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Social Marketing: Beyond the Hype or Behind the Curve?

May 22nd, 2012

IDC PMS4colorversion 4 300x99 Social Marketing: Beyond the Hype or Behind the Curve?

 

IDC, Rich Vancil

What is the reality of Social Marketing adoption? Does usage match up to the hype and high expectations? Or is this already an over-blown marketing fad, even in these early days?

IDC is beginning to see excellent examples of use, where Social Marketing is moving beyond experimentation and is beginning to put down roots as a “value-adding” contributor within the marketing-mix. Our latest research from shows that 84% of IT buyers are accessing social media to keep up with trends and stay connected.

SocialMarketing info150 274x300 Social Marketing: Beyond the Hype or Behind the Curve?However, of that same 84%, only 19% believe that social media has influenced how they interact with vendors and make purchase decisions. It would seem that tech vendors and tech buyers are inhabiting many of the same Social media spaces, but Social Marketing as a more intentional effort to influence buyers still needs work. Tech marketers are learning that they must give before they expect to receive, and focus on creating social media interactions that are highly relevant and provide value to buyers.

IDC is closely watching levels of investment and attention to the deployment of Social Marketing. How much is actually being spent in this area? What is the marketing-mix allocation of scarce monies and human resources to work on these initiatives? IDC starts by looking at investment and activity in Social Marketing. When one examines the actual allocations. the results are surprising. Investment in Social Marketing tools and programs is just 1.3% of the discretionary budget for a large IT vendor. As for the human resource: dedicated Social marketing talent is just .7% of total staff – or in other words – a part of one person’s time.

The infrastructure and tools to support Social Marketing must come in to place. Our research also shows that Social Marketing tools are at the top of the CMO’s shopping list for 2012. Only 34% of marketers surveyed currently agree that they have access to the right information at the right time to support decision making, analysis, planning, or forecasting.

We are still in the early days of this. I cast my vote on the side of optimism, and believe that Social Marketing execution will, in-time, be a core element of the B2B marketers tool kit.

In the mean-time, assess where are you on your progression towards delivering value, and earning the rewards of Social Marketing. Here are three tips for Social Marketers:

1) Don’t rush the listening process: Our parents taught us to “listen before you speak” and here is a great place to remember their words. IDC is seeing good usage of Social Marketing for the key activity of “Listening and Monitoring”. In fact, “just listening” to the conversations about your company–without even “saying” anything–is an excellent way to step into this new media. Many companies are rushing this step, which has limited their ability to meaningfully engage with their targets. Data from IDC’s 2012 Buyer Experience Study shows that buyers are most commonly found in communities and blogs, making them an excellent source of relevant conversations.

2) It’s not only about presence, it’s about influence. Always prioritize the value that you can bring to your audience. Help educate them. Help connect them with their peers. These are attributes that they dearly seek, versus being “sold to” by their tech vendors.

3) Invest and evolve: Continue to invest in Social Marketing and increase proficiency. The relatively low level of dollar and staff outlay will grow quickly in the coming years. At the same time, there should be a relatively sizable gain in cost per impact vs. traditional media. Social Marketing is capable of providing high impact at a relatively low cost. Invest and increase proficiency to achieve higher levels of impact.

Categories: Tech Business & Marketing Blog, Tech Business & Marketing Research | Tags: , , , , , ,

Key Findings From IDC’s 2011 Tech Marketing Benchmarks Study

September 21st, 2011

j ferrantino m Key Findings From IDCs 2011 Tech Marketing Benchmarks Study

Joseph Ferrantino, Research Analyst, CMO Advisory Service

Between May 15th and July 31st, 2011, IDC’s CMO Advisory Group fielded its 9th annual Tech Marketing Benchmarks Study. More than 100 tech companies representing about $850B in revenue responded, making this the CMO Advisory Group’s most successful benchmarking study to date. The average revenue for companies in this data set is $9.5B, and these data include companies ranging from less than $500M to about $100B. Technology hardware, software, and services companies with both direct and indirect channel strategies are represented in the database. The following are some key findings from IDC’s 2011 Tech Marketing Benchmarks Study.

