Chief Digital Officers: Bridging the Innovation Gap Between the CIO and CMO

The chief digital officer (CDO) is no longer an exotic, quixotic, flash-in-the-pan role. In some of the world's leading brands, the CDO is now the general manager of a large digital business unit with significant revenue targets reporting to the CEO. This is one of the fascinating conclusions from IDC's latest report on the CDO role based on interviews with CDOs from: Caterpillar, CVS Health, The Metropolitan Museum of Art, Meredith Corp., SAP Digital, Travelex, the U.S. Department of Commerce, and Under Armour.

The title of this study should in no way insinuate any lack of innovation on the part of CIOs or CMOs. Both roles are managing digital transformations that are reshaping everything about their organizations. Those efforts can be all consuming, so some brands are establishing the CDO to lead strategic innovation. Free from the operational KPIs of the CMO and infrastructure demands of the CIO, the CDO is expected to invent the digital growth engines of the future.

Information and software-based companies are moving into services and support areas across industries. They are bringing new business models based on data services, sharing economies, and mobility much faster than established companies can. This is a huge threat as these areas are major revenue growth opportunities in industries that may be in low single-digit growth mode. Legacy brands typically don't have the core competencies in software development or data and analytics needed to bring information-based products to market. In addition, cultures at many large enterprises are not used to the extreme cadence of digital business. As a result, leading companies are not only driving internal innovation and developing their own talent, they are investing and acquiring start-ups.

Based on our interviews, we have developed three archetypes for today's CDO:

• The digital GM: Reports to the CEO and leads the establishment and/or transformation of a significant business.
• The digital Disrupter:Reports to the EVP or equivalent and leads a dynamic team charged with driving product and service innovation and cultural transformation.
• The digital Evangelist:Reports a level or two down but is highly visible to the executive level. Leads a small team designed to raise digital IQ throughout the organization.

In practice, the CDO role spans a spectrum of overlapping responsibilities. The digital GM also drives innovation and raises the digital IQ of the entire enterprise. The digital disrupter is also in charge of raising digital and social adoption across the company. The digital evangelist is more of a support role that helps senior leaders drive digital transformation.

Two key questions every company should ask itself during the annual executive planning cycle are:

1. If we wanted to completely disrupt our industry, what kind of company would we start?
2. How do we become that company?

The executives running the companies profiled in this study have asked themselves these questions in one form or another. They may not have all the answers yet, but they have dedicated themselves to finding out before they get "Appled," "Ubered," or "Airbnbed." New mantras for the digital era are:

• The only way to control the pace of change is to set it — that's the primary mission of the CDO
• Always be disrupting
• Follow the money: find out where the VC money is going in your industry and watch those companies closely, partner with them, and invest in them or buy them if you can

For more information about this report please contact me: gmurray(at)idc(dot)com.

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The 4 big reasons you need an ABM strategy right now

There are four significant trends making account-based marketing (ABM) a major focus for B2B marketers:

1. Rising customer expectations are the most disruptive trend in business today. Customers no longer make categorical distinctions between their personal and professional brand relationships. They expect all companies to provide highly valuable personalized experiences all the time. Companies that differentiate their customer relationships on the basis of account-specific insights and responsiveness raise customer expectations and create competitive advantage. Expectations are set very early in the buyer's journey long before they interact with Sales, so marketing plays a crucial role in demonstrating value add from the very first touch.
2. Customer acquisition costs have changed dramatically. Saturation is a problem for many technology product categories, especially second platform solutions in the enterprise arena. As segments near or reach saturation, new customer acquisition costs soar and it becomes imperative to more efficiently find new customers, get the most out of existing customer relationships, and defend them from competitors. The scale efficiencies of marketing vs. sales are critical to accomplishing these objectives cost-effectively.
3. Subscription revenue models dramatically extend the time it takes to recoup cost of sales. Ideally, revenue and profit increase over time, but that is dependent on retention and expansion of the relationship which require constant care and nurturing. As a result, marketing must play a central role in optimizing the ongoing customer relationship.
4. Technology has enabled an increasing number of account based marketing program components to be scaled beyond a small group of select customers. Online communities, micro sites, personalized content, crowd sourced product features, and other digital elements are easier to offer at scale. As a result, they enable companies to gain additional margin and raise expectations in segments beyond their largest customers. These are the tools the digital marketer must leverage for delivering value to the account.

Despite its name Account Based Marketing is not an exclusively marketing function, far from it. At its most mature it is part of a larger program that coordinates all customer facing resources (from marketing, sales, finance, fulfillment, product development, service, support and partner organizations.) Prior to getting there, it can take a number of different forms depending on resource commitment from content curation, to verticalization, to sales enablement. Regardless of the stage of your ABM activities, the ultimate goal remains the same: to deliver a highly differentiated, deeply customized, supremely successful experience for every account. When executed well, ABM is a vital tool for increasing customer lifetime value and raising the bar for competitors.

Contact me to request more information on IDC's Account Based Marketing Maturity Model - gmurray(at)idc(dot)com. 

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IDC's Worldwide Marketing Technology 2014-2018 Forecast: $20 Billion and Growing Fast

Organizations worldwide will spend approximately $20.2 billion on software solutions for marketing in 2014. The marketing software market is expected to grow to more than $32.3 billion in 2018. It will be one of the fastest-growing areas in high tech, with a compound annual growth rate (CAGR) of 12.4%. Over the five years from 2014 to 2018, organizations cumulatively will spend $130 billion on software for marketing departments. This forecast includes a wide range of solutions in four broad categories: interaction management, content production and management, data and analytics, and marketing management and administration. (For more information see Worldwide Marketing Software Forecast 2014-2018: $20 Billion and Growing Fast, IDC # DOC #251902, October 2014.)

