An Industry-Proven Framework for Managing Marketing's Investment

Given the economic backdrop of 2008, there are more good reasons than ever for sales and marketing executives to engage in a deep scrutiny of their costs. Many organizations have made good progress on cost control, but there is much to be done; and our IDC CMO Advisory research continues to identify big pockets of wasteful spending in these functions. To help technology marketers better manage their investments, we have just completed our second edition of the sales, marketing, and market intelligence (MI) taxonomy. (email me at mgerard@idc.com for a free copy of this extensive marketing investment framework) This expanded taxonomy includes several new line items that need greater "illumination" of spending and staffing, so that executives can make decisions about their investments. These areas include:

• Digital Marketing. Growth in this area continues to outpace other marketing areas, and in many cases takes funds from these other areas. (e.g., more traditional advertising) Most importantly here, the digital marketing strategy must be a component of the broader marketing and sales strategy and not a standalone effort.
• Campaign Management. Marketers need to do a better job of integrating the traditional elements of the marketing mix with the newer elements, so as to achieve a unified campaign approach versus "silos" of program execution. (more to come on this topic since we just finished a Marketing Operations Board meeting on campaign management best practices)
• Industry and Solutions Marketing. These staff areas have received further definition and clarification of roles.
• Market Intelligence; Customer Intelligence; and Business Intelligence. These areas are under active re-assessment at many organizations as the importance of the functions continues to rise.
• Sales Enablement. This is a key leverage point for increased sales productivity. Marketing and sales are increasing their sales enablement effectiveness through a combination of people, process, and technology.
• Tele-sales and Inside Sales. These growth areas of the sales department receive further detail in this year’s study.

Read More

Is MPM 3.0 Even on Your Radar? (Marketing Performance Measurement)

Marketers in the technology sector have made significant strides in developing and deploying their marketing performance measurement(MPM) strategies. Most have moved beyond the unrealistic quest to establish the perfect return on investment (ROI) metric, and have developed a solid marketing operations area that focuses on maintaining a set of pragmatic marketing performance objectives and metrics. Even so, many companies remain behind the MPM development curve, with the economic, marketplace, and corporate pressures continuing to grow.

Where are the best practice leaders today (i.e., MPM 2.0), and what does their next generation MPM process look like? Here's a quick look at the state of the industry today for MPM based upon a recent study by IDC's CMO Advisory Service:

• Marketing Operations is "leading the charge" to improve the group's measurement process and drive analytical rigor across the organization in addition to the more familiar art of marketing. (refer to my earlier post regarding MO staffing levels and responsibilities)
• A cascading dashboard strategy has been deployed, including a CMO or executive-level dashboard, and dashboards at the business unit, functional and regional levels. Nortel has done a good job of building this type of hierarchy into their MPM process.
• Regions and business units are beginning to improve their data input and overall participation in the MPM process. Citrix takes this a step further and puts the responsibility of data collection and some analysis into the hands of the regions.
• The importance of measurement at the activity, functional and campaign level have penetrated the organization as an established "culture of measurement", resulting in improved efficiencies and effectiveness across marketing. In Intel. . . "discussions driven by the dashboard have made the staff smarter and more cognizant about how we're contributing to Intel business success and why."

Essential guidance for every marketer to either catch up to your peers, or to stay ahead of the MPM curve includes: 1) If you don’t have a MPM process yet, start now!. . . And don’t aim for perfection; 2) Use relevant metrics that drive action; 3) Include all marketing groups in your MPM process as well as sales; and 4) Include your MPM process as part of your weekly, monthly, quarterly and annual reporting and strategic planning process, with a well communicated cadence in alignment with sales and corporate.

Feel free to comment below or email me at mgerard@idc.com to continue the discussion. I'll be glad to share some additional insight regarding where I see companies headed for "MPM 3.0".

Read More

Highlights from IDC's Sales & Mktg. Effectiveness Summit

IDC just completed its 4th annual Sales & Mktg. Effectiveness Summit. This was a full day event in NYC that included a great line-up of executive speakers from Careerbuilder, Akamai, Salesforce.com, ESPN, American Express and others. Although this certainly won't do the event justice, here are a couple of the "gold nuggets" that I took away from the event:

