Friday, December 16, 2011

Three Ways to Update Your Funnel for the New B2B Buyer

B2B Buyer behavior is undergoing an extraordinary sea change triggered by Internet technology. Tech marketing and sales teams haven't caught up. They still rely on a 112-year-old sales funnel model. IDC introduces a new Customer Creation Framework better suited for the way customers really buy.

The Internet tsunami has radically changed B2B Buyer behavior. Before the Internet, the B2B buyer making a complex decision had few sources of information. Vendors leveraged that knowledge gap. The vendor sales person was the primary gateway to information the buyer needed to decide – a tremendously powerful position. Fast forward to today. The Internet and social media have triggered a turbulent change – the rich dialog has shifted on-line and away from the sales person.

As a result, the B2B Buyer in a complex sale is now an expert buyer with very different behavior and expectations.

  • Buyers are constantly on-line. IDC research shows that IT buyers find online search and the vendor website more valuable sources of buying information than face-to-face conversations.

  • Many times, buyers know more than sales people. 55% of buyers think sales people are only somewhat prepared or not prepared for initial meetings.

  • B2B buyers, who are life-long consumers, bring that expertise to work, expecting concierge service.

The Internet tsunami has massively changed Buyer behavior. Yet, we’ve seen surprising little change in the traditional funnel.

The Empowered Buyer is Killing the Traditional Sales Funnel

The traditional sales funnel is 112 years-old and bears the unmistakable marks of the industrial-era. Buyers are treated like widgets that sellers manufacture into a product called a customer. But today's empowered Buyer is far from a widget. The industrial-era funnel is horribly out-of-touch with reality. Symptoms of a sick funnel are showing up in poor conversion rates, lengthening sales cycles, and marketing and sales management challenges.

A New Customer Creation Framework

To ensure that prospective buyers want to become customers, tech companies need a new framework that better aligns with the way buyers buy today. This framework should maintain what is valuable about the industrial-era funnel. For example, the graduated stages of the traditional funnel are a useful, practical tool for measuring progress.

In order to meet the needs of the 21st century tech buyer, this new framework, which IDC calls the Customer Creation Framework (Figure 2), must advance from tradition in three important ways:

Buyer-centric: Act like a Concierge
Replace the manufacturing mind-set with a service orientation. Act like a concierge who delights guests with information and support services that guide them through their "Buyer's Journey". The "Buyer's Journey" describes the cognitive process that a buyer goes through as he makes a decision. The industrial-era funnel was almost exclusively concerned with internal tasks – vendors must create awareness, stimulate interest, close deals, etc. These tasks will still exist. However, they are conducted in a spirit that put the buyer's needs front and center.

Integrate Marketing and Sales
Instead of the assembly-line-like hand-off between marketing and sales silos, the IDC Customer Creation Framework calls for an orchestrated collaboration between the two functions. The fact that today's Buyer desires high-quality digital buying support and never, ever, goes off-line has HUGE implications. The digital dialog is most intense in the early stages of the Buyer's Journey. However, Marketing, as the owner of the company’s digital dialog, can never disengage, can never hand-off. The sales team cannot simply wait for the “good leads”. They may meet a prospective Buyer at any stage – at an event, for example, or in the hallway of a current account. Sales people must be prepared to serve the Buyer at whatever stage he happens to be at. Marketing must be more active enabling this entire sales conversation.

Smart: Data-driven
Finally, IDC’s Customer Creation Framework is smarter than the traditional funnel. The entire customer creation process contains data that can be harvested to use as a feedback system. By analyzing this data, barriers and opportunities will be revealed. Companies can then use marketing and sales tactics like knobs and levers to tweak the behavior and outcomes of the pipeline. Tested marketing campaigns can be strategically applied to build advantage. Digital technology in the form of the Internet is killing yesterday's funnel. However, digital technology is also giving us amazing tools to manage in the new one.

Thursday, November 17, 2011

Symptoms of a Sick Sales Funnel

Can you believe that the sales funnel is 112 years old? Hmmm. Seems like a lot has happened since then. No wonder the ole’ funnel is showing signs of wear. IDC research shows that the time it takes for tech companies to create a B2B customer has increased by 15% in the past year. Is it time for a fresh approach?

The sales funnel first appears in a 1925 book by Edward K. Strong called The Psychology of Selling and Advertising. Strong attributes the funnel’s invention in 1898 to Elias St. Elmo Lewis, a sales manager for National Cash Register (NCR). St. Elmo Lewis, who later helped found the Association of National Advertisers, called his sales funnel AIDA for the four stages of “awareness, interest, desire, and action”.