Worldwide Marketing Technology Spending by Category, 2014–2018

                                                                          Source: IDC 2014

The emergence of Marketing as a Service (MaaS)

While innovation continues, the era of consolidation has begun. Many acquisitions have been made by software industry majors to bring together key pieces of the marketing and advertising software landscape. This activity has been coincident with the transformation of the larger IT industry to what IDC calls the 3rd Platform where technology and maintenance services are offered "as a service." This model is a game changer for marketers and marketing software suppliers. Even though almost all current marketing solutions are cloud based, they are just beginning to be integrated enough to provide seamless operations and reporting across the diverse activities of a large marketing organization. Furthermore, newer platform solutions can be leveraged by third parties such as agencies and marketing BPOs to provide value-added services in a bundled offering, which IDC calls "marketing as a service." (For more information on MaaS, see Marketing as a Service (MaaS): A New Route to Market, IDC #247587, March 2014)

5 Action Items for CMOs

1. Construct a technology road map based on business drivers to guide investment
2. Consolidate applications into a platform with data and process level integration to improve efficiency and effectiveness
3. Work to integrate marketing technology with the enterprise infrastructure to reveal deeper insights into customers, partners, and market opportunities
4. Establish inter-disciplinary teams and processes to combat the silos point solutions can create
5. Learn to leverage corporate IT to improve vendor management, due diligence, and governance practices

For more information, please contact me at gmurray(at)idc(dot)com. 

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Marketing to the Data Driven Customer

Customers with digital DNA expect data driven value

The digital native generation is bringing new expectations to brand relationships. They are mobile first, crowd sourced, and data savvy. Their first and most frequent interaction with your brand will be digital and mobile. They find out what's cool, what's trending, and what's most likely to work best for them from their social networks. They don't have emotional attachments to brands because the product is compelling or the advertising is cool. Their emotional engagement comes from unexpected insights that make them more successful. This is the new basis of customer loyalty, advocacy, and lifetime value.

Of course you still need a compelling product and cool ads (or messaging.) But once the prospect is a customer, continual engagement depends on over the top data driven insights. It's no longer enough to just sell the hammers and saws and let the buyer go build their house. You need to monitor how they are using the hammer and saw. You need to deliver success by guiding their use of your product based on the behavior of your most successful customers. You need to leverage your position as the center of your customer universe to share best practices quickly and efficiently. The only way to do that at scale is through data.

Data Ownership vs Data Stewardship

In between the lines, you should be hearing a new philosophy with respect to customer data. Even though legally you "own" it, the data driven customer expects you to act as a data steward. You must treat their data as an asset to be used for their benefit, not just as the basis for driving revenue. Everything you provide to your customers should be designed to bring data back. Your customers should learn that the more data they provide, the more value they get in return - without negative side effects like having their data sold to an irrelevant ad network. Give to get and maintain the trust.

This has tremendous implications. Not only for marketers. Data marketing requires coordination with product development, IT, finance, fulfillment, point of sale, customer support, consulting services, sales. All these groups interact with customers and capture data on different aspects of their behavior - product usage, purchasing, problem resolution, planning, advocacy, etc. They all need to be understood to identify the most successful customers and the traits that drive their success. You can create tiers of services based on the level at which customer provide data. You can create cohorts of customers that exclude direct competitors. You can support exchanges within your customer ecosystem that enable strategic accounts to benefit from preferred peers. You can be extremely creative about how you structure your data marketing services.

The message is that in a world of shrinking product cycles, cheap knockoffs, and copycat services, data marketing is the new source of differentiation. No one else has the data you (should) have on how customers can be most successful with your products. Use it to attract and retain the best and leave the rest to your competitors.

To continue the conversation on data marketing and the data driven customer, contact me: gmurray (at) idc (dot) com.

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Marketing as a Service (MaaS): The next wave of disruption for marketing tech

Marketing technology has seen a remarkable innovation boom over the past 10 years — so much so that the market now boasts over a thousand vendors that IDC organizes into more than 75 categories. IDC believes this structure is unsustainable and over the next three years the forces of consolidation will exert fundamental changes in the way large enterprises provision marketing infrastructure and from whom they provision it. The marketing technology market, like much of the IT industry, will move to a cloud based service model which IDC calls the "third platform." As the illustration shows, more than 90% of the growth in the IT industry will come from this model.

For marketers, the third platform means the advent of Marketing as a Service (MaaS), which will have transformative affects for IT, IT services, and creative agencies. Key indicators that MaaS is on it way include:

• Unsustainable complexity: Point solutions have come to market independently leaving it up to marketers to assemble them into rational infrastructures. This is a highly inefficient market model for buyers and sellers.
• Transition to platforms: The consolidation of point solutions into platforms has already begun. Many noteworthy acquisitions have been made by major vendors such as Adobe, IBM, Oracle, salesforce.com, and SAP. However, this phase of market development will not last long as markets move rapidly from platforms to "... as a Service" models.
• Digital and creative coming together:AdAge recently named IBM the number one global digital agency in the world. IBM is rapidly hiring from the agency world to build out its creative services. Adobe has deep and long standing technology partnerships with many top agencies. The agency world needs a value proposition that will allow them restore margins and regain strategic relevance.

