable marketing automation platform is available to meet just about any company’s requirements and budget. These platforms often include systems for managing digital assets, allocating resources and tracking marketing expenditures, automating campaigns (online and offline), measuring marketing activity and demand generation, and managing Web content and leads.Many companies invest in marketing automation platforms as a way to make their marketing organizations more efficient. Though marketing automation can achieve that objective, two key benefits of these systems is that they help you connect better with prospects and improve the opportunity to engage prospects and customers.

What Marketing Automation Isn’t

Marketing automation isn’t magic. Success requires taking a methodical and disciplined
approach to segmenting, defining the customer-buying process, establishing agreed-upon
definitions of stages, creating personas, establishing common metrics, and committing to
faithfully using the system

.Marketing automation allows you to tailor your content and interactions to enhance how you connect with and engage prospects and customers. As a result, you can positively affect the conversion rate and sales cycle. And, in these tough times, who wouldn’t want to see higher and faster conversions?

Take a Customer-Centric Approach to Configuration

Such benefits alone present a good business case for marketing automation. But for a system to “be all that it can be,” it must be properly configured and deployed. Proper configuration and alignment require and enable stronger alignment between Sales and Marketing.

Many companies configure their systems around how they might sell and evaluate an opportunity (e.g., whether they’ve identified a budget, project, or need). However, before you deploy, take an outside-in view and configure the system around how your customer finds, evaluates, selects, and buys products in your category.

For your investment and that approach to pay off, Sales and Marketing need to agree on how the customer buys, the buying stages, and what constitutes a qualified opportunity, in terms of both fit (segment, budget, size, etc.) and buying behaviors. This approach allows you to use fit and behavior to create a lead-scoring schema.

Create and Measure Four Customer Interactions

Marketing and sales teams are typically proficient in connecting at the beginning and end of the conversation, but the real challenge is managing the middle of the conversation. The middle conversation is when prospects and customers are in the “in-between”—between initial contact and interest, on the one hand, and the short list and final selection, on the other.
A properly configured and deployed marketing automation system enables you to manage the middle. How? It makes it possible to cost-effectively sustain a dialogue with qualified
opportunities until they are ready to buy while enabling you to monitor the interaction between those opportunities and your organization.

You’ll want to set performance targets for these four kinds of interactions, and then use your marketing automation system to create, measure, and monitor them:

• Connections
• Conversations
• Engagement
• Consideration

Think of connections as those contacts with whom you have established communication and rapport and who have agreed to be “touched” by your organization. A connection doesn’t necessarily result in a conversation. Connections are just that: two entities that have a link between them.Think of how many people you may have in your LinkedIn network that you are connected with but don’t necessarily have conversations with. Conversations suggest an exchange—the sharing of ideas, opinions, or observations. Consider how many people you “talk” with on a variety of 3 topics on any given day. Though some of those people might be interesting, they may not necessarily be the right people—or they may not be ready to move the relationship forward.

Ultimately your marketing efforts aim to create engagement, and you want your marketing automation system to support those efforts. Engagement consists of interactions that indicate the strength of the relationship.

Finally, you want to produce and measure consideration because it is the precursor to conversion. Consideration simply refers to those prospects and customers who are actively “shopping” for the products and services you offer and are considering your offer among the options.

If You Build It, They Will Come

The premise of marketing automation is that it will help Marketing increase the number of
business opportunities for your company, deliver sales-worthy and ready leads to Sales, improve your visibility into the pipeline, and enable your marketing organization to focus on efforts that will drive the highest conversion rate and the lowest cost.

The value proposition is that marketing automation will shorten your sales cycle and help
improve your forecast accuracy.And it’s all possible with this one caveat: Marketing automation is only as good as the effort you make in using it. To use it properly and realize the kinds of results you want will likely require changing processes, addressing Marketing and Sales alignment, and improving skills.

Research suggests that when marketing and sales processes, skills, and systems are aligned, an organization can see a five-fold improvement in revenue. If you are willing to make the necessary investments, you can realize the benefits of implementing a marketing automation platform.

Bridging the Gap: Astronauts, Fighter Pilots, and Air Traffic Controllers Needed

As the sun sets on April, the months of May and June signal the halfway mark of the year, the beginning of summer, and — of particular note graduation. This year 1.7 million people are expected to graduate from universities and colleges in the U.S. This new and eager talent will be ready to enter the workforce, but as we all know, 2013 is still a tough year for employment.

