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IBM Center for Applied Insights




Why leading marketers outperform
Effective engagement and intelligent investment
2   Why leading marketers outperform




Evolving technology and social trends hold                       The opportunity of a connected world
                                                                 We live in a world of connections, awash in data. Thanks to
tremendous potential for engaging customers                      technology, customers interact with brands and one another
on an individual basis, helping to turn marketers’               in ways unimagined only ten years ago. Relationships used
                                                                 to be simple and unidirectional, with brands reaching out to
long-held aspirations into reality. Conceptually,                customers through static media channels such as advertising.
                                                                 Now, interactions are true dialogues, complex and bi-
these new capabilities should yield more
                                                                 directional. Customers are deeply involved in shaping their
effective marketing and ultimately better                        relationship with the brand and are communicating that point
                                                                 of view to others through social and mobile channels.
business results compared to traditional
approaches. But can this prove true in practice?                 This dynamic environment represents a vast opportunity for
                                                                 those who can meet the demands of ever-more sophisticated
                                                                 consumers. Today, people are primed to expect a high-
The answer is yes – though the story has an                      quality overall experience, one based on a deep knowledge of
                                                                 their motivations, desires and preferences. At the same time,
interesting twist. Marketing outperformers excel
                                                                 marketers need to effectively use their limited resources to
at engaging individual customers systematically.                 move the needle where it matters most. If the organization
                                                                 can balance these external demands and internal requirements,
What truly differentiates them, however, is that                 it can consistently touch customers in exactly the right way.
they also have the insights and organizational
                                                                 Today’s abundance of customer data is a priceless resource.
influence to invest marketing resources to better                Armed with advanced technology and more scientific
                                                                 approaches to harness this big data, marketers can finally be
coordinate the customer experience across their                  equipped to do what they’ve always wanted: market to indiv-
enterprise. Their marketing approaches contrast                  iduals. They can detect patterns, make new associations and
                                                                 acquire a deeper understanding of customers as individuals
with the rest of the pack and provide valuable                   – thereby enabling new methods of personalized engagement.

lessons for those looking to boost returns on                    That same approach is making it possible for marketers
marketing investments.                                           to demonstrate tangible returns on marketing spend. They
                                                                 now have the ability to gather, analyze and use hard data to
                                                                 discern marketing effectiveness and make fact-based invest-
                                                                 ment decisions.
About the study
To understand the impact of marketing management on
business outcomes, IBM surveyed 362 marketing
professionals from around the world across more than fifteen
industries. We linked these responses to publicly available
financial information to identify possible correlation between
marketing sophistication and financial performance.
IBM Center for Applied Insights   3




Paying off on the opportunity                                                organizations also make spending decisions differently,
So what’s the upside for marketing organizations that can                    employing a more analytical and cooperative approach. Often,
both engage customers effectively and invest their marketing                 line-of-business peers are part of the process, providing
spend better?1 What it adds up to in real terms is the power to              valuable input on the marketing mix.
drive better financial performance (see Figure 1). As a group,
businesses armed with forward-thinking marketing                             Simply put, leading marketers establish a system of engage-
organizations have three-year revenue CAGR more than                         ment that can help drive quantifiable outcomes. They deploy
40 percent higher than that of other companies, and their                    innovative technology and processes to automate, deliver,
gross profit is growing at a rate double that of their peers.                guide and accurately measure the impact of marketing actions
Those are impressive figures, especially in light of the current             across all channels. This system allows them to engage with
economic climate.                                                            customers in a personalized way and make more informed
                                                                             marketing investments with greater ROI.
Beyond the revenue and gross profit differences, what’s
equally significant is rate of gain. These leading companies
are growing gross profit faster than revenue. This suggests
they’re able to maintain high margins and sell more products                 Lands’ End: Engagement in action
at full price instead of relying on discounts.                               Catalog retailer Lands’ End created a customer data mart
                                                                             to gain a greater understanding of buying behavior and
Inside the forward-thinking                                                  develop systematically targeted, personalized marketing
                                                                             strategies. The end goal was to drive cross-channel stream-
marketing organization
                                                                             based and longitudinal campaigns. For example, automated
The stand-out financial results that some companies are able to
                                                                             campaign management software is able to support any
achieve suggest that they manage marketing more effectively.
                                                                             number of versions of a mailing, meaning Lands’ End is
Indeed, leading marketers report greater effectiveness across
                                                                             able to coordinate customer relationship management and
all four of the classic marketing “Ps”: Promotion, Product,
                                                                             campaign management with the catalog bindery to create
Place and Price (see Figure 2). They are more likely to assume
                                                                             custom, individualized mailings.2
an all-encompassing role, “owning” the customer experience
across channels and/or business functions. These marketing