MaaS includes the fundamental technology, IT services, and creative services that marketing needs in a bundled offering. Bringing these services together delivers significant value to CMOs who have two key sources of pain: On one hand, their agencies cannot effectively execute omnichannel campaigns nor deliver real time attribution reporting. On the other hand, technology has added a great deal of cost and complexity to their operating environments. MaaS enables them to outsource much of the technological complexity, pay for it out of their advertising budgets and get better integrated marketing services from their top agencies. For tech vendors it means gaining access to the advertising budget which dwarfs marketing IT spend by orders of magnitude. As a result, IDC expects this model to be a major route to market for marketing technology in the enterprise segment. It is therefore an urgent action item for tech vendors, system integrators, and agencies — partner now or lose a major channel. 

For more information on this important trend please contact me at gmurray(at)idc(dot)com.

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Measuring Sales and Marketing based on Customer Outcomes

Have you ever used Uber X, the freelance taxi service? Half the cost of a cab and twice the level of service. The cars are immaculate. The drivers are almost overwhelmingly nice. They care deeply about your experience. Not because they want a tip. They want your 5-star feedback. That's so important to their success that they will do almost anything to make sure you are happy. It is a customer first model that works because customers have the ability to give feedback that has direct business impact. It's the eBay model applied to real world human interaction.

Think of your salespeople as Uber drivers, they interact with customers every day. Your marketing is like the car - is it in the right place at the right time and taking the customer where they want to go? These things matter tremendously to customers and yet we have no means to empower them to drive the behavior of marketing and sales at the moment of engagement. We have customer satisfaction surveys. They are important but lack immediacy and context for sales and marketing.

I recently came across two articles that may be the proverbial starting gun for measuring customer focus. The first from the HBR blog, "Bonuses Should be Based on Customer Value not Sales Targets," profiles how GlaxoSmithKline no longer calculates sales bonuses based on prescription drug sales but on a basket of metrics related to patient outcomes. The second on the Forbes blog, "The 5-Star Employee, Why we need a Yelp for Business" presents a provocative picture of why employee ratings should be standard practice.

Clearly there are cultural and generational issues at stake and a lot of education needed to make these transformations acceptable and actionable in a way that improves outcomes for everyone. As customer facing technology coalesces around the CX Cloud model, marketers should think about how to get customer feedback more frequently. It will require innovation born of experimentation. Of course, no one wants to rate every piece of collateral. But maybe every third touch or at specific points in the nurturing process. Companies that figure it out will have the great advantage of being able to monitor customer experience and course correct in flight as opposed to relying on satisfaction surveys that are too little too late. Best of all, customers will feel the power of the relationship, something they won't get from traditional models. Uber X is not better just because it costs less, it delivers more at the same time.

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The one framework your CMO must share with your CIO

So many marketing solutions are available that it is very difficult for marketers, chief digital officers, and CIOs to have a holistic view of what they have, what they need and why. IDC has recently created a tool to help - The 2014 Strategic Framework for Marketing Technology. This tool provides a visualization of the different technologies needed to support different marketing organizations no matter how small or large, digital or non digital, modern or not. Pictured below is the whole map which presents solutions in four broad categories:

1. Interaction: The primary function of these solutions is to be customer facing
2. Content:  The primary function of these solutions is to facilitate the production and management of marketing content
3. Data and Analytics: The primary function of these solutions is to store and produce insights from customer, operations, and financial data
4. Management and Administration: The primary function of these solutions is to provide internal communications, workflows, budgeting and expense tracking.

IDC's Strategic Framework for Marketing Technology

v1.0 = 78 categories 

We have found that the complexity of technology requirements can be defined around a few factors:

• Company size
• Business model (eComm, B2C, B2B direct, B2B indirect)
• Vertical industry
• Mission of marketing (awareness, demand generation, etc.)

Using these factors, the map can be easily customized to show the current state, recommended next steps, and long term vision for just about any marketing organization. If you're a pure eCommerce company the advertising and digital commerce areas will be much more important and sales enablement would disappear. If you're a B2B direct company digital commerce might be a very low priority and sales enablement would loom large in your plans. Regardless of whether you're CPG, Health Care, Financial Services, startup or global enterprise, we can build a map to get your marketing, IT, and executive teams on the same page with respect to your marketing technology requirements.

For more information on our framework and the services we offer around it, please contact me at gmurray (at) idc (dot) com. 

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Top 3 customer experience challenges for marketers

Customer experience management is fundamentally about providing a seamless and consistent flow as prospects move through different phases of development and points of contact with a supplier. Delivering on this presumes a level of connectedness that many marketing organizations struggle to achieve. The reason for the struggle is that there are three significant forces of fragmentation opposing their efforts: specialization of roles, organizational hierarchies, and tactical technology. These forces threaten every marketing organization with two fatal flaws: they slow everything down and fracture the customer experience.

Three forces of fragmentation that marketers must fight:

1.     Specialization: all areas of marketing execution have become inch wide mile deep endeavors. As a result, there can be many degrees of separation between key roles such as social marketers, event planners, web administrators, technical writers, etc. What do these people talk about when they get in a room together? Does anyone else care how the events person manages food service or logistics?

How to combat the fragmentation of specialization: It is becoming clear that the one thing all marketing roles now have in common is the need to master data and analytics. Each specialized role produces and consumes data from all the others. It is critical that everyone in marketing understand how customer and operational data flows, how others use the data they produce, and the best analytical practices for gaining insight. This should be a key topic of conversation and community building.

2.     Hierarchical org charts: Marketing is no longer a command and control world. Yes, there is an overlay of reporting that has to go "up the chain." For many marketing leaders that grew up with the traditional B-school approach to management, adding layers to the org chart is a natural approach. However it results in compartmentalization that left untended creates a culture of disconnectedness.

