MIT Sloan Management Review (Spring 2011) published new research on CRM in an article titled, “Why CRM Fails and How to Fix It.” This is fantastic reading; truly an energizing piece pointing to down-to-earth advice. The four key insights that the authors drew from their research are equally applicable to marketing automation. They are (verbatim):
- “If the appropriate marketing capabilities are not developed, little or no return will be generated from investments made in CRM.”
- “The rate of organizational learning, rather than the size of the company’s CRM budget, determines how rapidly companies can change the way they relate to a consumer, which, in turn, is linked to the length of the consumer purchasing cycle.”
- “Top management can provide the money, software and authority to create a CRM program, but such investment must be informed by cycles of learning from consumer insight….an organizational culture that tolerates experimentation will be more successful at building new CRM capabilities.”
- “Hard work and commitment are what it takes to develop marketing capabilities…far from being a black box (marketing capabilities) can be developed through conscious, goal-directed learning by those responsible for CRM.”
While some scoff at my contention that today’s marketing is harder than ever before, these insights from the research support that view. Enough of the left brain/right brain argument. Enough of the data/experience fuss. Enough of the processs/technology discussion. It takes them all…along with leadership and courage. I’ll say that again: leadership and courage.
Back to the article. The authors display a matrix with four marketing activities (demand management, creating marketing knowledge, building brands, customer relationship management) on the left and three marketing relationships across the top. The marketing relationships between companies and consumers are: transactional (from the 1970’s), one-to-one (based on the long-term relationship focus of the 1980s ) and networked (flowing from online networks, the company supply chain and consumers).”
The latter (networked relationships) is characterized by “co-creating value with a network of consumers,” marketing knowledge coming from “key network participants and shapers,” consumers encouraged to “access a networks capabilities,” and consumer self service. How different is this from where your marketing is today? How does this vision apply to your marketing? How will you go about building the capabilities to succeed in this networked relationship between company and consumer?
Don’t be stuck in in the 1990s. Please read the article and let me know whether it made you want to cheer also…
(Back to marketing automation: Today’s ClickZ piece on Marketing Automation…Far from Automatic opened once again the discussion of why so many marketing automation implementations fail to deliver expected results. It makes good points but doesn’t go far enough into a meaty topic that I’ve covered frequently.
A March 2011 survey conducted by Patricia Seybold Group and Information Technology Services Marketing Association (ITSMA) found a correlation between leadership in data-driven marketing and increased sales productivity as well as improved market share over a two year period. Pretty exciting results!
Digging deeper into technology factors affecting their success, we found that more than half the data savvy marketing organizations have had a technology strategy and roadmap in place for more than a year, compared with only 12% of the other marketing organizations in the survey.
We also found that the data savvy use more kinds of marketing data in more ways. Significantly, the uses achieved through the capabilities of marketing automation systems, such as determining which leads are sales ready, predicting campaign effectiveness, and segmenting markets for targeting campaigns, stand out among those that the data savvy use but others don’t use. We see this finding as further validating the importance of marketing automation systems in driving improved business results.
Look for the survey report later this week at the Patricia Seybold Group site.
In today’s B2B buying environment, marketing can not be effective in driving demand, building brand, or charting strategies for future growth without technology. There are hundreds of reasons why marketers should invest in technology but I am more interested in what marketers report as their reasons. So, in a recent survey conducted by Patricia Seybold Group and ITSMA, I asked.
First a few details on the 107 survey respondents:
- Large B2B companies (half over $1 billion in revenue)
- Half from companies that primarily sell services; half from companies that sell products and services
- Marketers all managed one or more marketing functions in their companies.
The top four reasons these marketers invest in technology are to:
- Improve efficiency
- Make marketing investments based on data
- Hand better quality leads to sales
- Obtain greater understanding of prospects and customers to improve offers, products, services
Those who had made much more investments in technology for longer periods of time didn’t have significantly different reasons. In other words, the leaders haven’t moved on to focus on new horizons. They are continuing to invest to improve efficiency, accountability, sales productivity, and customer understanding.
If you are a marketer just beginning to invest in technology, you face a tough game of catch up. Data keep pouring in that correlate technology investment with data-driven marketing and correlate data-driven marketing with greater improvement in market share, lower cost of sales, and higher sales velocity. If you are just starting out you do have the benefit of learning from others’ mistakes…so take full advantage of the research on implementation success. There is no time to waste.
Nobody wins when marketing automation system implementations don’t yield expected results. Yet it happens so frequently that some industry observers predict slow adoption of this important technology because of implementation problems.
