The Four Stages of Data Driven Marketing

Who is your customer? It is a deceptively complex question that a surprising number of B2B companies cannot answer. The difficulty stems from several causes:

• Inconsistent definitions for customer attributes (account name, industry, segment, organizational hierarchy, contact name/email, etc.)
• Fragmentation of the data across multiple databases and applications
• Departmental perspectives on customer relationships
• Lack of an enterprise customer data management approach

The impact of all this is a severe slow down in decision making and an inability to optimize critical processes in customer facing functions, most poignantly in marketing and sales. The solution is to define customer creation as an enterprise process – not something that happens only in marketing and/or sales – and the implementation of data standards and governance to support it. This enables marketing to be data driven, but there are four distinct stages of data driven marketing and not all of them lead to success:

1. Stage One – Fast Failure. This stage is characterized by response-based decision making. Marketing decisions are based on response data from marketing systems – web hits, landing page registrations, and myriads of other campaign performance data. All of this is important, but leaves marketing unable to tie any of its activities to key business metrics such as revenue performance.

2. Stage Two – Slow Failure. This stage is introduces conversion-based decision making. Marketing and sales systems are integrated along with customer data definitions and structures. This provides a quantum leap forward for both sales and marketing. However, marketing is still one degree of separation from linking its activities to business performance. Sales pipeline is a good proxy but it is no substitute for the critical business data that comes from the next two stages.

3. Stage Three – Measurable Success. At this stage marketing finally is able to measure contribution to revenue. However, it is not enough to rely on initial contract data alone. Account A that closed for $1 million and account B that also closed for $1 million may be very different in terms of margin and lifetime value. Account A may have cost $250,000 to sell, install, and support where account B cost $500,000. If that's the end of the data set, then of course marketing should bring on more account A profiles.

4. Stage Four – Market Mastery. At this stage marketing understands the long term profitability of customer relationships. If over time account A buys nothing more and account B upgrades and expands its investment by millions of dollars at improving margins, marketing can refine its activities accordingly and begin to drive overall business performance.

The key lesson is that marketing is greatly influenced by the depth of data available to it. At each stage in IDC's data driven marketing model, new data can completely change all facets of marketing activity from strategic targeting and messaging to tactical campaign investment and roll out plans. As a result, it is crucial for companies to get to Stage Three as quickly as possible and remain ahead of competitors on the journey to Stage Four.

Read More

Making the Most of Channel Marketing

A recent IDC study of large IT companies found that, on average, channel revenue was $3.7 billion. The average internal channel marketing staff of 53 managed nearly 22,000 partners, equating to $12 million of revenue per internal staff but only half a million dollar per partner.

Most shocking from the study -- these organizations have an average of approximately 15,000 inactive partners. Active partners only constitute 31% of the channel mix, with the remaining 69% being inactive. Given the expense involved in recruiting channel partners and on-boarding their first sales, it is in the vendor’s best interest to identify the best partners across the entire partner population and enable them to step-up to higher levels of sales performance.

Channel Marketing Service and Automation Solutions

The traditional method of assigning business development managers to the top 5% of partners, and others to groups of the second 15% of partners, is not scalable. The business development manager assignment is a fixed cost that requires 35%+ growth rates – and it is hard to predict the winners. As shown in the figure below, in a recent IDC study channel managers rated the effectiveness of BDMs and customized channel marketing programs statistically identical in terms of their effectiveness at producing ROI. Providing access to customized channel marketing to all partners – including the bottom 80% - amortizes costs over a larger revenue base Customized channel marketing enables the winners to self-select and payback is driven by collective success.

Most Effective Resources

Source: IDC, The Importance of Customized Channel Marketing, 2011. n=22

Customized channel marketing programs can reduce the complexity of marketing through partners by streamlining channel marketing processes and increasing vendor ability to reach more partners simultaneously. Redundancy can be eliminated, as distribution of messages, campaigns, programs and promotions become part of a menu of interchangeable, additive activities.

