Operational Relevance: A Mandate for High-Tech Marketers
Operational Relevance:A Mandate for High-Tech Marketers THE TECH MARKETER’S ROLE IN C R E AT I N G T H E “ M A R K E T - D R I V E N ” F I R M Mark W. Vigoroso SVP, Global Marketing & Alliances Servigistics, Inc.
Agenda 2 What is “operational relevance”? 3 examples: Product Development, Sales, and Service Ops Payoffs
Hypothesis 3Marketing needs to achieve operational relevance in order for the company to realize the strategic and financial benefits of being a “market-driven” firm.
Is Your Marketing Team Operationally Relevant? 4 What’s the subject of most inquiries you get from other functions in the company? Strategic Operational Irrelevance Relevance Relevance How do we coordinate Latest report Where are Which product lines Which of our sales and marketing teamsOrder from an analyst the sales should we grow vs. clients are most and systems to eliminatelunch? firm leads? run for cash? profitable? pipeline leakage?“Pretty up” a Logo’d swag to Which Which indirect How should we How should wepowerpoint bring to a client emerging sales channels organize and allocate R&Dpresentation meeting markets will deliver the incent our sales capacity? deserve our fastest time-to- and services Tradeshow investment? value for us? teams to achieve booth duty client expansion targets?
What is “Market-driven”? 5 “Companies that are not market-driven believe the role of Marketing is to create the need for their products. You can see this in their behavior. Marketing is where t-shirts and coffee mugs come from. Marketing is the department that runs advertising. Marketing is the department that generates leads. Most of all, Marketing supports the sales effort. But mature companies realize the aim of marketing is to make selling superfluous. Marketing defines products based on what the market wants to buy.”
… Paves the Way for Operational Relevance… 7 Strategy without Operations is “tooth-less” Strategy OperationsWhat should we build? R&D / ProductHow and to whom should we Developmentsell it? Sales OperationsHow do we earn the right tokeep selling it? Client Services / Support Just get a seat at the table. Don’t try to OWN it. Think/act cross-functionally
Agenda 8 What is “operational relevance”? 3 examples: Product Development, Sales, and Service Ops Payoffs
… But Needs to be Founded in Fact, not Opinion/Experience 9A. What should we B. How and to whom C. How do we earn the build? should we sell it? right to keep selling• Segment/region/ • Segment prominence it? product line by region • Client sat / NPS momentum via TTM • Competitive • White space analysis and E(FTM) revenues momentum • Account mapping• Current / future • Market sizes product competency • Market growth rates relative to competition • Installed-based sellability • Win/Loss • Pipeline stage conversion rates
A. Product Development Operations PRP: Product Release Proposals NPI: New Product Introductions 10 Product Mgt A Product Release Sales Defined QM2 Scope Frozen QM3 Code Complete Product QA Stable Mgt B Build & Smoke Test QM4 Beta Ready automated testing to Portfolio Council drive continuous quality QM5 COO QA Complete Execs G/A Ready Product NPI / CBA CMO BRD Mgt C CTO Sprint 1 PRP VP, Prod Mgt Sprint 2 Alpha Beta Sprint Sprint Client Program Mgt Release PlanCommunity Finance Beta General Release Release Product Mgt D Cycle Reviews Build & Smoke Test QM1 periodic reviews of work-in- automated testing to Tech Requirements Due progress features drive continuous qualitySupport QM0 Product Mgt E ProServices Portfolio / Platform Mgt
Scorecard for Marketing Relevance in Product Dev Ops 13 Allocating R&D resources towards building products the market wants to buy should result in portfolio REVENUE and PROFIT growth. KPI Baseline Target Actual Product 1 direct contribution margin (DCM) Product 1 share of target markets Product 2 direct contribution margin (DCM) Product 2 share of target markets Product 3 direct contribution margin (DCM) Product 3 share of target markets
Scorecard for Marketing Relevance in Sales Ops 15 Harmonizing marketing and sales efforts should result in increased sales VELOCITY and EFFICIENCY. KPI Baseline Target Actual PQL/MQL Conversion Rate MQL/SQL Conversion Rate SQL/Promising Conversion Rate Promising/Upside Conversion Rate Upside/Commit Conversion Rate
C. Client Services Operations 16 “Client Leadership Team” Goals: Maximize Client Lifetime Value (CLV) Revenue (i.e. SELL MORE SOFTWARE to our existing clients) Profit (i.e. align our “care and feeding” investments with clients’ top- line contribution) Grow referenceable base Exec sponsors: COO, CMO • Client Services Team members from: • Account Services Finance Sales • Pro Services Marketing • BIS R&D
Scorecard for Marketing Relevance in Client Service Ops 17 Sensitivity analysis on client sat data and prioritized plan for client expansion should result in highly profitable recurring revenue streams from “tier 1” clients. KPI Baseline Target Actual NPS by product, region, segment Cross-sell opportunity:close ratio, Tier 1 accounts Up-sell opportunity:close ratio, Tier 1 accounts Cross-sell opportunity:close ratio, Tier 2 accounts Up-sell opportunity:close ratio, Tier 2 accounts Average Annual Client Value (ACV), Tier 1 accounts Average Annual Client Value (ACV), Tier 2 accounts Average Client Lifetime Value (CLV), Tier 1 accounts Average Client Lifetime Value (CLV), Tier 2 accounts
Agenda 19 What is “operational relevance”? 3 examples: Product Development, Sales, and Service Ops Payoffs
Payoffs 20 What matters most in company valuation? PROFIT (OPERATING) PROFIT GROWTH An operationally relevant marketing organization bridges the gap between the top-line-only incented sales organization and the often bottom-line-blind delivery and service organizations. Source of operational cost is often not the best source for driving operational efficiency Go-to-market strategy drives operational decisions and organizational structure Operating profit is created and grown via selling the right product to the right companies in the right markets
Parting thoughts… 211. Data sets you free2. Think cross-functionally3. Be ready to manage change
Thank you! 22Keep in touch! firstname.lastname@example.org www.linkedin.com/in/markvigoroso @mvigoroso