                Revenue growth                                                    Gross profit growth
                3-year CAGR, 2008-2011                                            3-year CAGR, 2008-2011




                  10%                                                               12%
                                                   7%                                                           6%

               Leading marketers                  Others                          Leading marketers            Others


Figure 1: Leading marketers both perform better and are able to grow profit faster than revenue.
4   Why leading marketers outperform




                                                                                          Engagement: A system that
Influence of marketing organizations                                                       works holistically
    Leaders       Ownership                            Effectiveness                      A robust system of engagement fuels marketing innovation,
    Others        % responded 4 or 5                   % responded 4 or 5
                  “full ownership”                     “highly effective”
                                                                                          enabling the business to meet customers whenever and
                                                                                          however they wish to interact with the brand. It also leads to
                                                 91%                               72%
Promotion                                                                                 greater flexibility and speed of execution with campaigns that
                                               79%                          55%
                                                                                          are more accurately targeted, integrated and closer to real time.
                                                                                          The system allows leading marketers to drive customer value
Products                                  71%                                     66%     at every interaction – online, offline, inbound and outbound,
/services                         48%                                  48%                across all channels.

                                         64%                                 57%
                                                                                          Tapping into the power of integrated,
Place                                                                                     multichannel campaigns
                                   50%                                 46%
                                                                                          By linking timely information about customers with flexible
                                                                                          campaign management, it becomes possible to craft more
Price                                   62%                                 52%           personalized offers across all available channels and make use
                                 41%                                 39%                  of technology to optimize interactions. Leading marketers are
                                                                                          33 percent more likely to serve personalized or targeted offers
                                                                                          in four or more channels and in real time and are better able
Figure 2: Leading marketers report greater influence across the                           to create integrated online/offline marketing programs (see
organization, including areas outside the traditional marketing silo.
Correspondingly, they also indicate greater effectiveness in these areas.                 Figure 3). They see the value of a coordinated, dynamic effort
                                                                                          and tend to use technology across all channels.




Channels used to deliver targeted/personalized messages in real-time
    Leaders
    Others

                74%
                      63%                63%                                 62%                       62%
                                                 51%                                53%
                                                                                                             49%              47%
                                                                                                                                    38%




               Website                   Customer service/                  Face-to-face              Social media           Mobile channels
                                         call center


Figure 3: Across the board, leading practitioners make greater use of a wide variety of channels to deliver targeted/personalized messages in real-time
based on customer interaction with the brand.
IBM Center for Applied Insights         5




If leading marketers are more likely to deliver messages across
                                                                         Leaders
channels, which ones are they using? As it turns out, they               Others
excel at leveraging these offers across virtually every channel:                                       Mobile
web, call center, social media, mobile, and face-to-face.
Consider what that means from a system and process stand-
point: campaign management has to be tightly integrated,
highly efficient and very agile. This is where a well thought-
out system of engagement shows its true value.

Putting personalization to work with mobile and
social marketing                                                     41% 25%                       36% 20%                            33% 18%
                                                                     Currently use mobile          Currently use location-            Currently use
By integrating technology across the marketing function,             messaging campaigns           based targeting                    mobile ads
leading marketers can make better use of specific tactics within
mobile and social media marketing. Although mobile and
social have become commonplace – “table stakes” in marketing                                           Social
today – these companies are able to innovate while those they
outperform are more likely to merely follow trends.