The traditional funnel uses an industrial era paradigm that treats a buyer like a widget. With the right machine, a vendor can manufacture that widget into a product called a customer. In the industrial model, the marketing team works awareness at the upper funnel when buyers aren’t too interested. As soon as there is serious interest, marketing sends the “lead” down the assembly line, handing off to a sales rep whose must fabricate an opportunity and produce revenue.

The problem is…the traditional funnel doesn’t work that well anymore.

Alarming evidence of sick sales funnels show up in the data. Tech vendors now take an average of 19 months to create a large account customer, an increase of 15% in just the last year. Some of this lengthening is certainly due to uncertain economic times. Greater risk aversion has increased the size of the average buying team from 5 people to 6. But we can’t blame everything on the economy. Buyers, IDC finds, don’t like this slowness. They want vendors help to shorten the cycle. According to the IDC Buyer Experience study conducted earlier this year, buyers want to push for a 40% reduction in the time to buy.

Poor funnel health also shows up in unsustainable conversion rates. Research from IDC’s 2011 Tech Marketing Benchmark and 2011 Sales Productivity Benchmark reveals that it now takes over 1000 marketing awareness targets to get one sale.

Symptoms of a sick funnel. Beyond the data, tech vendors are experiencing the effects of their sick, out-dated, funnel approach. Here are some common symptoms companies complain about. Does your company experience any of these symptoms?

  1. Bickering: Sales and marketing teams bicker over the number & quality of leads.

  2. Bad Data: You don’t have the right data to judge performance, predict the pipeline, and refine strategy

  3. Wrong Tools: Sales people don’t have the tools needed to sell, in spite of the fact that they have access to a tonnage of content.

  4. Failed sales: Sales people fail to convert most leads. Marketing has no idea what sales plans to do with leads.

  5. Funnel Gaps: Prospects fall out of the pipeline, but you’re not sure when or why

  6. Silos: Sales team thinks it’s a waste of time to provide feedback to marketing and your marketing team rarely seeks input from sales.

  7. Missing Messages: You can’t nurture buyers because you lack the right content
We need a new funnel framework. Much has changed since the sales funnel’s 19th century invention. Business is far more sophisticated. The Internet and social media have dramatically changed the way buyers buy. IDC CMO Advisory has guidance for a funnel makeover in the form of a new Customer Creation Framework.

Here’s an introduction to that framework in an IDC webcast called, Transforming Lead Management: How the new buyer is killing your funnel (and what to do about it).” (The webcast is recorded. Register and you can get the replay.)

Monday, November 7, 2011

Building the Big Tech Brand: Dell and Xerox

The last two years have been hard times for tech marketers: there has been major pressure to transform execution, coupled with a significant reduction in the rate of budget growth. This is truly the "We are being asked to do more, with less" situation that marketers casually complain about. But this time, it is reality.

Despite the headwinds, I have been very impressed with the major brand campaigns that Dell and Xerox have been able to execute.

Both Dell and Xerox have spent billions for a major make-over of their product portfolios: acquiring and developing significant Services and Software capabilities. So much has changed at these companies that the brand perception no longer matches the product reality.

Brand perception simplified is: "What do you think of, when you think of Dell?" And, "What do you think of, when you think of Xerox?". When I think "Dell", I think of several cardboard boxes of new PC gear lying in my driveway, fresh off the UPS truck. When I think "Xerox", I of course think "copiers".

Changing a company's brand perception is extremely difficult if not impossible. For how many years has our US auto industry been trying to change the negative brand perception for a now vastly improved product line? It has been, arguably, two decades. And still today, the brand perception does not yet square with the product reality.

If it doesn't square up, you have to make a big move. The CMO's of Dell and Xerox really had no choice but to undertake a major brand re-fresh and re-vamp. They needed to have brand perception start to match the product reality.

I am impressed by several factors in their execution:

1) The Dell and Xerox CMO's were successful because they presented their case as not a marketing issue, but a company issue.

2) These marketers created the budgets necessary to start the Big job. Major shifts require major monies. Having studied marketing budgets for so long I am convinced there is just no way to do this by shifting around the marketing mix of the run-rate budget envelope.

3) They were able to do this during the time of a recession. With 20/20 hindsight: they get extra points for having a lot more marketplace "voice", during a time when so many other vendors were hunkered down, scared and quiet.

The era of the Big Tech Brand is coming.

Going forward, our IT Industry will be one of consolidation and scale. It will be a slower growth industry and so the marketing challenge will be one of competitive share gains in addition to new market growth. And perhaps most importantly, the merging or our Business IT with our Personal IT will favor the biggest and best brands -- as the power of consumer "pull" will become a major factor in the IT decision equation.

Think deeply about your brand!

Does it square with product reality?

