Marketing Re-Imagined: Three Imperatives for Marketing Leaders

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  • Introduce yourself – tell personal story about why you are here. IBM’s own marketing transformation journey began about 5 years ago. The results were so impressive that it led to its acquisition of leading marketing automation technologies, including Unica and Coremetrics, in 2010 and DemandTec and Tealeaf this year. IBM’s commitment to helping its customers take this path forward is backed by the best technologies and minds in the business. To be successful in the age of Gen C, the connected marketer needs to reimagine marketing’s role, with new thinking about our customers, our businesses and our marketing approach.
  • We all know that the world is changing, that the job of the marketer is to help find and keep a customer. Expectations from your customer have raised the bar for marketing. They are not just benchmarking you against your competitors, but against the best companies delivering the best customer experience. Creating a lot of complexity in the marketer’s world.Customers know moreThey compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. 50% of smart phone owners have used their mobile phones to search for information in a storeComScore June 201150% of US consumers with a tablet or smartphone are using it while they are in front of the TV. Source: Nielsen, October201190% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009) Customer Demand More80% of CEOs think they deliver a superior customer experience, 8% of their Customers agree, Bain and Company, Close the Deliver Gap, 200588% of US Web buyers have abandoned an online shopping cart without completing a transaction,63% of all online adults said they would be less likely to buy from the same company via other purchase channels if they experienced a problem conducting a mobile transaction. (Tealeaf and Harris Interactive Mobile Transaction Survey)The business demand more of marketingIncreasing marketing being asked to measure/explain spending – top challenge from the IBM CMO surveyLeverage social for business benefitGuide interactions across more and more channels.84% increase in visitors to online retail sites via mobile devices over past year have increased - ComScore June 2011300% increase in mobile device online sales last holiday season IBM Benchmark50% of smart phone owners have used their mobile phones to search for information in a store 50% of US consumers with a tablet or smartphone are using it while they are in front of the TV90% of consumers online trust recommendations 63% of all online adults said they would be less likely to buy from the same company via other purchase channels if they experienced a problem conducting a mobile transaction.
  • If we think about what needs to happen in the marketing world, a way to distill it down, it’s these three things:First, how do you as an organization, become much, much better at engaging with customers as individuals, not as a segment, not as a mass demographic segment, but as an individual.The second is creating value at every touch, every communicationAnd the last is how to help your company be an authentic brand and culture, so it is aligned appropriately with the experience that your customer has.We’re going to drill in a bit deeper on each of these. These three imperatives may sound like old ideas but they are not. There are some fundamental differences in how you do it and the framework or perspective from which you do it.
  • How do you know your customers as individuals? You must think through the entire customer experience, living in the shoes of your customer, going through key transactions or the experiences your customer goes through every day. More progressive companies are taking this mapping very seriously, to walk in the shoes of the customer, to understand different scenarios, different paths that your customer goes through with you every day. And asking if are these the right experiences, where are the kinks? Where are the problems? Understanding that is key.Second is understanding digital behavior. If we go back 5 years ago, very few companies we talked with had the eCommerce VP and the marketing VP, and the IT guy sitting in the same room. But now more and more, we are seeing them converging. In fact, WSJ reported recently that the Four Seasons have said publically that over 50% of their marketing spend is digital. That was unheard of three years ago. And they are not even a retailer. It’s a remarkable shift, and what comes with that shift is the need to integrate that customer behavior while they are using their preferred channels and devices. It’s becoming a huge competitive advantage. Once you know your customer as an individual, how do you leverage that insight not just for marketing, not just in the front office, but how do you align that with the supply chain? And with the rest of yourorganization, with the product development? To some extent this is the ultimate, right? The outside in view of your business, taking customer information and aligning it from the front office to the back office, creating a customer-centric organization. Lastly social media – customers are talking not just to you, but to each other and they are expressing their frustrations, wants, needs, and anything else in between, in social networks. So