Using social network best practices, feedback from partners can be used to determine which activities work best from a partner perspective, and which activities need to be developed. This feedback is equally valuable for vendors and partners to see which customizable channel marketing activities are most effective. For the majority of channel partners, customized channel marketing programs offer much needed help in building their marketing plan.

The full report can be downloaded here.

Read More

Market Intelligence on the Move


Transformation continues to sweep its way through the marketing function and no "department" within the function is exempt from change. For this month's CMO Advisor newsletter, we are now focused on the market intelligence area.


Compared to its peer departments, Market Intelligence (MI) enjoys relative stability, as measured by the steadiness of the job description, job security and tenure, and budgets. But there is a groundswell of change -- or at least an expressed desire for change. In a recent survey of MI professionals, IDC observes that MI executives are seeking to increase the value they deliver to the organizations they support, and to deliver that value with greater efficiency.

Indeed, it is the sentiment of executives that IDC interviewed that "The market intelligence organization will change more in the next 3 years than it has changed in the past 10 years". That is a bold statement. To peel it back, here are the top areas of change that the MI profession is seeking to transform.

• MI executives want to transform their client engagement model and become more "proactive". In IDC's opinion, this sentiment stems from MI's traditional challenge of being a demand-driven organization that is constantly working in "response mode" to numerous requests from their internal customers.
• The MI area seeks to increase its contributions to corporate strategy and sales enablement.
• From a process and technology standpoint, MI would like to improve the information "value chain", from data sourcing to information delivery.
• MI seeks to provide greater support for long-range business planning.
• MI seeks to demonstrate more visible / tangible business value for its work output.

Our sense is that MI professionals have a good future vision of their role; one where they are highly efficient, driving strategic as well as tactical business value, and are highly valued by their internal clients across the organization for information and "insights" that positively influence business outcomes.

There are two areas that I believe are the best place for MI Transformation steps to begin. These are echoed by my colleagues at IDC and also validated by our surveys with MI executives. I will describe these and also take a bit of "analyst license" and provide some operational suggestions.

1. Improving support for corporate strategy and long term business decisions. I think that MI professionals would love to get out of the heavy load of short-time, fast response calls for bits and bites of data. What they would like to do is be involved in longer term, meatier analysis that is served at higher levels in the organization and that support important business outcomes. But MI is constrained by their people and processes.
The process changes I would suggest would be first; provide more technology and training for self-service for the run-rate of short and tactical requests. Second, consider greater off-shoring or right-shoring of the "back office" analysis roles within MI, and thereby create more roles for higher level "management – consulting" type MI personnel who can interface with executives for the longer-cycle, more complex projects.

By the way, on the right-shoring of MI tasks (moving the non-client facing anayltical tasks to lower cost countries), many of the largest tech vendors are on this march right now.

2. Sales Enablement. In IDC's many surveys of Selling Productivity, we see that very high salaried sales executives spend a large amount of their time searching for or re-creating information that will support their preparation. OK, so what function in the organization that is NOT the sales function is good at finding and organizing and delivering information? Market Intelligence! I think it would be a natural for the MI area to provide greater and more cost effective support for many sales-preparation activities. As an example, almost every MI function has a portal for serving and managing information assets. Why couldn't those same portals – or a version thereof – be used for sales assets? The time spent on searching for information assets is one of the most wasted and most common activities of salespeople.

Recently, I have been writing on similar transformations in related business units such as marketing operations, and we are also seeing some related changes taking place within sales operations. For every part of the marketing organization, the pressure is on to be efficient and drive positive business outcomes. IDC believes that there is a bright future ahead for MI leaders (and their teams) that understand the transformation that is under way and can begin that journey with concrete and bold new steps.


Rich Vancil

Read More

The Marketing Operations Role: Where To, From Here?

