 Featured Articles
How to Do Analytics Quickly and Cheaply
By Chris Koch, ckoch@itsma.com
For most of us, making a clear connection between what we do and business performance seems like a bridge too far. It’s much easier to focus on whether the program fulfilled its intended purpose—e.g., number of white-paper downloads—than it is to try to determine whether that white paper had any direct impact on a sale.
ITSMA is beginning an in-depth research program into analytics (which we define as analyzing data to inform decisions, predict buyer behavior, and forecast trends) to develop a set of simple analytics best practices for B2B marketers that don’t involve installing gobs of technology.
We’ve just completed a survey on analytics. I’ll be revealing some of the highlights of the survey at our December 16 online briefing, What You Need to Know About Marketing Analytics.
Two top experts will be joining me online that day: Pat LaPointe, who is managing director of a consultancy called MarketingNPV, which advises marketing executives on how to develop marketing metrics and analytics programs; and Samir Bagga, vice president of global marketing and communications for Satyam.
Using his own experiences at Satyam, Samir will discuss how marketers can partner with finance organizations to help create a bridge between marketing data and financial results. He’ll answer questions such as: Do you need a financial analyst permanently assigned to the marketing department? What other mechanisms can you set up to make the connection with finance?
Samir will also talk about how Satyam prepares in advance of launching a new program to be able to measure its impact. With so many different things going on at once, it can be difficult to figure out which of the four things you’re doing with customers at the moment is making the biggest difference.
Meanwhile, Pat will give us an overview of the kinds of data marketers should capture to do effective analysis. He’ll also talk about how marketers can get effective analytics programs up and running quickly and easily, without installing a bunch of complex technology. As a preview of some of the things you can expect to learn at the briefing, I’ve excerpted some of Pat’s comments from a recent interview I did with him:
ITSMA: Pat, I think many people confuse analytics and metrics (I know I do, anyway). What’s the difference?
LaPointe: Analytics is a process by which data is assessed from a variety of perspectives to try to generate specific insights or to try to predict what might happen, given a historical pattern.
Metrics are key indicators of either diagnostic or predictive value. So, for example, one might perform analytics on a large volume of historical customer transaction data to identify which customers buy which types of products and services. But with metrics, one might be looking at that data to see whether or not the percentage of customers who are spending more each month is increasing or decreasing, for example. So, the metric might be customer value evolution, and you might be looking at the index of customer value evolution on a rolling, three-month basis at any point in time.
You use metrics to help you assess the ongoing health and quality of your business. You use analytics to help you answer specific questions about what seems to be driving outcome, and you can use analytics to periodically recalibrate the metrics that you decide to pay attention to.
ITSMA: What’s missing from most analytics programs today?
LaPointe: One key factor is a lack of clarity in terms of how the programs we’re running are expected to ultimately transform into economic value. For example, if we’re running a program on customer retention, we capture only the middle ground of whether we retained customers. We don’t take it farther to determine whether that was the most profitable way that we could have spent our discretionary dollars.
Another factor is that we have so much going on at once that it becomes difficult to determine the specific effects of any one program.
For example, a marketer may decide to try to improve its channel partner program by launching an online university for channel partners and distributors. A program like that can often take months before the impact of better-trained channel partners begins to show up in terms of either the number or pace or velocity of new customers being added, or changes in the end-customer buying behavior that are more profitable. In the interim, other things might have happened: direct marketing campaigns, advertising campaigns, new sales incentive programs. After six months no one is really sure about the net contribution of all of that time and money invested in improving the channel partner program.
ITSMA: How can you separate the impact of one program from another?
LaPointe: I’m a big fan of experimentation, of trying something out on a limited basis before rolling it out everywhere. Let's go back to the online university for channel partners. Instead of diving in and spending all the money at once, maybe we start by developing a representative sample of channel partners and roll it out to them to see what impact, if any, it has on sales.
The good news is that this doesn’t require high-end statistical modeling techniques. However, it does require a little bit more money or time and attention. But the amounts of money and attention that we are talking about are fairly negligible compared to the amounts of money that are spent without any clear idea of what kind of return is expected. Nor are they large compared with the amounts of money that are cut from budgets after no credible evidence has emerged that there has been an impact.
To hear more about how to use small-scale experiments to improve marketing performance, members can log on to our online briefing on December 16.
