marketing operations

Power Tools-Use with Caution

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The results from the marketing performance research recently conducted jointly by ITSMA and VisionEdge Marketing (VEM), and Forrester were just announced. In its 12th year, the purpose of this study has been to understand how proficient marketers are at measuring and managing performance; using metrics, data, and analytics; and communicating marketing’s value, impact and contribution to the business. This year’s study captured input from more than 400 respondents. The study revealed areas in which marketers have made strides and areas where marketers remain challenged.Image

The result I found most perplexing was that, while marketers have access to more data than ever, leverage more analytics, and invest in more tools and systems, they continue to struggle to prove marketing’s contribution to the business. One clear indicator of this is that just 9% of CEOs and 6% of CFOs use marketing data to help make strategic decisions. Less than 10%! Although the majority of the marketers regularly produce and share a marketing dashboard, they are not bringing valuable, useful information to the table.

So where’s the disconnect? If you want your leadership team to understand how marketing is moving the needle in terms of top line revenue, market share, customer value, category ownership, and so on then the dashboard needs to be able to tell that story. Unfortunately, it appears that most marketers participating in the study use their marketing automation (MAP) or sales automation (CRM) systems to create their dashboards. In fact, dashboards and reports are already integrated into many of these systems. These dashboards, however, typically report on marketing activity and associated costs – email activity, website activity, social media activity, lead activity- rather than reporting on metrics executives can to set direction. It’s not that these reports and dashboards are bad; they are valuable when used to support tactical decisions, but if you want your CEO, CFO and other members of the C-Suite to use your dashboard it must clearly connect marketing investments and initiatives to business outcomes and results.

The ability to push a button and generate a pretty report that doesn’t add any value to the strategic decisions made at the C-Suite level doesn’t serve marketing well. To be on the right track, you need to start by making sure the marketing initiatives and investments are clearly aligned to business outcomes and that you have the right metrics in place. Otherwise, investing in better marketing tools is akin to buying a power saw when you have yet to master a hand saw. You have the ability to do more damage faster.

Learn more about the survey results and some initial impressions at:

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

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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 Imageworkforce, 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?

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In this article, you’ll learn…

  • Five factors for maintaining successful customer relationships
  • How to identify your most vulnerable customersImage
  • 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

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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.

vem big data 2It 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.

Analytics and Marketing Ops: A One-Two Punch for Growth

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Today’s customers are more value-oriented and less loyal creating even greater challenges in today’s business climate. With customer expectations increasing, the competitive landscape growing, the proliferation of new technologies and channels, and the avalanche of data, marketers needs more than intuition and experience to succeed. The world is just too dynamic and the pace of change is just too fast. In fact, the deluge of data is actually fueling the growth of analytics. As Dave Frankland of Forrest once said, “the goal is not to collect data, but to develop insights.” Insights are the purview of analytics. Analytics are algorithms advanced and/or mathematical techniques on large volumes of data that help marketers translate data into actionable insights to help drive marketing and customer strategies and optimize marketing efforts.

Analytics is hard and time consuming so why make the effort and investment? A High Performance research study by Accenture found that companies that invest heavily in their analytic capabilities outperform the S&P 500 on average by 64% and recover more quickly during economic downturns.

How are the high performers different? First, they have above average analytical capabilities. Second they have better decision support analytical capabilities. Third, they more highly value analytical insights, which seems obvious or they wouldn’t have invested in the first two. And finally, they use analytics across their entire organization, including sales and marketing. Julio Hernandez, a partner at Accenture, says, “Companies need to be analytically inclined and data- driven in order to turn insights into action for driving growth.”

How can you use analytics to drive growth? Marketing analytics help you answer questions such as: “Which customers are worth paying a lot of attention to? Which ones are worth less?” Analytics helps you evaluate and address five growth opportunities:

  1. Acquire more valuable customers
  2. Acquire customers who will buy more from you
  1. Acquire customers who will buy your more high value products/services
  2. Retain high value customers longer
  3. Determine which marketing activities have the greatest impact on accelerating customer acquisition and improving retention

Companies use analytics to make decisions related to business operations, competitive moves, staffing and skill requirements, customer strategy, positioning and messaging, marketing optimization. Even so few companies really invest in analytics. A 2011 Ventana Research study included input from more than 2,850 organizations found that more than half of organizations still spend the majority of their time in unproductive data preparation and quality assurance processes, rather than in applying analytics.

There are so many possible analytic projects to evaluate it may be hard to know where to start. To prioritize projects we recommend you evaluate projects against two criteria: ease of execution from easy to hard and value derived from low to high. Score each project and classify them into one of four categories.

  1. High-Value/Easy-to-Execute- Must Do’s
  2. Low-Value/Easy-to-Execute – Quick Hits (things you can do in 30 days or less)
  3. High-Value/Hard-to-Execute- Transformative
  4. Low-Value/Hard-to-Execute- Nice to Have

We recommend you focus on the high-value/easy-to-do first. This is the way to demonstrate fast high value wins. Then tackle the easy-to-execute/low-value for the next set of fast wins while you put a plan in place to address the hard-to-execute/high-value projects.

The math associated with analytics is only one step. Here are a few items that should be on your checklist before “doing the math”:

  1. Establish a clear methodology you will use to guide your work.
  2. Define the business objective and desired outcomes.
  3. Analyze and select the most appropriate data sources to support the outcomes and scope of work.
  1. Select, extract, and transform data upon which will be used to create models.
  2. Create, test, and validate models
  3. Apply model results
  4. Manage and modify models to improve performance

It’s probably become evident that an analytics approach to marketing takes skills and resources. In their book The Four Pillars of Profit-Driven Marketing, authors Leslie Moeller and Edward Landry claim that being good at analytics is not enough. Analytics along with the tools to disseminate the insights from analytics, the processes that makes sure analytics is not an afterthought and the organizational infrastructure are the keys to success.

How do you scale it? Most companies have some analytical capability, usually residing in a market research or intelligence function. We believe the optimal way to scale is with marketing operations. Marketing operations is oxygen for growth. A properly chartered and resourced marketing operations function facilitates an agile marketing organization. These marketing organizations define efficient and scalable processes, including data capture and management; use analytics to identify and recommend ROI-led marketing investment, including developing models to optimize channels; and facilitate strategic planning and growth by using analytics to develop market and customer segmentation models.

Our research shows that many organizations have someone performing some part of the marketing operations function, primarily budgeting, research and planning. As we approach 2012 and continue to try and manage a business environment that most of us would describe as uncertain, perhaps it is time to invest in the infrastructure and skills to achieve the next level of capabilities on your marketing metrics and analytics journey.