While this proves to be a problem for most business majors across the board, the profession of marketing has seen a sharp upturn in interest. In terms of salary increase, business majors with marketing degrees fared best, with starting salaries rising 4.7 percent from 2012 numbers. Why has the demand and importance of marketers increased in the past year? As the definition and role of marketing within organizations change, so do the skill sets that marketing graduates bring to the table.

So, just what skills do the marketers of today and tomorrow need to secure a job? You’ve heard all the classics before: good communication skills, excellent problem‐solving skills, asking good questions, and good research skills to make fact‐based decisions. Then, of course, there’s the ability to work in a team, meet the expectations of your boss, and use technology effectively.All crucial, tried‐and‐true skills. But in today’s competitive environment, it will take more than just the basics to succeed.

Successful marketers have a customer‐centric mindset. They recognize the importance of being able to accelerate the customer acquisition process, demonstrate customer responsiveness, focus on customer retention, and improve customer satisfaction and loyalty.And successful marketers understand the importance of accountability. They recognize organizations have a set of outcomes they are trying to achieve, and marketing must measure and report on how it is positively affecting these outcomes.

Marketing professionals everywhere know they need these customer‐centric skills and tout
them in their resumes and interviews.These are becoming another set of table stakes.
Distinguishing oneself from the crowd is a hard nut to crack. Marketers often try to tailor themselves to a particular job. Yet in smaller companies, a marketer needs to be able to perform a variety of jobs. And in today’s larger companies, a marketer may actually be doing the job of several people. So maybe there’s a more creative way to look at what you can bring to the table.

We often talk about personas as a way to better understand customers and create messages that will resonate. We can apply this same notion to marketing.There are three broad personas every marketing organization needs, which we’ll call astronauts, fighter pilots, and air traffic controllers. Let’s briefly explore each:

First, there is a need for a small number of talented people who are the visionaries. These are the individuals who see the future and pursue new ideas—the ones who are willing to take extraordinary risks for what they believe is the right thing to do, even at the cost of their jobs.These people are the astronauts of the marketing organization.These are highly trained, fearless innovators willing to travel into the unknown.They thrive on “what‐if” scenarios and are valued for their out‐of‐the‐box approach. The work they do is very important, because such trailblazers help us understand more about where we can and should go, and enable us to get there.

Second is a larger group of professionals trained to engage customers and in hand‐to‐hand combat with the competition.These are the warriors—the fighter pilots of the organization—who courageously participate in the daily battle of customer acquisition and retention.These professionals take all the attributes of a warrior such as courage, strength, agility, adaptability, stamina, resilience, acuity, restraint, stealth, cunning, and compassion and make them relevant to marketing.

They thrive on winning, both individually and for the organization.They deploy offensive and defensive strategies and tactics designed to grow market share and customer value. Without the warriors, the company cannot win in the marketplace.

Astronauts and fighter pilots would have high mortality rates with out the last persona, the air traffic controllers. While often behind the scenes, they are just as important to the organization.These people create and operate the systems and processes that direct marketing activities efficiently and effectively, so as to minimize mistakes, delays, and costs. They thrive on order and precision.These jobs may not seem as glamorous, and may not be on the front line, but they’re every bit as critical to the organization’s success.

As you think about your capabilities, preferences, skills, and personality, consider which persona you most resemble. Rather than focusing on a particular job with hundreds of applicants, synchronize your marketing skills to fit a persona.

Once that’s accomplished, focus on finding an opportunity and a company that values your
persona. Remember: Every company needs all three.

How Vulnerable Are You to Customer Defection?

In this article, you’ll learn…

• Five factors for maintaining successful customer relationships
• How to identify your most vulnerable customers
• How to calculate your company’s vulnerability index

In the early ’90s, the term “customer relationship management” (CRM) joined the marketing lexicon. Though the idea is often thought to refer to the implementation of some kind of technology, the real idea behind CRM is that the management of customer relationships is a business imperative.

CRM is about deciding which customers or segments to target, and then developing customer acquisition, retention, and growth plans that will attract and keep your best customers. CRM is really about making your customers the heart of your business.Our job as marketers is to acquire, grow, and retain profitable customer relationships to create a sustainable competitive advantage.