In mobile marketing, for example, the vast majority of
companies today make use of standard tactics such as mobile
device applications, optimized websites and emails formatted
for smart phone delivery. Leading marketers, however, take
it to the next level by using time- and location-specific mobile
                                                                     71% 56%                       48% 31%                            43% 30%
                                                                     Currently use apps           Currently use                       Currently use
messaging campaigns and ads (see Figure 4). Knowing not              on 3rd party social          social/local group                  location-based games
                                                                     networking sites             buying (or plan to                  (or plan to use within
only to whom you’re talking, but also where they are is critical     (or plan to use within       use within a year)                  a year)
intelligence as it drives the ability to make relevant offers that   a year)

reflect customer context. Imagine someone walking into a             Figure 4: Leading marketers make greater use of specific mobile and
concert or sporting event and having a virtual “pop up” store        social marketing tactics. They are quicker to incorporate location data and
appear on their mobile device, with specific promotions linked       embrace new marketing models such as social/local group buying.
to that event.

Social media marketing follows a similar trajectory.
Brand accounts on Facebook and Twitter have become
the new “brochureware” and are seen as ordinary. Leading
marketers are innovating with new models such as local/social
group buying and creating engaging apps that run on sites
like Facebook.
6   Why leading marketers outperform




Telefónica: Fine-tuning the                                        The critical importance of attribution
customer interaction                                               Many organizations have only a general sense of how well
Spanish telecommunications provider Telefónica executes            their campaigns and tactics work. Leading marketers stand
200 campaigns per month through millions of SMS marketing          out because they place greater emphasis on measurement,
messages and emails. Its outreach is coordinated and               tracking results and linking them to individual efforts.
optimized based on customer actions, an approach that              While their methodology may vary, 88 percent engage in
goes beyond predictive modeling to prescriptive, “next best        attribution in some way. And of that group, 93 percent have
offer” marketing. Each new offer is precisely tailored based       a set process for determining how results are attributed to
on customer purchases, segmentation, behavior, geography           various marketing activities.
and external data, with business rules around profitability,
company values and regulation. This has helped deliver a           What that means for the marketing organization is greater
35 percent increase in the number of customers in just             efficiency in their use of marketing budgets. They have
three months.3                                                     complemented investments in real-time engagements with
                                                                   corresponding measurement and analytics capabilities so
                                                                   they can optimize new efforts.

                                                                   Earning influence through results
Investment: Making resources count                                 The same measurement-driven insight that informs opera-
The technology that enables multichannel, personalized             tional spending decisions also impacts the role of marketing
marketing is readily available, and many companies have            within the organization. Leading marketers’ ability to
taken steps to implement it. So why exactly don’t more             demonstrate results helps them build credibility and the
organizations achieve the results shown by leading marketers?      financial justification needed to construct an enterprise-wide
It has to do with their ability to invest effectively, making      system of engagement. With this grounding, they’re able
results-based allocation decisions that maximize the return        to enlist the support of other business functions in knitting
on marketing spend.                                                together a common view of the customer across different
                                                                   points of interaction.
In part, investing wisely means putting marketing funds where
they’ll do the most good. However, it’s also about enabling        Collaboration with IT is particularly important since this
marketing to justify a broader role in consistently coordinating   system of engagement increasingly depends on technology.
and leading the customer experience across the enterprise.         Leading marketers have a distinct advantage here. Because
                                                                   they’re farther along the business transformation and
                                                                   technology adoption curve, these organizations have greater
                                                                   freedom of action. They are focused on how to improve
                                                                   and scale operations to differentiate their customer experience
                                                                   and grow their businesses.
IBM Center for Applied Insights   7




