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Customer-Centric Transformation
Merkle's research identifies key truths and misconceptions about marketing and technology transformation among U.S. executives from companies with revenues over $1 billion. The study highlights that successful transformation requires detailed planning, clear vision, skilled teams, and active executive sponsorship, as 70% of transformation initiatives fail. It also emphasizes the importance of continuous optimization versus a one-time approach to transformation.
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Customer-Centric Transformation
- 1. 1 © 2016Merkle. All Rights Reserved. Confidential PLACE IMAGE HERE LEADING A CUSTOMER-CENTRIC EVOLUTION
- 2. Truths (and Misconceptions)of Transformation
- 3. Merkle & Adobe’sResearch on Transformation 250 senior level executives in the US Have recently completed a broad scale marketing/technology transformation initiative Company revenue $1 billion or more Spans industries as well as B2B & B2C Who were the respondents? Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 4. Business impact is…Incremental Substantial Strategy is… Improving what’s in place Challenging what’s in place Tactics are… Defined upfront Refined as you go Approach is… One and done Iterative O P T I M I Z AT I O N T R A N S F O R M AT I O N Optimization vs Transformation Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 5. of transformation initiatives fail70% #30Percenters Learnall of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 6. Plan Build Sustain Fail to Initiate Plannever proceeded to development Fail to Adopt Is not embraced by organization, and abandoned Fail to Launch Enhancements never launch or significantly under deliver against expectations Risks at Each Stage of the Transformation Process Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 7. Transformation Success Requires… Planning Detailedplan and formal PMO to oversee work streams and track against milestones Vision Precise and shared understanding of business objective and desired end state Organization Processes, team in place and ready to support and sustain change. Team Skills Team with the right skill set and allocated at an adequate level Sponsorship Engagement, commitment and financial support of senior executive to the initiative 41% 42% 39% 43% 43% 24% 23% 16% 20% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Vision Sponsorship Management Execution Operations Key Competencies for Transformation Initiative a Success Initiative Not a Success Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 8. “We don't needto waste time (and money) on planning, we know what we want to do.”
- 9. Getting Planning Rightis Critical to Project Success Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 10. Planning: Vision ValueRoadmap as the Foundation Customer Journey Mapping Results Roadmap Value Vision Roadmap Value Vision Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 11. Planning: Vision ValueRoadmap as the Foundation Roadmap Value Vision Roadmap Value Vision Benefit analysis, at actual realization VALUE LEVERS (AT ACTUAL REALIZATION) 2014 2015 2016 2017 2018 2019 Total FULFILLMENT(new accounts) BENEFIT IMPACT 85% $xx,036 $xx0,994 $3,598,034 $6,360,712 $7,982,265 $8,735,309 $xx,670,349 FULFILLMENT(existing accounts) 85% $13,620 $327,164 $xx07,419 $xx19,224 $xx43,134 $xx01,920 $9,412,480 CROSS-SELL (accounts) 74% $16,856 $xx0,975 $4,002,647 $6,183,391 $8,648,510 $8,933,262 $28,045,640 MIGRATEDCALLS (volume) 55% $4,560 $50,766 $134,155 $xx7,894 $221,911 $xx2,845 $852,132 ATTRITION IMPROVEMENT(existing HH) 74% $xx,274 $xx5,794 $xx46,999 $5,043,113 $xx23,857 $7,048,532 $xx,517,569 NEW CUSTOMERS (accounts) 86% $16,142 $469,572 $1,758,113 $xx08,044 $3,900,386 $xx68,347 $13,520,605 ATTRITION IMPROVEMENT(new accounts) 86% $xx,168 $xx3,040 $xx32,234 $4,653,342 $5,839,632 $6,390,540 $xx,242,956 $xx7,657 $xx08,304 $xx,679,600 $xx,665,721 $xx,159,694 $xx,620,756 $xx2,261,731 VALUE DRIVERS (AT ACTUAL REALIZATION) 2014 2015 2016 2017 2018 2019 Total NEW CUSTOMER (ACQUISITION + ATTRITION + FULFILLMENT) $xx,347 $2,133,605 $7,988,381 $14,122,098 $xx,722,283 $xx,394,197 $xx,433,911 EXISTING CUSTOMER (CROSS-SELL + FULFILLMENT) $30,476 $xx8,139 $5,210,065 $xx02,615 $11,391,643 $11,935,182 $37,458,120 EXISTING CUSTOMER (ATTRITION) $xx,274 $235,794 $3,346,999 $5,043,113 $xx23,857 $xx48,532 $xx,517,569 CONTACT CENTER COST SAVINGS $4,560 $xx,766 $134,155 $xx7,894 $221,911 $242,845 $852,132 $xx7,657 $xx08,304 $xx,679,600 $xx,665,721 $xx,159,694 $xx,620,756 $xx2,261,731 TIMING IMPACT Weights NON-FMP COSTS -> 6% 50% 71% 92% 100% 110% 40% FMP -> 0% 10% 65% 100% 110% 120% 60% NET -> 2% 26% 67% 97% 106% 116% CROSS-SELL -> 1% 7% 75% 95% 112% 116% BENEFITS 2014 2015 2016 2017 2018 2019 Total FULFILLMENT(NEW + EXISTING) BENEFIT IMPACT 85% $xx,656 $xx88,157 $xx05,452 $8,479,936 $xx,725,399 $xx,737,229 $37,082,829 NEW CUSTOMER (ACQUISITION + ATTRITION) 86% $40,311 $1,172,611 $4,390,347 $xx61,387 $9,740,018 $10,658,888 $xx,763,561 EXISTING CUSTOMER (CROSS-SELL + ATTRITION) 74% $xx,130 $xx6,769 $xx49,646 $11,226,504 $xx,472,366 $xx,981,794 $50,563,209 CONTACT CENTER COST SAVINGS 55% $4,560 $50,766 $134,155 $xx7,894 $221,911 $242,845 $xx2,132 $xx7,657 $xx08,304 $xx,679,600 $xx,665,721 $xx,159,694 $xx,620,756 $xx,261,731 Recommendations - Mapping of recommendations based on effort and business impact 10 9 8 7 6 5 4 3 2 1 10987654321 LevelofImpact Level of Effort Quick Wins Longer Term The recommendations are plotted according to the prioritization exercise to determine potential quick win candidates ab c d e f g h i jk a b c d e a b c a b c d a b c Ensure Data ConsistencyEstablish Data Governance Guidelines Define Customer Profile Improve Data Capture & Integration Centralized Marketing System Determine DMP Technology Integrate Digital Data into DMP Syndicate Data From DMP Across Digital Media Consistent Consumer Profile Integrate Digital Data into Event Stream Increase Use of 3rd Party Data Analytics & Insights Environment Cross Media Measurement System Media Scenario Planning Data Visualization & Reporting Co-Marketing Environments Improve Visibility Over Current Decision Management Expand Rule Based Decisions Across Channels & Media Content Management Tool Personalization Across Media Utilize Addressable Platforms Expand Use of Display Media Site Personalization Change Content Approval Process Technology Consistency Across Brands Centralized Marketing Technology Ownership 25 Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 12. Planning: Vision ValueRoadmap as the Foundation Roadmap Value Vision Roadmap Value Vision Recommendations - Future state conceptual technology blueprint (Example 1) © 2014 Merkle. All Rights Reserved. Confidential and Proprietary. 10 Fifth Third – Hadoop Sources Media Execution (Experiential/Advertising) Channel Execution (Commerce/Service/Sales) Identity Management Decision Platform Data Management Platform (DMP) Foundational Marketing Platform · Full view of customer including longitudinal event stream and digital persona (anonymous/semi- anonymous) linked to a known individual · Supports full lifecycle of an individual (Prospect & Customer) · Inclusive of all relevant and granular sales and marketing data · Single, conformed tool agnostic dimensional data model · Dimensions, Facts, and Aggregates supporting key subject areas · Central rationalization of permission, preferences, and suppressions · Marketing metadata and cost · Supports Business Intelligence and Campaign Management Marketing Database Core Marketing Digital Analytics Management Platform Application Integration 360 Known 360 Unknown Segment Profile Decision Engine (PEGA PRPC) Personalization Engine Web Services & API’s DSP Syndication Meassaging Trigger Forecasting/Simulation · Media Mix Optimizaiton · Scenario Planning Response Attribution · Advanced