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This Is What a World-Class Marketing Organization Looks Like in 2015
At Percolate, we listen carefully to our clients’ challenges. For instance, how do you maintain brand consistency while still speaking to audiences in local markets in a tailored way? How can marketing technology go beyond social media management to make teams more effective at collaborating across all of their marketing channels in every region their brand reaches?
When you take a step back, marketers are struggling to figuring out how to structure a marketing organization that is simultaneously flexible, responsive, consistent, inspired and, ultimately, global in its reach. So what does a world-class marketing organization look like in 2015? How can you structure a marketing organization for speed, success and brand safety at the same time? Here we outline seven organizational attributes that will offer competitive advantages in the coming years.
1. Business and IT strategies fundamentally support each other
The IT function is no longer about resolving issues on PCs, it’s now an integral part of building a secure, scalable and efficient business. Benedict Evans argued this eloquently in his presentation at Bloomberg’s The Year Ahead event. Let’s look at Amazon as an example. Amazon isn’t a traditional technology company in the sense that it doesn’t sell software, while its cloud infrastructure as a service (IaaS) division Amazon Web Services (AWS) evolved out of the company’s own internal data center infrastructure. Fundamentally, Amazon is still primarily a retailer that uses technology to generate itself competitive advantages, ones that have made it one of the ten fastest growing global companies.
While Amazon is a strong example of how technology can drive growth by creating new revenue streams, optimizing retail experiences around superior customer insights and maximizing distribution economies of scale, Many CMOs and CIOs are not seeing eye to eye on the importance of technological integration. Accenture found that 40% of CMOs don’t see their IT department as moving fast enough, while 25% of IT executives see marketing executive as lacking foresight for technological innovation and need.
That kind of disconnect must be repaired. IT can’t just be a support function. It has to be fully integrated into planning and strategy. In particular, marketing and technology leaders need to find common ground around how customer data is stored, accessed and used to make business decisions. Using extensive data about customer shopping behavior cross-functionally in a closed-loop system has allowed Amazon to develop new products, optimize its web user experience and deliver customers better real-time shopping recommendations. Amazon’s analytical granularity has even discovered that every 100 milliseconds of additional page load time on its website results in a 1% decrease in sales, prompting the e-commerce giant to double down on site compression and optimization. Meanwhile, traditional and more conservative retail models where IT and marketing can’t create this type of closed loop are struggling to compete with Amazon’s speed and effectiveness.
Ultimately, finding the right, shared approach between IT and marketing leadership is key. IT will likely place greater value on customer privacy and data security, whereas marketing will want to use that same data to uncover valuable customer insights and intelligence.
2. There’s a marketing-tech leader that champions business-IT integration
So how does marketing and IT come together? It needs the people and the structure behind it. A Head of Marketing Technology or equivalent role is a relatively new position, but is quickly becoming one of the most important roles at companies. Some of the worlds biggest and most respected brands have identified the need for C-suite executives to take on marketing technology. These positions sit at the nexus of IT, data analytics, digital strategy, and marketing. A 2014 Gartner study discovered that 70% of Fortune 500 companies have Chief Marketing Technologist or equivalent leadership role, however where that role sits within organizations varies.
They are responsible for organizing a cross-functional mobility team between IT and business organizations. Their objective is to pilot relevant software innovations that offer improved consumer and employee digital-physical experiences. For senior marketing technology leaders like Babs Rangaiah, Unilever’s VP of Global Media Innovation & Ventures, streamlining and unifying customer technology touch points is a core part of breaking down data and digital silos that lead to brand and customer journey inconsistency.
3. Marketing organizations use data and analytics to put customers at the center
One of the primary ways IT and business strategy can support one another is through the use of data and analytics to put customers at the heart of the business. What does that mean? Instead of thinking in terms of geographic markets, or channels, businesses use technology to understand and fulfill customer needs at the right time and in the right way.
One of the best examples we’ve seen of analytics, data, and operations spanning and influencing marketing end-to-end is Tesco. As one of the world’s largest retailers, Tesco has spent decades extracting insights from customer buying trends and incorporating those insights into upstream operations. In one example, Tesco’s 50 person Analytics division uses the brand’s customer loyalty card program to extract customer purchasing insights that can be applied to redesigns of internal operational processes, from supply chain investment to product storytelling. Instead of looking at sales alone, Tesco incorporates decades of sales, demographic, even weather data to model scenarios, pilot and test new ideas, and ultimately make quick decisions on cross-functional strategies to lower the risk of stock outages at stores. These insights also helped Tesco launch its transformative digital channel Tesco Direct, which sells home products, eBooks and digital entertainment.