Four Ways That Marketing Can Be More Strategic in a Recession
By Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA, jschwartz@itsma.com
Despite all the economic problems we’re seeing today, when it comes to marketing, things aren’t as bad as they were in 2001. Sure, marketing budgets are being cut back—73% of respondents in our recent Marketing in a Downturn survey said they are trimming. But the vast majority of those decreases will be less than 15%. And when it comes to staff, the majority of respondents are holding steady (10% said they will add staff).
We have to conclude that marketing today is more strategically aligned with the business. Marketers are making successful business-based arguments for preserving budgets. At a recent roundtable discussion held with some of the survey respondents, I heard from one company that successfully maintained its marketing programs and budget. The marketing leader did so by presenting compelling research proving that in the last five recessions since 1970, companies that maintain marketing investment in downturns are more likely to be better positioned when the economy turns around. (Please email me if you would like a list of sources for that data.)
Marketing is more strategically aligned today because it acts more strategically. Here are some examples of how you can more strategically align your marketing activities:
- Do more than wordsmith your value propositions. Slapping the clause “In these calamitous/rocky/precipitous times” in front of your value propositions is not enough. Marketing must take a more active role in repositioning the offering portfolio and helping sales. For example, one member described how his company is investing in providing training and tools for the sales force to explain more persuasively how their solutions will help the customer’s business.
- Help customers prove the case. The challenge for marketing today is not necessarily to convince buyers but to provide the ammunition buyers need to get approval from their finance teams. Solution providers need to step up their ability to demonstrate results through ROI tools, testimonials and references, and simulations. Eliminating the “marketing speak” and using straight talk is a must.
- Maintain the commitment to research and thought leadership—more efficiently. Back in 2001, market research and competitive analysis were cut back severely. Today there is recognition that marketing is an “outside-in” process that requires getting (and staying) close to stakeholders. Similarly, thought leadership is viewed as essential for services and solutions marketing. ITSMA members are continuing their investments in thought leadership creation and dissemination but are doing so more efficiently. For example, one member said that his company is creating thought leadership globally rather than in each BU. Globally created thought leadership will be "localized" and delivered by the BUs.
- Take a competency view of marketing outsourcing. If marketers want to be strategic about what they outsource, they should view it in terms of competencies rather than headcount. My ITSMA colleague, Bob Baginski, breaks up marketing competencies this way:
Never outsource: Program management, account planning, internal communications, analyst relations.
Can/must outsource: Advertising, media relations, writing/editing/design, fulfillment, Website.
Blend: Strategy, product/portfolio management, brand, thought leadership, digital marketing, client forums, research.
It is clear that marketing’s stature within the organization has made strides since 2001. Marketing is certainly seen as more strategic. Yet, given the economic downturn, this strategic role has to be balanced with a shorter-term, tactical focus on payback. Marketers need to collaborate with sales to strengthen the company’s relationship with existing customers, reevaluate their segmentation and target marketing strategies, and keep abreast of changing market trends and competitor moves.
To learn more about marketing in a downturn, please contact Julie Schwartz at jschwartz@itsma.com.
 ITSMA’s Annual Marketing Conference: Four Priorities for 2009
By Chris Koch, ckoch@itsma.com
As the economic meltdown swirled through the headlines, ITSMA’s Annual Marketing Conference in early November became a testing ground for presenting and refining our views of how marketing must adapt in 2009. We saw four themes emerge from the presentations, our research, and our discussions with ITSMA member attendees:
- Be a downturn opportunist. When everyone cuts budget in a panic, opportunities emerge. Marketing needs to act on them:
- Maintain and win. Research shows that companies that are able to maintain their marketing spending while competitors are cutting emerge from recessions in a stronger position.
- Shift dollars to segments that will hold steady and grow. For example, research from Pierre Audoin Consultants that was presented at the conference showed that there are certain industries that should hold steady or even grow during a recession: utilities, telecom, public sector, and healthcare. Marketing needs to analyze and perhaps reprioritize its industry focus during these times.
- Focus on demand generation. Our November ITSMA survey, Marketing in a Downturn, found that marketers are shifting budget and resources from brand- and reputation-building activities to demand generation. Other actions that companies are taking, based on the responses to the survey, include developing new products, services, bundles, or solutions; i ncreasing Account-Based Marketing (ABM) marketing to individual accounts; going after customers where competitors may be showing signs of weakness; and l ooking for partners and acquisitions.
