In a recent report, my colleague Robert Brosnan correctly spotlights that marketers require ever more technology to capture, integrate, analyze, and apply customer data to marketing programs. Indeed, the technology portfolio that marketing leaders must understand and manage is exploding. Marketers typically have a portfolio of technology assets to support marketing planning, marketing asset management, campaign management, segmentation, and predicative modeling. And most marketers work with online marketing tools for email, mobile, social, and web analytics.
Rob recommends that marketers establish an enterprisewide marketing technology office (MTO) to ease and take advantage of technology development. The office, working through a chief marketing technology strategist, sets marketing technology strategy, makes the business case for embedding new technology within marketing programs, and manages technology-related partnerships. The marketing technology strategy should summarize the road map for how you plan to employ the technologies necessary to understand and engage more deeply with your target customers.
Forrester defines the marketing technology road map as:
A plan that matches short-term and long-term marketing goals with specific technology solutions to help meet those goals.
So how do you formulate the marketing technology strategy and road map?
Cross-channel campaign management (CCCM) tools face mounting pressure to evolve in the face of continuous, interactive, customer-led dialogue. CCCM capabilities have matured dramatically, but marketers often ask, “Are the applications resilient enough to meet the massive challenges marketing organizations face today?”
Forrester clients can see how much progress vendors have made in “The Forrester Wave™: Cross-Channel Campaign Management, Q1 2012”. We identified, researched, and scored 12 products from 11 providers: Alterian, Aprimo, ExactTarget, IBM, Infor, Neolane, Oracle, Pitney Bowes, Responsys, SAP, and SAS. Our approach consisted of an 81-criteria evaluation; reference calls and online surveys of 156 companies; executive briefings; and product demonstrations.
We found that marketers need CCCM applications to:
Manage a complex array of marketing processes. The campaign design process alone is elaborate – and happily vendors provide strong, yet simple, design tools. Yet CCCM tools also aid marketers in planning (budgeting, spend management, and calendaring), analysis, tactical execution, and reporting.
Develop more strengths in digital and emerging media. Although most vendors have extended their applications, many client references told us that vendors need to clarify their approaches to social, local, and mobile applications, and how real-time decisioning can be applied beyond offer management.
Rarely do moments like this occur. Last week, while watching the evening news (yes, I still watch news), I was horrified by the continued coverage of the cruise ship disaster in Italy. But, while watching the coverage, I was wading through my mail and opened a direct mail piece (also a rare event) that I had just received. To my horror, I found an offer from American Express to sign up for the Costa Concordia cruise. Worse still, it offered to “immerse” me in a truly European experience. To make things even worse, notice the typo in the headline?
While marketers strive to achieve messaging relevance that would make you stop what you’re doing and take notice, this execution in particular was a case of bad timing and lack of foresight into the implications of marketing campaigns already in flight.
What lessons does this highlight for customer intelligence (CI)?
Agility. In our research, we find that direct mail is one of the top channels that CI professionals favor over other channels. Despite CI’s heavy use of direct mail, this faux pas no doubt occurred because of the cycle time between the cruise ship disaster and the direct mail drop.
CI Pros: Speed up CI processes to provide greater organizational value. Apply principles of agile development to CI, especially to channels that are not inherently real-time, such as direct mail in this case.
ExactTarget filed an S-1 last Wednesday, November 23, the first step towards an initial public offering (IPO) by the end of March, 2012.1 The company grew substantially over the past several years and is tracking a 55% growth rate in 2011. ExactTarget now services about 4,600 direct clients and reports $148 million in revenue through September 30, 2011. Congratulations to Scott Dorsey and his team for guiding the company to this point.
How will ExactTarget's IPO benefit CI Pros? The IPO can:
Provide additional capital for research and development. The funds ExactTarget will raise through the IPO will help transform the company from an email service provider (ESP) into a full-fledged marketing technology platform. Increased R&D will allow the company to evolve through organic development and acquisitions. Both moves will help it to fill out its cross-channel campaign management and Customer Intelligence offerings. CI Professionals at mid-to-large enterprises should expect to see the company move more aggressively to offer enhanced enterprise marketing capabilities.
Enhance attractiveness to partners. ExactTarget's IMH has yet to catch on with heavy hitters in analytics, offline channel management, and marketing resource or operations management.2 The quarterly and annual disclosure requirements on ExactTarget could help clarify the company's plans to potential partners and assuage concerns about future competition. Stronger partnerships will lead to additional IMH applications for CI Pros.
But if you use the tablet to post reviews of Italian restaurants on Yelp, Amazon would merely collect that data, bundle it with the fact that a lot of customers in your community seemed to be favorably reviewing Italian restaurants, and then strike a deal with one restaurant to offer discounts, which it would e-mail to you. Some customers might feel tracked; others might not even notice.
David's example is certainly worthy of consideration. Building a database of targeted offers and triggered campaigns from aggregated browse behavior is one way for Amazon to extract value from Silk. It's clearly a striking example for privacy advocates, but it's not the whole story.
Aside from the Customer Intelligence advantages, Amazon's Silk browser also provides the retailer with competitive intelligence (the other CI?). Amazon can watch for products or product combinations purchased on competitor websites, then optimize its merchandise to match or beat those competitors. Besting other retailers doesn't require it to track individual Kindle Fire users or target them through seemingly creepy direct marketing. Instead it can continue to do what it does best -- optimizing its supply chain and catalog -- without appearing to overstep customers' privacy expectations.
