Channel Marketing Automation – When CRM is not Enough

Whether you pursue a lead through direct sales or a partner it doesn't really matter how you get the lead. But what happens next? With your direct sales, you track the nurturing process as the lead develops into an opportunity. You measure your sales reps by the number of meetings they get, the deals they close. You may even have a closed loop reporting process that shows the efficiency of your marketing and sales funnel.

With your partners, your lead gets passed off and … then what? Does the partner accept the lead? Do they follow up? Do their marketing outreach programs conform to your policies and expectations? How much time and how many touches does it take them to close? How do you decide which partner is qualified for which leads? How do you efficiently identify the productive partners, those that need encouragement and those that should be dropped?

Multi-Billion Dollar Channel Management Questions
These are critical questions that have a tremendous impact on businesses with significant indirect revenue. A recent IDC study of large IT companies found that on average channel revenue was $2.4B. It was generated by 34 channel marketing staff managing 8,500 active partners. That equates to $45 million of revenue per channel marketing staff member but only $1.2 million per partner. The dirty little secret – there are also on average approximately 19,000 inactive partners!


Source: IDC’s 2010 Best Practices Study in Channel Marketing (n=13)

A Better Way

Your CRM and SFA are not going to answer any of the critical channel management questions – although many companies think their CRM system is where they should be "managing partners". In fact, a partner management system fulfills a role more like an SFA – it tracks all the activity that occurs after the lead is generated. It should also facilitate the process of lead distribution – managing all the partner credentials and accreditations need to qualify for a particular lead. Then there's deal registration where the partners accept the lead so that it is not poached by another partner or … ahem … the direct sales force. And when you consider some of the other requirements of partner management, the CRM fallacy becomes clear:

• Recruitment and on-boarding
• Training and development
• Business Planning and Reporting
• Compensation and Incentive program management
• Marketing and Sales support

Are these capabilities that your CRM can provide? Your SFA? Would you even want them to? The answers should be no, no, and no. Don't be thrown off by that last bullet – the marketing and sales outreach your partners require is very different than the corporate outreach that marketing operations is doing. They rebrand, reschedule, embed, and otherwise repurpose marketing content, making a direct translation from corporate marketing to partner marketing wholly inappropriate.

If you have (or want to have) a significant amount of revenue going through the channel, you need a dedicated partner relationship management (PRM) system to automate more than just marketing and sales activities. Don't look to your CRM, SFA, or even the newer marketing automation vendors to provide you with the full set of capabilities necessary to effectively manage channels. Those solutions are focused on a very different set of requirements. They may have slideware and inch deep functionality, but that's typically it. Do ask about integrating a PRM with these systems as reporting should roll up easily across direct and indirect sales.

A number of key capabilities to consider when implementing a platform channel marketing automation:

• Manage partner profiles and contacts
• Deliver and track training, certifications, etc.
• Set business rules for lead distribution
• Handle deal registration
• Provide a single system of record for partner and channel management
• Provide detailed performance reporting (12-month rolling review)
• Track partner outreach campaigns
• Manage market development funds (MDF) and co-op spend

With these issues on the table, it should be clear that automating channel marketing requires a dedicated, purpose-built solution. It will be costly and painful and meet substantially lower expectations otherwise.

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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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Many Ways to be Agile

We all greatly enjoyed our time together at the CMO Advisory meeting in Santa Clara last month. The level of participation and feedback was all very positive and we would like to thank everyone who attended for bringing their "A" game with them.

One of the topics we talked about was Agile marketing. We keep coming back the Agile project management concept as we triangulate the issues of career path development, sales and marketing integration, and automating sales and marketing processes. Agile has something to offer on all three fronts, and may prove to be an essential catalyst for success.

First, a Word About Agile

Very briefly, Agile is a method for managing projects that is based on small teams delivering discretely defined outputs in very short time frames. It is characterized by frequent fifteen-minute status meetings (called "scrums") in which 3 to 7 team members answer three questions: What did I do yesterday? What am I doing today? What is in my way? The project manager (called a "scrum master") is in charge of managing all the obstacles so the rest of the team can proceed on schedule. The schedule is based on 2 to 4 week workloads (called "sprints"). Progress is tracked in a "burn down chart" that shows how many hours the team has put in and how many it has left to do.

Agile is ideal for managing high frequency activities such as digital marketing, as well as portions of larger projects such as a trade show that can be broken into smaller steps. Elements of the Agile method can also be borrowed and combined with more traditional waterfall approaches to manage the fire drills that inevitably happen in just about every other kind of marketing activity.

• We recommend that managers of organizations new to Agile use careful judgment when introducing it. Activities that are good candidates include: email campaigns, collateral development, building microsites, and creating social media assets. You can then move on to more complex issues like product launch planning, events, field marketing, etc. The extent to which Agile is adopted should be determined by marketing staff themselves, if the culture does not embrace it, don't force it.

Career Development
Agile can be an effective way to offer new skills and leadership opportunities to marketing staff. With its quick cycle times, small teams, and discrete deliverables, Agile offers marketing staff the ability to play different roles on different teams, including leadership, at almost no incremental cost.

