The Complexity of Multi-Path Marketing

In our most recent survey of CMO's, we asked: "What is your primary Voice by which you go to market? Is your Voice that of: product line; industry; solution; campaign (or theme); customer segment; or job role?" The responses were evenly spread across these six voices. Which basically translates to: "As an industry, we go to market with all those voices at once".

I see so many executives struggling with this complex messaging ambition. Mar-Comm executives like to refer to this ambition as their "messaging architecture" but frankly I don't see many of these architectures that would pass the building inspection: it's just too complex.

Now, add to this a second dimension: the media in which your voice is carried into the market. Today's marketer has dozens of choices of media to choose from: from traditional advertising to social media tools. Obviously.

Finally, add a third dimension of time. New IDC research shows that the average cycle time of creating a new tech B2B customer -- from initial marketing all the way through to a closed deal -- is over 17 months.

And so now you have six voices, perhaps 35 different mediums of choice; and 17 months of engagement time. What do you get? In the first place - you get overwhelmed with choice! In the second place, what you do get is about one closed deal for every 2000 contacts that you started with at the very beginning of your campaign.

I once had a job as an assistant product marketer and my boss gave me a direct task: "Fax those new product fact sheets to our top 100 clients, today". One medium, one voice, and one dimension of time. No decisions on my part. I was a skilled faxer, and quite poorly paid.

But now you are the boss and "they're paying you the big bucks"… So, how are you going to figure this out?

This is the challenge of multi-path marketing and I believe that it is a bellwether issue for senior marketers. Over the past several weeks I have been interviewing some of our industry's top marketers about this issue, seeking their approaches. Here is what I am hearing, and some guidance on process approach:



1) The objective of all of this is greater "Personalization". Get the right message and content to the right person in the right time, place, sequence, format and voice. Now, to accomplish this, you might think to install the marketing content and execution tools in the part of your marketing apparatus that is closest to the customer: the channel partner or field seller. Counter intuitively, the opposite is happening.

2) Personalization begins with centralization. To make personalization happen, the best marketers are moving content production, tools, and process "Upstream" -- that is, away from the field and deeper inside the central machinery of the marketing operations areas. Content and asset management tools and sales enablement portals are helping this process.

3) Yes, there still needs to be local execution decisions: translation and choice of media are the two primary areas. But the field marketers who are most successful in these decisions are supported by those robust content management tools way up-stream at headquarters.

4) An additional element that adds to the complexity of multi-path (and multi-geography) marketing execution is the contribution of agency partners. Agencies will add their own flavor of voice and media choices - which may cause a global campaign to become very "un-unified" quite quickly. Several large tech vendors are moving towards agency consolidation to help alleviate this.


In a recent head-to-head with a CMO I asked: "From a marketing perspective, what is your single biggest challenge for your $20b company?" His reply: "We need to ensure that the marketing messaging that we create here at the top is effectively threaded into our execution all across and down through the organization".

In a nutshell, that is the challenge of multi-path marketing.

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The IDC Sales and Marketing Automation Framework

Sales and marketing organizations are seeing a rapid evolution of solutions for automating their core business processes. While we are years away from anything like an integrated ERP-class solution that can manage the full range of sales and marketing activities, the building blocks are available today. CRM vendors have established that a single system of record is within reach for the sales team, and an emerging group of companies are is starting to prove that this goal is attainable for the marketing side of the house as well.

However, automating these two organizations will be a major undertaking for large companies. There will be significant process, cultural, and technical challenges. But the benefits are self-evident: lower cost, higher efficiency and productivity, greater accountability, better performance, improved customer experience, and potentially shorter sales cycles.

The Need for Alignment
The 80/20 Rule and the 50/50 Rule: IDC research shows that up to 80% of the content marketing generates is not used by Sales, even though a lot of it is specifically created for Sales and Channel enablement. Additionally, customers say that Sales reps are insufficiently prepared for their initial meeting 50% of the time. Clearly a massive disconnect is at work.
IDC's Framework for Sales and Marketing automation is, therefore, focused on the tight alignment of key Sales and Marketing processes. This framework represents only those processes that must be coordinated (potentially integrated) between the two organizations. It is not meant to be a comprehensive map of all the processes in which each organization must engage to be successful – there are many activities on each side of the dynamic that do not have a corollary on the other.
Each high level process in Sales that has a counterpart in Marketing must share:

• A common set of definitions for inputs and outputs
• Proportional allocation of budget and resources based on overall business objectives
• Phase-appropriate performance metrics
• An integrated IT ecosystem

Source: IDC, 2010

Implementation
IDC recommends that sales and marketing automation efforts be tightly coordinated across both organizations so that the customer experience and lead management processes are handled seamlessly by all parts of the infrastructure. Even if a marketing implementation will have no sales users and vice versa, the data definitions and flow will be critical for both organizations. IDC recommends that:

• Senior marketing and sales leaders meet regularly to plan, review, and asses automation projects
• Marketing operations and sales enablement teams are especially critical, they should have representatives from both organizations with senior level sponsorship.
• Marketing needs to be very cognizant of how leads and lead details will flow into the SFA/CRM environment.
• Sales needs to be diligent in making sure marketing is capturing the high priority prospects and the high priority details so that lead acceptance criteria is routinely fulfilled.

Next Steps
One of the key issues for automating sales and marketing is establishing a shared automation road map. Upcoming research from IDC will help you: prioritize your plans based on business impact and implement best practices to be most successful.

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Are you Ready for Marketing's 2010 Annual Planning Process?

Have you started planning for your 2010 fiscal year yet? Our best practices study in planning – people, process and technology indicates that the average marketing planning cycle begins about 6 months before the fiscal year end. (for CMO Advisory Service clients, refer to "Marketing’s Planning – People, Process and Technology, IDC Doc. #216134) If you're one of the more mature organizations, planning will be part of the fabric of your weekly, monthly and quarterly team meetings.

Regardless, a significant part of this annual process is assessment of your current "operational" metrics and development of next year's projected investment strategy. I define "operational" metrics as those metrics that track your marketing investment strategy, including:

1. Key Performance Indicators (KPIs) – such as Marketing Budget Ratio (marketing spend as a % of revenue), Program to People KPI, Revenue per Staff, Staff Throughput (program spend per marketing staff), Centralization KPI (% of marketing investment that is centralized vs. decentralized), Awareness-Demand KPI, etc.
2. Staff Mix (fixed spend) – such as advertising, product marketing, marketing operations, etc.
3. Program Mix (discretionary spend) – such as advertising (print, broadcast, corporate sponsorship), digital marketing, event marketing, etc.

IDC has published a complete taxonomy of these KPIs and staff and program mix areas to help marketing operations and marketing finance executives best manage their investment. (for CMO Advisory Service clients, refer to IDC’s Worldwide Sales and Marketing Taxonomy, 2008: A Blueprint for Cost Control, IDC Doc. #211900)

Tracking and evaluating these KPIs, program and staff mix levels across the organization, over time and versus other companies will best prepare you for your upcoming planning sessions; for management of your resources as well as for increasing marketing's credibility with other parts of the organization.
IDC's CMO Advisory Practice is in its 7th year of its Tech Marketing Benchmarks study. If you would like to participate in this research, including receiving a copy of the above Taxonomy, an overview of the results of the study and an invite to our annual marketing benchmarks telebriefing in August, please contact Seth Fishbein at sfishbein@idc.com. You will be joining the 100+ global companies that work with us year after year as part of this industry study.

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Tracking Marketing Budgets - Use it or Lose It?

There are many ways to track the success of marketing's planning process. One metric that is often mentioned by marketing operations teams is the percent variance of actual vs. budgeted marketing investment. One of a few good metrics to track if your processes and systems have matured to the point of being able to do this. . . even if you use Excel today. What variance is acceptable? I've seen targets range from 2 to 10% variance. 2-3% variance of actual expense vs. budget would be considered "very good" for a 1B+ revenue company.

Assuming that marketing budget allocation is optimized throughout the year, it makes sense that managers should motivate their staff to spend all monies that they are allocated; including ensuring that certain percentages of budget are targeted to specific segments, campaigns, etc. This leads to a "use it or lose it" mentality if not an official guideline. The problem with this strategy (or culture) is that market shifts requiring budget changes may occur at a faster pace than the company's ability to react to these changes by reallocating budgets. The result is that market opportunities may be missed as a result of insufficient distribution of funds to where they're needed most.