In contrast, their less successful peers still struggle with basic    •	   Encourage innovation – Leading marketers are at the fore-
alignment and coordination between marketing and IT – and                  front of adopting innovative technologies and channels and
technology integration with the rest of the organization.                  analyzing customer behavior and preference trends. By
Compared to leading marketers, they’re less likely to “own”                embracing new technologies and channels – and making
marketing technology decisions. Consequently, it’s more                    a concerted effort to coordinate activities – the business
difficult for them to invest in the technologies that enable an            can shift its consumer interaction stance from reactive
effective system of engagement.                                            to proactive.
                                                                      •	   Measure what matters – Marketers need to demonstrate the
The ability to show ROI on marketing investments not only                  benefit of everything they do – every touch point, interaction
helps leading practitioners to invest more intelligently, it also          and outcome. This will help them justify their expanded role
elevates their role in the business. They’re positioned to guide           and optimize future investments.
marketing technology decisions and shape the customer                 •	   Collaborate with IT – To create a system of engagement that
experience across business functions. They can focus on                    delivers value to customers at every touch, marketers need
driving strategic growth and shaping business strategy versus              technology. By working closely with their IT colleagues,
simply managing the mechanics of marketing.                                leading marketers can advance their ability to deliver
                                                                           a differentiated customer experience across a broad mix
                                                                           of channels.
Seton Hall University: The demonstrated
value of attribution                                                  Valuable lessons can be taken from leading marketers. By
Seton Hall University made innovative use of social marketing         looking closely at what they’ve done to enhance their ability
to make smarter marketing decisions. The University cor-              to engage and invest – develop a robust system of engagement
related Facebook usage and traditional marketing campaigns            and rigorously attribute all results – clues can be found for
with subsequent applications and enrollments to fine-tune its         improvement in your own organization. Equally important,
outreach. The result: the largest freshman class in 30 years,         however, is the strategic role of marketing within these
accounting for an 18 percent increase in net present revenue          forward-thinking organizations. Their view of marketing as
– all in an era when overall higher education enrollment is           an activity that interacts with and serves the entire business
trending downwards.4                                                  is an essential part of their success. It’s this rich combination
                                                                      of engagement, innovation, measurement and collaboration
                                                                      – all enabled by technology – that can help produce better
What should you do?                                                   financial performance.
As you look to improve your ability to engage and invest to
consistently drive greater performance for your enterprise,
consider these key initiatives:

•	   Expand the role of marketing – Leading practitioners have made
     marketing a business priority and given marketers a voice in
     overall strategy. Through greater ownership of the 4Ps and
     demonstrated results, these marketers have moved beyond
     traditional demand generation activities and are shaping the
     customer experience across the business.
About the IBM Center for Applied Insights
The IBM Center for Applied Insights (ibm.com/smarter/cai/
value) introduces new ways of thinking, working and leading.
Through evidence-based research, the Center arms leaders
with pragmatic guidance and the case for change.
                                                               © Copyright IBM Corporation 2012

About the authors                                              IBM Corporation
Derek Franks, Consultant at the IBM Center for Applied         New Orchard Road
                                                               Armonk, NY 10504
Insights, focuses on research that provides insight into
emerging business and technology trends. Prior to joining      Produced in the United States of America
                                                               September 2012
the Center he was part of IBM Retail Store Solutions group,
where his work centered on how enterprises can use             IBM, the IBM logo and ibm.com are trademarks of International Business
                                                               Machines Corporation in the United States, other countries or both. If
technology to drive improved business results. He has been
                                                               these and other IBM trademarked terms are marked on their first
a speaker at global conferences and collaborated with top      occurrence in this information with a trademark symbol (® or TM), these
companies from around the world. Derek can be reached at       symbols indicate U.S. registered or common law trademarks owned by
                                                               IBM at the time this information was published. Such trademarks may also
defranks@us.ibm.com.
                                                               be registered or common law trademarks in other countries. Other product,
                                                               company or service names may be trademarks or service marks of others.
Elana Anderson, Executive Director of IBM Cross-Channel        A current list of IBM trademarks is available on the web at “Copyright
                                                               and trademark information” at ibm.com/legal/copytrade.shtml
Marketing Solutions, is responsible for developing product
strategies and guiding product development, as well as         This document is current as of the initial date of publication and may be
go-to-market activities for these solutions. Prior to her      changed by IBM at any time. Not all offerings are available in every country
                                                               in which IBM operates.
current role, Elana was vice president of products at Unica
Corporation. She also previously served as vice president      THE INFORMATION IN THIS DOCUMENT IS PROVIDED
                                                               “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR
and research director of the marketing practice at Forrester   IMPLIED, INCLUDING WITHOUT ANY WARRANTIES
Research. Elana can be reached at andersel@us.ibm.com.         OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
                                                               PURPOSE AND ANY WARRANTY OR CONDITION OF NON-
                                                               INFRINGEMENT. IBM products are warranted according to the terms
Special acknowledgements                                       and conditions of the agreements under which they are provided.
We’d like to acknowledge the special contributions from our
core team without whose gracious contribution of time and
expertise this work would not have been completed.             	More specifically, to be classified as a leading marketer, a surveyed
                                                               1

                                                                respondent had to meet one of the following “engage” criteria: have a
                                                                high-level responsibility for creating and managing one-to-one marketing
Chris Wright                    Stephen Rogers                  across all channels, or be a proactive leader that owns the customer
Angie Casey                     Kevin Thompson                  experience across business functions. In addition, leading marketers must
                                                                “invest” using one of these approaches: collaborate with the rest of the
Jay Henderson                   Ellen Cornillon
                                                                company to determine appropriate increases/decreases based on last year’s
Amanda Felbab                   Caroline Day                    spending, or conduct extensive marketing mix analyses to determine
                                                                optimal spend allocations.