companies need to be prepared and be good at listening, have very strong listening skills in social media. These are the key elements for knowing your customers as individuals.Customer examples:IHG , leading global hotelier, using IBM Unica Campaign, 250% increase in email ROI with reservation relevant emailsYellow Pages -- Real Business Results using IBM Analyticshttp://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=RF&subtype=CS&htmlfid=STRL-8UKNN2&appname=crmd#Summary•Increased user satisfaction by 44 percent by improving the overall user experience•Helped increase the number of total site visits by 8.1 percent and the amount of unique visitors by 5.8 percent •Helped increase merchant click through rates by 4 percent by improving consumer engagement with advertisers•Reduced the number of no-result searches by 50 percent
  • Creating value at every touch:Second key area that marketing needs to get at is not thinking about marketing as a promotional, activity. That’s the old world marketing. The new world marketing is about service. Marketing should be so relevant it feels like a service. That’s the new paradigm around marketing, it’s got to be relevant, it’s got to feel like a service. The challenge in executing that philosophy is how do you do that in an automated way? You can’t do that manually, you have to do it across tens of millions interactions. How do you have an infrastructure, (what we can a system of engagement) to support you organization that scales, enabling personalization to millions of customers simultaneously. Lastly as you think about sharing data, how do you scale? IBM’s role in the area of data sharing and infrastructure, we are trying to set some standards. We are spending time and research on key industry standards, for example in the area of the data syndication.But in general one of the biggest stumbling blocks in creating value at every touch is the creativity of being relevant, and the flip side is how do you execute that. The biggest problem with execution is silos. Silos in marketing technology, where we see our customers, every day, having to integrate 50 or 100 different applications, that is not acceptable. So this change and convergence that you see in the market is really to address the issue of siloed technologies.Customer Examples:IBM itself- Marketing Transformation using Unica Campaign saw an 87% better email response and 30X faster time to executionTelefonica Vivo, the largest mobile phone provider in Brazil - 30% increase in campaign revenue through more targeted offers (and 40% improvement in employee satisfaction)eSurance – 2000 recovered policies per year, and 3 month payback with better application experienceQuicken Loans - $2M revenue, 8% mortgage lift through better app experienceMajor Retailer of sporting gear and clothing (cannot name-- LLBean) created an application that helps customers find parks/destinations where they can enjoy their passion for the outdoors. It’s not about selling anything, it’s about creating a customer experience that extends beyond your organization, delivering value to the customer.
  • Be an authentic brand and culture:The third imperative is about aligning brand and culture. At the end of the day, once you understand the customer experience, it really all depends on your company’s execution at every touch point; and those executions have to reflect the brand. I wonder how many of you here in the audience know what the true brand promise of your company is to the customer. Does everyone in your organization have that clarity, down to the front line people – every single sales rep, every single customer service rep, to the person who is designing the package, the fulfillment? You’ve got to make sure that the brand is aligned with the execution, otherwise the customer experience or the lack of living up to the brand promise will be reflected in social media, and that will come back and bite you. We have talked about the importance of technology here. Analytics to understand the customer, execution to be able to scale to millions of personalizations, One of the keys to authentic brand is proper use of technology. We have seen a lot of bad behavior in the market -- where the CMO is basically working around the CIO to solve these problems. Sometimes for good reason, namely the IT organization is bogged down for 5 years and any time the marketing organization asks for something it’s told it will take two years to accomplish. IBM is trying to change that-- we’re playing the marriage counselor role between the CMO and the CIO to make sure they are starting to get alignment in their joint strategy to help transform the business. We think this transformation is challenging, and you need two strong executives in every company to help transform the organization going forward. (BTW, the CMO /CIO titles are less important, it is the job function that needs to be there) and the alignment of the vision that’s important.Being an authentic brand and culture requires that organizations start to build up muscles around how do you properly leverage social networks. Think about it logically. Customers are using reviews and feedback ratings and blogs to make their decisions about purchasing your products and services. But what are you doing to amplify that good news or the great experience that customers have? Chances are many of you are