How do you measure customer relationships?

We’ve all come to accept that creating customer loyalty is an integral part of any organization’s strategy and focus. Various factors influence the success of any customer relationship initiative.

Here are five critical success factors:

1. Clearly defined business outcomes related to customer acquisition, retention, and growth

2. Agreement about who the customer is and what they want and need from your category (and you)

3. Well-defined customer segments (and their desired behaviors) and customer-experience objectives

4. A documented, integrated customer strategy

5. Explicit measures of success, and the data and processes needed to support the metrics

Customer satisfaction and loyalty are two of the most common measures of success. A variety of models are used to measure and quantify customer loyalty, ranging from simple recency and 2 referral models to RFM and customer lifetime value models. Recent research is examining those models to ascertain which, if any, truly measure customer loyalty.

Many organizations would agree that a loyal customer…

• Stays with the brand despite competitive offers, changes in price, negative word-of-mouth, and product failures
• Increases business/engagement in some way
• Actively promotes the brand to others

Though there are many approaches to measuring customer loyalty, one metric that many
organizations should consider is the Vulnerability Index.Add the vulnerability index to your marketing KPI’s. A vulnerability index serves as a way to measure loyalty in the face of competitive pull. Its purpose is to help you identify your most loyal customers—those who are going to stick with you through thick and thin.

To calculate your vulnerability index, you will need excellent market intelligence about your
competitors’ campaign’s channel, offers, and markets. Once you have this information, follow these seven steps to construct your vulnerability index:

1. Map the competitive activity. Include the competitor’s name, offer, duration of offer, and the offer’s focus area and market.

2. Generate a list of loyal customers in the market where the campaign ran.

3. Map their repurchase and engagement cycle based on frequency and last purchase date.

4. Isolate all the customers whose repurchase or renewal dates fall within the competitor’s campaign period. This is your observation set (OS) and the set of customers who will experience the greatest competitive pull and are, therefore, the most vulnerable.

5. Define your observation period, which is generally the campaign launch date and one purchase cycle after the last date of the competitor’s campaign.

6. Monitor the purchases by vulnerable customers. Track all the customers whose purchases drop during the observation period. These customers constitute your vulnerable set (VS).

7. Calculate the vulnerability index. Divide your VS by your OS and multiply that number by 100:

Vulnerability Index = (VS/OS) x 100.

The index will give you a good idea of the proportion of customers who are succumbing to
competitive pressure and some idea about the level of loyalty in those customers. If the index is high, you know that there is something to worry about. If the index is low, you can assume, with some degree of certainty, that your customers are exhibiting robust loyalty to the brand.

Because Marketing is charged with finding, keeping, and growing the value of customers,
customer retention falls within the domain of marketing. Therefore, marketing organizations
should have at least one objective aimed at retaining customers. In addition to monitoring customer loyalty and advocacy and customer churn, Marketing should also keep tabs on customer vulnerability. If your vulnerability index begins to climb and exceed that of your competitors, you can anticipate that your defection rate is going to increase. By monitoring your vulnerability index, you will know who your most loyal customers are, and you will be able to develop and implement strategies to withstand competitive pressure.

Big Data Promises Marketers Big Insights

By: Laura Patterson, President

The amount of data being generated is expanding at rapid logarithmic rates. Every day, customers and consumers are creating quintillions of bytes of data due to the growing number of customer contact channels. Some sources suggest that 90% of the world’s customer data has been created and stored since 2010. The vast majority of this data is unstructured data.

It is not surprising, then, that study after study shows that the majority of marketers struggle with mining and analyzing this data in order to derive valuable insights and actionable intelligence. A recent report by EMC found that only 38% of business intelligence analysts and data scientists strongly agree that their company uses data to learn more about customers. As marketers we need to learn how to leverage and optimize this flood of data and incorporate it into customer models we can use to predict what customers want.

Big Data

Many marketing questions require being able to perform robust analytics on this data. For example, understanding what mix of channels are driving sales for a particular product or in a particular customer set or what sequence of channels is most effective. These types of questions often require large sets of data, or what is being referred to as Big Data.

Big Data isn’t new; it’s just gone mainstream. A recent study found that almost half (49%) of US data aggregation leaders defined Big Data as an aggregate of all external and internal web-based data, others defined it as the mass amounts of internal information stored and managed by an enterprise (16%) or web-based data and content businesses used for their own operations (7%).