• We recommend that the career dev aspect of Agile be emphasized only after your organization is successful with Agile, it should not be an explicit objective when getting started.

Sales and Marketing Integration
Agile offers a very interesting way to get marketing and sales personnel together to quickly address issues of common interest such as: defining lead qualification criteria, setting up processes for lead transfers and clawbacks, coordinating last touch in marketing and first touch in sales, facilitating sales enablement, etc.

• We recommend that marketing and sales managers work together to get their teams to cycle in and out of Agile based projects so that each side can better understand the other - particularly In terms of providing a seamless customer experience at the point of lead transfer.

Process Automation
Automating large scale marketing departments Is going to be an enormous undertaking, and for many companies one of the key issues will be cultural. Marketing is notoriously not process oriented, nor are marketing personnel typically comfortable with the billable resource model. But this is the world they are going to be thrust into post-automation. Processes will be formalized, optimized and measured. Individuals will be expected to track their time against specific activities – and/or it will be automatically tracked within the system.

• Managers should not underestimate the magnitude of this transition and the fact that it will impact everyone in marketing personally. Some, hopefully most, high potential employees will embrace the change, others will find it threatening and disruptive.
• Agile marketing is an effective way to get marketing teams comfortable with – and to see the benefit of – working in structured, measured work conditions. Agile requires everyone to not only estimate the time they expect to spend completing specific activities, but to track and measure the actual time in "burn down" charts. This is a safe and democratic way to get your marketing staff prepared for the world of the "marketing ERP" that is just around the corner – and this cultural priming may be the best way to ensure the adoption and sustainable success of future automation efforts.

So we feel that Agile marketing is worthy of careful consideration. We hope you give it a try and let us know what your experience was like.
Cheers,
Gerry Murray

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My Next Marketing Career

The future belongs to marketing specialists, not generalists.

If I were starting my B2B marketing career today I would think about becoming a specialist in one of two areas. These are areas of marketing execution and measurement that may seem narrow, but will be deep enough to be the foundation for a specialized career. Narrow and deep is the key to success. Be the one person at your company that really knows how to provide:

1) "Forensics". Be the specialist in how to data-mine the activity inside a B2B sales force automation system. Become your company's expert in turning those data into analysis, and then turn the analysis into actions on how to change the marketing activity that impacts all phases of that sales pipleine.

OR (not AND !)

2) "Measurement Agility". The traditional execution of a marketing program or campaign follows a long arc of time from concept to content to production to media execution to response and to results. Digital and social media are dramatically shortening that arc and this brings a world of opportunity for more agile measurement and response. Become your company's specialist on rapid-time, real-time measurement and adaptation.

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Watch that Org Chart in 2010

Twenty percent of tech vendors $1b or greater in revenue are now reporting that they have experienced some form of organizational "mash-up" between marketing and sales over the last 12 months. This is the C-level effort to adddress the long-standing mis-alignments and costly points-of-friction between sales and marketing.

Lots of thoughts on this...but the most important is a "heads-up" to expect more organizational pressure and change in 2010. IDC forecasts marketing expenses (investment) to rise by 3.5% this year. We expect sales expenses (investment) to rise by 4.7%. Finally, we expect average revenue to to rise by 3.2 %. So, the math is not hard: operating margins will be under continued pressure. My sense is that the C-Level will respond with more brute force re-drawing of organization charts.

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Social Media is Not Marketing...Yet

I have just returned from the Bay Area where last week I moderated a panel of senior marketers on the topic of Social Media within the complex B2B marketing mix.

The more I think through the potential for this area, the more excited I become about the contributions that Social Media will eventually make to marketing.

What is most promising is that "Social” will help to transform marketing communications into what it should be: a two-way interaction between buyer and seller. Presently, much of our marketing communications is just the opposite: a one-way push of the vendor’s voice.

But Social Media is not Marketing…Yet. Mostly, it’s a jumbled mass of dialogue with a lot of static to sort through.

Social Media will become marketing when two things happen. First it needs to contribute to the "inbound" side of marketing. Web 2.0 conversations about your company’s product and services need to be mined and gleaned so that they become valuable components of your product management decisions. The litmus test here is that your product managers start to depend on those contributions.

The second thing that needs to happen is on the "Outbound" side of marketing. The litmus test here is that Social Media needs to become a primary preference for how buyers inform their decisions. IDC research shows that buyers almost always prefer to receive information from independent third parties and from their peers. So, Social Media should really shine in this application.

There is important work ahead to make it this happen. It’s all about how to operationalize your marketing organization to reap the benefits of Social Media. "Operationalize” doesn’t make it through your spell-checker… but it is on the lips of the best marketers in tech, today. Only with operational depth will Social earn its way into the marketing mix. In our latest survey of CMO’s less than one-half said that they were making "significant" progress on this task - and that’s from an audience who tend to self-rank pretty high.

Here are three operational Best Practices that I see marketing leaders taking, right now. These leaders, by the way, are moving quickly on these. My sense is that they know that these basic operational tasks need to be completed well before the inbound and outbound marketing benefits can be realized.