• Sales may be the "top scorer" in your company, but marketing most likely has the most "assists". [Mary Delaney, Chief Sales Officer, Careerbuilder.com] Do your sales & marketing teams appreciate the contribution of each group as well as the need to work as a team?
• "Candor", not "Cancer". [Delaney] That is, honest feedback can either be brought to the right person/team so that something can be done about it - Candor; or it can spread to every other individual in the organization resulting in lack of action and a reduction in efficiency and moral-Cancer. (I believe Mary sourced GE/Jack Welch for this philosophy)
• SF.com's framework for optimizing "Campaign to Cash": 1) Demand generation; 2) Sales effectiveness; 3) Territory and fit; and 4) Retention/upsell. No doubt this framework requires a combined marketing and sales effort, with a strong focus on data quality and segmentation its markets and subsequent strategy. They are certainly "sipping their own champagne" at SF.com. (better than "eating their own dog food")
• American Express has truly leveraged marketing asset management processes and technology(SAVO) to improve their effectiveness. For example: 1) significantly reduced the 10+ hours/week that sales spent on collateral creation and research tasks; and 2) improved usage and engagement measurement by sales of marketing's content and related assets including user and asset-specific metric reporting capabilities(e.g., 3,844 total log-ins and 12,654 document requests in the first month of their MAM roll-out).
• Akamai has taken some very tactical steps to improve marketing and sales alignment, for example: developed call scripts for inside sales and improved marketing's overall lead generation process to improve prospect qualification; created templates for more rapid response to RFPs; and developed competitive and objection guidelines for sales to help them in the sales process.

Read More

2008 Outlook for Tech. Mktg. Investment

Well, we've just completed our 6th annual technology marketing barometer study, and I have some good news and bad news to share with you. Let's get the bad news over with first. As marketers, we have our challenges cut out for us in 2008:

1. Challenging economic environment in 2008: An unsteady marketplace is introducing significant aversion to risk by tech executives.
2. Drive for overall marketing efficiency and effectiveness will continue with mounting budget pressure and market competitiveness.
3. Market and marketing channels will continue to proliferate, creating challenges and opportunities.
4. Tech marketing budgets will increase by 4% for the full year 2008. Although this is an increase, it is the lowest that IDC has forecast in the past four years and portends further pressure on the marketing function for cost control and productivity increases.

Now a bit of good news. For the companies that have been diligent in improving their marketing operations and effectiveness during the past five years, you are best positioned to "weather the storm", and may even have an opportunity to take share.

Here are some top level insights and guidance:

• Be prepared to withstand a budget reduction while still being able to keep the core elements of the marketing business model in place and productive. The best marketing leaders are always in a position to shift marketing investment as needed in a calculated manner to reduce any potential short or long-term implications on marketing's strategy.
• Don't just talk about aligning marketing and sales; but take clear steps towards improving this problem. For example, integrate marketing and sales operations either directly or indirectly and focus on improving key processes such as lead management; increase field marketing’s strategic role, moving beyond a pure support function to contribute to marketing and sales' local go to market strategy; and better enable sales, such as improving the value of marketing assets, enabling greater accessibility to those assets and improving channels of communication.
• Continue transforming your marketing organization to prepare for the next 12 to 18 months, and communicate this strategy to your executive peers: reduce the silos within corporate marketing and between corporate marketing, business unit marketing and the regions; better understand and engage the customer, both internally and externally; and increase your speed of measurement and action as a team.

Feel free to contact me at mgerard@idc.com for a copy of my recent telebriefing which offers more details to help guide your strategy and execution in 2008.

Read More

An Inconvenient Truth for Marketers: The Role and Value of Information

An inconvenient truth for IT vendors: The factors least considered by vendors in go-to-market programs are those most valued by technology buyers:

• IT vendors focus on the ROI of their marketing programs and their sales programs. They might also talk about the ROI a buyer can expect to achieve with their product (i.e., product ROI). Few sufficiently consider the ROI a buyer expects to achieve by spending time with a vendor’s information and people -- the relationship ROI.
• Technology marketers build marketing mix plans based on format (e.g., advertisement versus conference versus blog) and communications channel (e.g., TV versus Web versus print). But, in making IT purchase decisions, corporate buyers value content relevance and credibility over format and channel.
• When it comes to mobilizing a sales force, most tech vendors subscribe to one sales methodology or another and institute a sequence of selling stages. Meanwhile, the buying process is far from standard.

According to a recent IDC study, buyers spend up to 4.8 hours per week, on average, with third-party information to support current or future IT purchase decisions. Of this, about three hours per week are spent on information related to new purchases or general education that can lead to new purchases.