not amplifying that information. They just sort of happen, but there are ways to do that-- improve the probability that somebody will write a great review about you. How many of you are actively trying to solve the problem of a bad review? The tried and true strategy to deal with that is to decentralize problem resolution, so you can give the proper resolution quickly. This doesn’t mean necessarily that you give in to the customer, it means giving frontline employees the authority to make a decision because they are closer to the customer. And probably have the right context to have the right outcome for the customer. So I think holistically this is probably one of the toughest areas for marketers, that is why the partnership between CMO and CIO is so important, because this clearly cuts across all aspects of an enterprise, from buying, marketing, selling, servicing the client.Customer Examples:Petco, a leading retailer for pet owners, achieved a 100% improvement in coupon usage through understanding social habitsIncreased coupon redemption rate in stores by 100% through personalized ad campaigns• Increased sales by 22% per unique visitor and by 41% per multisession visitor• Increased number of visitors to company Web site – more than half of the buyers attracted by personalized ads were new to the site• Slashed cost-per-order – by 64% for bird accessories alonehttp://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0CRDD-8HKSYB&appname=crmdSeton Hall UniversityAchieved a 13 percent enrollment increase by capitalizing on Facebook and social media metrics analysis•Increased tuition deposits by 25 percent because of the ability to attract prospective students faster•Boosted the prospect conversion rate by more than 18 percent in the first year, representing an additional USD29 million in tuition revenueshttp://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0CRDD-8BPTEL&appname=crmd#benefitinformation
  • Source IBM Center for Applied Insights: analysis of 100 public companies and their responses to the 2012 IBM Global Marketing Survey.Q. Please rate the level of responsibility marketing has for each of the following area.% of 4/5 ratings on a scale of 1 to 5, where 1 means “no ownership” and 5 means “full control.”Engage: Have high-level responsibility for creating and managing one-to-one marketing across all channels OR Be a proactive leader that owns customer experience across business functions Allocate:Collaborate with the rest of the company to determine a percentage increase/decrease from last year ORConduct extensive marketing mix analysis to determine optimal spend and allocation Customer Examples: Each year we run a Marketing Success Awards competition during our annual customer conference. The three finalists from our Orlando summit held in September, are all great examples of what you can achieve when you transform your marketing approach. Rackspace, A hosted services provider in the United States integrates anonymous online site activity with offline data stored in its CRM solution to yield improved customer and product sales insight in near-real time when it implements a solution based on IBM Enterprise Marketing Management software running on the IBM Smarter Commerce for Cloud platform http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0CRDD-8XZM6Z&appname=crmd Business Results:•Increased the number of high-value leads significantly, translating into a higher sales success rate•Nearly eliminated errors in reports•Helped enable more effective, targeted campaigns based on customer profiles, channels or products•Allowed near-real-time data analysis and report creation and the ability to make more timely and informed decisions - attribution over time and across channels allowed them to reset budgets by channel to match revenue -95% accuracyBMO, Bank of Montreal, BMO Bank of Montreal is a highly diversified financial services organization. With total assets of $542 billion as of July 31, 2012, and more than 46,000 employees, named the winner of the 2012 Smarter Commerce Market Award, saw a 300% improvement in positive sales outcomes with relevant offers across channels. Also achieved ROI within months.American Marketing Association leading professional marketing organization, uses IBM Campaign and achieved a250% improvement in training program attendance.
  • We believe that every company that will succeed going forward will need a system of engagement. By that we mean you need an infrastructure in place that systematically instruments your company to be a better listener to your customers’ behavior, across all the channels, and have a data management strategy that can link bits of data about the individual customer across the channels/silos that exist today, even outside of the organization, with permission, linking in, socializing and what not. And then, have a holistic way of analyzing these data, and make a decision on what are the next best set of messages, service offers, and communication the organization needs to have. Then, the ability to consistently execute, across in bound and out bound, events based and different kinds of campaigns and programs. This whole set of layers is what is needed to ensure relevancy on a massive scale. Companies that cannot do this within 5 years will be in grave trouble, because they will be far, far behind of those that can do this.