The competitive issues raised by Silk are as critical as the individual privacy concerns.
Are you a retailer who competes with Amazon? What should CI professionals do to combat Amazon's move?
The new Amazon Silk promises to speed tablet web browsing. It also provides Amazon's core business with a secret weapon against other retailers. Amazon Silk is essentially a browser that, by default, routes all traffic through a proxy server. Amazon's back end consolidates multiple calls for images, libraries, and cookies into a single request. The proxy can even pre-fetch future page requests by users (think of search results pages).
How does Amazon Silk provide a competitive advantage to Amazon? Each Kindle Fire device is registered with an individual who is known to and maintains an extensive purchase history with Amazon. Amazon Silk allows Amazon to collect the users' browse behavior beyond Amazon-owned web properties. Regardless of where customers make purchases and whether those products are digital or material, Amazon can use the data collected to its advantage.
Amazon's new layer of Customer Intelligence permits it to:
Improve customer recognition. Amazon can maintain customer identity without facing the problems of cookie deletion or Flash LSOs. Should users access Twitter or Facebook through the browser, Amazon will have access to social identity as well.
Several recent Forrester reports home in on what we call “The Age Of The Customer” in which firms must seek to become customer-obsessed to build differentiation and loyalty. Those firms that embrace this will ramp up investment in four priority areas: 1) real-time customer intelligence; 2) customer experience and customer service; 3) sales channels that deliver customer intelligence; and 4) useful content and interactive marketing. All these needs are technology-infused – wholly dependent on technology and in categories where technology is evolving rapidly. Underlying these investments is the need to master the flow of data about customers: capturing/collecting data about them, analyzing it, distributing to those points of engagement, and, finally, integrating the insights into the customer experience.
Companies can’t succeed at doing this without a close partnership between the business areas leading the charge and IT. The rate of change of your customers, markets, business opportunities, and technology is simply too fast. Forrester is exploring this theme in our first CIO/CMO joint forum.
The reality, though, is companies flounder at this marketing-IT partnership. They flounder because of:
More ideas than capacity. A plethora of desired initiatives are constantly being surfaced – beyond the limits of available budget and with no mechanism to sort them into an achievable plan that IT can deliver on.
Consider the following scenario: It’s a hot summer day and a prospective customer walks into your store to buy an air conditioner. He evaluates several models and then buys one — but not from you. It turns out your competitor located two miles away is offering the same model at a 20% discount. How did he know this? He scanned the product's bar code using the RedLaser app on his iPhone, which displayed several local retailers with lower prices than yours. If he had been willing to wait three days for shipping, he could have purchased the exact same model while standing in your store from an online retailer at a 30% discount.
This type of technology-fueled disruption is affecting all industries, not just retailers. Since the early 1900s, businesses relied on competitive barriers such as manufacturing strength, distribution power, and information mastery. But this is all changing in the age of the customer, where empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.
To compete in the age of the customer, your business must become customer-obsessed. As Forrester’s Josh Bernoff (@jbernoff), SVP of Idea Development and author of Groundswelland Empowered, advocates in his latest research: “The only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers.”
Hello, everyone. As a new analyst on Forrester's Customer Intelligence team, I'm taking over coverage of enterprise marketing platforms. I'll range everywhere from cross-channel campaign management to interaction management to analytics and optimization tools.
I'm thrilled to join Forrester. We live in a time of extraordinary change in the way we conduct marketing. Businesses succeed and fail on how they bring the Customer Intelligence role to bear. I have the enviable task of following Suresh Vittal — who's since taken over the leadership of the CI role — as well as Dave Frankland, Zach Hofer-Shall, Fatemeh Khatibloo, Srividya Sridharan, and Joe Stanhope. As an aside, if we meet up, be sure to ask me the story of how Joe lured me to Forrester.
Extraordinary times imply that extraordinary challenges lurk underneath. CI professionals face the test of integrating data into a holistic view of customers. Recently in my report "CI Teams: Blocking and Tackling Is Not Enough," I dug into why data integration is such an omnipresent issue. As you might expect, a number of factors -- the explosion of touch points, the staggering amounts of data generated, budget, and skills -- contribute to the problem.
Relationship marketers love customer lifetime value (CLV) as a concept because it puts the customer at the core of the marketing investment decision and sneaks a peek into the future worth of the customer. But in reality, arriving at customer lifetime value is often a herculean task and the assortment of CLV approaches available doesn’t make the process any easier.
My latest research, titled “Navigating The Customer Lifetime Value Conundrum,” highlights key considerations for firms who plan to embark on the CLV journey. As a continuation of this research stream, I asked our Customer Intelligence community members what their experience with CLV was and a few interesting points emerged:
Inclusion of intangible value. At what point is it important to account for the intangible, non-transactional value that customers are generating especially through all the emerging channel interactions such as referrals, recommendations, likes, user-generated content, etc.?
Blurry definitions of "best" customers. Traditionally, resources are channeled toward your best customers with positive net present value (NPV). But often there is conflicting choice between investing in high-value, low-usage customers and low-value, high-usage customers. As a result, defining your "best" or "worst" customer/segment is not as obvious as a positive or negative NPV.
Diversity of CLV users. CLV is not just the domain of marketing or customer-focused teams, but it touches other stakeholders in the organizations. How do non-marketing stakeholders such as finance teams in your organization view this metric? Is CLV as important to non-marketing stakeholders as it is to marketing?