 But 21% of respondents were unsure how to best define Big Data. IDC defines big data as: ‘a new generation of technologies and architectures, designed to economically extract value from very large volumes of a wide variety of data, by enabling high-velocity capture, discovery, and/or analysis.’

Holistic Approach

Big Data incorporates multiple data sets—customer data, competitive data, online data, offline data, and so forth—enabling a more holistic approach to business intelligence. Big data can include transactional data, warehoused data, metadata, and other data residing in extremely massive files. Mobile devices and social media solutions such as Facebook, Foursquare, and Twitter are the newest data sources. Most companies use Big Data to monitor their own brand and that of their competitors. The use of “Big Data” has become increasingly important, especially for data-conscious marketers. Big Data is a valuable tool for marketing when it comes to strategy, product, and pricing decisions.

Big Data offers big insights and it also poses big challenges. A recent study by Connotate found the top challenge with Big Data was the time and manpower required to collect and analyze it. In addition, 44% found the sheer amount of data too overwhelming for businesses to properly leverage. As a result, many companies aren’t maximizing their use of Big Data.

The effort however associated with managing Big Data is more than worth it. The promise of Big Data is more precise information and insights, improved fidelity of information and the ability to respond more accurately and quickly to dynamic situations.

How to Handle Big Data

So while Big Data might seem a bit daunting, these steps will help you navigate using Big Data:

1. Clarify the question. Before you start undertaking any data collection, have a clear understanding of the question(s) you are trying to answer. Using Big Data starts with knowing what you want to analyze. By knowing what you want to focus on, you will be better able to better determine what data you need. Some common questions asked are ’which customers are the most loyal’ and/or ‘which customers are most likely to buy X‘? Big Data is about looking beyond transactional information, such as a click-through data or website activity.
2. Clarify how you want to use the data. Will you be using the data for your dashboard, to define a customer target set for a specific offer or to make program element decisions (creative, channel, frequency, etc.)?
3. Think beyond the initial question. Invariably the answer to one question leads to more questions. If you’re not sure, hold a brainstorming session to explore all the ways the data could be used and potential questions the answers might prompt. Structure your data in a dynamic way to allow for quick manipulation or sharing. Aggregate data structures and data cubes aid with this step. Construct your data cubes so that
   they contain elements and dimensions relevant to your questions.
4. Identify data sources that need to be linked. Once you identify the question and how you want to use that data you will have insight into what data you need. To run analysis 3 against data you will need to consolidate and link it. More than likely you will need to collect the data from disparate data sources in order to create a clear, concise, and actionable format. It may be necessary to invest in some new tools so you can pull and analyze data from disparate locations, centers, and channels. These tools include massively parallel processing databases, data mining grids, distributed file systems, distributed databases, and scalable storage systems.
5. Organize your data. Create a data inventory so you have a good understanding of all your data points.
6. Create a mock version of your data output. This is a key step to helping you determine the data sets. It will also help you with thinking about how you will convert the results into a business story.

Smart marketers use the data to tell a story that will illuminate trends and issues, forecast potential outcomes, and identify opportunities for improvement or course adjustments. They use the data to gain big insights into customer wants and needs, market and competitive trends. Tackle Big Data and tap into big insights that enable you to take advantage of market opportunities, deliver an exceptional customer experience, and give your customers the right products when, where, and at the price they want.

Focusing on Social Media Metrics Across the Stages of Engagement

CMOs and their teams are trying to determine the best way to create and measure customer engagement. As more customers connect via mobile and social channels this only adds to the complexity. Just as it took organizations time to learn how to leverage and manage websites, we are still learning how to leverage and manage these new channels. There’s no denying that social and mobile channels have become mainstream engagement vehicles that impact customer acquisition and retention. More of the marketing budgets are now being allocated to digital channels, taking these dollars from more traditional vehicles such as print advertising.