Attribution Methods · Attribution Engine Advanced Analytics · Analytic Models & Segmentation · Automated Scoring Framework & Metadata Analytics Response Attribution Media Mix Business Intelligence · Reporting · Visualization · Dashboards Real-time Data Management · Enables 360 customer profile to organization · Relevant Atomic level customer and marketing data · Synchronized with subset of Marketing Database to ensure accuracy of matching/keys · Informs Decisioning in real-time · Captures real-time transactions, behavior, and interaction details required for triggered communications Audience Management · Data Exchange Integration · Audience Syndication DemandSlidePlatformPlatformAudiencesContentManagementDigitalAssetManagementDigitalAnalytics Event Managment · Identity Resolution and XREF Management · Event Stream Parsing and Rationalization Digital Data Integration (DDI) · Cookie/Session/Pixel Linking and Aggregation · Anonymous/Known and On-line/Off- line Linking Insight/Action Data Data to Drive Decisions and Capture Insight Audience Profile Identity Audience Real-time Response / Disposition Data Audiences Tags Data Profile Decisions Identity Data Data Data Scoring History Metadata Insights Data Prospect Event Stream Score Data Scores Data Profile Events Data Real-time Real-time Real-time Batch / Real-time Batch Batch Batch Batch Real-time Real-time Campaigns Leads Real-Time/Batch Preference Management Real-time CDI Profile/Offer Lookup Tag Management DSP Mobile Social Web Near-time&IncrementalBatchProcessing Operational Inquiries, Referrals, and Transactions Products, Accounts, Customers, and Services Quotes and Applications Campaigns Web and Mobile Direct Mail and Email Call Center, Branch, and ATM Digital Email Activity and Dispositions Search and Display Responses/Impressions Social Profile and Activity Web and Mobile Profile and Activity Lists & Overlays Prospect Files & Vertical Lists Data Overlays & Appends Suppressions, Segments, and Scores Other Market/Consumer Research Mass Media Buy Activity Econometric Data Consumer Checking Savings CDs IRAs Money Market Wealth Management Investment Services Credit Cards Mortgages Auto Loan Home Equity Loan Student Load Personal Installment Load Personal Lines of Credit Protection Services Life Insurance Home Insurance Auto Insurance Credit Risk Management Institutional Services On-line Banking On-line Bill Pay Direct Deposit Check Card Rewards Mobile Banking Premium Banking ECIF EDW UDS ACAP TSYS BCRD FSER ALS Zoot FNA IB SBA TDEP GPR AGL ACE Unica Exact Target Eloqua ATG CAMP Chordiant Phoenix (ATM) Genesis (IVR) Aspect Dialer MGIC, Argus S2S Acces DB Dial America Exact Target/Eloqua Operational Email Systems Seach Partners (Spark) Display Partners (DART) Landing Pages (Harte Hanks/IT) Monetize and 53 Mobile (Mobile Data Mart) Preference Center (TBD) Digital Analytics (TBD) CoTweet (Social Activity) Harte Hanks Agus Acxiom IXI Central Opt Out DB DSG Customer Analytics Preference Center (TBD) Media Buying Partners (Segment Level) Internal Market Research External Market Research Integration Layer Transformation Data Quality Normalization (ODS Centric) Dimensionalized (Star Schema Centric) Business Rules Technical Subject Area Loads ETL-Real-time&BatchProcessing Mobile Application Optimize · Personalization · Targeted Offers · Product/Service Recommendations · Remarketing Collect · Viewing history · Contact History · Site Activity · Permission/Preference Identify · Latitude/ Longitude · Device ID · Email Address · Customer ID Inbound Call / Outbound Optimize · Preference History · Purchase History · Offer History · Offer Management · Call Routing · Knowledge Bank · Chat Response Collect · Contact History · Call Center Activities · Permission/Preference · Offer Disposition Identify · 53 Account Number · E-mail · Name and Address · Phone Number 53.com & Internet Banking Optimize · Personalization · Targeted Offers · Product / Service Recommendations · Remarketing · Forum / FAQ · Online Application · eDocs with Deep Linking Collect · Site Activity · Landing Page Activity · Content Impressions · Permission/Preference · eSignature · Click to Chat / Call · Issue / Support / Self Service · eDocuments Identify · Authenticated UID · Session, Cookie, IP Address · Device ID · Customer ID · Email · Name & Address · Phone Branch Email – EXACT TARGET & ELOQUA Optimize · Personalization/ Landing Pages · Targeted Offers Based on Web Behavior · Recommendations Collect · Sent · Opens · Clicks · Forwards · Spam/Opt Outs Identify · Phone · Email Address · Address · STMS Account Number Display - SPARK Optimize · Retargeting · Look-alike Models · 3rd Party Segments · Direct Match List Collect · Ad Impressions · Clicks · Media Activities · Profile Identify · Cookie · IP Address · Tracking Pixal Social – Hearsey or Sprinklr Optimize · Retargeting · Look-alike Models · 3rd Party Segments · Direct Match List Collect · FB Parent-Child Relationships · Application Usage · Ad Impressions Identify · User ID · Email Address · Zip Code · Cookie Search – SPARK & LEO BURNETT Optimize · Keyword Bidding by Segment · Creative Weights · Remarketing Collect · Search Redirects · Search Landing Page Activity · Key words Identify · Cookie · IP Address · Tracking Pixal Direct Mail – HARTE HANKS Optimize · Personalization · Targeted Offers · Recommendations Data Collection · Contact History Identity Attributes · Name & Address · Customer Number ATM Workflow Unica Campaign Email Service Provider Content/Asset ManagementETL and Workflow Management · Data loading and syncing · Automation & Job Control · File Management · Data Audit, Monitor & Alert Process Metadata & Data Health · Central identity store supports all customer recognition · Individual, ECIF Customer, Household, Account Identity Map and History · On-line and Off-line · Anonymous to Known Recognition Database Customer Data Integration (CDI) · Parsing, Hygiene, Standardization · Address Enrichment/NCOA · 3rd Party Match ID · Digital Data Integration (DDI) · Cookie/Session/Pixel Linking/ Aggregation · Matching (Hard Key & Fuzzy Logic) · Identity Resolution and XREF Management · Event Stream Management · Channel and Media Event Rationalization CDI Known DDI Anon. DDI Data Exg. Search Insight/ Identity / Event Stream Real-time Responsition & Disposition Data Insight · Next best action · Product recommendation · Available offers · Profle/Demos · Personalization · Segment/Value · Event Trigger Data · Cookie/IP, ECIF ID, Name/ Address, Device ID · Events, Behavior, Session · Disposition, Interests Audience Platforms Hadoop Platform Hadoop Pre-Processing – using big data capabilities as a “landing zone” before determining what data should be moved to the data warehouse. Data Exploration – using big data capabilities to explore and discover new high value data from massive amounts of raw data and free up the data warehouse for more structured, deep analytics. Offloading – moving infrequently accessed data from data warehouses into enterprise-grade Hadoop allows organizations the ability to store transaction-level data for longer periods of time. Digital Channel Event Stream Real-Time / Batch Optimize · Preferences · Purchase History · Offer History · Offer Management Collect · Contact History · Call Center Activities · Permission/Preference · Offer Disposition Identify · 53 Account Number · E-mail · Name and Address · Phone Number Optimize · Personalization · Targeted Offers · Product / Service Recommendations · Remarketing Collect · Visit · Transaction · Ad Impression Identify · 53 Account NumberKnowledge Bank Staging Exploration Event Streaming Execution Systems ACH WIRE TX CHECK IMAGE AUTO BILL PAY SUPERMICR RAFT / TPP Product Execution Systems UDS AFS ALS XAA FINDUR BANKTRADE ACBS NFS TSYS INFOLEASE TRUST FSER GENERAL LEDGER BUSINESS SOLUTIONS CRM CCAS MDM RAROC FNA CML PORTAL IntegrationLayer · Perform discrete transactions on behalf of