Aberdeen Research: The Mobile Channel Unites Marketing and IT


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Statistics show organizational success on the mobile strategy front is directly correlated to close collaboration between marketing and IT groups – more specifically, the alignment of objectives and project strategy across both departments. Read more in this custom research report by the Aberdeen Group.

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Aberdeen Research: The Mobile Channel Unites Marketing and IT

  1. 1. Opposites AttractThe Mobile Channel Unites Marketing and IT July 2011 Andrew Borg, Omer Minkara
  2. 2. July, 2011 Opposites Attract The Mobile Channel Unites Marketing and IT Research BriefOrganizations today are under increasing pressure to grow their marketpresence in the face of heightened market competition and an overcrowded Aberdeen’s Research Briefsand noisy media landscape. In May of 2011, Aberdeen surveyed more than provide a detailed exploration220 end-user organizations for its Metric-Driven Mobile Marketing study, of a key finding from a primaryscheduled for publication in August 2011. The research findings indicate that research study, including key performance indicators, Best-high customer adoption rates of mobile devices, combined with the in-Class insight, and vendorconstant need to increase customer loyalty by improving customer insight.satisfaction are driving organizations to invest in implementing marketingcampaigns and programs through the mobile channel.Forty-four percent (44%) of the companies in this survey with existingmobile marketing activities in place indicate that they are developing mobilesoftware applications ("mobile apps") as a critical part of their efforts toreach consumers through the mobile channel. This Research Brief willoutline the key factors driving marketing and IT roles within an organizationto invest in mobile application development as a key marketing initiative, thecollaborative relationship between marketing and IT in developing thoseapplications, as well as the business processes required to driveorganizational success from these initiatives.Mobile Apps as Market DriversIn May of 2011 Aberdeen surveyed more than 1,300 business executives for Fast Facts: Mobile Apps & Opt- insthe Quarterly Aberdeen Business Review. Mobile app development wasidentified as one of the top priorities for IT spend, with 41% of respondents √ 3-fold Increase:indicating that they had already designated a portion of their IT budget for Respondents who includedmobile app development over the next 12 months. mobile apps as an integral part of their mobile channelAlthough all types of mobile apps are experiencing a high level of interest, mix saw the growth of opt-such as Business-to-Business (B2B) and Business-to-Employee (B2E) apps, ins in their CRM databaseone key driver has been the growth of interest in consumer- or market- increase 3-times morefacing apps. Business-to-Consumer (B2C) mobile apps have emerged as than those whose mix didntpotent weapons in the marketers quiver, in part because they offer several include mobile appsdistinct advantages over more conventional marketing vehicles: they candeliver immediate and measurable benefits relevant to the individual end-user (such as secure remote data access, customized promotional offers,and personalized messages); they can be optimized to take full advantage ofthe capabilities of the specific mobile platform being used; they can trackand adapt to user behavior and geographical location, and they are able toextend a branded User Experience (UX) that can be tightly integrated withThis document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologies provide for objective fact-basedresearch and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrightedby Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent byAberdeen Group, Inc.
  3. 3. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 2the UX experienced through other marketing channels. They are a brandmanagers dream come true.Impact on Company PerformanceAberdeens Metric-Driven Mobile Marketing study uncovered several findings Survey Demographicsrelating to the respondent companys performance; comparing those The demographic breakdowncompanies using mobile apps as an integral part of their mobile marketing of survey respondents by theirprograms to those who do not (Figure 1). role in the organization is as follows:Figure 1: Year-over-Year Performance Improvement √ Marketing: 41%12% 11.4% Using B2C mobile applications √ IT: 11%10% Non-users √ Other (e.g. Operations, Sales): 48% 7.8% 8% 6.1% 6% 4% 1.5% 2% 0% Customer satisfaction Marketing s contribution to company revenue Percent of respondents, n=224 Source: Aberdeen Group, May 2011In the study Aberdeen collected data from more than 220 organizations "Integrating the mobile channelfrom around the globe, including both IT and marketing roles, to identify the into our marketing campaignsKey Performance Indicators (KPIs) most frequently utilized to measure the and programs has beenresults of their mobile marketing initiatives. The top two performance instrumental in growing our top-line revenue, which is a keymeasures indicated by all companies were customer satisfaction (70%) and priority of our organization."marketings contribution to company revenue (61%). This affirms therelevance of these two KPIs in ascertaining the effectiveness of marketing ~ Director of Sales, Largecampaigns executed through the mobile channel. Software Company, USAIn addition to these performance measures, the results showed thatcompanies using mobile apps as integral to their marketing campaigns grewthe number of opt-in subscribers in their prospect/customer database morethan three-times greater than non-users on a year-over-year basis.Goals Driving Mobile Marketing InvestmentsJuxtaposing the data provided by respondents in marketing and IT rolesilluminates the two primary goals that are driving investment in the mobilechannel: increasing top-line revenue, and improving customer retention.Research shows that while both goals are top of mind for marketers and IT© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  4. 4. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 3roles, increasing top-line revenue is a greater focus point for marketers. ITrespondents on the other hand focus comparably more on improvingcustomer retention (Figure 2).Figure 2: Marketing vs. IT Goals60% Marketing roles 50% IT roles50% 45% 41% "Our entire organization is 39%40% being prepared for the mobile market; all our services are30% now available at the convenience of consumers20% through mobile devices." ~ Finance Manager, large media10% company, USA 0% Increase top-line revenue Improve customer retention Percentage of respondents, n=224 Source: Aberdeen Group, May 2011Why does overall business contribution matter to the marketing or ITdepartments, which have historically been viewed as cost centers, notrevenue generators? All departmental budgets have been under significantpressure during the economic downturn, and theres a growing demand toquantify the direct contribution of all functional roles to the overall health ofthe business. This has been a primary driver for the increased interest inaugmenting the gut instinct of the traditional marketer with a moremodern, metric-driven approach. Tracking the improvement in marketingscontribution to company revenue reflects well on the marketers ability toinfluence top-line revenue through specific campaigns and programs.On the other hand, the increase in customer satisfaction we saw in Figure 1enables IT departments to achieve their objectives from supporting mobilemarketing initiatives by improving customer retention as seen in Figure 2.This reinforces the "customer-driven business" maxim, that the mostsuccessful businesses are the ones that best understand the needs of theircustomers, and address them with the right communication at the rightplace at the right time. As a result, they are more likely to hold on to theirmost valuable asset: their customer base. Aberdeens March 2010 studyProviding a 360° View of the Customer - Better Service - Higher Sales reportedthat top performing organizations that successfully managed customerinteractions to ensure customer satisfaction had 22% greater customerretention than all other respondents.IT Needs MarketingAberdeens November 2010 study Enterprise-Grade Mobile Applications:Secure Information When and Where Its Needed described that while the© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  5. 5. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 4marketing function often drives the initiative and sometimes the budget formobile apps, the best practices of top-performing organizations (seesidebar) highlight the crucial role that IT plays (Figure 3).Figure 3: IT-Driven Mobile App Development Processes Best-in-Class Definition IT standards for mobile software deployment 67% The November 2010 Aberdeen 29% report Enterprise-Grade Mobile Applications: Secure InformationCross-functional team to When and Where Its Needed define mobile software 64% defined Best-in-Class requirements 42% performance as follows: Mobile application √ 94% Frequency of timely initiative conforms to IT 50% Best-in-Class decisionsservice mgmt. framework 26% All Others √ 62% 1-year change in the frequency of timely decisions 0% 10% 20% 30% 40% 50% 60% 70% since the inception of the Percentage of respondents, n=240 mobile app initiative Source: Aberdeen Group, November 2010Sixty-seven percent (67%) of Best-in-Class organizations have IT standardsin place for software development, over 2-times the frequency of all otherrespondents. They understand that well-designed and well-supportedmobile apps define a superior end-user experience at product launch, aswell as over the long term. Sixty-four percent (64%) institute cross-functional teams that include marketing and sales to define mobile apprequirements, ensuring that the apps meet the needs of end-users; thispractice occurs more than 50% more frequently among Best-in-Classorganizations than it does amongst all others And Best-in-Class are almosttwice as likely to conform their mobile app initiative to a standardized ITService Management (ITSM) framework, which ensures a continued high-level of usability and support, as well as minimizing cost and risk to theorganization.Does Marketing Really Need IT?The current Metric-Driven Mobile Marketing study corroborates theimportance of establishing cross-functional collaboration between marketingand IT departments. In fact, when asked about the departments involved inthe execution of mobile marketing initiatives, 76% of companies utilizingmobile apps in their mix indicated that marketing and IT have a strategicalliance to manage marketing initiatives within the mobile channel.The commitment of IT is further demonstrated by their investment inmobile marketing programs. As shown in Table 1, 35% of funds to supportmobile marketing activities are sourced from internal IT teams or externalIT services budgets.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  6. 6. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 5Table 1: Mobile Marketing Budget Resources Percent of "As a result of the rapid Budget increase in our customers use Department Allocation of mobile devices, we have dramatically shifted ourInternal Marketing 45% resources (both on a strategicExternal marketing services (e.g. marketing, ad or 17% and tactical level) toPR agencies, consultants) successfully integrate the mobile channel in ourInternal IT team 33% marketing programs."External IT services 2% ~ Director of Marketing, largeExternal integrated Marketing and IT services 3% telecommunications services(e.g. digital solutions agency) company, USA Source: Aberdeen Group, May 2011Defining, establishing, and managing customer, prospect and company data isan essential ingredient of mobile marketing. It helps organizations ensure theintegrity and security of customer information, as well as the appropriateuse of data to build precision marketing campaigns that comply withindustry and government regulations. At a fundamental level, metric-drivenmobile marketing