The IBM Global CMO Study of 1700 CMOs  revealed that while top marketing executives recognize social media as an important channel for engaging customers, 80 percent or more of the CMOs surveyed said they still focus primarily on traditional sources of information like market research to help shape customer engagement and marketing strategies. Only 26 percent of CMOs track blogs, 42 percent monitor third-party reviews, and 48 percent reading consumer reviews to help shape their marketing strategies. A more recent study by PulsePoint earlier this year found that companies with an established extensive social media presence reported a return on investment that was more than four times that of companies with little or no social network engagement activity. Almost half of the 329 executives participating in the study said that the major impediment to social media campaigns was the lack of a standardized metric that can measure a return on investment. These studies serve to remind us that examining customer interactions across the channels in order to have a holistic picture is important. They also highlight that measuring isn’t the challenge; it is measuring the business value of social media that remains difficult.

In fact, there is no lack of data or metrics to track. As usual, the key challenge is selecting the right metrics and ones that are actionable. A key place to start is to determine what information actually indicates these stages of engagement that you can use to inform decision making. For example, how might you measure the quality and quantity of conversations started via social media channels and the conversion rate of these conversations to consideration behaviors, such as a particular type of inquiry. For example “liking” and “following” metrics may only reflect very early stages of engagement, such as contact or connection. Page views and click throughs provide insight into what captures interest and may also reflect early stage engagement behaviors. Ultimately you want to focus on social media metrics that help you understand how to impact the entire engagement cycle – from contact to conversation to consideration to consumption and eventually consumption and community. By adding these types of metrics, you can learn content and customer communication and interaction create both the most and best interaction and engagement.

Measuring and Linking Relevancy to Buyer Behavior

Various studies over the years have examined the relationship between content relevancy and behavior. Almost everyone would agree with the statement that “content must be relevant.” But what is relevance? According to Wikipedia: “Relevance describes how pertinent, connected, or applicable something is to a given matter. A thing is relevant if it serves as a means to a given purpose. In the context of this discussion, the purpose of content is to positively impact customer or employee behavior, such as increasing purchase frequency, purchase velocity (time to purchase), likelihood to recommend, productivity, etc.

When we ask marketers and others how they measure content relevancy, we often hear, “we base it on response rate.” If the response rate meets the target, then we assume the content is relevant or vice versa. Clearly there is a relationship between relevancy and response. Intuitively we believe the more relevant the content the higher the response will be. But measuring response rate is not the best measure of relevancy. There are many factors that can affect response rate, such as time of year, personalization and incentives. Also, in today’s multi-channel environment we want to account for responses or interactions beyond what we might typically measure such as click thrus or downloads.

So, what is the best way to measure relevancy? There are a number of best-practice approaches to measuring relevancy, many of them are complex and require modeling. For example, information diagrams can bean excellent tool. But for marketers who are spread a bit thin and therefore need a simpler measure, the three step approach below ties interaction (behavior) with content:
Count every single piece of content you created this week (new web content, emails, articles, tweets, etc). We’ll call this C.
Count the collective number of interactions (opens, click thrus, downloads, likes, mentions, etc.) for all of your content this week from the intended target (you’ll need a way to only include intended targets in your count). We’ll call this I.
Divide total interactions by total content created – R = I/C
To illustrate the concept, let’s say you are interested in increasing conversations with a particular set of buyers and as a result this week you:
Posted a new white paper on a key issue in your industry to your website and your Facebook page.
Tweeted 3x about the new white papers
Distributed an email with a link to the new white paper to the appropriate audience
Published a summary of the white paper to 3 LinkedIn Groups
Held a webinar on the same key issue in your industry
Posted a recording of the webinar on your website, Slideshare and Facebook page
Held a tweet chat during the webinar
Tweeted the webinar recording 3x
Posted a blog on the topic to your blog

We’ll count this as 17 content activities.

For this very same content during the same week you had:
15 downloads of the white paper from your site
15 retweets of the white paper
15 Likes from your LinkedIn Groups and blog page
25 people who attended the webinar and participated in the tweet chat
15 retweets of the webinar
15 views of the recording on Slideshare

This counts as 100 total interactions. It’s both possible and likely that some of these interactions are from the same people engaging multiple times, and you may eventually want to account for this in your equation. But for starters, we can now create a content relevancy measure.

R= 100/17 = 5.88.

If we had only measured the response rate, we might have only counted the downloads and attendees, 40, so we might have had the following calculation

R = 40/17 = 2.35

The difference is significant. Over time, we can understand the relationship between the relevancy and the intended behavior, which in this example is increasing “conversations”. Tracking relevancy will enable you to :
Establish a benchmark
Set content relevancy performance targets
Model content relevancy for intended behavior