Recent research by Patricia Seybold Group and McKittrick Associates shows that there are more than 20 skills, practices, and organizational practices important for a success implementation. While suppliers, consultants, and marketers have amply documented what needs to be done and often how to do it, the extent of the changes that may be needed makes if hard to focus on what to do first. Unfortunately, many turn to system selection as their first step.
Views of five suppliers, representing more than 2000 marketing automation implementations, show remarkable similarity and point to seven steps to success with marketing automation. Significantly, all seven can be substantially underway before selecting a system. In rough order of priority, the seven steps are:
Establish clear objectives, performance measures, and metrics
Agree on the end-to-end lead management process
Have a champion in senior management
Improve the sales-marketing relationship
Develop a process for lead scoring and updating lead scoring
Build skills in segmentation and targeting
Develop a content strategy and plans
The suppliers indicated that these are areas in which a) their less successful customers struggle most, b) their more successful customers excel, and c) experienced customers continue to face difficulty. Yet marketers can, and should, begin making the changes within marketing and between marketing an other stakeholders before selection of a system.
More information is in the full research report, available for download at no charge.
So you’re in the market for a marketing automation platform. You’ve gone through the Step-by-Step Guide to Selecting a Marketing Automation System by David Raab. He takes you from defining your requirements to making a decision and then (Step 7) directs you to “Invest in Deployment.” Good advice. Better advice: start investing in deployment well before you choose a platform.
When you succeed with marketing automation, you win big, but when you fail to achieve the revenue increases, cost reductions, and increases in accountability and agility (as a third of implementations do), you are probably only using a small fraction of the platform functionality. You got stuck early in your implementation because you shied away from the fundamental transformations needed in order to market effectively to today’s customers. You spent the money and maybe put your career on the line. The results aren’t there. No one is happy.
When you look at the advice — and there is plenty of it — on how to succeed in marketing automation, it looks like a laundry list for the marketer who has little else to do. The key question is: WHERE DO YOU FOCUS?
I’ve started to explore that question with major suppliers of enterprise platforms for B2B marketing automation and show in the chart below the skills, processes and organizational practices at which less successful customers struggle the most. Four out of the five suppliers reporting to date say their less successful customers come up short in:
- Lead management processes
- Clear objectives, performance measures and metrics
These are NOT practices that marketers can come up with in a flash AFTER selecting a platform. The objectives, in fact, should come FIRST. The work with sales on lead management processes takes time to build understanding and explore needs and viewpoints. Take a look at the illustration below (courtesy of Patricia Seybold Group and McKittrick Associates) and think about implementation before you get deep into selection.
Gary Angel recently wrote a great post on Segmentation for Digital Analytics Done Right. He points out that to properly understand a visitor’s web behavior you must understand who they are and what they are trying to do. Are they customers or prospects? If customers are they going to the site because they have a support problem or want to buy something more? Only after you know the who and the why can a change in a metric, such as visitors, be properly interpreted. More significant, he makes that case that for the intersection of each visitor type and each visitor purpose, the marketer must determine the appropriate performance measure. Make up a matrix with visitor types on the left and visitor purposes across the top. Then think about each cell in that matrix:
- What is your objective for that visitor and visitor purpose?
- What do you want the visitor to do next?
- What is the relevant performance measure?
- How do you talk to that person?
- What content do you provide?
This is exactly how a content marketer thinks. Who (buyer persona) and why (stage of buying cycle) drive the content agenda, conversion objective and performance measure. But for content marketers there is more. For each cell in that matrix, there is a time dimension: for instance, a prospect may build awareness of their need over a period of two months. During that time the marketer stays in touch with a nurture program. Response-driven nurtures bring further segmentation to bear.
It’s no wonder we need technology. Have you connected the dots in your web site, content marketing, and lead management programs? What is holding you back?
There was a good post by Brian Hansford on how marketing automation isn’t all about features and functions. He asks ten questions that will help marketers focus on factors that will impact their success with marketing automation. I add 47 more questions in my recent report for Patricia Seybold Group on how vendors help their customers succeed. Vendors help their customers succeed in six ways:
- Product features the make implementation easier
- Implementation services, training and support that respond to customers’ needs
- Pre-purchase staffing and implementation recommendations that set realistic expectations
- Post-implementation diagnostic and account management services to help customers grow their effectiveness in using the platform and nip problems in the bud
- On-going programs that leverage what customers have learned to address problems and identify opportunities for improvement
- Sharing what they’ve learned from other customers about skills, processes, and organizational factors that lead to success; using that knowledge to improve products and services.
Questioning vendors in each of these areas will build a base of knowledge that empowers marketers to succeed in their implementations.
Are there other ways vendors help their customers succeed?