MOM’S THE WORD
THE CORE
How brand leaders are using Marketing Operations Management tools to build the marketing technology infrastructure – and why you need to get on board
By Chris Lynn
Marketing executives talk about brand equity, retention, awareness and share – but they have not done a good job of linking the money they spend to what gets discussed in the boardroom: shareholder value. And in measuring the contribution of different parts of a business to its success or failure, money is the only common currency.
Boards, driven by both regulatory and share price motivations, are demanding more accountability and transparency. For CMOs, this translates into a need to demonstrate success in their highest calling: selling more valuable stuff to more people more often, and proving that they are doing it more efficiently than ever before.
So Marketing, that last bastion of manual work processes, is finally succumbing to the use of information technology. CEOs have implemented CRM (customer relationship management) applications to measure and manage sales and service performance and used ERP (enterprise resource planning) tools to improve operations and procurement. They are now turning their attention to the marketing supply chain, and the CMO should be seen as leading the change rather than being dragged unwillingly into it.
The improvement of marketing efficiency and effectiveness is where technology – and centralized procurement, of which we’ll talk more later – can help. Of course, marketing groups are no strangers to technology, especially at the desktop level. And many of the tools that fall under the general heading of Marketing Operations Management (variously called Marketing Automation or Marketing Resource Management [CMO, September]) have been around for some years. But the use of enterprise-scale software, linked in an integrated fashion to deliver measurable value to the business, is a recent phenomenon.
MOM is a broad category whose components include: DAM (digital asset management); workflow and collaboration tools; project management, planning and budgeting tools; campaign management; CRM; a “dashboard” of marketing key performance indicators (KPIs); business intelligence/analysis tools to support market segmentation and customer analysis; personalized and general print collateral, web and email publishing tools; and elements of ERP.
Most major corporations already have ERP and CRM systems. Retailers, financial services and consumer packaged goods companies depend increasingly on the insights provided by their business intelligence systems. But only now are we seeing widespread use of a brand asset library (owned and run by the corporation, not an agency or contractor). And only now are we seeing a wider adoption of collaboration, campaign management and budgeting tools that go beyond Excel and Microsoft Project.
An example is Bank of America’s deployment of software developer Aprimo’s MOM tools. The bank deployed the first of these, a market-planning module to systematize the planning process, in 2001. The software ensures that objectives and targeting are clearly defined and communicated to team members and business partners, and it has improved cycle times in approving communications briefs. The bank also uses a production management module to handle workflow and collaboration, project milestones and real-time expense management. Finally, it has a DAM system to ensure that the correct versions of brand-related media assets are available to all the people involved in creating and managing campaigns.
According to BofA VP Keith Gordon, the bank has spent about $750,000 annually on the system over the past three years, and has seen a strong ROI through efficiency gains. With 1,300 users, the company is doing a better job of managing thousands of marketing activities – reducing the cycle time for approvals by 32 percent, cutting invoice processing time from 47 days to 13 (for a total of 20,000 invoices in 2003), rationalizing its vendors of marketing services (trimming the number of research vendors it uses, for example, from 20 companies to four) and halving the time taken for developing marketing budgets. These are the measurable benefits – and as an adopter of Six Sigma process improvement methods, BofA is keen on measurements. But Gordon also cites less easily quantifiable benefits – better collaboration, breaking down silos and easier deployment of best practices around the company – which also contribute to the bottom line.
North of the border, Canada’s Scotiabank is using a combination of SAS Analytics with IBM’s DB2 database and Unica’s Affinium campaign management tools. These technologies are used to improve its effectiveness in delivering marketing campaigns that drive revenue. According to the bank’s direct marketing guru, Tom McTeague, more than 600 million transactions are analyzed weekly for “out of pattern” activities. This not only enables the bank to comply with government requirements to check for money-laundering, but it also allows marketers to recognize and predict important events in their customers’ lives, like buying a new house or paying off a mortgage. The integrated system generates a lead report for the appropriate branches and creates a personalized mailer to the consumer that congratulates them, for example, on making their last mortgage payment and invites them to discuss ways to invest their freed-up income.
Scotiabank runs 40 to 50 predictive response models monthly against the transaction data, generating propensity scores for the customer to respond to a mailing and a sales call, identifying the marginal cost and thus the expected profitability of the offer. As McTeague points out, the objective is not to deliver the bank’s sales offers to the right customers, but rather the right offers through the right channels to the right customers. The system centralizes the lead- and offer-development process while keeping the control of the relationship in the hands of the front-line branch staff. The initiative, in which Scotiabank has invested $2 million to date, has brought in $1 billion in incremental business.
For companies that blanch at the size of the investment or the prospect of another enterprise software deployment, hosted applications are an option. Just as CRM capability can be rented monthly from application solution providers such as Salesforce.com, so can MOM tools be leased from companies including Mtivity and Assetlink. Mtivity, for example, focuses on providing tools to smooth the workflow in creative design and print production, especially for personalized mailings. One of its customers, DLL, calculated savings of UK₤580,000 per year in digital print costs and staff time, at an annual cost of under UK₤50,000 for the system – a payback likely to warm the heart of the most jaded CFO.
Forrester Research analysts say MOM is the foundation of a badly needed “marketing technology backbone,” built around customer data, that will support an integrated approach to strategy, development and measurement across all parts of the marketing mix. This infrastructure – and the central control it will bring – will drive the transformation of marketing from its hand-tooled origins to a measurable, efficient set of processes. MOM doesn’t negate the value of creativity – but it does weigh creativity against cost and other considerations as never before.
Who should take the lead in buying into MOM? Software vendors tend to talk to the CIO when introducing enterprise software. But as I noted earlier, the CMO needs to lead the charge on process improvements in marketing, working with IT to proactively seek solutions that enable the improvements. In too many businesses, however, it’s a case of IT being from Mars and Marketing from Venus. Here’s a prediction: leading organizations will create a role of Vice President of Marketing Technology, combining the strengths of both IT and marketing to examine ways to create, implement and measure great campaigns with technology.
The promise of MOM is of a better and more measurable return on marketing investments. Done right, MOM will help the CMO get a seat at the boardroom table – right next to his new best friend, the CIO.
Chris Lynn is a principal of Hillam Technology Partners LLC (www.hillamtech.com), a consulting firm specializing in technologies for process improvement in marketing and publishing. He can be reached at chris@hillamtech.com. Send comments to cmomagazine@cxo.com.