Wednesday, October 12, 2011

CMO's report universal lack of preparedness for key challenges

IBM released the findings of their Global CMO study yesterday and one of the primary conclusions is that CMOs feel unprepared to address key challenges. The most surprising thing is how consistent the feeling is across regions and vertical industries. CMOs generally face the same issues and report very similar levels of "unpreparedness" in the face of them. Top challenges include: data explosion, social media, growth of channel and device choices, and shifting consumer demographics, among others.
The findings are based on 1,734 structured in-person interviews with CMOs in large organizations conducted between February and June of 2011.Regional and vertical representation was reasonably well balanced. The sheer scale of the effort and the willingness of so many CMOs to participate indicate a role under siege.
In our research, IDC has learned that marketing is undergoing fundamental and painful transformations on several levels: new and expanding datasets, new channels and forms of communication, new tools and infrastructure requirements, new dynamic in customer acquisition, new pressure to prove business impact, new skills required for success. It is a multi-dimensional change that has many marketing leaders struggling to keep up.
The IBM study provides a strong basis for CMOs to educate their C-level peers on the challenges they face. However, by design, it does not offer practical models for addressing the issues. IDC has strong evidence that the customer data record is the fundamental design principle around which all customer facing activities and systems should be (re-)built. The customer record is increasingly the source for strategic insight, tactical planning, and performance metrics. Any marketer working in an organization without an enterprise customer creation process (with the requisite standards for customer records, data governance, and the infrastructure to support it) is set up for failure.
Unfortunately hardly any companies today manage customer creation as an enterprise process. We believe that this is the root of the universal "unpreparedness" revealed in the IBM Global CMO study. Having a practical model for implementing an enterprise customer creation process is the first step toward mastering all the key challenges CMOs and their marketing organizations are facing today.
ENTERPRISE customer creation is not something that only happens in marketing and/or sales. It encompasses every customer touch point over the lifetime of the relationship. It goes beyond the jurisdiction of any departmental leader and therefore must have C-level (CEO) endorsement and active support. It is the demand side equivalent of supply chain automation and we all know how WalMart conquered the world by mastering that side of the economic coin. On the demand side, the challenge is finding and forming relationships with prospective customers much earlier using channels and resources not traditionally thought of as marketing (or sales.) In addition the relationship needs to be tracked consistently from marketing to sales to finance, provisioning/fulfillment, support, etc - i.e. the customer data record must be uniformly defined and managed across departments. All the information associated with a customer record must be available to everyone involved in the process. It is a massive undertaking on par with the supply chain automation effort, but the reward is being months ahead of your competitors in terms of customer contact and relationship building – a key competitive advantage that will be very hard to displace.

Tuesday, October 11, 2011

Spark by Marketo

Marketo announced a new sub-brand called Spark targeted at the SMB market. It's a testament to how successfully Marketo has transitioned from SMB to the enterprise space that it has to go back and offer a new brand for what used to be its primary market. The demand for marketing automation at large enterprises is driving rapid growth for all marketing automation companies, and Marketo is no exception. So much so that smaller prospects are starting to perceive the company and its target market as having outgrown them. Not so.
SMB is intrinsic to Marketo's heritage and the company has no intention of walking away. The Spark offering is more than just a "lite" version of its flagship product. The idea behind Spark is that it is a bundle of software and services to help small companies quickly adopt and become expert in the use of modern marketing automation technology. Marketo is dedicating expert staff to offer training, support, and mentoring for its Spark customers. The importance of this cannot be overstated as marketing automation requires a higher level of sophistication, analytical ability, and business process expertise than most small companies have in their marketing departments.
The challenge for Marketo will be managing Spark as a sustainable business model. Typically the enterprise segment is much more profitable for software companies (SaaS or not). Large companies have more money, bigger projects, and greater potential for expansion into other business units. However, Marketo knows the SMB business well and has a subscription model revenue stream that's ramping up to the point where it can afford to support the launch of a down market offering until it starts to pay for itself. It is the rare company that can serve both segments well, but Marketo has clearly separated the two teams internally which IDC believes is absolutely critical for success.

Wednesday, September 21, 2011

Key Findings From IDC's 2011 Tech Marketing Benchmarks Study

Between May 15th and July 31st, 2011, IDC's CMO Advisory Group fielded its 9th annual Tech Marketing Benchmarks Study. More than 100 tech companies representing about $850B in revenue responded, making this the CMO Advisory Group's most successful benchmarking study to date. The average revenue for companies in this data set is $9.5B, and these data include companies ranging from less than $500M to about $100B. Technology hardware, software, and services companies with both direct and indirect channel strategies are represented in the database. The following are some key findings from IDC's 2011 Tech Marketing Benchmarks Study.