Looking Back, Briefly:

Marketing Operations has been the fastest growing job role in tech marketing over the past few years. When IDC first started its surveys of marketing spend and staffing back in 2003, Marketing Operations wasn't even on the job roster at most organizations. Today, the "MO" role represents about 6.5% of the total staff and it is the fourth largest job "category" for a large marketing department. So, what happened? The rise of this role was the response of the CMO to the general condemnation that marketing was not acting like a business. The Marketing area was perceived as offering up no accounting, and no accountability... but also offering no end to the pleas for more budget. And so Marketing Operations as the "staff accountant" role started to turn up at the larger and more complex marketing organizations. As the MO role really took off, the general job description would include four areas: budgeting and planning; measurement and reporting; technology deployment (marketing automation technology); and process improvement.

Looking at Today:

Of the four job areas described above, the most problematic, right now, is technology. There is a vast new set of IT tools available for marketing organizations: Marketing Resource Management; Content Management; Performance measurement; Analytics; Social Media Platforms and Monitoring; and the list goes on. The problem is that in general, marketing organizations do not have the staff skill sets to effectively evaluate, deploy and use these tools. In our 2011 Role Survey of Marketing Operations professionals, respondents said that their number one problem today is the sorry state of the "Automation Infrastructure" and that their number one goal is "Finding the People that know how to fix this". There is an equally large and underlying issue "below" the technology level, and this is the database and data management issue. With so much marketing automation now in place, the first output that this new technology is producing is crystal-clear visibility to the fact that: "Wow, we have REALLY POOR customer records". And so a very major issue for the Marketing Operations role is finding the database-savvy personnel who can help with this challenge.

Looking Forward:

Given how fast the MO role has grown and given the significant challenges of today, I want to offer three areas of "Essential Guidance" for CMO's and their MO "lieutenants". The first step is to re-visit the job description. In a series of executive interviews that I recently completed, many MO professionals complained that "Our Marketing Operations area has become the dumping-ground for all the unwanted marketing tasks that no one else wants to do!". Now, whose fault is that?

Job number one, therefore, is for the CMO with the MO team to define and then re-articulate its role to other parts of marketing; so that it does NOT become the dumping-ground! Job number two is to then conduct an "Activity assessment" of what the MO personnel are actually doing, as held against that job description This may all sound like a junior league management exercise but my strong suspicion is that because the role has grown SO fast over the past four years that it MAY be the case that role clarity and scope are due for a closer look. This assessment should also include the organizational placement of the MO role. Why are so many of our MO staff at corporate headquarters? Why are these staff not within our product lines and in the field? These are questions worth asking. Job number three is then to ask "Where do we go from here?" regarding the role and staffing. I believe that the "future" of MO role effectiveness and impact is not in more staff as measured by headcount. In fact, the MO role as a percentage of staff is likely reaching an upper limit at this point. My hunch is that it may "cap out" at perhaps 8 to 10% of staff. However, the MO roles of tomorrow will be more strategic than they are today. The nature of the role will evolve. While today's MO staff are largely involved with individual execution (within the job description mentioned previously), the MO role of the future will be more about educating and infusing other parts of the marketing organization with a marketing process-excellence mentality, skills, and tools. In this way, the MO staff will become a more "leveraged" function. This leverage will include improving the influence and impact of MO across the entire marketing organization, not just at the corporate marketing location(s). As you further deploy the MO role, think about not hiring more Marketing Operations staff....think about driving the existing "smarts" and influence of MO down and through your entire marketing organization.

-- Rich Vancil

Read More

Essential Guidance for 2011

Building the Intelligent Sales & Marketing Organization.

IDC's best and brightest analyst teams were assembled in Boston and San Jose during the past two weeks to present their latest insight and guidance for creating the global intelligent economy; focusing specifically on the impact of social, mobile and virtual technologies on this vision. Morning speakers discussed how to position for the third wave of IT industry growth driven by mobility, clouds, big data and intelligent industries. In the afternoon, one of the many tracks included presentations by IDC's Sales and Marketing Advisory team about the vision of the intelligent sales and marketing organization and they key success factors required to achieve this vision. A few key take-aways from each of the presentations in this track are provided below.

