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The Challenges of Marketing – In a Multi-Channel, Do-Not Contact World Chris Selland Vice President, Sell-Side Research Aberdeen Group Agenda Today’s multi-channel marketplace • The empowered customer takes center stage Issues facing marketers • • • • Overwhelmed (and fed-up) customers Overzealous(?) regulators Alignment with sales Leveraging technology Facing the challenges Q&A E-Commerce Sales Growth ($Billions U.S.) e-Commerce Sales (US $B) 17.2 18 16 13.77 14 10.788 9.761 12 9.248 10 8 13.2 11.921 12.46 7.079 5.393 5.722 10.465 9.47 8.009 7.904 7.894 6.25 6 4 2 0 Q4 '99 Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Targets are Overwhelmed Commercial and Internet Messages per Day per Person 3000 Other Consumer 2560 Messages (all media) 650 440 1985 2000 Source: E.piphany, 2002 Total Internet Consumer Messages Direct mail pieces: Up from 35 million in 1980 to 85.6 million in 1999 Telemarketing: Number of calls average consumer receives today is 60 to 90 a month E-mails: The average Internet user now receives tens to hundreds of e-mail messages a week — many of them unsolicited and unwanted pitches Enter the Government Government legislation increasing • • • • • Do-Not-Call CAN-SPAM Graham-Leach-Bliley (Banking) HIPAA (Health Care) More coming… Marketing primarily targeted • Control of names moves to individual/customer Outcomes: • Budgets shift from marketing to customer support Marketing in the Enterprise Lack of metrics for spending • • Traditionally viewed as cost center Intense pressure to show “ROI” Corporate culture • • Support other operations Sales, engineering Coordinate more than produce Limited (so far?) impact of technology • • • Traditionally a backwater – often by choice Hire agencies, don’t buy software What’s real and what’s hype? Failure of personalization, banner advertising, etc.. ‘Boil the ocean’ integration requirements The Root of the Problem Source: Accenture, 2003 CRM Leadership Study “We’ve had believers in Sales & Customer Service, but have been hindered by Marketing’s unwillingness to participate.” “Marketing brings prospective clients into the CRM system, but once they’re in it becomes Sales’ job. There is low marginal benefit to getting Marketing involved.” “We absolutely run Marketing as a profit center. We look every day at what Marketing is bringing in - and they hate it.” “For marketing, sales attainment is the ultimate measure of success.” Source: Reservoir Partners, November 2003 Marketing Mix Brand/Awareness Print Ads Online Ads Trade Shows PR Speaking Leads Partners DM Online/Offline Marketing and Sales Ownership Marketing ? ? ? Sales Metrics – Soft and Hard Soft Metrics Hard Metrics •Customer loyalty •Customer lifetime value •Customer satisfaction •Churn rate •Quality of service •Cost of service •Sales effectiveness •Close rate Invest Now – Profit Later The Empowered Customer Customer-controlled product discovery processes pull buyers deeper into the sales funnel Result? 1. Service-direct: Across all channels 2. Sloppy ball handing: Few will tolerate clumsy hand-offs 3. Speeders rule: Expectations for proactive, direct service are especially high among younger buyers 4. Brand Risk: Expectations set by other experiences – and not necessarily your competitors! CRM and Channels Marketing Sales Suppliers Your Company Support Channels Customers Debating Direct How should companies optimize Web sites, product pages, etc. in their multichannel go-to-market strategies? How can companies best tap the global market reach and customer-centricity of the online channel? When should companies sell direct? Is collaborative commerce attainable? What investments in e-commerce technologies should be the priority? How does Marketing align with Sales, Customer Service and channel partners (and processes?) Marketing Analytics Most companies have too much, not too little, technology • Adding more makes the problem worse Needed: Single ‘System of Record’ • • Touched by multiple functional applications Data architecture needs to move outside the application Solutions • • Data warehouse Customer Data Integration (CDI) Customer Data Integration 2-way updates CDI Metadata App A (SFA) App B (ERP) App C (Billing) App D (Legacy) etc… Conclusions Marketing needs to be viewed as an investment • Marketing as a ‘profit center’ is incorrect at best, dangerous at worst Metrics are still critical • Separate ‘hard’ from ‘soft’ – but use both! Beware legislation • • Marketing at the forefront Organizational alignment separates winners from losers Marketing can no longer afford to be an ‘island’ • • Integration – business and technical – is critical! Analytics – think ‘less’ not ‘more’ AberdeenGroup Contact AberdeenGroup The Trusted Advisor and Business Value Research Destination of Choice for the Global 5000 Executive © 2004 AberdeenGroup • 19