Mastering Marketing Mayhem in a Meaningful, Meticulous Manner

I hope this title captures your attention; I’m trying to make a point about the chaos going on in managing and operating marketing. What marketing needs in 2016 is to manage and optimize its efforts in a more unified manner. This perspective kicks off a new series on the challenges for marketing to automate or execute tasks and manage toward maximum performance. We all know that the craft of marketing is in need of significant transformation, from the CMO throughout the entire marketing organization and all the way out to the experience of consumers and customers. But this may be a fanciful mission, as applications and technology does not really automate marketing let alone manage it. Most marketing automation products are specialized applications that are not used by marketing management, let alone front-line marketing managers; they are for specialized needs in demand generation or digital marketing that personalizes inbound and outbound interactions with contacts for the purpose of advancing dialogue and creating relationships. Marketing automation, like its cousin sales force automation, has been a placeholder category that describes only a narrow slice of marketing, and the term has been co-opted by the industry for its own purposes. Though some observers predict that CMOs will outspend CIOs and other leaders of the business in technology investments, I have debunked this ludicrous idea; even if it were true, that would not make marketing departments much more efficient in their management and operations. To counterbalance the silliness of the marketing automation dialogue, I plan to bring you a series on key areas for investment to start the conversation. Evaluating them should help Marketing demonstrate its commitment to promoting effectively its organization and its products and services. Here is an overview of the many issues in the landscape.

Marketing encompasses a complex set of functions that have been and continue to be separate operations rather than methodically aligned to a common set of goals. Few organizations have an integrated plan that measures these efforts with a common set of metrics or key indicators of marketing performance. Recently, however, newer vendors have begun to advance marketing performance management (MPM) and focus on using a common departmental budget with historical spend and focus on creating forward-looking plans that can integrate a common library of metrics. But there is still much to do to manage Marketing’s portfolio of resources and assets to achieve desired goals and expected outcomes. The first step in such a transformation is to establish a common set of goals and objectives with a continuous plan that links to metrics and monitors progress and becomes the basis for a common dialogue on achievements and utilization of the budget. So far few marketing organizations have taken this step, most are adopting software for marketing analytics yet without it they cannot demonstrate the level of governance and commitment required for marketing excellence. Finding software that can provide consistency and a sharedvr_NGBP_06_dedicated_applications_help_users_look_ahead environment for metrics and collaboration is critical; it also should be easy to integrate with marketing budgeting and planning systems. This will be worth the effort: In our next-generation business planning benchmark research more than half (55%) of organizations said that a dedicated application enables them to explore all implications of scenarios; many fewer (40%) said this of spreadsheets. In addition only one-fifth (22%) of marketing organizations are able to drill down to details during a meeting. Thus a capable tool can help optimize execution and facilitate collaboration in the marketing team. At this point, however, only 15 percent of participants said that they manage the marketing planning process very well.

It also is time for Marketing to embrace the digital experience in which consumers and customers interact with websites, communities and even commerce on the Internet. This must be done carefully, as lack of consistency in the digital experience can lead to bad customer experiences and degrade customer satisfaction. Over the past year in reviewing technologies (even the ones we at Ventana Research use) I have been amazed to find how little they are interconnected; lack of integration creates significant impediments to streamlined user experiences in accessing information about products and services along with their supporting content. It impedes not just personalization of the experience but the ability to go from browsing to purchasing of goods and services. Obviously this impacts a company’s revenue and bottom line. The disconnect is not easy to resolve. Some website software includes a content management system (CMS), and demand generation systems offer digital marketing capabilities. Vendors of these technologies talk about simple integration and their partnerships, but almost all require significant customization and consulting resources to actually work.

And for organizations building a community and looking to reduce the inbound load of inquiries and sometimes confusion with their FAQ, the use of a learning management system (LMS) can help their marketers communicate information related to products and services. Our next-generation learning management system research shows that an LMS can help in responding to customer service complaints and issues, which more than one-third (35%) of organizations said is important. Innovative new approaches that use virtualization and video can enable an actual employee to converse with customers are now available and can help reduce questions into the organization.