How to combat the fragmentation of hierarchies: Marketing organizations should be defined around processes not activities. Marketing processes must be supported by collaborative environments that foster greater visibility and coordination between contributors. Enterprise social networks are becoming essential for creating a culture of openness and connection. Organic approaches are not enough, marketing leaders need to seed the social network with process oriented communities such as: campaign management, sales enablement, content lifecycle management, etc.

Transforming Marketing From Silos...

... To Systems

3.    Technology: IDC identifies nearly 90 different categories of marketing technology (not including middleware and infrastructure!) That alone should tell you the function and the IT market serving it are unsustainably fragmented. The deployment of highly specialized tools can empower people within their specialties but can leave them on a technology island in the greater scheme of things. Major IT vendors have started to consolidate some of the basic building blocks, but there are still many areas in which niche/best of breed capabilities are needed.

How to combat the fragmentation of technology: The two centers of gravity for your marketing IT infrastructure are your integrated marketing management solution and your website. They should be intimately tied to each other and all other marketing systems/tools should integrate with one or both of them. This becomes a forcing factor for integrating processes and data flows. Marketers also need to demand more of their technology vendors to accelerate the evolution of platforms that tie together the systems of engagement, content, administration and data.

The most successful CMOs will ensure the pervasive deployment and adoption of technology increases collaboration, socialization, and systems thinking. They will design marketing organizations around customer-centric processes and exert deliberate efforts at all levels to combat the forces that threaten the connectedness needed to serve up a seamless customer experience. 

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Busting the Myth of Sales Disintermediation

Are IT Buyers so self sufficient that sales people will no longer be needed? Much was made in 2013 of the notion that IT Buyers make a large percent of their decision before engaging with sales. Every major market research company had its own number but they all ranged north of 50%, a scary thought especially if it represented a rising trend.

As shown in the figure below, enterprise IT buyers actually rely very heavily on vendor input for enterprise solutions. Buyers can make categorical decisions like "we need a new CRM or billing system." But they need a great deal of information from marketing, sales and technical sales in order to complete their decision making processes.

Finding the Right Mix of Marketing and Sales Engagement

Q.        What percent of your decision for an enterprise-level purchase when multiple vendors are competing for your business has been made by the time you first speak with a salesperson?

Source: IDC's 2013 IT Buyer Experience Survey, n = 193

The implications for supporting customer journeys is significant. For purchases that are low cost, familiar and low risk customers want to be as self sufficient as possible. And sellers need them to be because it costs too much for even telesales or online chat to support these transactions. At the other end of the spectrum of course it gets far more complex and that translates into opportunity for vendors - if they are truly aligned with the buyer's journey. 

One of the most important value adds that most sales and marketing lacks is the need to educate customers on how to buy as much as what to buy. For costly complex purchases, customers need guidance on:

1. How to evaluate the strategic priority of the solution as well as the technical and business benefits
2. How to build consensus across line of business, corporate IT and other key players in the decision making process.

According to our latest IT Buyer Experience research, marketing and sales teams that provide this insight early and often will help buyers make their decisions up to 40% faster, putting them ahead of the competition and ahead of forecast.

For more information on this and related research please contact me at gmurray(at)idc(dot)com.

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Cross Training for Marketing

Most marketing organizations are organized around a set of silos based on specialized program functions within branding or demand generation. The skills, tools, and relationships needed to manage advertising, events, email, website, social, video production, technical writing, etc. are very different. The pressure and complexity involved in each area can easily turn them into organizational islands. They may each have their own databases, audiences, and reporting structures. They may be further fragmented when replicated across business units and geographies. While specialization is necessary and will only increase, the fragmentation and separation that typically accompany it can break down the customer experience, introduce inefficiencies and redundancies, and slow down the whole marketing operation.

The challenge is how to make strong sustainable connections between specialists so that new competencies can be acquired without the negative side effects. Data management and analytics have emerged as two key skills common to every marketing activity. These topics are ideal for bringing marketers together to share how each of their areas produces and consumes data and the models and tools they use to gain meaningful insights. IDC recommends marketing organizations conduct regular analytics knowledge jams to share competencies, resources, and insights. To cross train them on the many other functions that affect customer creation. Key objectives include:

• Provide visibility into how data is produced and consumed in other areas
• Improve data capture, quality, and usability
• Socialize important analytic models
• Provide a more holistic perspective on the customer experience
• Raise the overall data and analytics IQ of the marketing team

In each session, representatives from different groups share 15 minute presentations of what they are working on and how they use data and analytics. This will help combat the fragmentation brought on by specialization, reduce inefficiencies and redundancies, and make marketing more responsive.

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Sales process - the missing ingredient for marketing ROI

Most marketers in B2B enterprises have never been trained on sales process. If I were running your marketing or sales organization this would be the first thing on my agenda. Why? Because without understanding sales process, marketing is essentially set up to fail. How can anyone improve or contribute effectively to something if they don't know how it works. It's like setting up your manufacturing to produce blue widgets but not telling your suppliers what parts you need for your particular widgets. So they ship you tons of blue stuff and hope that somehow it all works out. That's the position, to one degree or another that most enterprise marketing organizations are in even at some of the most advanced process-centric companies in the world. Largely because they have chopped up the customer creation process into a collection of departmentally independent activities. 

In a large enterprise with many products lines, business units and segments, there are likely to be a number of different sales processes. Marketing and sales resources should be aligned against these processes horizontally. This is the key to making the shift from a siloed command and control organization to a responsive, integrated customer focused one. Not only is it important to design around sales process, which should be designed around the buyer's journey, but it is important to design for change. Markets are dynamic and sales processes change.