Marketing investment growth in 2011 is lagging revenue growth at 3.5% and 6.5% respectively. Moreover, the 3.5% marketing investment change figure is significantly lower than tech marketer’s sentiments in January of 2011, when they reported expectations of an 8% increase to marketing budgets. In past years, IDC’s CMO Advisory Group has observed that marketing investment growth generally tracks revenue growth, but that trend has not re-emerged since the recession. Larger companies in particular are experiencing weak marketing investment growth. Companies with revenues between $3B and $9.9B are reporting marketing investment changes of only 2.1%, and companies with revenues greater than $10B are even less at 1.7%. Smaller companies are investing more heavily; companies with less than $500M, between $500M and $999M, and $3B to $2.9B in revenues have average marketing investment changes of 10%, 8.1%, and 7%. Services companies have the weakest marketing investment growth in 2011, however, with an average of -1%.

IDC’s CMO Advisory Service tracks a series of key performance indicators that marketing executives should monitor closely in their own organizations. The following are some key observations on changes to top-line key performance indicators in 2011:

  • Marketing Budget Ratios, which are calculated by dividing total marketing spend by revenue, are decreasing in 2011 because revenue growth is outpacing revenue growth.
  • IDC’s Awareness-Demand Ratio, which calculates the total amount of marketing spend dedicated to awareness building activities versus demand generating activities is at 52%, which means that the focus this year has shifted to Awareness. Last year, marketers were favoring Demand.
  • Program-to-People Ratios, which show the percentage of total marketing spend that is directed towards programs, have increased year over year to 60%. The main contributor to the increase in this ratio in 2011 is the increase in Awareness generating activities such as Advertising, which are more program-spend heavy.

2011+Tech+Marketing+Benchmarks+Webinar+V1 Key Findings From IDCs 2011 Tech Marketing Benchmarks Study

Digital Marketing Program spend–defined as display ads, search ads, email marketing, digital events, company web sites, search engine optimization, and social networks–continues to increase rapidly. In 2010 digital marketing accounted for 19.3% of total program spend, but in 2011 this number has risen to 26.4%. Advertising program spend, which includes display ads and search ads in addition to traditional advertising mediums, has also increased year over year. This finding is consistent with the overall increase in Awareness activities. Marketing organizations are also allocating more spend to web site content and development this year, which is now 8.2% of the total marketing program spend mix.

IDC’s CMO Advisory Service has also observed changes to marketing staff allocations in 2011, see below for some highlights:

  • Web site content and development is not only a key area of program spend investment–marketing departments have also increased their staff allocations in this area to 5.6%. IDC believes that this is a positive change, since IDC’s 2011 Buyer Experience Study revealed that the first place prospects turn to for information is a company’s web site.
  • Marketing operations has experienced growth for a number of years, but this trend seems to be leveling off as the position matures. Marketing operations currently accounts for 5.3% of total marketing staff which is a decrease from last year’s allocation. IDC does not believe that companies are actually reducing marketing operations staff; the cause of the year over year decrease is a combination of other staffing categories increasing more rapidly and an IDC taxonomy change to include a new category called marketing IT.
  • The CMO Advisory Group has been championing sales enablement for the past few years. In 2010 sales enablement accounted for 3.1% of the total staff mix, but since then this allocation has risen to 3.7%.

These are only a few of the findings uncovered by IDC’s 2011 Tech Marketing Benchmarks Study. For more information, or to participate in upcoming IDC studies please contact Joseph Ferrantino at jferrantino@idc.com.