Underlying the marketing investments for website and community or commerce environment must be intelligence for supporting the inbound and outbound digital marketing efforts that have evolved from demand generation systems and engaging visitors to the sites. Part of which is to directly link to active promotion and targeting of pay-per-click (PPC) and ensure effective search engine optimization (SEO). In practice many organizations interact with customers through separate systems that each manage their own environments such as Bing and Google; Facebook, LinkedIn, Twitter and other social media channels take specialized approaches to create presence and lure visitors into the marketing channels. But we are beginning to see more integrated approaches to digital marketing to simplify automation and oversight, to extract data to apply analytics to and to create metrics to determine effectiveness and return on investment. This is important because, according to our data and analytics in the cloud benchmark research, social media is the second-most important external data source in almost half (48%) of organizations, following cloud-based business applications (61%). And for many organizations they are beginning to use social media ratings of individuals to determine their relevance and for establishing a better approach to responding to consumers and customers as part of multi-channel contact center efforts. The amount of time and resources companies spend should motivate them to look for more efficient methods to manage digital interactions, especially across social media channels.

This point also applies to demand generation, which tries to turn suspects into prospects that can be passed along to sales and is a key part of what Sales expects from Marketing. While marketing organizations have experimented with a variety of email and automation-based approaches over the past few years, not many have succeeded in finding full value from their efforts, often losing some trust from sales and even corporate and finance management in their ability to generate the quantity of viable marketing qualified leads. For this activity many marketing organizations depend on a key person or two who may not have the experience in best practices or systems to know how to apply continuous improvement or when to ditch one technological approach for a better one. This often results in stale legacy approaches that produce a decline in the quantity of quality leads being generated by the marketing organization. Lacking target personas and aligned positioning and messaging embedded in automated nurturing, demand generation is part of why they are not fulfilling its promise.

In some cases, sales organizations seeing this decline have been slowly taking responsibility for achieving the quotas for which they are compensated and evaluating a new generation of inside sales that nurture and interact with prospects directly. I highlighted this in my recent diatribe on the state of sales organizations that outlines the increasing divide between marketing and sales in many organizations. If we expect marketing teams to be more progressive, then it probably will be necessary to link a portion of their incentives and rewards to revenue objectives. In addition most demand generation systems as systems of record are ineffective in applying and presenting analytics and metrics; it requires more software capabilities and people skills to get the appropriate data into the marketing analytics and performance management. Marketing will have to turn elsewhere for analytics; it is one the largest users of data and analytics in the cloud, as more than one-third (37%) use them today, according to that research. Similarly our recent next-generation predictive analytics research finds that Marketing is most often the user of these advanced analytics in almost half (48%) of organizations, and almost one-third (29%) are evaluating it for use into 2017. Predictive analytics for example can help determine the probability of individuals to respond to offers or becoming customers, and it can be articulated in the form of a score or a grade that can be useful for helping nurture or directly engage particular individuals.  Marketing information is used by 44 percent of organizations for predictive analytics, and one-third (32%) plan to use it which indicates its potential.

A positive digital experience is not complete without consistent information about products and services available across the website and commerce systems to other channels of marketing, sales and operations that could range from print, store and channel efforts to the demand and supply chain. Product information management (PIM) systems can support these efforts and can be managed by the marketing and product teams without depending on IT, even though these information assets must be shared and in many cases syndicated across business channels. In organizations where IT has established master data management, this is an infrastructure function and not the focal point of PIM efforts, which require a product master that can be managed within the application environment. For more detail on this issue, see my perspective on PIM Trumps MDM. Having a diverse set of product information that can include images, videos, descriptions, diagrams and even feedback and ratings from others is essential to a full digital experience that can facilitate answers to questions or accelerate browsing to purchasing in commerce or other channels. Many organizations have instituted digital asset management (DAM) to support their website and commerce, but usually these systems are not flexible for managing the entirety of product information. This issue has led to a new generation of PIM applications that blend the technologies. The unification of PIM and commerce systems was critical to almost two-thirds (63%) of organizations participating in our previous PIM benchmark research. It makes sense for commerce and PIM providers to forge partnerships since they have common customers in marketing organizations and businesses. PIM is necessary to eliminate errors and mistakes in product information as well to improve the customer experience; these were two key benefits of a dedicated approach to PIM in our previous research. We expect it to be a key point in the new research we are conducting this year on the next generation of PIM, which must adapt to the roles and specific business processes of marketing and sales organizations.