Marketing automation systems, especially those that are integrated with the sales force automation or customer relationship management system, have begun to provide marketing with some clues to sales process. At least they can see what happens or does not happen when they deliver something to sales. But the data does not always explain why, and that's the critical part. Marketing needs to understand very specifically how Sales operates in order to optimize around customer outcomes. The alternative is for marketing to optimize around departmentally focused KPIs like the number of MQLs (ugh), or SALs, or worse vanity metrics like hits, sentiment, likes, etc. These metrics are useful indicators for some marketing activities, but not as business drivers for marketing investment.

Aligning marketing and sales around sales process is the first step to formulating an enterprise customer creation process that extends across all customer touch points, including: billing, fulfillment, service and support. At each stage of maturity, marketing, as well as all the other customer facing departments, gain much greater visibility and accountability to the whole process and its connection to corporate objectives for growth, market share, and margin. This is all necessary for a true picture of marketing ROI.

Your action items:

• Marketers: lobby your top executives to make regular sales process training for marketing a priority. 
• Sales executives: demand that marketing know how the different parts of your sales force work so they can more effectively develop prospects and serve customers. 
• CEOs: get smart about your customer supply chain by applying the same level of due diligence and process discipline to it that you have to your product and services units. As a result, you will make much more effective use of marketing investment and be able to hold your whole customer facing team accountable for its contribution to your strategic objectives.

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Next Gen Marketing Teams: From Silos to Systems

Automation has revolutionized marketing. It has brought new insights, capabilities, and methods of engagement. It has demanded new skills, thrust us into the omni-channel universe, and opened new levels of visibility and accountability. But these are all ripples in the pond, so to speak, only the most immediate after effects of a rather large splash down. The most profound change is just beginning to be felt. Automation has introduced the notion of an enterprise customer creation process, a horizontal function that cuts across all marketing activities. Effectively implementing and managing this process requires next generation marketing teams to be much more integrated and coordinated. 

Despite its mystique as a freewheeling, creative and dynamic function, corporate marketing is in reality a deeply fragmented hierarchical organization. Specialists typically function in separate domains moving from project to project with great urgency, rarely having time to consider the big picture. The need to be highly responsive to changes in direction has created a culture adverse to structured workflows. However, as marketing automation solutions consolidate into an enterprise system, a diverse set of marketing roles, process definitions, and data structures are brought together. In response, marketers are beginning to redesign their organizations around workflows instead of activities. Rather than having social, web, advertising, content, partner, analytics, systems admin, etc. in separate organizational buckets, these roles are being reformed into cross functional teams responsible for executing entire campaigns. 

Marketing solutions are starting to be designed around a multi-disciplinary community model. Adobe's marketing cloud offers a collective view of the campaign workflow for each member of the team and unique workspaces for the various roles in content production, campaign management, analytics, etc. Each member can see what contributions have been made and why. They can communicate in real time on key issues and how they affect the overall process. IDC expects this trend to become pervasive. Providers such as Salesforce.com, Oracle, IBM, SAP, and others are driving their solutions around a vision of the "customer facing ERP" which integrates all customer facing functions in what will most likely be a hybrid cloud for managing customer experience. The implications for organizational design will be significant and CMOs should start instilling the culture of workflow based communities as soon as possible. 

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Create and Close Customers up to 40% Faster

IDC's CMO Advisory has conducted an annual IT Buyer Experience survey for the past six years. We have tracked many changes and interesting trends, but one thing stands out as a consistent inefficiency in the market: every year IT Buyers report the purchase processes can be approximately 40% shorter. Over the course of a 10-month average process that means the potential is to accelerate revenue by an entire quarter. This is a huge opportunity for both buyers and sellers with tremendous financial incentives for both and yet no improvement in six years. Why not and what to do about it?

Buyers put about 2/3 of the blame for this inefficiency on themselves. There are scheduling issues, conflicting agendas, changing budgets, changes in personnel, immature purchase processes, etc. The challenge for vendors therefore is two-fold:

1. Reduce the inefficiencies that are inherent in their own marketing and sales processes, and
2. Better facilitate the buyer's process(es)

Gap between actual and ideal IT purchase processes, 2009-2013

To do this, vendors need to intimately understand the Buyer's Journey. It starts with Exploration, moves to Evaluation, and ends with a Purchase.  Buyers spend the most amount of time in the Exploration stage, largely independent of direct vendor interaction. As they move through each stage, their agendas change dramatically and the process accelerates. Buyers spend less time in each subsequent stage and have higher expectations of vendor response times. By carefully defining and monitoring buyers' journeys, marketing and sales can better serve customer needs, keep pace with buyer expectations, and cut out big chucks of inefficiency.

For example, in the Exploration stage, the buyer's main objective is to establish fit between their business challenges and a solution. The main resources they use are related to trends in their industry. The primary internal influencers are business buyers (functional leaders, business unit mangers, and executives.) Once they enter the evaluation stage, however, their objective and trusted sources change completely.

In our report, IDC CMO Advisory 2013 IT BuyerExperience Survey: Create and Close Customers up to 40% Faster, we outline specific steps IT marketers should take at each stage in order to get the right messages to the right decision makers. For more information, please contact me at gmurray (at) idc (dot) com.

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If Content is Still King, Data is Heir to the Throne

Content marketing is becoming a primary strategy to solve the challenges of massively scaling and diversifying marketing channels. But content does not naturally support both scale and diversity at the same time. The only thing that scales as endlessly and cost effectively as the digital world is data. As a result, data marketing is on the rise and will ultimately inherent the throne as the core strategy for modern marketing. What is data marketing? It's using interactive data to directly influence or add value to your prospects, customers, and partners. Think of it as content marketing without the editorial. Data marketing is already fueling the rapid growth of content marketing. The best pieces of content marketing are typically wrapped around a compelling piece of (static) data. The key is that stripped of editorial, data must become interactive and not only deliver personalized insights but capture and bring user input back. 