                                                               	Lands’ End implements customer-centric strategies. IBM case study.
                                                               2

                                                                June 2011. http://public.dhe.ibm.com/common/ssi/ecm/en/zzc03007usen/
                                                                   ZZC03007USEN.PDF

                                                               	Telef ó nica | Vivo nets a 30 percent increase in marketing revenue with
                                                               3

                                                                IBM Unica. IBM case study. January 2012. http://www-01.ibm.com/software/
                                                                   success/cssdb.nsf/cs/SBAT-8UCTFB?OpenDocument&Site=default&cty=en_us

                                                               	Seton Hall achieves lift of 18 percent in enrollment through Facebook. IBM
                                                               4

                                                                case study. September 2011. http://public.dhe.ibm.com/common/ssi/ecm/en/
                                                                   zzc03052usen/ZZC03052USEN.PDF


                                                                          Please Recycle




                                                                                                                     SWE14003-USEN-02

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How Leading Marketers Outperform

  • 1. IBM Center for Applied Insights Why leading marketers outperform Effective engagement and intelligent investment
  • 2. 2 Why leading marketers outperform Evolving technology and social trends hold The opportunity of a connected world We live in a world of connections, awash in data. Thanks to tremendous potential for engaging customers technology, customers interact with brands and one another on an individual basis, helping to turn marketers’ in ways unimagined only ten years ago. Relationships used to be simple and unidirectional, with brands reaching out to long-held aspirations into reality. Conceptually, customers through static media channels such as advertising. Now, interactions are true dialogues, complex and bi- these new capabilities should yield more directional. Customers are deeply involved in shaping their effective marketing and ultimately better relationship with the brand and are communicating that point of view to others through social and mobile channels. business results compared to traditional approaches. But can this prove true in practice? This dynamic environment represents a vast opportunity for those who can meet the demands of ever-more sophisticated consumers. Today, people are primed to expect a high- The answer is yes – though the story has an quality overall experience, one based on a deep knowledge of their motivations, desires and preferences. At the same time, interesting twist. Marketing outperformers excel marketers need to effectively use their limited resources to at engaging individual customers systematically. move the needle where it matters most. If the organization can balance these external demands and internal requirements, What truly differentiates them, however, is that it can consistently touch customers in exactly the right way. they also have the insights and organizational Today’s abundance of customer data is a priceless resource. influence to invest marketing resources to better Armed with advanced technology and more scientific approaches to harness this big data, marketers can finally be coordinate the customer experience across their equipped to do what they’ve always wanted: market to indiv- enterprise. Their marketing approaches contrast iduals. They can detect patterns, make new associations and acquire a deeper understanding of customers as individuals with the rest of the pack and provide valuable – thereby enabling new methods of personalized engagement. lessons for those looking to boost returns on That same approach is making it possible for marketers marketing investments. to demonstrate tangible returns on marketing spend. They now have the ability to gather, analyze and use hard data to discern marketing effectiveness and make fact-based invest- ment decisions. About the study To understand the impact of marketing management on business outcomes, IBM surveyed 362 marketing professionals from around the world across more than fifteen industries. We linked these responses to publicly available financial information to identify possible correlation between marketing sophistication and financial performance.
