From the MarTech Conference in Boston, Massachusetts, August 19-20, 2014. SESSION: How to Align Marketing Technology with Business Strategy - Given by David Raab, @draab - Principal, Raab & Associates. #MARTECH

1. How to Align Marketing Technology
with Business Strategy
MarTech Boston
August 19, 2014
David M. Raab
Raab Associates
www.raabguide.com
draab@raabassociates.com

5. Strategy =
method to a goal

6. Strategy Implications
Strategy Statement: Attract large numbers of high-paying customers by creating a highly
innovative product that can be sold via ‘buzz’ marketing.
Financial
Margin
• High
Number of customers
• Add customers
Revenue / customer
• High

Customer Value
Image
• Exciting
• Advanced
Relationship Product
• Unique

Internal
Operations
Marketing
• Build ‘buzz’
Innovation
• Simplified
interface
Production
• Quick
delivery
Customer
support
Admin

Learning
Information & systems Competencies
• Outsourced
manufacturing,
• Channel training,
• Design,
• Marketing
Organization
Product-based

7. Successful Strategies
• Steve Jobs’ Apple: insanely great products
• Amazon: customer convenience
• UPS: efficiency and reliability
• Southwest Airlines: low cost

8. Unsuccessful Strategies
• Steve Cook’s Apple: multi-color phones?
• Steve Ballmer’s Microsoft: copy Apple?
• JCPenny: high fashion or low price or in-shops
or ???
• Radio Shack: only source for stuff nobody
wants

9. Good Strategy: It’s All About Fit
• Resources
• Competencies
• Market needs
• Competitors
• Environment

10. Strategy Implications
Strategy Statement: Attract large numbers of high-paying customers by creating a highly
innovative product that can be sold via ‘buzz’ marketing.
Financial
Margin
• High
Number of customers
• Add customers
Revenue / customer
• High

Customer Value
Image
• Exciting
• Advanced
Relationship Product
• Unique

Internal
Operations
Marketing
• Build ‘buzz’
Innovation
• Simplified
interface
Production
• Quick
delivery
Customer
support
Admin

Learning
Information & systems Competencies
• Outsourced
manufacturing,
• Channel training,
• Design,
• Marketing
Organization
Product-based

11. Case Study:
Strategy to MarTech Connection
• Business:
– New company, disruptive tech, clearly superior
• Business Strategy:
– Grow quickly by adding customers via partner sales
• Marketing Strategy:
– Now: support partners via joint field events
– Future: build company-generated lead flow via media, Web site
• MarTech Strategy:
– Build for fast growth, future needs
– Now: support field via self-service promotions
– Future: support media via analytics, Web site via MA integration
• MarTech Choices:
– Now: best-in-class end-user email, forms, selections
– Future: flexible MA database, data warehouse outside MA

12. Strategy to MarTech Framework
Business
Strategy
Marketing
Strategy
MarTech
Strategy
MarTech
Architecture
MarTech
Components
• Focus:
Product vs
service vs cost
• Financial:
Margin vs
number of
customers vs
revenue per
customer
• Value Prop:
Image vs
relationship
vs product
• Channels
• Spending
• Intimacy
• User skills
• Target metrics
(CPA, LTV, ROI,
growth, etc.)
• System scope
• Channel
integration
• Execution
automation
• Program
sophistication
• Flexibility
• Scalability
• Cost
• Staffing
• Shared vs
siloed
• Suite vs. best
of breed
• In-house vs
outsource
• Owned vs
rented
• External
integration
(CRM, Web,
etc.)
• Database
• External data
• Data quality
• Identity
association
• Analytics
• Decision
engines
• Execution
systems
(email, Web,
social, events)
• Management
(content,
planning,
budget, etc.

13. Strategy to MarTech Example
Business Strategy
“Offer low prices profitably in online retail by running with low operating costs”
• Focus: Cost
• Financial: Modest margin, high number of customers
• Value Prop: Relationship (trusted source of best prices for standard products)

14. Strategy to MarTech Example
Marketing Strategy
“Attract price-conscious customers by stressing low prices and making highly targeted
offers; key metric is marketing ROI (=promotion efficiency)”
• Channels: limit to major channels (easier to optimize)
• Spending: tie closely to profitability but grow over time to gain scale
• Intimacy: track customers closely to allow targeted offers
• User skills: modest (standard skills needed; keep costs low)
• Target metrics: ROI is most important

15. Strategy to MarTech Example
MarTech Strategy
“Keep costs low by running tightly integrated systems, highly automated systems
with limited scope (i.e., optimize in only a few channels)”
• System scope: manage all marketing interactions through single system
• Channel integration: tightly integrate channel data; loosely integrate promotions
• Execution automation: highly automated targeting to add revenue and reduce costs
• Program sophistication: modest sophistication; only need targeted offers
• Flexibility: accept limited flexibility in return for lower costs of optimized processes
• Scalability: high to accommodate required volume and avoid replacement projects
• Cost: as low as possible
• Staffing: small, highly skilled staff to run automated systems and manage
outsourced resources

16. Strategy to MarTech Example
MarTech Architecture
• Shared vs siloed: share all possible functions to reduce costs
• Suite vs. best of breed: use suite to reduce costs, improve integration
• In-house vs outsource: outsource to reduce costs; accept limited flexibility
• Owned vs rented: rent at start but ultimately want to own to reduce costs
• External integration (CRM, Web, etc.): highly integrated to capture and consolidate
data and to present targeted offers during interactions

17. Strategy to MarTech Example
MarTech Components
• Database: standard database; limit unstructured data unless clearly cost-effective
• External data: limited use to reduce costs
• Data quality: basic capabilities required
• Identity association: basic capabilities required; primarily tracking known customers
• Analytics: highly automated offer targeting, media optimization
• Decision engines: must insert business factors into decisionis (e.g. inventory levels)
• Execution systems (email, Web, social, events): use suite features if possible
• Management (content, planning, budget, etc.): use suite features; need tight cost
management but otherwise only basic capabilities

18. What’s for
lunch?
Does
anybody
really do
this?

19. Why Strategy Matters