a customer (deposits, funds, transfer, withdrawals) · System of record for some financial service or product-level attributes · Authoritative system of record for client product or service and it’s current state (balance) · System of record for most product or service specific or characteristics (rate, term) · Primarily internal-facing business systems that create or derive information about a customer or transaction that has relevancy elsewhere in the Organization (RAROC Score, Service Tier, etc) Fifth Third Sources & Extracts Unica Detect Upgrade FileNet Recommendations - Mapping of recommendations based on effort and business impact 10 9 8 7 6 5 4 3 2 1 10987654321 LevelofImpact Level of Effort Quick Wins Longer Term The recommendations are plotted according to the prioritization exercise to determine potential quick win candidates ab c d e f g h i jk a b c d e a b c a b c d a b c Ensure Data ConsistencyEstablish Data Governance Guidelines Define Customer Profile Improve Data Capture & Integration Centralized Marketing System Determine DMP Technology Integrate Digital Data into DMP Syndicate Data From DMP Across Digital Media Consistent Consumer Profile Integrate Digital Data into Event Stream Increase Use of 3rd Party Data Analytics & Insights Environment Cross Media Measurement System Media Scenario Planning Data Visualization & Reporting Co-Marketing Environments Improve Visibility Over Current Decision Management Expand Rule Based Decisions Across Channels & Media Content Management Tool Personalization Across Media Utilize Addressable Platforms Expand Use of Display Media Site Personalization Change Content Approval Process Technology Consistency Across Brands Centralized Marketing Technology Ownership 25 Initiative Description Objective The management and association of identity attributes across all channels and media. The creation of a longitudinal view of the experience a consumer has with Fifth Third Bank (the consumer event stream) • To enable accurate marketing to a customer/prospect with an intelligent solution to identity management and association of identity attributes across all channels and media. • Provide the ability to enhance the marketing platform with the organization of customer event stream information in a chronological order of events for an individual, account, and household. Benefits & Pain Points Remediation Systems Impacted / Replaced • The ability to scale and address digital event and activity data, as well as anonymous and known prospect universe • Increase the ROI of marketing programs by accurately identifying customers and prospects and reducing the costs involved with additional data hygiene and duplication • Marketing Data Mart (MDM) • ECIF • EDW • Foundational Marketing Platform (To be developed) • Webtrends • Akamai Video Server Estimated Costs and Duration – Cash View • Total of 7 months across multiple phases (for onetime costs) • One Time Cost: $500k • Ongoing Cost: $416K until 2019 Risks, Assumptions, Dependencies • Data availability and timeliness • Client staffing availability and Skillset • Business rules definitions • Hadoop: Consideration for other data streams that haven’t been included (chat histories, etc.) • Hadoop: Consistent follow on work for Merkle to sustain additional feeds Identity Management Platform Initiative Description Objective The management and association of identity attributes across all channels and media. The creation of a longitudinal view of the experience a consumer has with Fifth Third Bank (the consumer event stream) • To enable accurate marketing to a customer/prospect with an intelligent solution to identity management and association of identity attributes across all channels and media. • Provide the ability to enhance the marketing platform with the organization of customer event stream information in a chronological order of events for an individual, account, and household. Benefits & Pain Points Remediation Systems