- Start competing on analytics. Tom Davenport, consultant, professor, and author of the book Competing on Analytics, talked about ways marketers have begun using analytics to find the best customers and charge them the right price, determine whether campaigns are working, and prioritize the marketing spend. The next step is to make analytics and fact-based decisions a key element of strategy and competition. This translates into a single, simple question: “What’s the best that can happen?” Examples of using analytics in this way include the flexible pricing (aka yield optimization) models of the airline and hotel industries. The prerequisites for this kind of sophisticated approach are good-quality data; a single, cross-company approach to data analysis; top leadership commitment to analytics; a few clear goals for analysis (for example, Harrah’s, a casino, uses analytics to improve customer loyalty and service); and a core group of talented analytics experts.
- Become a bullfighter. As marketers look for a way to stand out in a tough market, we need to start thinking about revising our vocabulary. Among the meaningless terms we put in our value propositions, “next generation” was the leading offender in a 2006 survey of press releases by research company Factiva. Malcolm Frank, senior vice president of marketing and strategy for professional services firm Cognizant Technology Solutions, spoke at the conference about what he calls “the Omaha effect,” in which marketers dilute the meaning of their value propositions by trying to make them appeal to everyone in every geography. By being more specific, eliminating jargon from their messages, and not being afraid to focus on smaller market segments, marketers can make their messages more memorable.
- Improve the quality of senior customer engagement. In hard times, it’s tempting to cut back on labor-intensive attempts to reach high-level executives inside customers and prospects. If cuts are unavoidable, this is the time to focus on quality over quantity. For example, a recent survey of CEOs by IBM that was presented at the conference involved face-to-face interviews with over 1100 CEOs around the world. The depth of the discussions revealed more detailed insights than could have been achieved using other methods. Though few companies have the resources of an IBM, everyone needs to make the time for meaningful face-to-face interactions with senior execs at customer organizations—even if it’s only 10 or 100 rather than 1100. That means including discussion about substantive business issues and relevant, compelling content. Use those interactions not just to glean information but also to build tight relationships.
- Collaborate more with sales and business partners. Customers have long wanted providers to work together to deliver solutions. In a recent survey, Cisco found that 75% of its channel partners wanted to deliver services collaboratively with the company. Such partnerships are an important focus during the downturn because it’s a way to do more business without adding resources. To make sure its partnerships work, Cisco qualifies its partners carefully. It also surveys customers continually to make sure the partners are maintaining certain customer satisfaction levels. Finally, if the partner is not responsive, the customer can still call Cisco directly and Cisco will track the number of complaints. If a partner isn't delivering its end of the solution, Cisco will discontinue its participation in that program.
ITSMA members will receive an in-depth report on these four priorities and more insight from ITSMA’s Annual Marketing Conference over the coming months.
Ask ITSMA: What’s the Typical Response Rate for Email Marketing?
By Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA
Each month, ITSMA receives a number of queries through Ask ITSMA, a resource designed to give members a quick and easy way to get insight on important services and solutions marketing questions they face. In this column, we will publish some of our favorite questions along with excerpts from our replies.
Do you have figures on the effectiveness of email marketing in terms of response rates?
 First, about metrics: general metrics must be taken with a grain of salt. Open rates or click-through rates are dependent on the specifics of the campaign. One percent may be good for some campaigns, but we have seen a client have an open rate of 50% for some emails because they are very targeted, strong lists. So it all depends.
ITSMA's take is that email marketing remains extremely important, but companies need to move in two directions (similar to all marcom): more targeted and segmented communications and more “value-based” communications. This means fewer mass-broadcast emails and more targeted newsletters, relationship-building emails, invitations to seminars, demos, online games, Weblogs, white papers, and so on. Also, of course, email marketing needs to be integrated with everything else.
Companies are personalizing emails and making the content more appropriate for certain prospects. For example, one of our clients split its list of prospects into two categories so that it could understand these prospects better and then created each email around specific information that it obtained about the various contacts.
 Another one of our clients launched a direct mail and email marketing campaign with a leading application software company to generate interest and leads for our client’s software upgrade and implementation expertise. The company used two direct mailings and one email drop to IT managers/execs, finance, HR, and operations. Both the direct mail and the email messages were personalized (“Dear Dave”) and asked whether the customers had considered upgrading their software. Both the direct mail pieces and the email listed URLs where customers could go to understand the ROI, benefits and trade-offs, and value of upgrading. The emails brought the best response rate in driving folks to the Web (5.8% response). Close to 2000 unqualified leads were generated, nearly 40% of whom downloaded a white paper on upgrading ROI. Those people were called and emailed to see if they were interested in an assessment and ultimately an insight day to help outline the business case for upgrading (or not). Close to 100 expressed interest in going through an assessment.
