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Elana Anderson Eric Schmitt Senior Analyst Senior Analyst


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Elana Anderson Eric Schmitt Senior Analyst Senior Analyst

  1. 1. June 28, 2004. Call in at 10:55 am Eastern Time Elana Anderson Eric Schmitt Senior Analyst Senior Analyst Forrester Research Forrester Research ForrTel: Relationship Marketing Trends And Technologies
  2. 2. Agenda <ul><li>New market dynamics demand change </li></ul><ul><li>The shift to Left Brain Marketing </li></ul><ul><li>The evolution of the marketing technology backbone </li></ul><ul><li>Recommendations </li></ul>
  3. 3. The big picture <ul><li>Two technology trends are reshaping marketing </li></ul><ul><li>Media fragmentation </li></ul><ul><li>Addressability </li></ul>
  4. 4. Trend 1: Media fragmentation <ul><li>More media channels and content streams now compete for consumer attention </li></ul>
  5. 5. Media fragmentation: What it means <ul><li>Consumer choice grows </li></ul><ul><li>Audiences fragment </li></ul><ul><li>Competition for audience attention increases </li></ul><ul><li>Per-contact costs rise </li></ul><ul><li>Efficiency of advertising decreases </li></ul><ul><li>Clutter results </li></ul><ul><li>Attention spans shorten </li></ul>
  6. 6. Erosion of attention impacts advertising
  7. 7. Direct marketing response rates are in decline Source: Direct Marketing Association Email Catalog Telemarketing Response rate Cost/ contact 1.61% 1.46% 0.99% 2.32% 5.73% $0.55 $0.18 $0.09 $0.63 $1.45 $3.95 $1.31 $1.28 $2.88 $6.17 7.2 7.3 14.2 4.6 4.2 Direct mail Inserts Revenue/ contact Revenue/ cost
  8. 8. The painful effects of clutter January 2004
  9. 9. Trend 2: Predominance of addressable media <ul><ul><li>Sometimes addressable </li></ul></ul><ul><ul><ul><li>Web </li></ul></ul></ul><ul><ul><ul><li>Retail POS </li></ul></ul></ul><ul><ul><ul><li>TV </li></ul></ul></ul><ul><ul><li>Not addressable </li></ul></ul><ul><ul><ul><li>Radio </li></ul></ul></ul><ul><ul><ul><li>Newspapers </li></ul></ul></ul><ul><ul><ul><li>Billboards </li></ul></ul></ul><ul><ul><li>Addressable </li></ul></ul><ul><ul><ul><li>Direct mail </li></ul></ul></ul><ul><ul><ul><li>Email </li></ul></ul></ul><ul><ul><ul><li>Telephone </li></ul></ul></ul>
  10. 10. Media addressability: What it means <ul><li>Targeting prevails </li></ul><ul><li>Measurability increases </li></ul><ul><li>Consumer privacy concerns grow </li></ul><ul><li>Regulatory environment changes </li></ul><ul><li>Data management gets tougher </li></ul><ul><li>Consumer control grows </li></ul>
  11. 11. Addressability’s byproduct Base: 470 responses recruited from members Source: Intelliseek and Forrester Research, Inc. “ Do you use, or have you signed up for any of the following services or technologies?” P ersonal video r e c o r der P o p -up blocker so f t w a r e Spam blocker so f t w a r e D o not call list 82% 56% 52% 14%
  12. 12. Putting it all together <ul><li>Media fragment </li></ul><ul><ul><li>Marketers’ need to target grows </li></ul></ul><ul><li>Addressable media eclipse mass media </li></ul><ul><ul><li>Marketers’ ability to target increases </li></ul></ul><ul><li>Marketing becomes more measurable </li></ul><ul><ul><li>Analytical marketing techniques predominate </li></ul></ul>
  13. 13. Welcome to the era of Left Brain Marketing
  14. 14. As the marketing environment changes . . . <ul><li>Traditional contact strategies are losing effectiveness </li></ul><ul><ul><li>Increasingly difficult to gain access to the audience </li></ul></ul><ul><ul><li>Marketers exclusively focusing on “push marketing” are missing opportunities </li></ul></ul><ul><li>Focus on retention is more critical than ever </li></ul><ul><ul><li>High penetration in some consumer verticals </li></ul></ul><ul><ul><li>Deeper penetration of the customer drives retention, value, and loyalty </li></ul></ul><ul><li>Visibility and accountability are a mandate </li></ul><ul><ul><li>Privacy legislation drives need for governance </li></ul></ul>
  15. 15. To address these challenges, firms must . . . <ul><li>Centralize governance of customer communications </li></ul><ul><ul><li>Ensure compliance with consumer privacy legislation </li></ul></ul><ul><ul><li>Migrate from product- to customer-centric marketing </li></ul></ul><ul><li>Integrate contact strategies across channels and lines of business </li></ul><ul><li>Optimize the value of customer interactions </li></ul><ul><ul><li>Give marketing a voice in every interaction </li></ul></ul><ul><ul><li>Transition from “push” to “pull” marketing </li></ul></ul><ul><li>Build a consolidated enterprise marketing technology infrastructure </li></ul>
  16. 16. To address these challenges, firms must . . . <ul><li>Centralize governance of customer communications </li></ul><ul><li>Integrate contact strategies across channels and lines of business </li></ul><ul><li>Give marketing a voice in every interaction </li></ul>Marketing technology backbone
  17. 17. The marketing technology backbone <ul><li>Technology that supports and integrates marketing strategy, development, delivery, and measurement </li></ul>
  18. 18. Marketing technology is evolving Marketing automation platform Marketing Campaign management Customer Sales Service Planning Optimization Sales Service Decisioning engine
  19. 19. Requirements of the enterprise infrastructure Traditional Emerging Corporate governance Line of business Organization Distributed model Small group of power users Users Higher volume and velocity, new types Fixed schedule, few segments, batch-n-blast Programs External data, more timely access Customer data warehouse Data Inline integration Analytics Separate environments Direct mail, telemarketing Inbound, transactional, etc. Channels
  20. 20. Recommendations <ul><li>Organizational and process change is a precursor to the success of the marketing technology backbone </li></ul><ul><li>Get the right team in place </li></ul><ul><ul><li>Find a business sponsor with vision, power, and budget </li></ul></ul><ul><ul><li>Understand the required skills </li></ul></ul><ul><ul><li>Build a bridge with IT </li></ul></ul><ul><li>Prepare for organizational and process change </li></ul><ul><ul><li>Customer-centric </li></ul></ul><ul><ul><li>Governance and accountability </li></ul></ul><ul><li>Start with the low-hanging fruit </li></ul><ul><ul><li>Work toward a long-term vision but deliver incrementally </li></ul></ul><ul><ul><li>Crawl before you run </li></ul></ul>
  21. 21. Thank you Elana Anderson [email_address] Entire contents © 2004 Forrester Research, Inc. All rights reserved. Eric Schmitt [email_address]