will only be as effective as the accuracy and currency ofthe data gathered; as a consequence, internal IT resources are the idealpartner to provide marketing with a sound technical basis for data viabilityand analytics.Eighty-two percent (82%) of the businesses using mobile apps indicatedextensive involvement of IT to plan, build, launch, and manage the data-driven processes at the core of mobile apps. This affirms the need formarketing departments to establish close collaboration with their peers inIT to effectively leverage the valuable data within their marketing campaignsand programs.Case in Point: Garanti Bank on the MoveGaranti Bank is one of Turkey’s largest retail banks with 817 branchesacross Turkey and five foreign branches in Luxembourg, Malta andNorthern Cyprus. The bank operates in an extremely competitive globalenvironment providing retail, corporate and private banking services to over10 million customers.Garanti ’s success is based on outstanding customer service, and they seeproduct innovation as a key competitive advantage. Garanti has beenresponsible for a number of banking firsts not only in Turkey, but across theglobal banking industry, including its mobile banking service.The Turkish mobile market is one of the world’s most dynamic: with apopulation of nearly 75 million, the second largest in Europe, it has a mobilepenetration level approaching 100%. In comparison, only 12.3% of thepopulation has access to broadband internet, making the mobile phone theideal channel for web services.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  7. 7. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 6It was against this background that Garanti saw the opportunity to offergreater convenience and superior levels of customer service through a newmobile banking service. Garanti had already deployed an advanced internetbanking infrastructure, but it wanted to take it one step further by providingits customers with the ability to access their bank accounts while on themove.Core to Garanti’s mobile banking strategy was eliminating the need for "Our goal was to offer thecustomers to download or activate software – they wanted them to be able broadest set of mobile bankingto access the mobile banking service directly through any internet-enabled services to Turkey’s mobilephone. Customers would be able to check the balance of their account, subscribers on the device ofmonitor the due dates and balances of credit cards, receive mini statements, their choice. We have been extremely pleased with thebuy and sell shares on the stock market, request a loan, transfer money, results.”reach market information and even top up their mobile phone - all throughtheir mobile device of choice. ~ Barbarous Ugan, Head of Delivery Channels, GarantiGaranti needed an integrated mobile banking solution that would make the Bank, Istanbul, Turkeyservice available to all mobile users, no matter what mobile device they had.As Barbarous Uygun, Head of Delivery Channels explained, “ We needed avendor with experience in delivering carrier - grade mobile softwaresolutions across a wide variety of mobile devices. We also wanted ourmobile banking service to mimic the online site as much as possible so thatusers would be familiar with its operation.”After a rigorous vetting process, they selected Antenna Software to developtheir mobile banking solution. Antenna’s decade of experience in deliveringsolutions to some of the largest banking enterprises, mobile operators andmedia companies worldwide made them Garanti’s top choice.Antenna’s mobile banking module was integrated with Garanti’s existingbanking platforms, website and security infrastructure for userauthentication and data encryption. Garanti also valued Antenna’s advancedUI design, as well as its patented web rendering, agile content adaptation,rapid deployment, and support for the widest possible array of mobiledevices and features, with over 8,500 devices supported.As a result, Garanti was able to create a seamless customer experiencefrom online to mobile, reduce customer service costs while maintaining highlevels of customer satisfaction, and provide the mobile banking service overany customer’s phone. This has enabled them to serve 310,000 mobilebanking customers with a monthly average of 200,000 secure financialtransactions and 4 million mobile web page views.Mobile Apps: Recommended ActionsThe broad adoption of powerful mobile devices among end-users hascreated what is essentially a new marketing medium, whereby consumershave vast amounts of information at their fingertips; and when opted-in,marketers can amass a vast amount of valuable information about thoseconsumers behavior.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  8. 8. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 7With all the "noise" in the mobile channel, businesses are attempting to riseabove the din to deliver targeted and relevant marketing messages toindividual consumers. The use of mobile apps provides companies with aprecise tool to reach consumers where they live: in the mobile channel,with the right message, at the right time.Aberdeen recommends the following actions to marketing and ITprofessionals that implement mobile app initiatives to maximize the businessbenefits.For Marketers: • Listen closely to the market. Interacting with prospects and customers to ascertain their needs and desires in mobile access can empower the mobile app initiative to be most effective. Data from the May 2011 Metric-Driven Mobile Marketing study shows that businesses that deploy targeted and relevant mobile marketing campaigns by reaching consumers through appropriate platforms outperform their peers that dont by 32% in annual revenue growth. • Reach them where they live. Consider a mobile channel strategy that integrates mobile apps and mobile web – it shouldnt be an either/or proposition. Approximately half (46%) of all companies targeting consumers through the mobile channel are incorporating the mobile web as an essential element of their strategy. A comprehensive and coordinated approach which reaches the consumer with