Categories: Tech Business & Marketing Blog | Tags: , , , , ,

The Four Stages of Data Driven Marketing

August 18th, 2011

Gerald Murray The Four Stages of Data Driven Marketing
Gerald Murray, Research Manager, CMO Advisory Service

Who is your customer? It is a deceptively complex question that a surprising number of B2B companies cannot answer. The difficulty stems from several causes:

Inconsistent definitions for customer attributes (account name, industry, segment, organizational hierarchy, contact name/email, etc.)
Fragmentation of the data across multiple databases and applications
Departmental perspectives on customer relationships
Lack of an enterprise customer data management approach
The impact of all this is a severe slow down in decision making and an inability to optimize critical processes in customer facing functions, most poignantly in marketing and sales. The solution is to define customer creation as an enterprise process – not something that happens only in marketing and/or sales – and the implementation of data standards and governance to support it. This enables marketing to be data driven, but there are four distinct stages of data driven marketing and not all of them lead to success:

1. Stage One – Fast Failure. This stage is characterized by response-based decision making. Marketing decisions are based on response data from marketing systems – web hits, landing page registrations, and myriads of other campaign performance data. All of this is important, but leaves marketing unable to tie any of its activities to key business metrics such as revenue performance.

2. Stage Two – Slow Failure. This stage is introduces conversion-based decision making. Marketing and sales systems are integrated along with customer data definitions and structures. This provides a quantum leap forward for both sales and marketing. However, marketing is still one degree of separation from linking its activities to business performance. Sales pipeline is a good proxy but it is no substitute for the critical business data that comes from the next two stages.

3. Stage Three – Measurable Success. At this stage marketing finally is able to measure contribution to revenue. However, it is not enough to rely on initial contract data alone. Account A that closed for $1 million and account B that also closed for $1 million may be very different in terms of margin and lifetime value. Account A may have cost $250,000 to sell, install, and support where account B cost $500,000. If that’s the end of the data set, then of course marketing should bring on more account A profiles.

4. Stage Four – Market Mastery. At this stage marketing understands the long term profitability of customer relationships. If over time account A buys nothing more and account B upgrades and expands its investment by millions of dollars at improving margins, marketing can refine its activities accordingly and begin to drive overall business performance.

The key lesson is that marketing is greatly influenced by the depth of data available to it. At each stage in IDC’s data driven marketing model, new data can completely change all facets of marketing activity from strategic targeting and messaging to tactical campaign investment and roll out plans. As a result, it is crucial for companies to get to Stage Three as quickly as possible and remain ahead of competitors on the journey to Stage Four.

Categories: Tech Business & Marketing | Tags: , , , ,

Making the Most of Channel Marketing

July 28th, 2011

Gerald Murray Making the Most of Channel Marketing
Gerald Murray, Research Manager, CMO Advisory Service

A recent IDC study of large IT companies found that, on average, channel revenue was $3.7 billion. The average internal channel marketing staff of 53 managed nearly 22,000 partners, equating to $12 million of revenue per internal staff but only half a million dollar per partner.

Most shocking from the study — these organizations have an average of approximately 15,000 inactive partners. Active partners only constitute 31% of the channel mix, with the remaining 69% being inactive. Given the expense involved in recruiting channel partners and on-boarding their first sales, it is in the vendor’s best interest to identify the best partners across the entire partner population and enable them to step-up to higher levels of sales performance.

Channel Marketing Service and Automation Solutions

The traditional method of assigning business development managers to the top 5% of partners, and others to groups of the second 15% of partners, is not scalable. The business development manager assignment is a fixed cost that requires 35%+ growth rates – and it is hard to predict the winners. As shown in the figure below, in a recent IDC study channel managers rated the effectiveness of BDMs and customized channel marketing programs statistically identical in terms of their effectiveness at producing ROI. Providing access to customized channel marketing to all partners – including the bottom 80% – amortizes costs over a larger revenue base Customized channel marketing enables the winners to self-select and payback is driven by collective success.

Most Effective Resources

IDC%2BChannel%2BManagement%2Bslide Making the Most of Channel Marketing

Source: IDC, The Importance of Customized Channel Marketing, 2011. n=22

Customized channel marketing programs can reduce the complexity of marketing through partners by streamlining channel marketing processes and increasing vendor ability to reach more partners simultaneously. Redundancy can be eliminated, as distribution of messages, campaigns, programs and promotions become part of a menu of interchangeable, additive activities.