Executing for Marketing Excellence in 2011 by Rich Vancil:

Start – or accelerate – your social business transformation
 With communication cycle-times dropping and the purchase decision influence continue to shift to buyers, a shift to "social business" is imperative for your success;
 41% of businesses have already implemented an enterprise social software solution
 Focus on building "peer-to-peer" connections, not "vendor-to-customer"
Make a deeper investment in intelligence and operations
 Drive marketing operations and market intelligence initiatives and investment down through the organization, across the business units and into the regions
 Better establish and govern the processes for sales enablement and data quality to improve sales intelligence and their ability to leverage insight and resources.
Build a better budget (IDC CMO and Sales Advisory clients should refer to IDC's combined marketing and sales investment benchmarks data)
 As marketing budgets recover, allocate new investments with the needs of a new reality – digital marketing is here to stay, and is only increasing in its ability to drive awareness building and demand generation; and greater alignment with sales will require continued investment in campaign management, sales enablement and lead management extending into what has traditionally been considered sales' domain.


Building the Intelligence Sales Organization by Michael Gerard:

Listen to your buyers:
 Technology buyers indicated a desire to reduce their buying cycle time by 40%.
 Two-thirds of the delay between desire vs. actual buying cycle time is the result of buyers' internal funding and decision-making processes; however, vendors' sales teams can impact this part of the delay!

Drive sales to be more strategic by investing in a next generation sales operations team which focuses on – sales strategy, productivity and automation. Team with marketing, your learning and development organization and IT to gaps in sales intelligence – customer intelligence for sales and sales enablement.

Push the limits on sales performance measurement
 Establish a sales analyst function to better measure sales productivity
 Improve data quality with the aid of other parts of the organization
 Analyze the sales pipeline, rep performance and the impact of sales productivity improvement initiatives to help impact strategic and tactical decision-making



The Sales & Marketing Automation Imperative by Gerry Murray:

o Investment in sales and marketing automation continues to increase as companies recognize the value of technology in adapting to new market realities
o However, sales and marketing need to better align across their own teams as well with other parts of the organization to create a more holistic experience for customers (e.g., marketing, sales, finance, services, support)
o Your company should establish a customer data czar, with team members in sales and marketing, to execute and govern data quality processes.
o Evolve to a more comprehensive sales enablement platform (i.e., beyond a content portal) centered on integrated customer experience management

Clients of IDC's Sales Advisory Service [http://www.idc.com/eagroup/sales.jsp] and CMO Advisory Service [http://www.idc.com/eagroup/cmo.jsp] should contact us for a full overview of any of these areas as well as access to our latest research schedule and listing of published research.

Please do provide any comments on this topic below or reach out to us to participate in upcoming sales and marketing research.

Read More

Update on Social Business Transformation

Social Media in the B2B world has got a bit of a bad rap right now. Let’s frame the problem. The obstacles might be spoken (or whispered) as:

• "These new communication platforms, and this social media movement within our company…is …who knows? Well, let’s just keep an eye on it. Let’s see what develops. But for the time being these are…
• NOT the valid business-communications media we should be using to communicate with the serious audience we wish to reach. "

These obstacles may be over-observed.

Let’s broaden the definition and talk not about Social Media, but about "Social Business Transformation". The real Transformation lies not in what you see: with Twitter or LinkedIn or FaceBook. For personal networking, these tools may be the whole game: you are involved in connections that are one or two links deep. But at the enterprise level these tools are merely the surface layer. Social Business Transformation is about deep communications adaptation; changes in culture; new rules of engagement; shifts in organizational centers-of-influence; and then (lastly) the associated tools and technologies that enable communications on the surface.

IDC is digging deeper to uncover this major trend and transformation in business communications. "Social" will continue to press its way into the enterprise - into our lives as business professionals.

With my research partner and IDC’s Social Business expert Erin Traudt, IDC has just completed a series of interviews with IBM about their own Social Business Transformation We are impressed with IBM’s accomplishments.