Marketing investment growth in 2011 is lagging revenue growth at 3.5% and 6.5% respectively. Moreover, the 3.5% marketing investment change figure is significantly lower than tech marketer's sentiments in January of 2011, when they reported expectations of an 8% increase to marketing budgets. In past years, IDC's CMO Advisory Group has observed that marketing investment growth generally tracks revenue growth, but that trend has not re-emerged since the recession. Larger companies in particular are experiencing weak marketing investment growth. Companies with revenues between $3B and $9.9B are reporting marketing investment changes of only 2.1%, and companies with revenues greater than $10B are even less at 1.7%. Smaller companies are investing more heavily; companies with less than $500M, between $500M and $999M, and $3B to $2.9B in revenues have average marketing investment changes of 10%, 8.1%, and 7%. Services companies have the weakest marketing investment growth in 2011, however, with an average of -1%.

IDC's CMO Advisory Service tracks a series of key performance indicators that marketing executives should monitor closely in their own organizations. The following are some key observations on changes to top-line key performance indicators in 2011:
  • Marketing Budget Ratios, which are calculated by dividing total marketing spend by revenue, are decreasing in 2011 because revenue growth is outpacing revenue growth.
  •  IDC's Awareness-Demand Ratio, which calculates the total amount of marketing spend dedicated to awareness building activities versus demand generating activities is at 52%, which means that the focus this year has shifted to Awareness. Last year, marketers were favoring Demand.
  •  Program-to-People Ratios, which show the percentage of total marketing spend that is directed towards programs, have increased year over year to 60%. The main contributor to the increase in this ratio in 2011 is the increase in Awareness generating activities such as Advertising, which are more program-spend heavy.

Digital Marketing Program spend--defined as display ads, search ads, email marketing, digital events, company web sites, search engine optimization, and social networks--continues to increase rapidly. In 2010 digital marketing accounted for 19.3% of total program spend, but in 2011 this number has risen to 26.4%. Advertising program spend, which includes display ads and search ads in addition to traditional advertising mediums, has also increased year over year. This finding is consistent with the overall increase in Awareness activities. Marketing organizations are also allocating more spend to web site content and development this year, which is now 8.2% of the total marketing program spend mix.
IDC's CMO Advisory Service has also observed changes to marketing staff allocations in 2011, see below for some highlights:

·    Web site content and development is not only a key area of program spend investment--marketing departments have also increased their staff allocations in this area to 5.6%. IDC believes that this is a positive change, since IDC's 2011 Buyer Experience Study revealed that the first place prospects turn to for information is a company's web site.
·      Marketing operations has experienced growth for a number of years, but this trend seems to be leveling off as the position matures. Marketing operations currently accounts for 5.3% of total marketing staff which is a decrease from last year's allocation. IDC does not believe that companies are actually reducing marketing operations staff; the cause of the year over year decrease is a combination of other staffing categories increasing more rapidly and an IDC taxonomy change to include a new category called marketing IT.
·       The CMO Advisory Group has been championing sales enablement for the past few years. In 2010 sales enablement accounted for 3.1% of the total staff mix, but since then this allocation has risen to 3.7%.

These are only a few of the findings uncovered by IDC's 2011 Tech Marketing Benchmarks Study. For more information, or to participate in upcoming IDC studies please contact Joseph Ferrantino at

Tuesday, September 20, 2011

The Customer Cloud: The Killer App for the Social Enterprise

The old two-step marketing and sales model for customer creation is dead. Today we have a three part model: Socializing, Marketing, and Sales – with socializing taking on increasing importance and marketing being redefined in the process. That’s a good thing for customers but it makes the market more competitive for sellers. Companies have to seek out and engage with both existing and potential customers in radically new ways outside of explicit business contexts with resources previously not thought of as customer facing.
This activity is going on today at a furious pace, but it is highly fragmented. With the introduction by of and the social ready rebuild of at Dreamforce, as well their Chatter and CRM capabilities, customer interactions will come together in what is emerging as the Customer Cloud – the first killer app for the social enterprise.
The Customer Cloud will evolve into the source of record for all account and contact data because it can provide the Holy Grail of the customer creation process – the unified customer record. As a result, it will be the centering point for all customer interactions. It is definitive because:
  • It is self-regulating – contacts update their own data via social tools such as LinkedIn, Facebook, etc. greatly improving data accuracy and timeliness
  • It is real time – individuals have a vested interest in updating their social profiles asap
  • It has practically infinite scalability and reach.
  • It is equally available to all customer facing functions from marketing to sales, as well as fulfillment, finance, service and support, etc.
  • It provides insight into relationships – account contacts can be sustained and expanded even in the face of departures, and corporate hierarchies can be better understood and tracked.