Impacted / Replaced • The ability to scale and address digital event and activity data, as well as anonymous and known prospect universe • Increase the ROI of marketing programs by accurately identifying customers and prospects and reducing the costs involved with additional data hygiene and duplication • Marketing Data Mart (MDM) • ECIF • EDW • Foundational Marketing Platform (To be developed) • Webtrends • Akamai Video Server Estimated Costs and Duration – Cash View • Total of 7 months across multiple phases (for onetime costs) • One Time Cost: $500k • Ongoing Cost: $416K until 2019 Risks, Assumptions, Dependencies • Data availability and timeliness • Client staffing availability and Skillset • Business rules definitions • Hadoop: Consideration for other data streams that haven’t been included (chat histories, etc.) • Hadoop: Consistent follow on work for Merkle to sustain additional feeds Identity Management Platform Initiative Description Objective The management and association of identity attributes across all channels and media. The creation of a longitudinal view of the experience a consumer has with Fifth Third Bank (the consumer event stream) • To enable accurate marketing to a customer/prospect with an intelligent solution to identity management and association of identity attributes across all channels and media. • Provide the ability to enhance the marketing platform with the organization of customer event stream information in a chronological order of events for an individual, account, and household. Benefits & Pain Points Remediation Systems Impacted / Replaced • The ability to scale and address digital event and activity data, as well as anonymous and known prospect universe • Increase the ROI of marketing programs by accurately identifying customers and prospects and reducing the costs involved with additional data hygiene and duplication • Marketing Data Mart (MDM) • ECIF • EDW • Foundational Marketing Platform (To be developed) • Webtrends • Akamai Video Server Estimated Costs and Duration – Cash View • Total of 7 months across multiple phases (for onetime costs) • One Time Cost: $500k • Ongoing Cost: $416K until 2019 Risks, Assumptions, Dependencies • Data availability and timeliness • Client staffing availability and Skillset • Business rules definitions • Hadoop: Consideration for other data streams that haven’t been included (chat histories, etc.) • Hadoop: Consistent follow on work for Merkle to sustain additional feeds Identity Management Platform Roadmap -Multi-phase Future State Enablement Roadmap Addressable Messaging and Targeting Consumer Analytics and Insights Comprehensive Display Program Decision Management Cross-Media Measurement Technology Alignment, Roles, Responsibilities, and Ownership Media Scenario Planning Content Approval Refinements Data Quality Improve Data Capture and Integration Identity Insights Personalization Channel Execution Content Management Quick Wins 3-6 Months Phase 1: Foundation 12 Months(FY ’16) Phase 2: Activation 12 Months(FY ’17) Phase 3: Expansion 12-18 Months(FY ‘18-’19) Phase 4: Efficiency 12-18 Months(FY ‘19-’20) Ongoing FY ’20-on Operating Model Foundational Marketing Database Data Management Platform and Integrations Data Visualization Co-Marketing Platform (Wholesale & Affiliates) Omni-Channel Personalization Capabilities Site Personalization and Testing Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 13. “Getting the technologyright will be the hardest part.”
- 14. Operationalizing the Changesto Sustain Transformation Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 15. Organizational Readiness: OrganizationalStrategy » Organization structure to deliver integrated programs ‣ Does your current organization structure allow you to easily collaborate and coordinate across product/business unit silos to deliver a customer- (vs. product-) centric program? ‣ If not, is there a way to accomplish that without a huge “re-org” effort?