As business models evolve, many industries need to find ways to support subscription billing and recurring revenue processes. Most commerce systems are good at single transactions and shopping basket experiences but not as good at renting and periodic licensing of services that require subscriptions. In recurring revenue effective dating of when the service begins or fees change and when additional services are added can be complex. Customers also may have a variety of billing methods that can be applied differently for services. Even the largest software companies providing software as a service often lack effective billing to support online payment transfer, which half of organizations (52%) use, second only to credit cards (77%), as found in our recurring revenue benchmark research. Improvingvr_Recurring_Revenue_05_multiple_departments_interact_with_customers the customer experience is the second-most important business objective (68%) of recurring revenue, and half (51%) of organizations see it as a driver for introducing recurring revenue. But once you engage customers, you must continue to engage and promote other relevant services that can enhance the customer relationship and potential revenue contributions. Our research finds that Marketing is interacting with customers in almost two-thirds (63%) of organizations that use recurring revenue, and 20 percent or more of marketing organizations are involved with defining, identifying or evaluating subscription billing systems. Overall the research finds integrating systems to be the top technology challenge to recurring revenue business in half (51%) of organizations.

For organizations seeking to renovate their digital commerce environment in the presentation of information related to the organization and its specific products and services, addressing many of the previous points is essential. Rather than simply replacing the current system, I recommend considering the needs of the consumer in terms of PIM and the potential of subscription billing and recurring revenue. Organizations that have not developed a refined plan and unified approach to the digital experience before selecting technology may find themselves involved in customization chores and consulting expenses; they should rather look for applications designed to adapt to each other. It is clear to me that marketing leaders will need to be vocal and lead in demanding better approaches to support this mission, as many vendors are focused less on what is needed to simplify their systems than on selling their add-on modules and work with only a few products that come from vendors with whom they have relationships.

I have pointed out how the digital technology disruption is changing business processes and methods for operating, and this is true for marketing. In fact, the majority of new systems operate as software as a service in a cloud computing approach that is rented and available on the Internet. Almost all new software for marketing released in the past five years, including analytics, operates in the cloud. The large numbers of users and data vr_DAC_15_spreadsheets_unreliable_for_analyticssources in dispersed locations are best served with this approach, especially compared to copying and pasting in spreadsheets: More than half (58%) of organizations see them as unreliable for analytics.

Marketing cannot afford to overlook the advances in mobile technologies and the need to make the digital experience operate seamlessly and responsively for users of smartphones and tablets. This might seem simple, but variances across Apple and Android devices and across three or four browsers make it complex for digital experiences in marketing. In efforts to make Internet-based efforts more responsive, marketing organizations should explore developing native applications on the mobile devices or how to operate across a variety of social and digital platforms, which is important for cross-promotion and -selling. To offer a complete digital experience requires using all internal and external information assets about visitors and customers, including third-party big data sources combined with analytics to provide market intelligence and cryptic data that was not previously available to integrate with marketing data. To manage such a large portfolio will require project management that can encompass all the assets and resources and make them accessible for the entire marketing organization.

It’s obvious that Marketing has a lot to do to compete and prosper in the digital age. My analysis is that CMOs and other marketing leaders will have to get more engaged, take risks and even step outside their comfort zones in exploring and learning. Take a broad view of the processes, information and technology for the entire organization and its people and identify where working together and having consistency of projects, plans, analytics and results will help engage employees and inspire the best possible performance. Marketing is a team sport, and CMO need to not just be a captain but also equip the team to work together and be effective in their roles. As I noted in beginning, Marketing is under pressure to excel in performance and provide tangible value to the business. These steps can help it do that.