Meanwhile, IT vendors invested over $174 billion in marketing and sales in 2007 to reach and influence technology buyers. This investment creates a lot of competition for that three hours per week per IT buyer. To engage and deepen relationships with buyers, vendors must strengthen a buyer’s return on time spent with their information, whether delivered online, at events, or through their sales teams.

I expect to see a more pronounced industrywide shift within IT sales and marketing driven by these buyer priorities. Relevance, content, and credibility will become the increasing focus of marketing mix planning and sales enablement. The catalysts of the change are rising sales and marketing costs that outpace the growth in IT spending, the commoditization of IT solutions, and the fact that savvy buyers are becoming more protective of their time. The implementers of change are many: IT marketing and sales, channel partners, content providers, content management vendors, marketing and sales consultants, media partners, and other participants
along the vendor’s go-to-market chain.

By Clare Gillan, SVP, IDC Executive and Go-To-Market Programs

Read More

B-to-B Online and Interactive Marketing - Cutting Through the Hype

Online advertising, social networking, search engine marketing (SEM), Internet broadcasting, wikis, Web 2.0 … what do these terms mean for your marketing strategy? How do you harness the power of this new medium without straying from your current strategy? The new and constantly changing digital marketplace represents great opportunity for your marketing organization and your company; however, many tech marketers are off to some operational false starts in this area. I recently completed a study of the online and interactive marketing area and related processes of 15+ tech marketing leaders. This included in-depth interviews with marketers as well as spending a full day with ~20 leading tech marketers discussing these issues as part of an IDC Marketing Operations Board meeting. Here is some key insight and guidance based upon this research:

• Consolidate online and interactive marketing efforts from a process, infrastructure, and governance perspective, yet continue collaborating with business units (BUs) and the field (e.g., integrated marketing councils). The resulting benefits will include greater branding and messaging consistency and improved efficiency and effectiveness across your marketing organization, enabling you to do more with less.
  
• Incorporate online and interactive marketing efforts as part of broader awareness-building and demand-generation strategies, but think "engagement" and longer-term relationship building — not just generating a lead.
  
• Don't hesitate to experiment; build it into your plan. Changes are happening fast in the digital marketplace, and those companies that are able to quickly identify and harness the benefits of the best technologies and applications will be first to achieve competitive differentiation. After all, shouldn't technology companies be first to demonstrate thought leadership in this space?
  
• Marketing must partner and collaborate with IT, something that marketing hasn't historically been good at. Leverage your strong marketing operations team and other process people in the organization to develop a longer-term IT strategy for the marketing organization, and team with IT to provide the foundation for a comprehensive digital marketing strategy.
  
• Don't abandon your more traditional marketing knowledge and experience! Just as in the real world, you can build it online, but that doesn't mean that they'll come.

Feel free to email me at mgerard@idc.com if you'd like some additional information about this study or post any questions/comments directly to this blog.

Read More

The Marketing Operations Function - Can we Maintain the Momentum?

I first studied the rise of the marketing operations (MO) function early in 2005; and MO professionals and teams have made significant progress since then. However, much work still remains; and the momentum of marketing operations leaders' strategic impact is at risk of being lost at many organizations. Here are some key findings/insight from my 3rd annual study of the MO function to help ensure the continued success of this important role in the marketing organization:

1. Make the case for an MO function that reports to the CMO if you haven't already, and leverage IDC research to justify staffing levels for this function. Based upon IDC's Marketing Performance Matrix, 90% of companies in the Marketing Leadership quadrant have one; and your position and your marketing organization's success depends upon the strategic planning and process discipline that this role brings to the table. IDC's overall guidance or "rule of thumb" for staff allocation to the MO function is 2–4% of total marketing staff and one MO staff person for every $10 million to $15 million of marketing budget.

2. Know your CMO's priorities. To ensure that the marketing operations team remains highly relevant and successful at a strategic as well as a tactical level, its objectives and priorities must be in alignment with the needs of the CMO. The more advanced MO teams will help to identify these priorities for the CMO.

3. Maintain Your Team's Focus on your Top Priorities. More and more MO teams are becoming overwhelmed with the quantity of projects that they're involved with, resulting in a loss of focus; which is impacting their efficiency and effectiveness. Be realistic about your goals, and focus on the areas where you can make the greatest impact in your organization in the short-term while laying the foundation for longer term efforts.

4. Drive the MO team towards continuous improvement and innovation. This may include improving existing processes or acting as the catalyst for development and execution of new, innovative ideas.

Want more information on this role? Feel free to send me an email at mgerard@idc.com and I'll be glad to share some of the results of this study with you.

Read More