From the MarTech Conference in Boston, Massachusetts, August 19-20, 2014. SESSION: How to Align Marketing Technology with Business Strategy - Given by David Raab, @draab - Principal, Raab & Associates. #MARTECH
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How To Align Marketing Technology With Business Strategy By David Raab
1. How to Align Marketing Technology
with Business Strategy
MarTech Boston
August 19, 2014
David M. Raab
Raab Associates
www.raabguide.com
draab@raabassociates.com
6. Strategy Implications
Strategy Statement: Attract large numbers of high-paying customers by creating a highly
innovative product that can be sold via ‘buzz’ marketing.
Financial
Margin
• High
Number of customers
• Add customers
Revenue / customer
• High
Customer Value
Image
• Exciting
• Advanced
Relationship Product
• Unique
Internal
Operations
Marketing
• Build ‘buzz’
Innovation
• Simplified
interface
Production
• Quick
delivery
Customer
support
Admin
Learning
Information & systems Competencies
• Outsourced
manufacturing,
• Channel training,
• Design,
• Marketing
Organization
Product-based
7. Successful Strategies
• Steve Jobs’ Apple: insanely great products
• Amazon: customer convenience
• UPS: efficiency and reliability
• Southwest Airlines: low cost
8. Unsuccessful Strategies
• Steve Cook’s Apple: multi-color phones?
• Steve Ballmer’s Microsoft: copy Apple?
• JCPenny: high fashion or low price or in-shops
or ???
• Radio Shack: only source for stuff nobody
wants
9. Good Strategy: It’s All About Fit
• Resources
• Competencies
• Market needs
• Competitors
• Environment
10. Strategy Implications
Strategy Statement: Attract large numbers of high-paying customers by creating a highly
innovative product that can be sold via ‘buzz’ marketing.
Financial
Margin
• High
Number of customers
• Add customers
Revenue / customer
• High
Customer Value
Image
• Exciting
• Advanced
Relationship Product
• Unique
Internal
Operations
Marketing
• Build ‘buzz’
Innovation
• Simplified
interface
Production
• Quick
delivery
Customer
support
Admin
Learning
Information & systems Competencies
• Outsourced
manufacturing,
• Channel training,
• Design,
• Marketing
Organization
Product-based
11. Case Study:
Strategy to MarTech Connection
• Business:
– New company, disruptive tech, clearly superior
• Business Strategy:
– Grow quickly by adding customers via partner sales
• Marketing Strategy:
– Now: support partners via joint field events
– Future: build company-generated lead flow via media, Web site
• MarTech Strategy:
– Build for fast growth, future needs
– Now: support field via self-service promotions
– Future: support media via analytics, Web site via MA integration
• MarTech Choices:
– Now: best-in-class end-user email, forms, selections
– Future: flexible MA database, data warehouse outside MA
12. Strategy to MarTech Framework
Business
Strategy
Marketing
Strategy
MarTech
Strategy
MarTech
Architecture
MarTech
Components
• Focus:
Product vs
service vs cost
• Financial:
Margin vs
number of
customers vs
revenue per
customer
• Value Prop:
Image vs
relationship
vs product
• Channels
• Spending
• Intimacy
• User skills
• Target metrics
(CPA, LTV, ROI,
growth, etc.)
• System scope
• Channel
integration
• Execution
automation
• Program
sophistication
• Flexibility
• Scalability
• Cost
• Staffing
• Shared vs
siloed
• Suite vs. best
of breed
• In-house vs
outsource
• Owned vs
rented
• External
integration
(CRM, Web,
etc.)
• Database
• External data
• Data quality
• Identity
association
• Analytics
• Decision
engines
• Execution
systems
(email, Web,
social, events)
• Management
(content,
planning,
budget, etc.
13. Strategy to MarTech Example
Business Strategy
“Offer low prices profitably in online retail by running with low operating costs”
• Focus: Cost
• Financial: Modest margin, high number of customers
• Value Prop: Relationship (trusted source of best prices for standard products)
14. Strategy to MarTech Example
Marketing Strategy
“Attract price-conscious customers by stressing low prices and making highly targeted
offers; key metric is marketing ROI (=promotion efficiency)”
• Channels: limit to major channels (easier to optimize)
• Spending: tie closely to profitability but grow over time to gain scale
• Intimacy: track customers closely to allow targeted offers
• User skills: modest (standard skills needed; keep costs low)
• Target metrics: ROI is most important
15. Strategy to MarTech Example
MarTech Strategy
“Keep costs low by running tightly integrated systems, highly automated systems
with limited scope (i.e., optimize in only a few channels)”
• System scope: manage all marketing interactions through single system
• Channel integration: tightly integrate channel data; loosely integrate promotions
• Execution automation: highly automated targeting to add revenue and reduce costs
• Program sophistication: modest sophistication; only need targeted offers
• Flexibility: accept limited flexibility in return for lower costs of optimized processes
• Scalability: high to accommodate required volume and avoid replacement projects
• Cost: as low as possible
• Staffing: small, highly skilled staff to run automated systems and manage
outsourced resources
16. Strategy to MarTech Example
MarTech Architecture
• Shared vs siloed: share all possible functions to reduce costs
• Suite vs. best of breed: use suite to reduce costs, improve integration
• In-house vs outsource: outsource to reduce costs; accept limited flexibility
• Owned vs rented: rent at start but ultimately want to own to reduce costs
• External integration (CRM, Web, etc.): highly integrated to capture and consolidate
data and to present targeted offers during interactions
17. Strategy to MarTech Example
MarTech Components
• Database: standard database; limit unstructured data unless clearly cost-effective
• External data: limited use to reduce costs
• Data quality: basic capabilities required
• Identity association: basic capabilities required; primarily tracking known customers
• Analytics: highly automated offer targeting, media optimization
• Decision engines: must insert business factors into decisionis (e.g. inventory levels)
• Execution systems (email, Web, social, events): use suite features if possible
• Management (content, planning, budget, etc.): use suite features; need tight cost
management but otherwise only basic capabilities