Today, few companies encourage different business units, countries or functions to reallocate budgets amongst each other based upon changes in demand, priorities, etc. In fact many companies penalize marketers for not being "on budget" regardless of the circumstances. Will we or should we ever encourage our marketing teams to increase the transparency of their budgets or to even share budgets amongst each other based upon the needs of the market? And who will provide the objective market insight to help these teams best optimize budgets from a more macro perspective? One thing is for sure -- the increased optimization of marketing planning processes coupled with greater adoption of marketing automation will improve marketers' ability to react appropriately to these challenges and reduce reaction times to changes in the company and/or the market.

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The Fruits of our MRM Investment

Five or six years ago I was frequently asked the question "What is the one key metric to track the impact of our marketing investment?" Without even breaching the open-ended topic of what is ROI, I typically responded with my own question of "Do you even know how much you're spending on marketing, let alone what the return is?" In most cases the response would be a simple "no". After working with 100s of companies on analyzing their investment as well as seeing the progress that marketing operations and marketing finance people have made, I can comfortably say that as an industry we have matured significantly in our ability to track marketing investment . . . at least at a high level. (e.g., Marketing Budget Ratio (mktg. spend/revenue), Program-to-People KPI, etc.) I consider these to be operational metrics as opposed to execution metrics. (refer to past posts for more details re: execution metrics)

Greater sophistication in investment management, which is enabled by better processes and greater availability of MRM applications, may include tracking marketing investment along one or more of the following criteria: (to name a few)

• Customer size (e.g., named accounts, enterprise, large, medium, small, consumer);
• Product and/or solution;
• Campaign;
• Existing, more mature business areas or product lines vs. newer, higher growth business areas or product lines; and/or
• Low growth vs. high growth regions and/or countries.

About 60% to 70% of technology companies manage their marketing investment along one or more of these areas. [IDC CMO Advisory Practice Tech Mktg. Benchmarks Database] For example:

• tech companies invest on average 60% of their marketing budget on existing, more mature business areas or product lines with the remaining budget allocated to newer, higher growth business areas or product lines; and
• tech companies invest on average 52% of their marketing budget to low growth regions and/or countries with the remainder to high growth areas.

Yes, we've made some progress in tracking our marketing investment. This has certainly put us in a better position to manage our investment and improve our credibility with the CEO, CFO and sales peers. But we still have quite a distance to go; especially in making the connection between this investment and the subsequent return. (e.g., increased awareness, greater engagement, increased number of leads, high velocity through the pipeline)

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Marketing's Planning Process: An Ongoing Activity, not an Annual "Trip to the Dentist"

As your marketing organization approaches the end of its annual planning cycle, remember that it shouldn't end on January 1, 2009. As marketers we must get better at managing our annual and intra-year process as a part of our regular business processes vs. a once per year disruptive event. Doing so could be a helpful step forward in improving our ability to manage investment, shift resources in response to market conditions, and improve alignment within marketing and with the rest of the organization. Based upon interviews with marketing leaders in the technology industry and findings from IDC's recent Marketing Operations Board meeting, I'd like to offer the following "food for thought":

1. Staffing: Do you have an individual or team who's accountable for developing, executing and governing your planning process? The marketing operations function can provide the foundation and discipline for a well-orchestrated and managed planning process. Although this role has been effective in planning and orchestrating marketing's annual and intra-year planning process, marketers' view of planning as a separate activity from their daily job coupled with their lack of financial acumen continues to hinder the success of planning. (email me to receive a copy of our recent mktg. ops. study. . mgerard@idc.com)

2. Process: Marketers have made significant progress in establishing planning processes, such as global marketing leadership boards, a consistent taxonomy, financial tracking and other performance measurement processes; however, the lack of consistent adoption of these processes across the organization including a lack of alignment with finance, sales and regional marketing must be overcome to advance marketing to a higher level of operation and performance.

3. Technology: It is only in the past 3-4 years that most marketing organizations have actually achieved an understanding of how much they spend on marketing across the organization, mostly leveraging highly manual processes and Microsoft Excel. A recent IDC study revealed that 40% of IT marketers in companies >$3B in revenue continue to use Excel and other manual processes vs. a more automated MRM(marketing resource management)-type solution. It is time for us to advance to the next level of marketing, including tracking of investment at a more detailed level. (e.g., by objective, campaign, activity, brand, product, country, or segment) MRM applications offer the opportunity to do this in a more systematized and efficient manner. But remember, process first.

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