Modern business solutions are increasingly deployed in the cloud on SaaS platforms that capture every transaction of every user. SaaS vendors are finding huge value in these datasets. They provide empirical evidence of best practice, efficacy, and cost effectiveness. Marketing and sales automation vendors can show their customers and prospects what types of campaigns result in the greatest lead generation, the highest value and velocity through the pipeline and the greatest return. They can tell them what type of social media content and cadence is most effective on which social media channels. This insight represents enormous value-add over and above the operational efficiency the systems provide.

Consider the power of this model applied to channel marketing. A SaaS platform for channel enablement can offer partners a single point of access to content repositories, transaction systems, execution environments, (inbound and outbound marketing, sales process tools) and social networks. If it's constructed properly it provides a place for partners to get work done, not just a library to read about how to get stuff done. For smaller partners that lack infrastructure and staffing resources this is an invaluable resource. As they use the platform it captures:

• Engagement – who's downloading what how often from the platform
• Transactions – deal registration, order submission, billing update, MDF reconciliation.
• Execution– the number of leads their marketing has produced, how leads are progressing through their pipeline
• Social interactions - groups they join, how they participate, what SMEs they interact with.
• Performance data – closed deals, order value

Access to this data can be offered from the platform through the development of a few simple forms and reports. The more data partners provide, the greater the level of analysis and insight they get in return. This information can be used to identify best practices of the top performers and shared (in aggregate) with other partners to help them run their businesses, resulting in better overall performance of all partners.

By utilizing pure data as collateral, companies can deliver highly targeted proprietary insights at scale much more efficiently than they can with content. While the role of content will in no way diminish, companies that master the art of data marketing will have greater levels of engagement, retention, and revenue with all their key constituents than those that rely exclusively on content marketing. 

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Using Data as a Service for Scalable Channel Enablement

The magic ingredient for successful channel enablement at scale is data. Imagine having the financial, operational, and behavioral data you need on partners to optimize new product launches, coverage models, and channel programs. Imagine being able to show partners — no matter how new or small or niche their focus — how other partners like them have achieved high return on investment (ROI) on their business with you. IDC's Channel Enablement Maturity Model provides a stage-by-stage guide for advancing the organizational, process, technology, and data infrastructure necessary to transform your channel marketing and sales enablement operations. The journey along IDC's Channel Enablement Maturity Model is one of evolving from a publishing/transactional framework to a process-driven one.

IDC's Channel Enablement Maturity Model - Summary View

	Stage 1: Ad Hoc	Stage 2: Opportunistic	Stage 3: Repeatable	Stage 4: Managed	Stage 5: Optimized for Scale
Key characteristic	"Every product for itself"	"Portals grow like weeds"	"Consolidation but still stuck in publishing mode"	"Central control over process-driven approach"	"It's all about analytics (Data as a Service)"

Source: IDC 2013

The DNA for Success is in the Data 
IDC defines channel enablement as "developing the right competencies in the right partners to deliver the right solutions to the most profitable customers." Ultimately, the goal is to provide a scalable model to identify high ROI best practices and propagate them throughout the partner population at a very granular level. There are three ways in which manufacturers can capture the partner data needed to support the analysis:

• Contractual obligation: Requires significant time and effort from partner account management, is limited to the largest partners, and is periodic at best. 
• Operationalized data capture: The partner platform should be thought of as a SaaS offering that provides a wide range of functionality but also collects data on every partner interaction. The ideal platform will consolidate all of the interactions with partners by offering personalized access to content and transactional systems, as well as execution platforms for marketing, sales, and support. By virtue of this consolidation, it captures an increasingly large portion of partner interactions and thus provides a great deal of valuable data to inform channel marketing and management. 
• Data as a service: Externalize partner performance data and make it available to partners in a way that captures even more data from more partners. The level of detail they get depends on the level of detail they provide. As a result, they can get actionable insights on how to better manage their businesses and market, sell, and support specific solutions. The database is in a virtuous cycle of enrichment. They should be able to get insight into a wide variety of strategic and tactical questions such as: 
• How many people do I need in marketing, sales, technical, and support roles? 
• What level of skills and training should they have? 
• What marketing activities are most effective? 
• What sales methodologies and plays are most effective at what stage? 
• What manufacturer resources and networks should staff be utilizing most frequently? 

While data is the crown jewel, there are significant people, process, and technology prerequisites for success. To find out more please see IDC's Channel Enablement Maturity Model or contact me at gmurray (at) idc (dot) com.

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Connectedness - The Missing Metric for Sales Enablement

Enablement programs for B2B sales and channel resources tend to focus on activities – trainings, certifications, portal visits, most popular assets, most posts per person, ratings, etc. These are all indicators suggesting enablement resources may have been consumed. But they don’t do a very good job of measuring one of the most important objectives of enablement - changing behavior. New platforms that integrate publishing, process, and social capabilities are making it possible to track behavior patterns in the context of specific business processes. Hidden in this data are the daily habits that differentiate our best direct and indirect sales resources. Sales enablement professionals need to find this data and share it with the rest of their sales audience.

This is a particularly crucial for the on-boarding process. Regardless of whether you’re training a new/replacement sales rep or bringing on a new partner and their employees, connectedness is a key metric that you need to capture and track. It is the only way to continually optimize behavior. You can capture financial and operational data with most of the content management, CRM, and marketing automation technology out there. But these systems are not explicitly designed to capture patterns of behavior. Even those with social networking capabilities are not being used effectively in this regard.