Using social network best practices, feedback from partners can be used to determine which activities work best from a partner perspective, and which activities need to be developed. This feedback is equally valuable for vendors and partners to see which customizable channel marketing activities are most effective. For the majority of channel partners, customized channel marketing programs offer much needed help in building their marketing plan.

The full report can be downloaded here.

Categories: Tech Business & Marketing | Tags: , , , , , , , , , , , ,

Market Intelligence on the Move

June 8th, 2011

logo idc eag Market Intelligence on the Move

Rich Vancil

Transformation continues to sweep its way through the marketing function and no “department” within the function is exempt from change. For this month’s CMO Advisor newsletter, we are now focused on the market intelligence area.

Compared to its peer departments, Market Intelligence (MI) enjoys relative stability, as measured by the steadiness of the job description, job security and tenure, and budgets. But there is a groundswell of change — or at least an expressed desire for change. In a recent survey of MI professionals, IDC observes that MI executives are seeking to increase the value they deliver to the organizations they support, and to deliver that value with greater efficiency.

Indeed, it is the sentiment of executives that IDC interviewed that “The market intelligence organization will change more in the next 3 years than it has changed in the past 10 years”. That is a bold statement. To peel it back, here are the top areas of change that the MI profession is seeking to transform.

  • MI executives want to transform their client engagement model and become more “proactive”. In IDC’s opinion, this sentiment stems from MI’s traditional challenge of being a demand-driven organization that is constantly working in “response mode” to numerous requests from their internal customers.
  • The MI area seeks to increase its contributions to corporate strategy and sales enablement.
  • From a process and technology standpoint, MI would like to improve the information “value chain”, from data sourcing to information delivery.
  • MI seeks to provide greater support for long-range business planning.
  • MI seeks to demonstrate more visible / tangible business value for its work output.

Our sense is that MI professionals have a good future vision of their role; one where they are highly efficient, driving strategic as well as tactical business value, and are highly valued by their internal clients across the organization for information and “insights” that positively influence business outcomes.

There are two areas that I believe are the best place for MI Transformation steps to begin. These are echoed by my colleagues at IDC and also validated by our surveys with MI executives. I will describe these and also take a bit of “analyst license” and provide some operational suggestions.

1. Improving support for corporate strategy and long term business decisions. I think that MI professionals would love to get out of the heavy load of short-time, fast response calls for bits and bites of data. What they would like to do is be involved in longer term, meatier analysis that is served at higher levels in the organization and that support important business outcomes. But MI is constrained by their people and processes.
The process changes I would suggest would be first; provide more technology and training for self-service for the run-rate of short and tactical requests. Second, consider greater off-shoring or right-shoring of the “back office” analysis roles within MI, and thereby create more roles for higher level “management – consulting” type MI personnel who can interface with executives for the longer-cycle, more complex projects.

By the way, on the right-shoring of MI tasks (moving the non-client facing anayltical tasks to lower cost countries), many of the largest tech vendors are on this march right now.

2. Sales Enablement. In IDC’s many surveys of Selling Productivity, we see that very high salaried sales executives spend a large amount of their time searching for or re-creating information that will support their preparation. OK, so what function in the organization that is NOT the sales function is good at finding and organizing and delivering information? Market Intelligence! I think it would be a natural for the MI area to provide greater and more cost effective support for many sales-preparation activities. As an example, almost every MI function has a portal for serving and managing information assets. Why couldn’t those same portals – or a version thereof – be used for sales assets? The time spent on searching for information assets is one of the most wasted and most common activities of salespeople.

Advisor pic Market Intelligence on the Move

Recently, I have been writing on similar transformations in related business units such as marketing operations, and we are also seeing some related changes taking place within sales operations. For every part of the marketing organization, the pressure is on to be efficient and drive positive business outcomes. IDC believes that there is a bright future ahead for MI leaders (and their teams) that understand the transformation that is under way and can begin that journey with concrete and bold new steps.