Overall, Tesco’s data-driven approach to better understanding their customers has generated an estimated $100 million GBP in cost savings, in addition to revenue and margin gains from improving its customer segmentation capabilities. But to accomplish what Tesco accomplished, marketing leaders have to create accountability for the direction, funding, prioritization and governance of customer analytics and data science.
4. More technology centralization connects brand, product and customer information
The right incremental data about daily operations can improve business outcomes, ensure optimal resource allocation, and reduce unnecessary redundancy. Ultimately, the right data can inform teams about customers’ individual needs and behaviors. But to make use of that data an organization needs processes, structures and technology in place to capture, store and interpret it, then make it widely accessible. One noteworthy example of redesigning a marketing department for efficiency information transparency comes from our long-time partner, GE. Before Percolate, GE’s marketing teams used separate, silo’d tools for digital and brand measurement, leading to data fragmentation, inefficiency and reduced strategic transparency. Today, with ten lines of business and sixteen markets collaborating within a single shared marketing calendar system, GE’s global and regional teams can move faster, stay aligned and leverage and adapt successes in other parts of the organization. Two years later, nearly 400 marketers at GE use Percolate as the technology foundation to tell innovative stories about the brand and its impact on the world.
That said, although many marketing leaders recognize a need to integrate and deploy these types of technology solutions, many buyers are struggling to close the gap between technology promise and current, available vendor capabilities.
5. Marketing and sales are aligned to provide a more consistent customer experience
Because so much of the modern customer journey is digital and happens pre-sale, there are now even more touch points that a marketing organization must manage, understand and monitor. Today’s marketing, sales and service organizations need to be integrated from both an operational and technology standpoint so customer context is shared (and remains consistent) across all three.
However, with only 36% of B2C marketing leaders saying their CRM is effective at supporting unified customer lifecycle management and 18% indicating their CRM strategy has problems (according to a recent Forrester survey), the technology landscape is still ripe for new entrants and innovations that can track customer experience more comprehensively.
6. Digital and physical are also connected to support customer experience consistency
For retailers like Tesco, customer experience doesn’t begin or end in brick-and-mortar stores anymore. By integrating data and analytics into its sales and marketing cycle, Tesco created a closed-loop system for fulfilling demand.
This idea of connecting digital and physical — often referred to as the Internet of Things — within a business model not only increases values to customers, it also has positive bottom-line impact. In 2011 GE began deploying sensors in hardware systems like jet engines to connect them to a cloud-based software platform. By connecting a physical asset with connectivity for ongoing data transfer, GE converted a single jet engine sale into a technology-enabled services system: performance diagnostics for less downtime and more miles flown over the course of a year. These innovations have helped GE create new revenue streams expected to generate $1 billion in 2014.
These new types of data intelligence demands create greater urgency for enterprises to manage efficient internal data transfer. Marketing leaders specifically will increasingly want and need access to market and product data that is typically captured and kept in engineering, IT or operations, and will have to collaborate with a greater number of stakeholders outside of marketing to get it.
7. Agency relationships are structured for global storytelling, channel specialization and local implementation
Before our current mobile-social era of modern digital, a single agency might be able to meet most or all of a brand’s advertising needs. Today, a single agency equipped to be an end-to-end creative or media management solutions is the exception, not the standard. Instead, the role of agencies is increasingly gravitating toward three archetypes: (1) the globally-aligned digital agency that acts as a catalyst for the brand’s high-level storytelling, positioning and strategy, (2) the channel specialist with deep execution expertise in one or more specific tactical approaches to connecting the brand’s story with audiences, and (3) the local specialist, which operates in-market or at the regional level to translate, execute and/or measure the brand’s story on the ground.
As more and more marketing organizations transition from a brand management model to a content + channel + customer lifecycle orchestration model, the more we expect to see brands focus their agency relationships around these three specialization archetypes.
Overall, the best marketing organizations in 2015 will be the ones who are well staffed for digital capabilities, and are organized around an operational framework — and technology foundation — that enables data availability, openness and understanding, supports a unified customer experience across different digital and physical touch points and fosters global to local marketer and agency collaboration around an overarching, inspired brand narrative