relevant offers no matter what mobile platform theyre using, leveraging native mobile apps, web apps, and mobilized web sites, should be the objective. • Think beyond the campaign. The mobile channel is about increasing customer intimacy and an expanded dialog that unfolds over time. Its ultimately a long term, strategic approach to increasing customer loyalty. • Collaborate with IT to ensure the security and compliance of apps accessing end-user data. The growing use of mobile devices brings additional responsibilities to each business function, inclusive of marketing. The breach of a companys security system can expose valuable customer information to any hostile entity, which could result in significant financial risk, including loss of business from existing customers as well as legal costs. Marketing departments should consult with their peers in IT to ensure the security and integrity of end-user data. In organizations where marketing and IT are working together as strategic business partners those risks are mitigated; they also outperform those that dont collaborate by approximately 2-times in terms of the percentage of increased business obtained from their existing customers, year-over-year.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  9. 9. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 8For IT: • Streamline marketings data management processes. Understanding the workflow that enables marketers to capture, record, manage, and update end-user data collected from mobile apps is a key factor in streamlining those processes. In this way, IT departments can empower their peers in marketing to build more personalized, relevant, and robust B2C mobile apps; which serve the need of marketing to accelerate prospects through the sales cycle, thereby improving marketings contribution to company revenue goals. • See marketing as collaborators, instead of provocateurs. Cross-functional teams that incorporate both IT and marketing staff help mobile initiatives find common ground. They can ensure that mobile apps meet the needs of end-users, serve the requirements of marketing, and are secure and compliant with IT policy. Establishing this internal process allows multiple departments to provide input into mobile marketing initiatives, reducing redundant processes between different departments as well as facilitating buy-in from key stakeholders within the organization. Streamlining potential overlaps between departments through such an entity enables companies to reduce customer acquisition costs by 1.3% on a year-over-year basis, while organizations without this process experience a 1.5% increase in the cost of customer acquisition. • Help marketing take the long view. Although you can appreciate their need to rapidly deploy mobile marketing campaigns to respond to competitive market pressures, you can bring a broader perspective to collaboration; focus on building sustainable differentiation with a strategic vision. The correct infrastructure can help ensure long-term growth and success, versus scrambling to meet the demands of the campaign "du jour."For Both Marketing and IT: • As a team, clearly communicate the business value of the mobile channel initiative. The ability to identify the business value of mobile marketing initiatives through performance measures, such as improvement in company revenue, enables businesses to link mobile marketing activities to specific financial outcomes. Tracking, measuring and reporting of mobile campaign results is a primary driver of an organizations ability to identify the benefits of its mobile marketing activities. This is essential for obtaining executive-level support of those activities: organizations that implement this strategy are 60% more likely to gain executive sponsorship for their mobile marketing initiatives. • Come together. Marketing and IT need to come to a common definition of program success for the mobile channel strategy. Define mutual objectives that reflect the validity of both world views: for marketing, measures that reflect market growth and© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  10. 10. Opposites Attract: The Mobile Channel Unites Marketing and ITPage 9 brand penetration; for IT, measures that track channel performance, reliability, accessibility, and reach.For more information on this or other research topics, please visitwww.aberdeen.com. Related Research Optimizing The Marketing-to-Sales Lead The 2011 Marketers Agenda: Accessing Lifecycle; March 2011 and Understanding Customer Experience Enterprise Mobility Management 2011: Data Is Life or Death; July 2010 Mobility Becomes Core IT; March 2011 Enterprise Mobility Management: Email Marketing: Customers Take It Optimizing the Full Mobile Lifecycle: May Personally, December 2010 2010 Enterprise-Grade Mobile Applications: A Busy Spring in Mobile City: Mobility Secure Information When and Where Moves from Enterprise Periphery to Core Its Needed, November 2010 IT, May 2010 Marketing Asset Management - Its More More Mobility – Less Budget: Enterprise Than Just An Image, November 2010 Strategies for the Current Economic On-Premises Mobile Retail: Empowering Downturn; March 2009 Deeper Customer Engagement, October 2010 Authors: Andrew Borg, Senior Research Analyst, Wireless & Mobility (andrew.borg@aberdeen.com) Omer Minkara, Research Associate, Customer Management Technology Group (omer.minkara@aberdeen.com)For more than two decades, Aberdeens research has been helping corporations worldwide become Best-in-Class.Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter — the facts that enable companies to get ahead and drive results. Thats whyour research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage the powerof insight to deliver innovative multichannel marketing programs that drive business-changing results. For additionalinformation, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call(800) 456-9748 or go to http://www.harte-hanks.com.This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent byAberdeen Group, Inc. (2011a)© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897