- 16. Organizational Readiness: OperatingModel » Mapping current state » Identifying gaps, pain points » Defining future state flow » Provide details about each step including input, outcome, key players, skill set Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 17. Organizational Readiness: Roles& Responsibilities » List of required role based on defined process » Indicate RACI for each of the functional roles » Develop position description for each role » Map roles and staffing level against current team Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
- 18. Download the FullReport 18 Learn all of the truths and misconceptions of transformation in Merkle’s Customer-Centric Transformation white paper. Click here to read the full report.
Editor's Notes
- #3 This truly is an incredible time to be a marketer. The reality of what media and channel technology can do today is finally catching up to the dream and promise of customer-driven, 1 to 1 marketing. In recent years the number of companies that are exploring broad-scale, customer centric transformation has absolutely skyrocketed. And it occurred to us that while there’s a lot of information about the tactics and technologies, there isn’t a lot of discussion about how to ensure a successful transformation. I’ll start with highlighting findings from our research on the Truths and the Misconceptions of Transformation. [*] Then I’ll hand it off to Andre who will give us his first hand view of Lessons Learned from the Field as a leading vendor partner in the marketing technology space.
- #4 We’ll be discussing excerpts from our recently published white paper “The case for change” which is based on findings from our research on transformation, sponsored by our partner Adobe. We asked 250 senior executives to describe their company…their approach to transformation and to evaluate a recent broad scale initiative. The companies had revenue of $1 billion or more and spans multiple industries as well as across B2B and B2C.
- #5 Let’s come to a common definition of transformation. In particular the difference between optimization and transformation. [*] “Optimization” typically means driving incremental impact and working with and within what’s in place. Tactics are usually clearly defined, and the approach is one and done. [*]On the other hand, transformation is another animal altogether. Unlike optimization, the expected benefit is substantial and it’s all about questioning and challenging what’s in place. Also, unlike change, what’s needed to be done is often fluid and iterative and not always clearly defined. Optimization can be successful within a business as usual environment. But transformation is much bigger, more complex and require… a broader scope, a more rigorous approach and specific competencies that may not be in place today.
- #6 So what exactly are the odds of success? [*] This topic has been studied by a lot of smart people over the years and the research have been fairly consistent in finding that 70 percent of complex, large-scale change programs don’t reach their stated goals. So let’s talk about how you can improve your odds of joining the 30% [*] who do succeed.
- #7 Typically we think of success and failure as all or nothing. But the truth is that when evolving an idea into reality, there’s the risk at every stage, starting with Planning. [*] These would be the projects that never make it into development – whether because funding wasn’t approved or the project just lost steam along the way. [*] Next is the Build phase and there’s all sorts of ways for things to go sideways – maybe the enhancements are never launched or more commonly, significantly under deliver on expectations and probably over deliver on cost and timeline. [*] Finally there’s the Sustain phase where the initiative is launched but doesn’t take hold and is ultimately abandoned. As we review our findings we will be calling out where success factors may be specific to one or more of the stages.
- #8 So here are the key competencies required for a successful transformation and below you can see how the difference between those companies who had a successful transformation and those that did not in terms of their mastery of these pillars. First we start with Vision… In this presentation I’ll be focusing on several of these competencies and referring to specific attributes that roll up underneath them
- #9 We’re going to present our research findings by framing them around some of the missteps or misconceptions that get in the way of success. Let’s start with this one [*] I get it – you and your team want to make things happen and want to spend less time thinking and just jump into the action. However, committing to a formal planning process that’s appropriately staffed and adequately funded is essential. This is where an idea materializes into something more tangible.
- #10 Shortchanging this critical phase will have repercussions downstream in the project. We found in our research that companies with successful transformation initiatives were 2.2x more likely to have a formal program management office in place, 2.8x to require a business case and 2.5x more likely to develop and adhere to a multi-phased road map that helped them prioritize and plan out their efforts.
