Download Top-10 Marketing Processes for the 21st Century The marketing

Strategic Planning, SPA-20-0671
C. Marcus, K. Collins
Research Note
24 July 2003
Top-10 Marketing Processes for the 21st Century
The marketing function must evolve to support advanced,
customer-centric marketing processes. There are 10
processes that will deliver the greatest value to customers
and the enterprise.
Core Topic
Customer Relationship Management:
Business Strategies, Technologies and
Applications for Marketing
Key Issues
How can the marketing function better focus
on value creation by leveraging technology
in its operations?
How will enterprises drive profitable loyalty
while satisfying increasingly demanding
prospects and customers?
How will marketers fill the gap between data
and insights that are acted upon?
How will marketing communications evolve
to craft optimal dialogues with consumers?
Strategic Planning Assumptions
By 2007, marketers that devote at least 50
percent of their time to advanced,
customer-centric marketing processes and
capabilities will achieve marketing ROI that
is at least 30 percent greater than that of
their peers, who lack such emphasis (0.8
probability).
By 2007, fewer than 20 percent of
marketing organizations among Global
1000 enterprises will have evolved enough
to successfully leverage customer-centric,
value-added processes and capabilities (0.8
probability).
Enterprises are recognizing that stronger and more-enduring
customer relationships are critical to long-term profits. Most
marketing organizations are at least conceptually well-situated to
drive customer centricity, via a more-strategic approach that is
focused on delivering value around customers and customer
segments. To be effective, however, the marketing function must
evolve from focusing on products and transactions into placing
more emphasis on customers and relationships that are aligned
with enterprise goals and strategies. However, most marketing
organizations face several critical challenges:
• More-demanding customers who expect offerings and
communications to be increasingly aligned with their needs,
preferences and lifestyles.
• The ability to support a growing number of marketing
activities to drive the customer-centric enterprise. This ability,
however, should have a limited impact on other parts of the
enterprise — or the extended enterprise, where execution is
critical (for example, call center, store or branch, Web site,
partners) — while concurrently facing increasing pressure to
justify marketing resources and expenditures.
• Dealing with a variety of loosely coordinated marketing silos
(for example, corporate, communications, products,
customers, channels, fields, markets) that lack sufficient
focus on collaboration around key, high-value processes.
If marketing is to lead the customer-centric enterprise, it must
first lead by example and break down functional silos to create a
more-strategic and customer-centric enterprise approach. By
2007, fewer than 20 percent of marketing organizations among
Global 1000 enterprises will have evolved enough to successfully
leverage customer-centric, value-added processes and
capabilities (0.8 probability).
Gartner
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Marketing organizations must move away from a tactical focus
on day-to-day activities and place more emphasis on high-value
business processes that add value to customers, enhance brand
equity and produce stronger, more-predictable return on
investment (ROI). There is growing evidence of a set of 10 highvalue marketing processes that the marketing function of 21stcentury-leading enterprises will have to master. The specific
processes that will prove to be most valuable to an enterprise will
vary, depending on the development stage of the marketing
function, as well as the enterprise's business model or vertical
market. Listed in order of increasing sophistication and, hence,
required mastery, these marketing processes are:
1. Marketing operations management: Due to increased
competitiveness, product and channel proliferation, and greater
market, media and interactive channel fragmentation, the
complexity of marketing operations has increased. As such, the
marketing function must strive for higher degrees of process
standardization and automation to drive greater efficiency and
productivity, as well as better alignment of resources and
activities with corporate objectives. Higher levels of efficiency
and productivity are essential so that marketers can dedicate
more time and effort to higher-value marketing processes.
However, driving internal and external adoption and use will
mean supporting dynamic processes that reflect diverse
requirements across business units and geographies, as well as
changes over time. Without these processes, many users in the
marketing function will continue to resort to unstructured and
often-chaotic operational behaviors.