A unified customer record provides the basis for breaking down the discrepancies, decay, and dysfunction that currently plague (or prevent the implementation of) enterprise customer creation processes, especially in B2B. It offers companies the potential to coordinate all of their customer facing activities around a single source of information – the lack of which has been the Achilles Heel in all previous efforts in CRM, data warehousing, and other valiant attempts to unify customer facing functions.
Thus at Dreamforce, the announcements of and the social data readiness of are major strategic milestones for With the addition of the Radian 6 social monitoring last year, this neatly rounds out a very strong play for leadership in the battle to deliver the Customer Cloud and provide the customer facing infrastructure of the future that will be build upon it.

Thursday, August 18, 2011

The Four Stages of Data Driven Marketing

Who is your customer? It is a deceptively complex question that a surprising number of B2B companies cannot answer. The difficulty stems from several causes:
  • Inconsistent definitions for customer attributes (account name, industry, segment, organizational hierarchy, contact name/email, etc.)
  • Fragmentation of the data across multiple databases and applications
  • Departmental perspectives on customer relationships
  • Lack of an enterprise customer data management approach
The impact of all this is a severe slow down in decision making and an inability to optimize critical processes in customer facing functions, most poignantly in marketing and sales. The solution is to define customer creation as an enterprise process – not something that happens only in marketing and/or sales – and the implementation of data standards and governance to support it. This enables marketing to be data driven, but there are four distinct stages of data driven marketing and not all of them lead to success:
1. Stage One – Fast Failure. This stage is characterized by response-based decision making. Marketing decisions are based on response data from marketing systems – web hits, landing page registrations, and myriads of other campaign performance data. All of this is important, but leaves marketing unable to tie any of its activities to key business metrics such as revenue performance.
2. Stage Two – Slow Failure. This stage is introduces conversion-based decision making. Marketing and sales systems are integrated along with customer data definitions and structures. This provides a quantum leap forward for both sales and marketing. However, marketing is still one degree of separation from linking its activities to business performance. Sales pipeline is a good proxy but it is no substitute for the critical business data that comes from the next two stages.
3. Stage Three – Measurable Success. At this stage marketing finally is able to measure contribution to revenue. However, it is not enough to rely on initial contract data alone. Account A that closed for $1 million and account B that also closed for $1 million may be very different in terms of margin and lifetime value. Account A may have cost $250,000 to sell, install, and support where account B cost $500,000. If that's the end of the data set, then of course marketing should bring on more account A profiles.
4. Stage Four – Market Mastery. At this stage marketing understands the long term profitability of customer relationships. If over time account A buys nothing more and account B upgrades and expands its investment by millions of dollars at improving margins, marketing can refine its activities accordingly and begin to drive overall business performance.
The key lesson is that marketing is greatly influenced by the depth of data available to it. At each stage in IDC's data driven marketing model, new data can completely change all facets of marketing activity from strategic targeting and messaging to tactical campaign investment and roll out plans. As a result, it is crucial for companies to get to Stage Three as quickly as possible and remain ahead of competitors on the journey to Stage Four.

Thursday, July 28, 2011

Making the Most of Channel Marketing

A recent IDC study of large IT companies found that, on average, channel revenue was $3.7 billion. The average internal channel marketing staff of 53 managed nearly 22,000 partners, equating to $12 million of revenue per internal staff but only half a million dollar per partner.
Most shocking from the study -- these organizations have an average of approximately 15,000 inactive partners. Active partners only constitute 31% of the channel mix, with the remaining 69% being inactive. Given the expense involved in recruiting channel partners and on-boarding their first sales, it is in the vendor’s best interest to identify the best partners across the entire partner population and enable them to step-up to higher levels of sales performance.

Channel Marketing Service and Automation Solutions

The traditional method of assigning business development managers to the top 5% of partners, and others to groups of the second 15% of partners, is not scalable. The business development manager assignment is a fixed cost that requires 35%+ growth rates – and it is hard to predict the winners. As shown in the figure below, in a recent IDC study channel managers rated the effectiveness of BDMs and customized channel marketing programs statistically identical in terms of their effectiveness at producing ROI. Providing access to customized channel marketing to all partners – including the bottom 80% - amortizes costs over a larger revenue base Customized channel marketing enables the winners to self-select and payback is driven by collective success.
Most Effective Resources
Source: IDC, The Importance of Customized Channel Marketing, 2011. n=22
Customized channel marketing programs can reduce the complexity of marketing through partners by streamlining channel marketing processes and increasing vendor ability to reach more partners simultaneously. Redundancy can be eliminated, as distribution of messages, campaigns, programs and promotions become part of a menu of interchangeable, additive activities.
Using social network best practices, feedback from partners can be used to determine which activities work best from a partner perspective, and which activities need to be developed. This feedback is equally valuable for vendors and partners to see which customizable channel marketing activities are most effective. For the majority of channel partners, customized channel marketing programs offer much needed help in building their marketing plan.
The full report can be downloaded here.