Sales enablement professionals need to use social networking as a basis for propagating best practices. The measurement should span not only person to person networking, but also track community membership, links to all manner of resources from internal portals, as well as communication with subject matter experts, peers and mentors. To be most effective, this capability should be deployed within a process driven platform for sales enablement, as opposed to an old school portal based on a publishing model. These new platforms go beyond simply providing access to content. They are process driven and deliver content, sales plays, transactional capabilities, and more all in the context of the company's go to market strategy. In addition they have or are easily integrated with enterprise social networking capabilities which are crucial to facilitating and capturing how people interact with all the great resources they contain. 

There are two key dimensions the connectedness metrics should include – the number of connections to the right resources and the cadence of communication. For example:

•          Which internal portals/systems do they log into – how often?
•          Which SMEs do they interact with – how often?
•          Which internal communities have they joined – how often do they visit and contribute?

This data can be invaluable in helping new reps and partners become more effective faster. What behaviors do our “A” reps and best partner reps exhibit? The intention is not to gratuitously boost hits and visits to marketing collateral, but to find the right level of connectedness for different types of reps. Being able to show other reps and partners that they can boost performance by making simple behavioral changes like subscribing to certain resources, joining communities they didn't know existed, or increasing the frequency of communication is the path of least resistance to effectiveness.

Today many large high tech companies report it takes a year to get a sales rep fully up to speed with the pipeline needed to meet quota in the following year. Clearly there can be a lot of process, product, market, customer, competitive, etc. knowledge that needs to be transferred. But don’t neglect to transfer the behaviors that will help them  best utilize the resources the organization has offer.

For more information on IDC's sales enablement research, please contact me: gmurray (at) idc (dot) com.

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How bright is the silver lining of Salesforce.com's Marketing Cloud?

At their annual Dreamforce shindig last week Salesforce.com announced the formalization of their marketing capabilities as the Marketing Cloud. Essentially it is a coupling of four key pillars of Salesforce.com's front end:

1. Customer intelligence: Data.com enriches contact and account information with fresh feeds from sources such as LinkedIn and many others. Enables both sales and marketing to create detailed contact profiles for segmentation, targeting and campaign management.
2. Social advertising and content management: The recent Buddy Media acquisition provides support for a wide range of social channels (social, web, mobile) and formats including contests, videos, and photos. Users can coordinate their publishing and advertising activity and measure impact throughout the social sphere.
3. Social listening and analytical tools: Radian 6 monitors popular social services such as Twitter, Facebook, LinkedIn, YouTube, as well as blogs, forums, communities and more. Supports 17 languages and mobile access.
4. Core CRM functionality: Salesforce.com consolidates resources to provide sales reps with a single source that can connect them with other applications, contacts, colleagues and workflows. Pulls data together into account/opportunity context. Delivers reporting data to sales and sales managers and can provide opportunity and pipeline performance data into other systems such as marketing and order management.

Salesforce.com is taking its "Social Business" mantra to heart by building its marketing functionality with a "social first" philosophy. The question is: will this be enough to satisfy Salesforce.com customers (and the company itself)? The answer is probably not. The functionality you won't find in Marketing Cloud is significant - the core campaign management tools, workflows, analytics and more offered by marketing automation vendors (e.g. Eloqua, Marketo, Neolane, Pardot, etc.) Even though there are fewer seats to be sold to marketers as opposed to sales, these two worlds are rapidly converging. The systems needed to automate them will need to do likewise, as evidenced by the tight integration of most marketing automation systems with Salesforce.com and the recent announcement of Chatter for Eloqua.

But Marketing Cloud is undoubtedly only the first step, in fact it's well beyond the first step for Salesforce.com and the only issue going forward is how do they continue to expand functionality in this area?  The build or buy equation for Salesforce.com currently favors the build approach as valuations for marketing automation vendors are sky high, at least in terms of an acquisition. Salesforce.com has plenty of time to creep into the marketing automation arena, establish itself as a more serious threat and then re-evaluate its strategic decision around marketing functionality.

In the meantime, marketing automation vendors have their work cut out for them. They must stay well ahead of where Salesforce.com's Marketing Cloud may go. They must continue to grow rapidly, prove their staying power and market value. Customers, however, should have no illusions that Marketing Cloud is an enterprise marketing automation platform in its current state. There is much more to marketing than social engagement especially for B2B models. Waiting for Marketing Cloud to evolve or for social to mature is simply not a choice, there is way too high a price to be paid in terms of market share, growth, and profitability. So if you're considering marketing automation don't delay or change course because of Marketing Cloud. Charge ahead full steam and should the social engagement of Marketing Cloud pop your ROI, by all means add it to your arsenal. 

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Data-Driven Marketing: A Survey of Marketing Automation Maturity in Global High-Tech Companies

Marketing has become technology, process, and data driven. On average, marketing operations teams at the large high-tech companies in this survey manage over a dozen major systems in an ecosystem that is rapidly evolving. The purpose of this survey was to assess the technology load on marketing organizations in terms of number, scope, and scale of systems as well as adoption, effectiveness, resources, and overall satisfaction levels. There are many interesting results from the data:

• Companies that take an enterprise approach to managing the customer creation process make the most effective use of their marketing infrastructures.
• Data-driven marketing requires many types of systems working together. They must be managed, matured, and optimized together to be most effective.
• Business intelligence (BI) competency is critical — it's one thing to have the data, it's another to use it.
• Penetration into the intended user base for each marketing system is the key:
• Leaders have achieved 90% or higher user adoption for the four pillars of any digital marketing infrastructure: campaign management, Web content management, CRM/SFA, and customer database. By comparison, laggards average only one over 90%.
• Leaders have achieved 75% or higher user adoption for 9 out of the 13 key digital marketing technologies categories we included in our survey. Laggards average only five systems at or above 75% adoption.
• Most respondents (even leaders) believe they have not realized much of the potential they see in their marketing systems.
• Organizational, process, content, and data readiness are seen as the major impediments to reaching the full potential of digital marketing infrastructures.