Mark Smith

CEO and Chief Research Officer

Supercharging Sales and Commerce in 2016

For several years I have been advocating that sales organizations adapt their processes and applications to optimize both sales performance and the customer experience. For details see my research agenda for last year. However, it appears that not many sales organizations have responded to this challenge; many can barely maintain their quarterly sales forecasts and monthly pipeline, track progress toward quotas and ensure that sales commissions are processed promptly and paid accurately. A great many are still using spreadsheets for these critical activities. Yet our benchmark research finds that more than half (61%) who use them for commissions said this makes the effort more difficult. Elsewhere, I have seen B2B sales organizations continue down the old path of annoying prospects with direct cold calling and email vr_scm14_06_spreadsheet_use_impedes_efficiencyinstead of nurturing real relationships. For B2C sales, the digital age of search engine optimization (SEO) and pay-per-click (PPC) has begun to haunt prospects by inserting ads in our personal social media channels. My research suggests that these practices are not due to bad intentions but to force of habit and lack of desire, time and resources to develop a modern strategy and plan. Most are just managing the basics of their sales processes and relying on sales force automation (SFA) systems, reporting and dashboards, which will only produce more of the same, less than optimal results.

This won’t do in 2016 as many factors have changed. Strong emphasis on achieving revenue targets and increasing pressure by and on sales management to provide complete and useful information and satisfying experiences to their prospects and customers. Those that don’t succeed are likely to fall further behind the competition in their pursuit of sales excellence. For those serious about improving all aspects of sales, from planning to result, I offer some suggestions.

Organizations that generate revenue through sales to consumers and business with digital commerce often continue to use systems that do not include capabilities to optimize the customer experience. Our preliminary research finds a number of them examining their systems to determine whether the “click to order” paradigm is not very efficient and able to engage customers and provide all the product information they want. Most digital commerce systems are ineffective in managing product information let alone being able to replicate product records from an enterprise master source. Antiquated commerce systems cannot support the latest digital attributes of products such as images, videos, reviews and feedback that motivate customers to go from browsing to purchase. Having consistent product information across all channels of interaction is now a necessity that requires product information management (PIM) processes and systems. This is not primarily a responsibility of the sales group but of marketing and the product organization, but it affects all of them. To address it we see partnerships developing between PIM and commerce providers who have realized the need for better support that results in purchases.

vr_Recurring_Revenue_01_why_companies_use_recurring_revenueA growing approach to sales is recurring revenue and subscription methods of payment. Our research on the topic finds good reasons for this change, the most common (for 51%) being to increase revenue and improve the customer experience. But most organizations are not well equipped to make this shift. They must integrate new processes with their digital commerce systems to support a variety of subscriptions and charges that require effective dating and billing methods. We will track the momentum of recurring revenue in new benchmark research on next-generation product information management and determine best practices in building a unified commerce approach that blends management of products and customer experience to energize sales. We will also assess the vendors and products that best fit these requirements in our 2016 PIM Value Index.

Continuous optimization of existing processes is not feasible using conventional sales activities and tools, as I have pointed out. It is common to find a disparate collection of sales applications, usually loosely coupled, centered on the SFA or sales compensation system and expanding into forecasting, opportunity management, quota and territory management, analytics and reporting. Today, however, sales compensation systems are available that do more than automate and integrate sales operations with finance and include sales performance management with quota, territory, learning and analytics designed to improve sales outcomes. Such sales compensation systems are more effective in managing incentives and rewards than are using spreadsheets. Some vendors have added internal compensation benchmarking to ensure equal pay is provided for equal work across genders and ethnicities. Innovative but not widely used yet are automation of sales contests and team-based scoreboards that, using gamification, can rally a whole sales organization toward individual, group or overall objectives. Similarly providing continuous recognition of the sales force can be part of broad- or narrowcast communications. Our sales compensation management benchmark research finds that providing recognition to top performers is critical to more than half (53%) of organizations.