To boil it down, here are three observations for Social Business Transformation success:

1. Tap in to the Professional Ego.

You say that you enter into a web community because you want to "connect". But I would suggest that most of the energy behind any personal or business Social Media activity has a strong element of: "Here I am!" None of us would enter a single Social keystroke unless we wanted to satisfy an ego need. The need to feel important. And, (fingers-crossed), the desire to be recognized! By extension, would not the math argue that if we spend nine or ten hours each day at the workplace, that this dynamic should be a more powerful force in the business world ("Look at my great new technical workaround!") than in the personal world ("Look at my cool new postcard collection!")

The IBM developerWorks website is a technical resource for the IBM developer community. Established in 2000, it is now one of the largest IBM sites, with over 4 million unique visitors per month. It is a resource where developers in the IBM ecosystem offer their knowledge and skills. About one-half of the content on this vast site is posted from outside of IBM: developers, partners, and customers. Why does it work? Professional ego! But it takes time and investment. developerWorks has been an eleven-year work-in-progress for IBM.


2. You can’t force interaction.

The viable and vibrant IBM communities we have studied are years in the making. It takes significant time and investment to devlop a community to the point where it is somewhat self-sustaining. One IBM executive noted that Community development is like planting a tree where the first year of nurturing, watering and pruning requires almost constant attention. And more than one IBM community that we examined was several years underway and still under active investment mode. It is also notable that each Community only becomes self-sustaining because of the external contributions (see above). Our estimate would be that for every one community that is self sustaining, that there are hundreds in "push" mode (hoping that our voices will be heard and enjoined).

"If the people don’t want to come, all the marketing in the world won’t stop them".


3. Construct and Adhere to Policy.

This is interesting. I think we all are a bit attracted to the Social Media because we can express ourselves in a way that allows us to put our corporate toes across the corporate line, if even for an instant! However, the successful sites that are viable today are here in part to some basic and sensible policing. We have to. We all need to protect our customers, to do the best by them.

Our sense is that sustained and successful Social Business Transformation efforts are going to be more powerful than we have ever imagined. Good examples (such as with IBM) are already in place. Of course there are challenges; but these obstacles will over time be trumped by the benefits (see Figures).

How is your company coming along on its own Social Business Transformation?

- Rich Vancil

Read More

Marketing Automation: Keys to Success

Of the 235 respondents in a November IDC survey, nearly 40% had not implemented a marketing automation solution (yet). Not implementing a marketing automation solution may be the ultimate career limiting move for today's marketers. Digital marketing has exploded in scope and complexity making it practically impossible to efficiently and effectively reach your target audience without a fully realized marketing automation infrastructure. If you haven't gotten started you are already way behind the ball.

40% have not yet implemented marketing automation

Source: Marketing Automation: the Rise of Revenue, IDC #255860, Dec 2010. n = 234

Marketing automation is a must have for today's marketing and sales organizations. There is a wide array of online sources readily available to buyers that can significantly influence purchasing behavior. As a result, marketers must maintain a pervasive and continuously refreshing digital presence. Frequency is emerging as the most critical capability for sales and marketing organizations – frequency of outreach, analysis, and reporting. The cycle time for everything in marketing is under enormous pressure and companies that deliver more often, respond faster, and sustain their digital presence more successfully will be the winners.

Keys to success:

• Standardize your customer data
• Deploy marketing automation
• Review KPIs for marketing and sales to ensure alignment, visibility, and data integrity
• Integrate data, workflows, and governance across the whole "response to revenue" cycle

Top 3 places small companies (less than $1B) start:

• Lead management
• Campaign management
• Content management

Top 3 places large enterprise ($1B or more) start:

• Campaign management
• Lead management
• Financial reporting

Marketers must solve a stack of process, operational, and technical issues. It is a very complex and large scale problem spanning not only marketing and sales, but every other piece of the "response to revenue cycle, including: configuration, pricing, order processing, accounting, as well as service and support functions as well. The full scope of the customer relationship must be visible and measurable. Point solutions focused on particular marketing processes are great catalysts, but, IDC recommends companies take a holistic approach that ensures consistent data, workflows, and governance throughout the customer lifecycle.

Read More