Customer Centricity Requires CMOs to Drive Data and Channel Integration

In a post last March I wrote about how Chief Marketing Officers (CMOs) are starting to drive the corporate application agenda.  I had concluded that as corporations become more customer-centric, they are looking for, or starting to use, a new generation of data-driven applications to help them extract insights about their customer behaviors so that they can improve their interactions with customers and prospects regardless of the communication channel. Technologies such as big data (an interesting post here about the role of big data in next-generation marketing), mobile, social and cloud are at the core of these new applications that are being aggressively embraced by CMOs.

Since I wrote that post I continued to spend time with CMOs trying to better understand their multi-channel marketing challenges, as well as analyze how they are using relevant solutions from portfolio companies such as Extole, Exelate, 8thbridge, Pivotlink, ThisMoment, and Turn.  I saw two encouraging trends: First, a few of the companies I consider marketing thought-leaders are already starting to think in terms of multi-channel marketing and are licensing software solutions that will enable to realize their customer-centricity goals.  Interestingly, these companies are not looking for their ad agencies to provide them with these technologically complex solutions, realizing the limitations of these agencies but also because they consider such integrated multi-channel marketing solutions to be a unique competitive advantage.  In addition to many private companies, IBM has been one of the vendors that realized this shift and is now trying to capitalize on it.  The Wall Street Journal recently wrote an article regarding how IBM is approaching marketing executives with new technology solutions to address their needs. In that article Travelocity's founder and former CEO Terry Jones was quoted as saying that many companies target customers through individual channels such as TV, radio, online and mobile technology rather than a unified approach.  CMOs are all trying to figure this out.  Second, several other companies are starting to aggressively align their relevant departments and plan for introducing such solutions into their organizations.  These companies realize that:

1. In order to become customer-centric and deliver a consistent message to each individual regardless of the communication channel, companies must first integrate all their customer- and prospect-related data.  Up to now, organizations would silo the various types of customer-related data.  Offline customer data (store data , catalog data, TV panel data) was kept separately than online data (email, data collected through a brand’s web site).  Data from mobile interactions was kept separately from that of desktop interactions.  Data regarding earned media interactions, e.g., social interactions, was kept separate from paid media interactions, i.e., data related to online advertising, or even TV advertising.  Online data is measurable.  Marketers first saw the advantages of this measurability through their online desktop advertising efforts. Because of this measurability they saw that the ROI from online advertising is superior to that of TV advertising, as an example.  This is why search advertising and display advertising budgets have been exploding over the past 3 years.  Now marketers want to extend the measurability found in online advertising to other types of communication channels, e.g., social, and the way to do so is by better utilizing the data they collect.  As Altimeter also points out, there is a great incentive for integrating all the data types that are collected from these channels and media.
2. Delivery of the right message through the right channel not only necessitates data integration but also requires the integration of the right “back office” systems with the appropriate “front office” applications; the systems of record, e.g., the corporate CRM system, with the applications of engagement, e.g., the brand’s Facebook page.  To achieve this goal, CMOs must ultimately partner and collaborate with their CIOs.  While several marketing organizations have been hiring their own IT resources, they are starting to realize that it is not to their benefit to recreate what IT organizations have already build, and it will take too long; and time is not on their side.  The Wall Street Journal article cites the case of Motorola Solutions, whose CMO created a dedicated technology team that works with the unit’s CIO.

Companies that don’t start planning on how to become customer-centric and how achieve this goal by integrating their all their customer-related data and systems in order to provide a consistent and unified message across all their interaction channels will find themselves at a considerable disadvantage over the next 5 or so years.

Comments

[Joanna_rustin]

Great post Evangelos. Thanks for the mention. We hear these challenges echoed by retail marketers and are seeing encouraging results using SaaS apps to harness data and apply fine-grained segmentation techniques to hone in on key customer groups. This paper is a great resource for readers interested in learning more about these advancements in marketing optimization: http://landing.pivotlink.com/5WaysCustomerSegmentation_Website.html

Joanna Rustin, PivotLink

[Rachel Southcott]

Great resource for my research in QA Training.

[Andrew Stein]

Timely post, Evangelos. This push is apparent in the recent analyst reports on CMOs & Marketing.

By the title, I thought this was going to be about "sales channels," not "marketing customer-reach channels."

Seems there's a prerequisite for any technology company with dealer-sales-channels putting a degree of separation between prospects and customers and the company to also integrate that data into the company's database.

This is no small problem - as there is a lot of institutional anxiety in dealers, as they see their world changing with the shift to cloud and subscription models. However, it's amazing to note that there persists a significant number products from top-10 software companies whose business is still dominated by their legacy per-seat license model and an arms-length dealer channel.

Great post, and a need for a follow-up on the shift required in this other "channel" aspect.

[Evangelos]

The multi-channel world companies need to operate in has made marketing a far more complex proposition where technology can play a pivotal role, very much like it is playing in other areas. It has also put marketing in the front and center of CRM rather than as the last component of CRM, as was previously the case. Indirect sales environments have not yet attracted the necessary attention, as direct sales environments have and admittedly more work must be done there,

Thank you for the suggestion and will plan on addressing this topic in one of my future posts