 Of course, the quality of the mailing list is critical. Our client said that they first used an existing list that only generated a .005 response rate. Then they went back and bought a better/newer list. They paid more than they wanted to spend but split the cost with a partner.
Relative to other vehicles for engaging potential clients, email often falls to the bottom of the list. Recommendations from colleagues, past experience, the Internet, press articles, analyst firm recommendations, conference presentations, direct mail (snail mail), and even phone calls from sales reps are rated by buyers as being more effective than email. However, based on anecdotal evidence from our clients, this is what they “say” and might not match what they actually “do.”
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Recent ITSMA Thought Leadership
Two Extremes That Will Clarify Your Launch Strategy
http://www.itsma.com/research/abstracts/V0045.htm
Product and service launch strategies are framed by two extremes: blow open the market right away with a big marketing push or build awareness slowly over time. Wharton marketing professor Peter Fader calls these extremes “penetration” and “skim.” In this Viewpoint, Fader explains how marketers can use skim and penetration as guidelines for developing the most appropriate campaigns.
Marketing in a Downturn
http://www.itsma.com/research/abstracts/SV4320.htm
ITSMA members are beginning to feel the effects of the financial markets crisis. Although pipelines remain strong in the fourth calendar quarter, companies are issuing cautions regarding 2009. There is little to no visibility for 2009 customer demand. In response, marketers are changing their strategies and tactics.
How Customers Choose Solution Providers, North America, 2008, Focus Report
http://www.itsma.com/research/abstracts/F014.htm
ITSMA's 2008 How Customers Choose Solution Providers Study revealed a number of important insights. Through detailed research and analysis of customer buying behavior, we have concluded that marketers need to engage customers earlier than ever before—during what we call the epiphany phase of the buying cycle. Based on interviews with 216 U.S.-based business and IT buyers of business and technology solutions, the report helps marketers better understand the marketing activities that will deliver the desired results at three major stages of the buying cycle: epiphany, awareness, and interest.
The ROI of Community
http://www.itsma.com/research/abstracts/V0044.htm
As online communities continue to proliferate, B2B marketers are concerned that their own efforts at community could be lost in the shuffle or fail to provide business value. How should B2B marketers focus their community efforts to provide compelling content for members and business value for their companies? For some answers, we went to Bill Johnston, who blogs about online community strategy and runs the Online Community Research Network.
Upcoming ITSMA Events
To view all events, please go to http://www.itsma.com/aspfiles/events/calendar.asp.
What You Need to Know about Marketing Analytics
Online Web Briefing
December 16, 2008
8:00 am Pacific – 11:00 am Eastern – 16:00 London (Duration: One hour)
(Free for ITSMA members)
http://www.itsma.com/Events/event_desc/08OB12G35.htm
As the economy sputters, gut instinct and intuition need to be leavened with more fact-based thinking. It’s critical that marketing improve its ability to analyze data to inform decisions, predict buyer behavior, and forecast trends. Please join ITSMA’s Chris Koch, MarketingNPV’s Pat LaPointe, and Satyam’s Samir Bagga as they reveal highlights from ITSMA’s survey on marketing analytics and provide insights and best practices in areas such as:
- Elements of a successful marketing analytics program
- Quick, inexpensive methods for predicting marketing campaign success
- Ways to collaborate effectively with finance on analytics
- Challenges that prevent organizations from developing a successful analytics program
Classic Insight
Check out these ITSMA Online Briefings that have been rated highly by ITSMA members:
Online Reputation Management: Bolstering Your Brand Through Conversation and Community
http://www.itsma.com/research/abstracts/OLB071016.htm
Just as important as what you say about your company is what others are saying about you. Today, marketers are looking for the best ways to leverage the Web to enhance their reputations and build their brands. In this Online Briefing, Brian Harvey, senior director of global marketing and strategy at Accenture; Vic Odryna, CEO, Zazzle Technology; and ITSMA’s Bob Baginski discuss how to proactively shape and amplify your reputation online.
Account-Based Marketing: Best Practices and Critical Success Factors
http://www.itsma.com/research/abstracts/OLB070213.htm
ITSMA's Jeff Sands, IBM's Naomi Wilsey, and Xerox's Liz Vega copresent this Briefing on best practices and critical success factors for Account-Based Marketing (ABM), a hot new approach that helps companies deepen relationships and increase revenue with key accounts. |