For the majority in sales the ability to see their progress toward quota, commissions earned and available potential territory is not vr_NGBP_01_business_planning_capability_indexreadily available in the business intelligence software managed by IT, and analytics designed for visual discovery will not meet the full sales organization’s needs. In most cases the analytics and visualization is too complicated and is not able to be narrated and contextualized through text let alone be able to collaborate on the information. Now a new generation of analytics and sales performance applications are beginning to fill the void. In many cases the analytics are simpler and more informative and already interpreted and in the form of notification or natural language that you can read and are easily accessible on mobile devices. And for some of the elites in sales management who are getting notifications on their smart watches like the Apple Watch. For its part sales management needs to be able to continuously plan sales efforts by performing what-if scenarios and assessing trade-offs on promotions and incentives; this cannot be done with spreadsheets. Our next-generation business planning research finds that spreadsheets make it difficult to manage sales and operations planning (S&OP) processes in more than half (51%) of organizations. Additionally only 10 percent of organizations said they have all the numbers needed to understand trade-offs in S&OP, and fewer than half (43%) are satisfied with their process. This sort of dissatisfaction is leading organizations to assess new systems for S&OP and not much is different in sales forecasting. Our research into business planning finds that sales is less than effective and operate below average compared to all areas of the organizations. Also available today are sophisticated analytics-driven sales forecasting and pipeline optimization applications that provide visibility into the impacts of sales efforts; these could help the one-quarter of organizations that take two weeks or longer to compare actuals to the forecast to find variances.

Other advances include applications to support the full order-to-cash sales process, and some evolving from configure price quote (CPQ) efforts are demonstrating a more effective process-centric approach that provides the workflow and extensibility missing in SFA. And CPQ has been a critical application that is absorbed through vendor acquisition into larger sales application suites. For B2B organizations this approach can help reduce friction and delays in closing deals and support revenue recognition that acknowledges delivery of goods or receipt of services. For others, contract automation software can help ensure consistency of legal terms and authorize signatures that historically have been delayed by email and stages in the sales pipeline.

Sales groups should expect more from their marketing colleagues in the development of quality product information and materials to support the sales process. Many industry efforts in sales asset management aimed at gaining more consistency in materials have fallen short but are essential to sales effectiveness. For many sales organizations more direct coaching and working with account managers can help guide them on the path to their objectives. More than one-third of organizations are planning to use or are evaluating collaborative coaching, according to our sales compensation benchmark research. But marketing, not sales, should be responsible for nurturing suspects into becoming prospects and tracking the interactions that properly prepare leads for sales to manage into its funnel. Experimentation with sales lead nurturing is a response to marketing’s inability to fulfill on its demand-generation efforts. It will take time to see whether these new applications for sales can help increase productivity and ultimately sales. In any case, continuing separate efforts of the marketing and sales functions can only pull these organizations farther apart and undermine the success of the enterprise.

I recently pointed out the digital technology agenda and resulting disruptions to business that led to a new generation of sales applications and tools available from the vendors serving this market segment. In particular we have begun to see better use of predictive analytics to score sales leads on the probability of purchase within a given time period, which brings sales more valuable insights than dashboards and reports do. Our next-generation predictive analytics research reveals that more sales organizations than I realized (38%) are already using them. We will publish more research on next-generation sales analytics in 2016, and I have already given a look at this focus. vr_NG_Predictive_Analytics_01_front_office_functions_use_predictive_analyticsElsewhere, time in sales operations spent on tasks like data preparation can be reduced by new tools or applications that have these capabilities built in. In another disruptive area advances in social collaboration enable digital interaction across an organization to share opportunities and address issues. Using video to provide training through learning management systems (LMS) or real-time exchange of information is critical for sales, too. It is clear that all systems and information that people in sales use should be readily available on mobile devices; look for products that do not require frequent pinching in and out of the user experience. Keep in mind that all of these applications for sales can be accessed through software as a service and cloud computing, which may be easier to deploy and less costly than doing it in-house.

People outside of sales also should realize the need for investments in core applications including digital commerce, product information management and sales performance management. In 2016 we will release our value index on sales performance management that will assess and rate vendors and products. Our research shows that in more than half (59%) of organizations Finance plays a key role to influence and sponsor investments for the sales organization. Heads of sales organizations likewise should know that their sales operations team needs time and resources to better support the sales force. Putting applications on mobile devices with an easy and familiar user experience can further engages sales reps to get out and accomplish what they are chartered to do: sell. Furthermore, to stay strong sales organizations will have to invest in developing their talent and make recruiting efforts more effective. The alternative is less than promising. Sales organizations should be active in taking control of their destiny and supercharging their efforts in 2016.


Mark Smith

CEO and Chief Research Officer