1. Centralize. If you have followed the IDC CMO area research, you know that we are not great fans of heavy-handed corporate marketing. But in this case we are pressing hard for this. The issue is that (Congratulations, by the way) everyone in your company is now in marketing! Well-meaning engineers are merrily blogging about a new technical advance. Your sales reps are tweeting about a local seminar that they are setting up. The problem is that we are creating the perfect environment for a major breach of data. A privacy issue will be violated; an important confidentiality will be disclosed. When this happens, the blame I think is going to wind its way back to the marketing department, regardless of marketing’s role in the breach. So, corporate marketing needs to have the basics of governance and policy in place.

The second opportunity for centralization is for shared service creation. One of my clients has five major development groups and the lead developer in each group took a separate initiative to construct a community site for the development community and their most engaged customers. Couldn’t the deployment of a master community site with five sub-divisions have saved money? Yes. And wouldn’t it be easier to then deploy a single mining tool across those sub-divisions? Yes.


2. Train. I don’t think that there is a lot of good external "courseware" for how to conduct Social Media Marketing. But wait! Remember that everyone in your company is now in marketing?? I would bet that for every 100 people who are involved in Social conversations, that you have two or three real sharp-shooters. Find those two or three, and have them train the rest.


3. Measure. Poor metrics can give good marketing activities a bad name. One of the basic faults in metrics development is measuring activities and not results. Measuring the number of Tweets or enumerating the cast of your Followers are stark examples of these errors. Measure how many buying decisions you influenced. Measure how many customer service issues you identified and passed on to the right area for resolution. It seems basic but I am surprised at how many marketers still measure just the volume, the activities. Why? Because it’s easy. You have to be willing and able to do the harder work.


"Operationalize" for Social Media. An important initiative for 2010.

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The IDC Marketing Operations Holiday Gift List

This month I was delighted to join the Advisory Board of MOCCA: The Marketing Operations Cross-Company Alliance. In this new role I am looking forward to working with a number of current IDC CMO Advisory clients and also many new colleagues as we help to expand the professional capabilities of the important Marketing Operations (MO) role.

At the initial Advisory Board meeting, the basic theme of the discussion centered around the complexity and expansion of the MO role. “Our typical member needs so much and the role is evolving so quickly” …we concurred… “That we have a world of opportunity to serve and support them. And so, where to start?”

And so, where do we start, to start 2010? First, let’s finish 2009 end enjoy the Holidays.

It has been a difficult 2009 for all of us in marketing. But especially so for our MO staff! Marketing’s selfless few who have ignored the hunger-pangs of process improvement so that demand generation might eat ! Our tireless servants-of-spreadsheets who have had to bear the ceaseless administration of budget reviews, even as their own chart of accounts were flayed to the bone by corporate finance!

Who more deserving than your favorite MO professional to be remembered at this important time of year?

To make things easier for all, I have prepared a simplified Marketing Operations Holiday Gift List, so that you may save time in shopping for your favorite MO professional. With this list completed, you may rest well over the holiday break, secure with IDC’s assurance that your MO staff will achieve professional success in 2010:


1) Her choice of a Shiny New MPM dashboard; an MRM system; or a Sales Enablement portal. Okay: you could argue that this is an extravagant gift to have to purchase during a recession. But IDC’s most recent survey of marketing automation investment trends and our on-going conversations with MO professionals would indicate that evaluation and investment in marketing automation is at its fastest pace of the past seven years. So, why should your MO staff not receive what all the others are?


2) A Brand-New Colleague (to help out with the increasing work-load).

Here is my observation: a few years ago, helpful or break-through contributions from the newly-hired MO staffer was viewed as an un-expected pleasant surprise for the CMO. Today, that same CMO sees the MO role as legitimate and necessary and established. As such, the CMO is now ratcheting-up the expectations that they have of MO-area output: better controls and budgets; crisper processes; and greater alignment with other functions. However, the percentage of total marketing staff in place to satisfy those rising expectations has leveled off in the range of 4-5%, over the past two years.

So: what to look for in our new colleague? Impeccable grooming, but willing to roll up sleeves and get hands dirty. The ability to data-cleanse an aging lead file with the best of them. Full of energy and capability. A respected background in sales and marketing. A holder of political equity, and a willingness to expend it .

3) How about giving your most important MO professional the gift of Six Months of Peace, Love and Understanding with Sales? Can’t seem to find that on Amazon or E-bay? How about a copy of the bestselling book “Difficult Conversations”?

4) A reasonable Marketing Budget Increase for 2010. This is also a difficult gift to ask for during a recession. But IDC is known for being conservative and objective in its outlook and forecasts, yes? And so our current sentiment that the average tech vendor should receive an increase of 3% to marketing budgets in 2010 should not break the bank. So, make sure that your marketing department gets its fair share (plus twenty percent).

5) An all expense paid, ten-day trip to Hawaii. This has absolutely, positively nothing to do with Marketing Operations but it sure sounds nice, doesn’t it?


From the IDC Executive Advisory Group – Happy Holidays and prosperous New Year!

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