Clients of IDC's CMO Advisory can access the full document here. 

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Lead Distribution Scoring - a key differentiator for B2B marketers

Lead scoring is a well established technique for marketers to translate digital responses into levels of qualification for next stage outreach. For companies with no direct sales or sales cycles of 30 days or less lead scoring methodologies can be rapidly optimized around purchase behavior. For long cycle B2B sales processes, the optimization process goes only as fast as opportunity development which for many high tech companies can be 18 months or more. This is a crucial time for B2B marketers and they need to be just as exacting in how they manage the post-lead qualification journey as they are in getting prospects to the starting line.

B2B marketers need to segment, message, time, and target their communications with their direct sales reps just like they do with external prospects and customers. In my previous blog post Six Key Table Stakes for B2B Sales and Marketing Alignment marketers were tasked with three things:

1. Treat the sales force like a market segment
2. Market collateral (and leads) like solutions
3. Take an account-centric approach to lead generation 

Lead distribution scoring touches on all three. Lead distribution scoring is a second stage scoring process for marketing qualified leads that enables marketers to "get the right information to the right sales rep in the right format at the right time to move an opportunity forward." This is IDC's definition of Sales Enablement and is a fundamental concept that should govern how marketing markets all of its output to direct sales (leads, campaigns, collateral, etc.) The days of posting to a portal or flowing and forgetting MQLs into the CRM are over. Lead distribution scoring incorporates dimensions such as:

• What type of rep is this contact going to? 
• By segment 
• By tenure
• By region
• By product line, etc.
• Does the rep need many leads or a very limited number of leads? 
• What account is the lead associated with?
• Is the sales rep meeting with this account in the next four weeks, next two weeks?
• How is this contact connected to others in the account? 
• Is this contact interested in the same solution as other contacts in the account?

Using a lead distribution scoring methodology will bring sales and marketing into much more direct alignment on a one to one basis. It can be applied not only to leads but to collateral, campaign training, and more. Marketing output can be "made to order" for sales reps so that it is not only highly qualified, it is also has high immediacy and relevancy to the reps' call sheets. If the relationship between marketing and sales so bad that accessing call sheets is a non-starter, then look for friendly reps who might be willing to give a little more to get a little more from marketing.

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Six Key Table Stakes for B2B Sales and Marketing Alignment

The IDC CMO and Sales advisory services held their most recent client leadership meeting in Santa Clara on June 5th. One of the key topics of the day was sales enablement. The ensuing dialog between the sales and marketing execs in the room was as impassioned as it was ineffective. Many of the usual themes were expressed (in the nicest possible way): "marketing leads are crap", "sales doesn't follow up", etc. etc.

Whenever I hear this conversation it always sounds like the two sides are talking past one another. Neither really understands how to express their frustration in a way that has any meaning to the other. What's missing are some basic table stakes:

Sales 

1. Train marketing on sales process. It is impossible to effectively contribute to, much less consistently improve, an unknown process. No marketing team should be expected to deliver effective collateral or leads to a sales organization until they have been fully trained on sales process and methodology. In a large organization with multiple business units and product lines there will be many sales processes and the marketing teams charged with supported them must receive the same depth and cadence of training that the sales reps get.

Marketing 

2. Treat the sales force like a market segment. There are great variations in the needs of different kinds of reps in your organization and you must understand them on a rep by rep basis no less urgently than you do for your external marketing targets. The needs of an enterprise rep with two accounts are radically different than an SMB rep with 400 accounts or a territory where they may not know all the potential customers. Don't throw 10,000 leads a month at both of them. You get the idea. Nurture your sales reps like any other targets and tune the metrics accordingly.

3. Market sales collateral like solutions. Marketing tends to market its wares to the sales force like products whose benefits are self evident. Assets are often "published" or "distributed" generically with tags to help reps "find" them. Imagine what would happen to the funnel if that was the extent of external marketing efforts! Sales support assets should be marketed through targeted nurture campaigns. Once you get going on #2 above, you can start to address the needs of each rep and market your leads, collateral and other assets as solutions to the right sales problem at the right time!

4. Take an account centric approach to lead generation. Marketing is generally great at understanding the world in terms of segments and contacts. These are fundamental concepts for planning, budgeting, and executing marketing activity. However, sales reps think of the world in terms of accounts. Marketing needs to make leads more relevant to reps by delivering them in an account context.

Sales and Marketing

5. Define customer creation as an enterprise process. This is the most effective way to change the corporate culture and gain executive support for addressing the many alignment issues across all customer facing functions in the enterprise. The analogy here is supply chain. Before it was defined as an enterprise process the people, processes, technology, data, and budgets within it were managed on a purely departmental basis. Defining it as an enterprise process made it possible to optimize and continually improve the supply chain based on overall business performance. The customer creation process - from prospecting to closing to upselling - needs to be owned and measured in the same way.

6. Implement customer data as an enterprise service. Once customer creation is established as an enterprise process, it requires an enterprise approach to customer data management in order for the optimization and continuous improvement to take place based on core business metrics and not on a collection of disassociated departmental KPIs.

These six table stakes should be treated as urgent action items for all high tech Sales Operations and Marketing Operations personnel. Some organizations are doing some of these things, but no one has implemented all of them as organizational norms.

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