Wednesday, June 8, 2011

Market Intelligence on the Move

Transformation continues to sweep its way through the marketing function and no "department" within the function is exempt from change. For this month's CMO Advisor newsletter, we are now focused on the market intelligence area.

Compared to its peer departments, Market Intelligence (MI) enjoys relative stability, as measured by the steadiness of the job description, job security and tenure, and budgets. But there is a groundswell of change -- or at least an expressed desire for change. In a recent survey of MI professionals, IDC observes that MI executives are seeking to increase the value they deliver to the organizations they support, and to deliver that value with greater efficiency.

Indeed, it is the sentiment of executives that IDC interviewed that "The market intelligence organization will change more in the next 3 years than it has changed in the past 10 years". That is a bold statement. To peel it back, here are the top areas of change that the MI profession is seeking to transform.

  • MI executives want to transform their client engagement model and become more "proactive". In IDC's opinion, this sentiment stems from MI's traditional challenge of being a demand-driven organization that is constantly working in "response mode" to numerous requests from their internal customers.
  • The MI area seeks to increase its contributions to corporate strategy and sales enablement.
  • From a process and technology standpoint, MI would like to improve the information "value chain", from data sourcing to information delivery.
  • MI seeks to provide greater support for long-range business planning.
  • MI seeks to demonstrate more visible / tangible business value for its work output.

Our sense is that MI professionals have a good future vision of their role; one where they are highly efficient, driving strategic as well as tactical business value, and are highly valued by their internal clients across the organization for information and "insights" that positively influence business outcomes.

There are two areas that I believe are the best place for MI Transformation steps to begin. These are echoed by my colleagues at IDC and also validated by our surveys with MI executives. I will describe these and also take a bit of "analyst license" and provide some operational suggestions.

1. Improving support for corporate strategy and long term business decisions. I think that MI professionals would love to get out of the heavy load of short-time, fast response calls for bits and bites of data. What they would like to do is be involved in longer term, meatier analysis that is served at higher levels in the organization and that support important business outcomes. But MI is constrained by their people and processes.
The process changes I would suggest would be first; provide more technology and training for self-service for the run-rate of short and tactical requests. Second, consider greater off-shoring or right-shoring of the "back office" analysis roles within MI, and thereby create more roles for higher level "management – consulting" type MI personnel who can interface with executives for the longer-cycle, more complex projects.

By the way, on the right-shoring of MI tasks (moving the non-client facing anayltical tasks to lower cost countries), many of the largest tech vendors are on this march right now.

2. Sales Enablement. In IDC's many surveys of Selling Productivity, we see that very high salaried sales executives spend a large amount of their time searching for or re-creating information that will support their preparation. OK, so what function in the organization that is NOT the sales function is good at finding and organizing and delivering information? Market Intelligence! I think it would be a natural for the MI area to provide greater and more cost effective support for many sales-preparation activities. As an example, almost every MI function has a portal for serving and managing information assets. Why couldn't those same portals – or a version thereof – be used for sales assets? The time spent on searching for information assets is one of the most wasted and most common activities of salespeople.

Recently, I have been writing on similar transformations in related business units such as marketing operations, and we are also seeing some related changes taking place within sales operations. For every part of the marketing organization, the pressure is on to be efficient and drive positive business outcomes. IDC believes that there is a bright future ahead for MI leaders (and their teams) that understand the transformation that is under way and can begin that journey with concrete and bold new steps.

Rich Vancil

Friday, April 15, 2011

The Marketing Operations Role: Where To, From Here?

Looking Back, Briefly:

Marketing Operations has been the fastest growing job role in tech marketing over the past few years. When IDC first started its surveys of marketing spend and staffing back in 2003, Marketing Operations wasn't even on the job roster at most organizations. Today, the "MO" role represents about 6.5% of the total staff and it is the fourth largest job "category" for a large marketing department. So, what happened? The rise of this role was the response of the CMO to the general condemnation that marketing was not acting like a business. The Marketing area was perceived as offering up no accounting, and no accountability... but also offering no end to the pleas for more budget. And so Marketing Operations as the "staff accountant" role started to turn up at the larger and more complex marketing organizations. As the MO role really took off, the general job description would include four areas: budgeting and planning; measurement and reporting; technology deployment (marketing automation technology); and process improvement.