  • Another cut of the system of engagement, not by layers, but by types of functions shows that clearly there is a loop here. If you have enough data about your customer, with better analysis, you can make better decisions, and deliver that across the different channel, be able to optimize those decisions through testing—you know one of those things that we see work really well in those organizations that are successful are those that can test and respond to the results quickly. It’s much better to be faster in this new world than it is to be safer in this new world. So the ability to deliver and test and capture the results and manage in this loop is paramount.Again, everything that we are doing here, all the billions that IBM is spending , is in building out more and more holistically, more complete, the system of engagement. Customer Examples:Burt's Bees - The Burt’s Bees business has come a long way since its founding in an old, one-room Maine schoolhouse in 1984. Over more than a quarter-century, what began as two entrepreneurs selling honey and beeswax candles has grown into a multimillion-dollar brand, offering more than 200 personal care products in nearly 35 countries. Burt’s Bees now serves targeted display ads, uses brand messaging in a non-invasive way, tracks results for continuous optimization and aligns with engagement efforts on social media networks. To broaden its base of loyal customers, the Burt’s Bees team turned to display ad retargeting. They rely on the IBM® Coremetrics® AdTarget display ad retargeting solution and Coremetrics display ad partner Dotomi to serve up ads to visitors who browsed product-level pages and may have proceeded farther in the site, into the shopping cart phase. http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=RF&subtype=CS&htmlfid=SJHA-8SJHPM&appname=crmdLucky Brand - A Liz Claiborne Inc. subsidiary, Lucky Brand uses Intelligent Offer as a key part of its digital marketing program to increase personalizationand engagement with its fashion-savvy, brand-conscious customers. The company has learned from experience that it pays to analyze andoptimize recommendations to match the shopping behavior of its customers. IBM Coremetrics Intelligent Offer dynamically generates personalized product recommendations to drive cross-sells. http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=RF&subtype=CS&htmlfid=SBAT-8TUN9V&appname=crmd
  • Looking at our customers holistically, means it’s not just about the channels that we have direct communication with that matter, it’s also about the paid media and earned media as well. BTW, these are Forrester Research terms, on the three types of media that matter to an individual customer. So system of engagement is paramount for owned media. But we are seeing some pretty interesting trends in paid media and earned media. For example in earned media, we’ll net it out for you on some of the key things people are doing – first they are trying to listen to understand general sentiment, sentiment analysis. (second) They are trying to tie together profiles of individuals in social media and networks with their online behavior with their offline transaction behavioral data, aligning those behaviors. Third, they are trying to execute campaigns that coordinate across social and non social channels. We did a survey recently that shows that 90% of marketers are starting to think about coordinated campaigns using the social channels. And the last piece is how do you build an operational process the help amplify fans and also help control problems. Those are the four things that people are doing in earned media. In the progression of adoption, I think those 4 things will go further as time plays out.On paid media, we are seeing some interesting things. Companies are playing with engagement applications, or with engagement type of devices to turn paid media into owned media. So what do we mean by engagement, you know sometimes an organization will create an app for the benefit of the customer, that have nothing to do with selling or marketing. Some store that is selling some CPG product may be building an happ to help people exercise, or Coca Cola may help you find the nearest fountain or a retail store may help you find the next best set of people around the area to socialize information about a purchase decision – these are all engagement apps. Also games, a lot of organizations are creating games. Not that they are selling anything by giving away these games, but by having customers use these apps, they are creating owned media, so they can now engage with the customer through those channels.And another thing is we are seeing major trend around digitization of the offline channels, the stores, the streets in cities, the airports, we’re seeing some of these more static ads need to move forward, to be much more personalized than they are today. So these are some of the trends we are seeing.Also in the retail space, we are seeing the convergence of merchandising and marketing playing out. Used to be a chief merchandising officer, chief marketing officer, we see that converging because customer centricity is now moving into merchandising as well.
  • IBM sponsors significant research that is relevant to marketers. Demontrates our commitment today and well into the future. 1) IBM is investing in furthering the marketing profession 2) some interesting fact for press coverage – over 14,000 press reports/mentions for data from the holiday benchmark report.