2. Marketing visibility, accountability and value measurement: As
the sheer number and complexity of marketing efforts have
increased, the ongoing visibility of marketing activities across the
entire enterprise and all its distribution channels has become a
significant challenge. Although some individual tactical elements
(such as direct marketing or e-marketing activities) have
improved in terms of measurability, marketing efforts remain
mostly tracked at a tactical level, using a variety of spreadsheets
and uncoordinated tactical applications. Also, although interest in
marketing demonstrable ROI continues to rise among senior
executives, the marketing function in large enterprises remains
largely unaccountable. Achieving greater visibility and
accountability of marketing efforts requires enterprises to develop
and deploy formal, standardized processes and systems for the
planning, budgeting and tracking of marketing efforts. Also,
measurement must evolve from evaluating specific programs into
identifying the best timing, combination and sequence of targeted
communications or interactions, and assessing the overall impact
on customer value.
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
SPA-20-0671
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3. Customer and market insight generation: Beyond traditional
competitive analysis, market research and customer surveys,
enterprises must be able to capture and leverage vast amounts
of customer and market information. Doing so requires a
methodical approach to data capture and quality management,
analytics skills and the ability to transform data into meaningful
insights. It also requires the ability to distribute these derived
insights for use in strategic planning, tactical program
development and interactive management.
4. Customer-value-based segmentation: The practice of
segmentation is not uncommon, but among many enterprises, it
remains mostly product-centric, focusing on demographic or
"firmographic" (that is, demographics related to business
statistics) characteristics that align products to market segments.
Aligning resources with potential returns requires a shift to
customer-centric segmentation, where the focus is on customer
behaviors and attributes as they pertain to: 1) the broader
relationship between a customer and the enterprise, and 2) the
associated lifetime value potential. This evolution must go
beyond focusing on the customer's value to the enterprise and
become truly customer-centric, giving at least equal weight to the
value that the enterprise provides to the customer. As a process,
the key to customer-value-based segmentation is to understand
if, when and how a customer is likely to derive value, and
whether the enterprise can effectively orchestrate its resources to
provide that value and achieve a desired return.
5. Portfolio and capacity-based resource allocation: Beyond a
conventional assessment of capabilities, enterprises must be
able to use their resources effectively to acquire, develop and
retain customers. This requires a systematic approach to
understanding, developing and managing capabilities and
resources, relative to a portfolio of value-based customer
segments. The ultimate goal is optimal resource allocation,
relative to the potential value that will be provided to each
customer segment as well as the expected risks and returns that
will be associated with doing so. Although marketing is likely to
be responsible for overall customer segment portfolio and
capacity-based allocation, the associated resources go well
beyond marketing and include such things as sales, service,
production and channels. As such, it is critical for business
processes to be highly cross-functional, and to leverage effective
knowledge and information management.
6. Product development and introduction: As the emphasis
changes from product-driven markets to customer-focused
segments, the core value proposition of new offerings must
become increasingly fine-tuned around customers' evolving
needs and preferences. Doing so also requires more-flexible and
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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dynamic approaches to pricing, bundling, packaging and
migration between offerings. Also, as clients and consumers
become more demanding and product life cycles continue
shrinking, there is a need for more-targeted and timely product
offerings, which means that the time-to-market for new product
introductions becomes even more critical.
7. Customer-needs-based trigger identification: As changes
make customer requests less-predictable, strategic leverage
shifts to processes that enable enterprises to sense
unanticipated changes earlier, so they can make proper and
timely responses. As such, marketing communication processes
must shift their mind-set from "waves" of programs to the
identification and implementation of life-event and interactiondriven marketing strategies and tactics. Understanding such
"moments of truth" in a relationship depends on suitable data
captures and quality management, and the ability to derive
market and customer insights. These capabilities, along with
sound customer-value-based segmentation, are foundational
elements for processes that support just-in-time marketing
interactions, which will become increasingly necessary to
establish more-meaningful and valuable customer relationships.