Categories: Tech Business & Marketing | Tags: , , , , , , , ,

Essential Guidance for 2011

March 21st, 2011

logo idc eag Essential Guidance for 2011

Rich Vancil

March 21, 2011

Building the Intelligent Sales & Marketing Organization.

IDC’s best and brightest analyst teams were assembled in Boston and San Jose during the past two weeks to present their latest insight and guidance for creating the global intelligent economy; focusing specifically on the impact of social, mobile and virtual technologies on this vision. Morning speakers discussed how to position for the third wave of IT industry growth driven by mobility, clouds, big data and intelligent industries. In the afternoon, one of the many tracks included presentations by IDC’s Sales and Marketing Advisory team about the vision of the intelligent sales and marketing organization and they key success factors required to achieve this vision. A few key take-aways from each of the presentations in this track are provided below.

Executing for Marketing Excellence in 2011 by Rich Vancil:

Start – or accelerate – your social business transformation

  • With communication cycle-times dropping and the purchase decision influence continue to shift to buyers, a shift to “social business” is imperative for your success;
  • 41% of businesses have already implemented an enterprise social software solution
  • Focus on building “peer-to-peer” connections, not “vendor-to-customer”

    • Make a deeper investment in intelligence and operations

  • Drive marketing operations and market intelligence initiatives and investment down through the organization, across the business units and into the regions
  • Better establish and govern the processes for sales enablement and data quality to improve sales intelligence and their ability to leverage insight and resources.

    • Build a better budget (IDC CMO and Sales Advisory clients should refer to IDC’s combined marketing and sales investment benchmarks data)

  • As marketing budgets recover, allocate new investments with the needs of a new reality – digital marketing is here to stay, and is only increasing in its ability to drive awareness building and demand generation; and greater alignment with sales will require continued investment in campaign management, sales enablement and lead management extending into what has traditionally been considered sales’ domain.

    • Building the Intelligence Sales Organization by Michael Gerard:

    Listen to your buyers:

  • Technology buyers indicated a desire to reduce their buying cycle time by 40%.
  • Two-thirds of the delay between desire vs. actual buying cycle time is the result of buyers’ internal funding and decision-making processes; however, vendors’ sales teams can impact this part of the delay!

    • Drive sales to be more strategic by investing in a next generation sales operations team which focuses on – sales strategy, productivity and automation. Team with marketing, your learning and development organization and IT to gaps in sales intelligence – customer intelligence for sales and sales enablement.

    Push the limits on sales performance measurement

  • Establish a sales analyst function to better measure sales productivity
  • Improve data quality with the aid of other parts of the organization
  • Analyze the sales pipeline, rep performance and the impact of sales productivity improvement initiatives to help impact strategic and tactical decision-making

    • The Sales & Marketing Automation Imperative by Gerry Murray:

  • Investment in sales and marketing automation continues to increase as companies recognize the value of technology in adapting to new market realities
  • However, sales and marketing need to better align across their own teams as well with other parts of the organization to create a more holistic experience for customers (e.g., marketing, sales, finance, services, support)
  • Your company should establish a customer data czar, with team members in sales and marketing, to execute and govern data quality processes.
  • Evolve to a more comprehensive sales enablement platform (i.e., beyond a content portal) centered on integrated customer experience management

    • Clients of IDC’s Sales Advisory Service [http://www.idc.com/eagroup/sales.jsp] and CMO Advisory Service [http://www.idc.com/eagroup/cmo.jsp] should contact us for a full overview of any of these areas as well as access to our latest research schedule and listing of published research.

    Please do provide any comments on this topic below or reach out to us to participate in upcoming sales and marketing research.