  • 3. IBM Center for Applied Insights 3 Paying off on the opportunity organizations also make spending decisions differently, So what’s the upside for marketing organizations that can employing a more analytical and cooperative approach. Often, both engage customers effectively and invest their marketing line-of-business peers are part of the process, providing spend better?1 What it adds up to in real terms is the power to valuable input on the marketing mix. drive better financial performance (see Figure 1). As a group, businesses armed with forward-thinking marketing Simply put, leading marketers establish a system of engage- organizations have three-year revenue CAGR more than ment that can help drive quantifiable outcomes. They deploy 40 percent higher than that of other companies, and their innovative technology and processes to automate, deliver, gross profit is growing at a rate double that of their peers. guide and accurately measure the impact of marketing actions Those are impressive figures, especially in light of the current across all channels. This system allows them to engage with economic climate. customers in a personalized way and make more informed marketing investments with greater ROI. Beyond the revenue and gross profit differences, what’s equally significant is rate of gain. These leading companies are growing gross profit faster than revenue. This suggests they’re able to maintain high margins and sell more products Lands’ End: Engagement in action at full price instead of relying on discounts. Catalog retailer Lands’ End created a customer data mart to gain a greater understanding of buying behavior and Inside the forward-thinking develop systematically targeted, personalized marketing strategies. The end goal was to drive cross-channel stream- marketing organization based and longitudinal campaigns. For example, automated The stand-out financial results that some companies are able to campaign management software is able to support any achieve suggest that they manage marketing more effectively. number of versions of a mailing, meaning Lands’ End is Indeed, leading marketers report greater effectiveness across able to coordinate customer relationship management and all four of the classic marketing “Ps”: Promotion, Product, campaign management with the catalog bindery to create Place and Price (see Figure 2). They are more likely to assume custom, individualized mailings.2 an all-encompassing role, “owning” the customer experience across channels and/or business functions. These marketing Revenue growth Gross profit growth 3-year CAGR, 2008-2011 3-year CAGR, 2008-2011 10% 12% 7% 6% Leading marketers Others Leading marketers Others Figure 1: Leading marketers both perform better and are able to grow profit faster than revenue.
  • 4. 4 Why leading marketers outperform Engagement: A system that Influence of marketing organizations works holistically Leaders Ownership Effectiveness A robust system of engagement fuels marketing innovation, Others % responded 4 or 5 % responded 4 or 5 “full ownership” “highly effective” enabling the business to meet customers whenever and however they wish to interact with the brand. It also leads to 91% 72% Promotion greater flexibility and speed of execution with campaigns that 79% 55% are more accurately targeted, integrated and closer to real time. The system allows leading marketers to drive customer value Products 71% 66% at every interaction – online, offline, inbound and outbound, /services 48% 48% across all channels. 64% 57% Tapping into the power of integrated, Place multichannel campaigns 50% 46% By linking timely information about customers with flexible campaign management, it becomes possible to craft more Price 62% 52% personalized offers across all available channels and make use 41% 39% of technology to optimize interactions. Leading marketers are 33 percent more likely to serve personalized or targeted offers in four or more channels and in real time and are better able Figure 2: Leading marketers report greater influence across the to create integrated online/offline marketing programs (see organization, including areas outside the traditional marketing silo. Correspondingly, they also indicate greater effectiveness in these areas. Figure 3). They see the value of a coordinated, dynamic effort and tend to use technology across all channels. Channels used to deliver targeted/personalized messages in real-time Leaders Others 74% 63% 63% 62% 62% 51% 53% 49% 47% 38% Website Customer service/ Face-to-face Social media Mobile channels call center Figure 3: Across the board, leading practitioners make greater use of a wide variety of channels to deliver targeted/personalized messages in real-time based on customer interaction with the brand.
  • 5. IBM Center for Applied Insights 5 If leading marketers are more likely to deliver messages across Leaders channels, which ones are they using? As it turns out, they Others excel at leveraging these offers across virtually every channel: Mobile web, call center, social media, mobile, and face-to-face. Consider what that means from a system and process stand- point: campaign management has to be tightly integrated, highly efficient and very agile. This is where a well thought- out system of engagement shows its true value. Putting personalization to work with mobile and social marketing 41% 25% 36% 20% 33% 18% Currently use mobile Currently use location- Currently use By integrating technology across the marketing function, messaging campaigns based targeting mobile ads leading marketers can make better use of specific tactics within mobile and social media marketing. Although mobile and social have become commonplace – “table stakes” in marketing Social today – these companies are able to innovate while those they outperform are more likely to merely follow trends. In mobile marketing, for example, the vast majority of companies today make use of standard tactics such as mobile device applications, optimized websites and emails formatted for smart phone delivery. Leading marketers, however, take it to the next level by using time- and location-specific mobile 71% 56% 48% 31% 43% 30% Currently use apps Currently use Currently use messaging campaigns and ads (see Figure 4). Knowing not on 3rd party social social/local group location-based games networking sites buying (or plan to (or plan to use within only to whom you’re talking, but also where they are is critical (or plan to use within use within a year) a year) intelligence as it drives the ability to make relevant offers that a year) reflect customer context. Imagine someone walking into a Figure 4: Leading marketers make greater use of specific mobile and concert or sporting event and having a virtual “pop up” store social marketing tactics. They are quicker to incorporate location data and appear on their mobile device, with specific promotions linked embrace new marketing models such as social/local group buying. to that event. Social media marketing follows a similar trajectory. Brand accounts on Facebook and Twitter have become the new “brochureware” and are seen as ordinary. Leading marketers are innovating with new models such as local/social group buying and creating engaging apps that run on sites like Facebook.
  • 6. 6 Why leading marketers outperform Telefónica: Fine-tuning the The critical importance of attribution customer interaction Many organizations have only a general sense of how well Spanish telecommunications provider Telefónica executes their campaigns and tactics work. Leading marketers stand 200 campaigns per month through millions of SMS marketing out because they place greater emphasis on measurement, messages and emails. Its outreach is coordinated and tracking results and linking them to individual efforts. optimized based on customer actions, an approach that While their methodology may vary, 88 percent engage in goes beyond predictive modeling to prescriptive, “next best attribution in some way. And of that group, 93 percent have offer” marketing. Each new offer is precisely tailored based a set process for determining how results are attributed to on customer purchases, segmentation, behavior, geography various marketing activities. and external data, with business rules around profitability, company values and regulation. This has helped deliver a What that means for the marketing organization is greater 35 percent increase in the number of customers in just efficiency in their use of marketing budgets. They have three months.3 complemented investments in real-time engagements with corresponding measurement and analytics capabilities so they can optimize new efforts. Earning influence through results Investment: Making resources count The same measurement-driven insight that informs opera- The technology that enables multichannel, personalized tional spending decisions also impacts the role of marketing marketing is readily available, and many companies have within the organization. Leading marketers’ ability to taken steps to implement it. So why exactly don’t more demonstrate results helps them build credibility and the organizations achieve the results shown by leading marketers? financial justification needed to construct an enterprise-wide It has to do with their ability to invest effectively, making system of engagement. With this grounding, they’re able results-based allocation decisions that maximize the return to enlist the support of other business functions in knitting on marketing spend. together a common view of the customer across different points of interaction. In part, investing wisely means putting marketing funds where they’ll do the most good. However, it’s also about enabling Collaboration with IT is particularly important since this marketing to justify a broader role in consistently coordinating system of engagement increasingly depends on technology. and leading the customer experience across the enterprise. Leading marketers have a distinct advantage here. Because they’re farther along the business transformation and technology adoption curve, these organizations have greater freedom of action. They are focused on how to improve and scale operations to differentiate their customer experience and grow their businesses.
  • 7. IBM Center for Applied Insights 7 In contrast, their less successful peers still struggle with basic • Encourage innovation – Leading marketers are at the fore- alignment and coordination between marketing and IT – and front of adopting innovative technologies and channels and technology integration with the rest of the organization. analyzing customer behavior and preference trends. By Compared to leading marketers, they’re less likely to “own” embracing new technologies and channels – and making marketing technology decisions. Consequently, it’s more a concerted effort to coordinate activities – the business difficult for them to invest in the technologies that enable an can shift its consumer interaction stance from reactive effective system of engagement. to proactive. • Measure what matters – Marketers need to demonstrate the The ability to show ROI on marketing investments not only benefit of everything they do – every touch point, interaction helps leading practitioners to invest more intelligently, it also and outcome. This will help them justify their expanded role elevates their role in the business. They’re positioned to guide and optimize future investments. marketing technology decisions and shape the customer • Collaborate with IT – To create a system of engagement that experience across business functions. They can focus on delivers value to customers at every touch, marketers need driving strategic growth and shaping business strategy versus technology. By working closely with their IT colleagues, simply managing the mechanics of marketing. leading marketers can advance their ability to deliver a