8. Orchestrated customization: The marketing function often
relies on supply-chain partners such as advertising, research and
promotion agencies in support of marketing efforts. Such
partners, along with internal functions, must be better aligned to
serve evolving customer needs, preferences and behaviors.
Enterprises must enable processes that further leverage
customer and market insights into the creation, development and
delivery of integrated marketing efforts. Identification and use of
business rules, metrics and workflows will become essential to
supporting increasingly automated processes that aim to
efficiently deliver the benefits of one-to-one relationship
marketing.
9.
Orchestrated
cross-channel
dialogues:
Customers
fundamentally view their relationships as being with enterprises,
not with individual business units or interaction channels. As
such, beyond the coordination and optimization of individual
communications and interactions, enterprises must be able to
prioritize and align marketing efforts at individual or customer
segment levels — regardless of the outbound or inbound
channels involved, or the lines of business involved. For most
large enterprises, even a simple customer address change can
present considerable challenges, due to the many silos of
information. The challenges often are greater when it comes to
sharing key customer information and derived customer insight.
Enterprises must recognize that without pulling this information
together, it is practically impossible to truly understand individual
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
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customer value, channel usage or contact preferences.
Processes that enable enterprises to understand, map and
execute multichannel dialogues with customers, in a largely
automated fashion, will become more critical. The ultimate goal is
to leverage predictive models of customer behavior — along with
models and business rules that represent the market
environment and enterprise objectives — to dynamically
orchestrate and monitor ongoing communications and
interactions with individual customers across multiple and
distributed channels.
10. Customer-value-based network management: In this
increasingly networked world, enterprises depend on supply-anddemand network partners to reach and serve their customers.
Enterprises must envision a competitive environment, composed
of value networks of partners, that link together to deliver value
— sometimes in an enduring manner and, at other times, in a
more-opportunistic, dynamic fashion. Doing so requires a solid
understanding of the comparative advantages and the
complementary roles and capabilities that partners bring together
— relative to the needs, preferences and behaviors of each client
or customer segment. As such, marketers must begin to develop
and implement processes that facilitate the coordination and
management of resources across an extended enterprise or
value network. Examples include increasingly aligned and morecollaborative distribution channel partners, alliances that help to
deliver relevant content around key life-stage events, and
coalition loyalty programs that provide greater value to
customers. Extended-enterprise marketing processes must be
dynamic enough to support various workflows and business logic
that may change, depending on the customers and partners
involved. These processes also must be sufficiently standardized
to be manageable, and to provide broad and dependable visibility
of the demand network performance.
Each of these high-value processes can leverage a variety of
traditionally tactical, technology-enabled marketing components
that support key marketing functions (that is, customers,
resources, brands and products, as well as demand network
management, data and analysis). The difference is how these
components are redefined and brought together to create morestrategic business processes that are focused on delivering
customer value. These processes are not mutually exclusive —
rather, they are interactive. For example, being able to leverage
contact and complaint histories from multichannel dialogues
improves the ability to identify and leverage key event-triggers.
Also, including customer information from the extended demand
network, as well as effective customer and market insight
generation, improves overall customer understanding. Therefore,
as the enterprise evolves toward greater sophistication via these
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
SPA-20-0671
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10 key customer-centric marketing processes, those processes
can be continually enhanced and improved, making the
enterprise better.
Bottom Line: Although traditional value-added marketing
processes will continue to play a role in the evolution of the
marketing function, marketers need to focus their attention on
new processes and capabilities. Enterprises must find time to
develop and master more-advanced marketing processes by
improving the efficiency of the marketing function and by shifting
resources, to be better aligned and to produce greater value. By
2007, marketers that devote at least 50 percent of their time to
advanced,
customer-centric
marketing
processes
and
capabilities will achieve marketing return on investment that is at
least 30 percent greater than that of their peers, who lack such
emphasis (0.8 probability).
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
SPA-20-0671
24 July 2003
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