Looking at Today:

Of the four job areas described above, the most problematic, right now, is technology. There is a vast new set of IT tools available for marketing organizations: Marketing Resource Management; Content Management; Performance measurement; Analytics; Social Media Platforms and Monitoring; and the list goes on. The problem is that in general, marketing organizations do not have the staff skill sets to effectively evaluate, deploy and use these tools. In our 2011 Role Survey of Marketing Operations professionals, respondents said that their number one problem today is the sorry state of the "Automation Infrastructure" and that their number one goal is "Finding the People that know how to fix this". There is an equally large and underlying issue "below" the technology level, and this is the database and data management issue. With so much marketing automation now in place, the first output that this new technology is producing is crystal-clear visibility to the fact that: "Wow, we have REALLY POOR customer records". And so a very major issue for the Marketing Operations role is finding the database-savvy personnel who can help with this challenge.

Looking Forward:

Given how fast the MO role has grown and given the significant challenges of today, I want to offer three areas of "Essential Guidance" for CMO's and their MO "lieutenants". The first step is to re-visit the job description. In a series of executive interviews that I recently completed, many MO professionals complained that "Our Marketing Operations area has become the dumping-ground for all the unwanted marketing tasks that no one else wants to do!". Now, whose fault is that?

Job number one, therefore, is for the CMO with the MO team to define and then re-articulate its role to other parts of marketing; so that it does NOT become the dumping-ground! Job number two is to then conduct an "Activity assessment" of what the MO personnel are actually doing, as held against that job description This may all sound like a junior league management exercise but my strong suspicion is that because the role has grown SO fast over the past four years that it MAY be the case that role clarity and scope are due for a closer look. This assessment should also include the organizational placement of the MO role. Why are so many of our MO staff at corporate headquarters? Why are these staff not within our product lines and in the field? These are questions worth asking. Job number three is then to ask "Where do we go from here?" regarding the role and staffing. I believe that the "future" of MO role effectiveness and impact is not in more staff as measured by headcount. In fact, the MO role as a percentage of staff is likely reaching an upper limit at this point. My hunch is that it may "cap out" at perhaps 8 to 10% of staff. However, the MO roles of tomorrow will be more strategic than they are today. The nature of the role will evolve. While today's MO staff are largely involved with individual execution (within the job description mentioned previously), the MO role of the future will be more about educating and infusing other parts of the marketing organization with a marketing process-excellence mentality, skills, and tools. In this way, the MO staff will become a more "leveraged" function. This leverage will include improving the influence and impact of MO across the entire marketing organization, not just at the corporate marketing location(s). As you further deploy the MO role, think about not hiring more Marketing Operations staff....think about driving the existing "smarts" and influence of MO down and through your entire marketing organization.

-- Rich Vancil

Monday, March 21, 2011

Essential Guidance for 2011

Building the Intelligent Sales & Marketing Organization.

IDC's best and brightest analyst teams were assembled in Boston and San Jose during the past two weeks to present their latest insight and guidance for creating the global intelligent economy; focusing specifically on the impact of social, mobile and virtual technologies on this vision. Morning speakers discussed how to position for the third wave of IT industry growth driven by mobility, clouds, big data and intelligent industries. In the afternoon, one of the many tracks included presentations by IDC's Sales and Marketing Advisory team about the vision of the intelligent sales and marketing organization and they key success factors required to achieve this vision. A few key take-aways from each of the presentations in this track are provided below.

Executing for Marketing Excellence in 2011 by Rich Vancil:

Start – or accelerate – your social business transformation
 With communication cycle-times dropping and the purchase decision influence continue to shift to buyers, a shift to "social business" is imperative for your success;
 41% of businesses have already implemented an enterprise social software solution
 Focus on building "peer-to-peer" connections, not "vendor-to-customer"
Make a deeper investment in intelligence and operations
 Drive marketing operations and market intelligence initiatives and investment down through the organization, across the business units and into the regions
 Better establish and govern the processes for sales enablement and data quality to improve sales intelligence and their ability to leverage insight and resources.
Build a better budget (IDC CMO and Sales Advisory clients should refer to IDC's combined marketing and sales investment benchmarks data)
 As marketing budgets recover, allocate new investments with the needs of a new reality – digital marketing is here to stay, and is only increasing in its ability to drive awareness building and demand generation; and greater alignment with sales will require continued investment in campaign management, sales enablement and lead management extending into what has traditionally been considered sales' domain.

Building the Intelligence Sales Organization by Michael Gerard:

Listen to your buyers:
 Technology buyers indicated a desire to reduce their buying cycle time by 40%.
 Two-thirds of the delay between desire vs. actual buying cycle time is the result of buyers' internal funding and decision-making processes; however, vendors' sales teams can impact this part of the delay!