differentiated customer experience across a broad mix of channels. Seton Hall University: The demonstrated value of attribution Valuable lessons can be taken from leading marketers. By Seton Hall University made innovative use of social marketing looking closely at what they’ve done to enhance their ability to make smarter marketing decisions. The University cor- to engage and invest – develop a robust system of engagement related Facebook usage and traditional marketing campaigns and rigorously attribute all results – clues can be found for with subsequent applications and enrollments to fine-tune its improvement in your own organization. Equally important, outreach. The result: the largest freshman class in 30 years, however, is the strategic role of marketing within these accounting for an 18 percent increase in net present revenue forward-thinking organizations. Their view of marketing as – all in an era when overall higher education enrollment is an activity that interacts with and serves the entire business trending downwards.4 is an essential part of their success. It’s this rich combination of engagement, innovation, measurement and collaboration – all enabled by technology – that can help produce better What should you do? financial performance. As you look to improve your ability to engage and invest to consistently drive greater performance for your enterprise, consider these key initiatives: • Expand the role of marketing – Leading practitioners have made marketing a business priority and given marketers a voice in overall strategy. Through greater ownership of the 4Ps and demonstrated results, these marketers have moved beyond traditional demand generation activities and are shaping the customer experience across the business.
  • 8. About the IBM Center for Applied Insights The IBM Center for Applied Insights (ibm.com/smarter/cai/ value) introduces new ways of thinking, working and leading. Through evidence-based research, the Center arms leaders with pragmatic guidance and the case for change. © Copyright IBM Corporation 2012 About the authors IBM Corporation Derek Franks, Consultant at the IBM Center for Applied New Orchard Road Armonk, NY 10504 Insights, focuses on research that provides insight into emerging business and technology trends. Prior to joining Produced in the United States of America September 2012 the Center he was part of IBM Retail Store Solutions group, where his work centered on how enterprises can use IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation in the United States, other countries or both. If technology to drive improved business results. He has been these and other IBM trademarked terms are marked on their first a speaker at global conferences and collaborated with top occurrence in this information with a trademark symbol (® or TM), these companies from around the world. Derek can be reached at symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also defranks@us.ibm.com. be registered or common law trademarks in other countries. Other product, company or service names may be trademarks or service marks of others. Elana Anderson, Executive Director of IBM Cross-Channel A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Marketing Solutions, is responsible for developing product strategies and guiding product development, as well as This document is current as of the initial date of publication and may be go-to-market activities for these solutions. Prior to her changed by IBM at any time. Not all offerings are available in every country in which IBM operates. current role, Elana was vice president of products at Unica Corporation. She also previously served as vice president THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR and research director of the marketing practice at Forrester IMPLIED, INCLUDING WITHOUT ANY WARRANTIES Research. Elana can be reached at andersel@us.ibm.com. OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON- INFRINGEMENT. IBM products are warranted according to the terms Special acknowledgements and conditions of the agreements under which they are provided. We’d like to acknowledge the special contributions from our core team without whose gracious contribution of time and expertise this work would not have been completed. More specifically, to be classified as a leading marketer, a surveyed 1 respondent had to meet one of the following “engage” criteria: have a high-level responsibility for creating and managing one-to-one marketing Chris Wright Stephen Rogers across all channels, or be a proactive leader that owns the customer Angie Casey Kevin Thompson experience across business functions. In addition, leading marketers must “invest” using one of these approaches: collaborate with the rest of the Jay Henderson Ellen Cornillon company to determine appropriate increases/decreases based on last year’s Amanda Felbab Caroline Day spending, or conduct extensive marketing mix analyses to determine optimal spend allocations. Lands’ End implements customer-centric strategies. IBM case study. 2 June 2011. http://public.dhe.ibm.com/common/ssi/ecm/en/zzc03007usen/ ZZC03007USEN.PDF Telef ó nica | Vivo nets a 30 percent increase in marketing revenue with 3 IBM Unica. IBM case study. January 2012. http://www-01.ibm.com/software/ success/cssdb.nsf/cs/SBAT-8UCTFB?OpenDocument&Site=default&cty=en_us Seton Hall achieves lift of 18 percent in enrollment through Facebook. IBM 4 case study. September 2011. http://public.dhe.ibm.com/common/ssi/ecm/en/ zzc03052usen/ZZC03052USEN.PDF Please Recycle SWE14003-USEN-02