  • So what are we doing to help you re-imagine marketing. We are adding capabilities, and creating better integration of these capabilities. We are tying together email, web analytics, digital analytics, campaign management, lead management, all the different channels in execution, into a much more seamlessly integrated suite so that you don’t have to do the integration. We are rolling out new standards around page tagging, digital data exchanges, (this is an area where we are submitting our standards to the W3C body for the support of the entire industry). We recently announced a brand new product called Marketing Center that is digital, cloud based, all in one suite to help you do campaign management, analytics, post campaign analytics, email marketing in a single cloud-based solution, which will work with your infrastructure, or as a departmental solution as well. What you can expect from IBM is that we will continue to enrich these solutions breadth and depth and the integration between them and other IBM components and we will also be acquiring other companies in this space, and at the end of the day, IBM is becoming a major player in helping CMOs to solve these problems going forward.
  • Marketing Re-Imagined: Three Imperatives for Marketing Leaders

    1. 1. Marketing Re-ImaginedThree Imperativesfor Marketing Leaders
    2. 2. Marketing’s universe is changing…Customers know moreCustomers demand moreYour business expects moreMarketing must re-imagine its role
    3. 3. Marketing re-imagined requiresa new approachKnow your customer as an individualCreate value at every touchBe an authentic brand and culture
    4. 4.  Understand the complete customer experience Integrate digital behavior with traditional datasources Leverage customer insight in all parts of thebusiness‒ Leverage customer insight to increasedepartment to department collaboration‒ Leverage customer insight with partners,agencies and customer communities Listen to social conversations
    5. 5.  Create marketing so good that it feels like a service Scale and support millions of relevant offers Execute holistically based on standards-basedsuites and hybrid suites Introduce data syndication standards inside andoutside the organizationLeverage systems of engagement to ensure relevant and positivecustomer experiences across all touch points that are aligned withcorporate character
    6. 6.  Respond authentically to customer needs andprovide consistency in customer experience Ensure CMOs and CIOs drive and align operationswith the company’s brand across all areas of thebusiness Amplify your fans’ experience;delegate more problem resolutionpower to front-line employees Work with IT not around IT tomake this happenMarketBuyService Sell
    7. 7. Marketers who re-imagine more likelyto outperformRevenue Growth / Gross Profit Growth3-year CAGR, 2008-2011Engage:optimizeexperienceacross all channelsAnalyze: sophisticated and crosscompany marketing analysisLow HighHighLow 6% / 7%12 % / 10% LeadingMarketers
    8. 8. Marketing re-imagined requires acomprehensive system of engagementInstrumentationCentralized DecisioningData ManagementCustomer and Marketing AnalyticsCross-channel ExecutionIntegrated Layers of CapabilitiesOn-Cloud, On-Premises, and Hybrid Offerings
    9. 9. A comprehensive system of engagementsupports five key marketing processesAnalyzeto identify opportunitiesand predict outcomesCollectdata that augmentseach customer profileDecideon the bestaction, offer, contentand/or channelDeliverrelevant pricing,engaging messages, andcapture reactionsManagemarketing processes andmeasure results
    10. 10. Marketing re-imagined requires workingacross all mediaEarnedmediaPRPaidmediaadadOwnedmediaPrice, promotion, product
    11. 11. IBM research can guide your marketing journey Only 22% of marketers use social channels in theirintegrated marketing campaigns. Less than 20% of marketers use on-line customerbehavior data to drive off-line campaignsIBM State of Marketing 2012370+ Marketing Execs Mobile sales as a percentage of total site sales hit arecord 13% in March 2012 - double 2011 Visitors referred from a social site are 50% more likelyto buy then visitors overallIBM Holiday Readiness ReportCMO’s feel least prepared to deal with: Data explosion Social media Growth of channels and devices Shifting consumer demographicsIBM CMO Study – 1700 CMOs
    12. 12. IBM solutions help make your effortsto re-imagine marketing a realityComprehensive suite for relevantand personalized offers across allchannels and media - used by over2,500 organizations worldwide Digital Marketing Optimization Cross Channel MarketingOptimization Marketing PerformanceOptimizationExpands offerings with pricing,promotion, and product mixoptimizationRecent acquisitionsRich EMM SuiteExpands with customer experiencemanagement and analytics
    13. 13. IBM is committed toyour marketingsuccess now andinto the future

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