Drive sales to be more strategic by investing in a next generation sales operations team which focuses on – sales strategy, productivity and automation. Team with marketing, your learning and development organization and IT to gaps in sales intelligence – customer intelligence for sales and sales enablement.

Push the limits on sales performance measurement
 Establish a sales analyst function to better measure sales productivity
 Improve data quality with the aid of other parts of the organization
 Analyze the sales pipeline, rep performance and the impact of sales productivity improvement initiatives to help impact strategic and tactical decision-making

The Sales & Marketing Automation Imperative by Gerry Murray:

o Investment in sales and marketing automation continues to increase as companies recognize the value of technology in adapting to new market realities
o However, sales and marketing need to better align across their own teams as well with other parts of the organization to create a more holistic experience for customers (e.g., marketing, sales, finance, services, support)
o Your company should establish a customer data czar, with team members in sales and marketing, to execute and govern data quality processes.
o Evolve to a more comprehensive sales enablement platform (i.e., beyond a content portal) centered on integrated customer experience management

Clients of IDC's Sales Advisory Service [] and CMO Advisory Service [] should contact us for a full overview of any of these areas as well as access to our latest research schedule and listing of published research.

Please do provide any comments on this topic below or reach out to us to participate in upcoming sales and marketing research.

Tuesday, February 8, 2011

Update on Social Business Transformation

Social Media in the B2B world has got a bit of a bad rap right now. Let’s frame the problem. The obstacles might be spoken (or whispered) as:

• "These new communication platforms, and this social media movement within our company…is …who knows? Well, let’s just keep an eye on it. Let’s see what develops. But for the time being these are…
• NOT the valid business-communications media we should be using to communicate with the serious audience we wish to reach. "

These obstacles may be over-observed.

Let’s broaden the definition and talk not about Social Media, but about "Social Business Transformation". The real Transformation lies not in what you see: with Twitter or LinkedIn or FaceBook. For personal networking, these tools may be the whole game: you are involved in connections that are one or two links deep. But at the enterprise level these tools are merely the surface layer. Social Business Transformation is about deep communications adaptation; changes in culture; new rules of engagement; shifts in organizational centers-of-influence; and then (lastly) the associated tools and technologies that enable communications on the surface.

IDC is digging deeper to uncover this major trend and transformation in business communications. "Social" will continue to press its way into the enterprise - into our lives as business professionals.

With my research partner and IDC’s Social Business expert Erin Traudt, IDC has just completed a series of interviews with IBM about their own Social Business Transformation We are impressed with IBM’s accomplishments.

To boil it down, here are three observations for Social Business Transformation success:

1. Tap in to the Professional Ego.

You say that you enter into a web community because you want to "connect". But I would suggest that most of the energy behind any personal or business Social Media activity has a strong element of: "Here I am!" None of us would enter a single Social keystroke unless we wanted to satisfy an ego need. The need to feel important. And, (fingers-crossed), the desire to be recognized! By extension, would not the math argue that if we spend nine or ten hours each day at the workplace, that this dynamic should be a more powerful force in the business world ("Look at my great new technical workaround!") than in the personal world ("Look at my cool new postcard collection!")

The IBM developerWorks website is a technical resource for the IBM developer community. Established in 2000, it is now one of the largest IBM sites, with over 4 million unique visitors per month. It is a resource where developers in the IBM ecosystem offer their knowledge and skills. About one-half of the content on this vast site is posted from outside of IBM: developers, partners, and customers. Why does it work? Professional ego! But it takes time and investment. developerWorks has been an eleven-year work-in-progress for IBM.

2. You can’t force interaction.

The viable and vibrant IBM communities we have studied are years in the making. It takes significant time and investment to devlop a community to the point where it is somewhat self-sustaining. One IBM executive noted that Community development is like planting a tree where the first year of nurturing, watering and pruning requires almost constant attention. And more than one IBM community that we examined was several years underway and still under active investment mode. It is also notable that each Community only becomes self-sustaining because of the external contributions (see above). Our estimate would be that for every one community that is self sustaining, that there are hundreds in "push" mode (hoping that our voices will be heard and enjoined).

"If the people don’t want to come, all the marketing in the world won’t stop them".

3. Construct and Adhere to Policy.

This is interesting. I think we all are a bit attracted to the Social Media because we can express ourselves in a way that allows us to put our corporate toes across the corporate line, if even for an instant! However, the successful sites that are viable today are here in part to some basic and sensible policing. We have to. We all need to protect our customers, to do the best by them.

Our sense is that sustained and successful Social Business Transformation efforts are going to be more powerful than we have ever imagined. Good examples (such as with IBM) are already in place. Of course there are challenges; but these obstacles will over time be trumped by the benefits (see Figures).
How is your company coming along on its own Social Business Transformation?
- Rich Vancil