- #11 So what might a comprehensive Plan look like? Here at Merkle we think about the three tiers of Vision, Value, Roadmap [*] First we start with an in-depth understanding of the current state. [*] Bringing the teams together to collaborate on identifying the pain points in the current customer experience and overall infrastructure and to begin creating the desired future state. This exercise is important for two reasons – first is that you are gaining the perspective and expertise of a broad array of team members from across the organization. But just as important is that this and subsequent activities builds ownership and ultimately buy-in toward the transformation. From this, we would build out the requirements for a subset of the highest priority interactions. [*] This results in the future state vision - one of the assets would be a future state customer journey to illustrate the desired experience flow but also to map out the data, technology, measurement and organizational infrastructure needed to support the future state. As with the exercise of evaluating the current state, this map also does double duty in that it’s a tremendous communication and socialization tool. It bring to life the end state in a way that can be understood across every level of the organization.
- #12 [*] The Value part starts with a [*] prioritization of the interactions that make up the customer journey vision – with heavier weighting on those interactions that will drive high business impact. This becomes the input to a value tree analysis [*] where we understand the capabilities that enable each use case but also the KPIs and specific value drivers. Finally, these input roll up into the [*] overall investment and benefit calculations in the form of a Business Case
- #13 Finally, there’s the Roadmap [*] The prioritization that’s used for the value case is also a key input here [*] in that it informs the detailed description [*] of capabilities and enablers required to bring the use case to life as well as the accompanying blueprint [*] and flows into the final roadmap [*] which will guide the development process.
- #14 And our next misconception… [*] [As we saw with our poll, technology is typically not the biggest barrier to success] Of course, getting the technology components right is critical to a program’s success. However, it is the people factor of organizational readiness that will ultimately trip up your efforts.
- #15 This is the category where we see the big difference between successful and failure, in particular as it relates to sustaining the vision of your transformation A key reinforcing mechanism to sustaining change is aligning incentives to the desired behavior. Successful initiatives were 3.3x more likely to focus on it. In addition to product-focused conversion and profitability metrics, the organization needs to incorporate an enterprise-level view of customer value that spans across products as a key performance indicator and rewarding the behavior we’re looking for… As the saying goes, “that which is measured, improves.” Other areas of focus includes adapting workflow, processes and work groups where successful initiatives were respectively 2.5 times and 1.9 times more likely to address. There are 3 components to address on this topic – Organizational Strategy, Operating Model and Roles & Responsibilities.
- #16 Let’s start with Organizational Model…All too often, it’s assumed that a transformation initiative will require a major “re-org.” But the truth is, the current structure may not need to change at all, or may only need minor tweaks. In fact, given the level of disruption and the complexities, a re-org is probably the last thing you’d want to consider. Really, who wants to deal with this? So, before we go to the extreme of even considering re-org, let’s start with a couple of questions [read] <*> Chances are, there are ways to get your organization closer to a people-based marketing vision without dramatic org changes.
- #17 Now let’s get into Operating Model. This is really the make or break of whether transformation can be sustained. First you need to map the current state process and highlight gaps that will hinder the organization’s ability to execute customer-driven programs. You will do this through a combination of individual and group interviews as well as review of any existing documentation. The next step is to define what the future state flow should be [*] – in this example it’s the process of creating a Campaign Playbook. And For each process, you’ll want to double click on details, such as the step here of Developing Campaign Objectives. We’ll spell out what’s needed to execute this step including the input, the output, key players and skills set. It’s a lot of work but this is the level of detail that’s needed, because you don’t want any surprises down the line.
- #18 Next is Roles & Responsibilities. Following through with our example of developing a Campaign Playbook, [*] here’s an example of the future state process, which then is laid out against the required people for each step. [*] You want to start with a higher level RACI for each of the roles but very quickly will need to get into the details, including position descriptions as well as coming to terms about how your current team maps against the future state. In our experience, you will very likely need to make changes to the team – whether that’s rebalancing current skill set and or ramping up your team size to deliver on the vision.