    Categories: Tech Business & Marketing | Tags: , , , , , , , , , , ,

    Update on Social Business Transformation

    March 1st, 2011

    logo idc eag Update on Social Business Transformation

    Rich Vancil

    Update on Social Business Transformation

    Figure1a Update on Social Business Transformation

    Social Media in the B2B world has got a bit of a bad rap right now. Let’s frame the problem. The obstacles might be spoken (or whispered) as:

    • “These new communication platforms, and this social media movement within our company…is …who knows? Well, let’s just keep an eye on it. Let’s see what develops. But for the time being these are…
    • NOT the valid business-communications media we should be using to communicate with the serious audience we wish to reach. ”

    These obstacles may be over-observed.

    Let’s broaden the definition and talk not about Social Media, but about “Social Business Transformation”. The real Transformation lies not in what you see: with Twitter or LinkedIn or FaceBook. For personal networking, these tools may be the whole game: you are involved in connections that are one or two links deep. But at the enterprise level these tools are merely the surface layer. Social Business Transformation is about deep communications adaptation; changes in culture; new rules of engagement; shifts in organizational centers-of-influence; and then (lastly) the associated tools and technologies that enable communications on the surface.

    IDC is digging deeper to uncover this major trend and transformation in business communications. “Social” will continue to press its way into the enterprise – into our lives as business professionals.

    With my research partner and IDC’s Social Business expert Erin Traudt, IDC has just completed a series of interviews with IBM about their own Social Business Transformation We are impressed with IBM’s accomplishments.

    To boil it down, here are three observations for Social Business Transformation success:

    1. Tap in to the Professional Ego.

    You say that you enter into a web community because you want to “connect”. But I would suggest that most of the energy behind any personal or business Social Media activity has a strong element of: “Here I am!” None of us would enter a single Social keystroke unless we wanted to satisfy an ego need. The need to feel important. And, (fingers-crossed), the desire to be recognized! By extension, would not the math argue that if we spend nine or ten hours each day at the workplace, that this dynamic should be a more powerful force in the business world (“Look at my great new technical workaround!”) than in the personal world (“Look at my cool new postcard collection!”)

    The IBM developerWorks website is a technical resource for the IBM developer community. Established in 2000, it is now one of the largest IBM sites, with over 4 million unique visitors per month. It is a resource where developers in the IBM ecosystem offer their knowledge and skills. About one-half of the content on this vast site is posted from outside of IBM: developers, partners, and customers. Why does it work? Professional ego! But it takes time and investment. developerWorks has been an eleven-year work-in-progress for IBM.

    2. You can’t force interaction.

    The viable and vibrant IBM communities we have studied are years in the making. It takes significant time and investment to devlop a community to the point where it is somewhat self-sustaining. One IBM executive noted that Community development is like planting a tree where the first year of nurturing, watering and pruning requires almost constant attention. And more than one IBM community that we examined was several years underway and still under active investment mode. It is also notable that each Community only becomes self-sustaining because of the external contributions (see above). Our estimate would be that for every one community that is self sustaining, that there are hundreds in “push” mode (hoping that our voices will be heard and enjoined).

    “If the people don’t want to come, all the marketing in the world won’t stop them”.

    3. Construct and Adhere to Policy.

    This is interesting. I think we all are a bit attracted to the Social Media because we can express ourselves in a way that allows us to put our corporate toes across the corporate line, if even for an instant! However, the successful sites that are viable today are here in part to some basic and sensible policing. We have to. We all need to protect our customers, to do the best by them.

    Our sense is that sustained and successful Social Business Transformation efforts are going to be more powerful than we have ever imagined. Good examples (such as with IBM) are already in place. Of course there are challenges; but these obstacles will over time be trumped by the benefits (see Figures).

    How is your company coming along on its own Social Business Transformation?
    - Rich Vancil

    

    Categories: Tech Business & Marketing | Tags: , , , , , , , , ,

    Marketing Automation: Keys to Success

    December 22nd, 2010

    Gerald Murray Marketing Automation: Keys to Success
    Gerald Murray, Research Manager, CMO Advisory Service

    12/22/10

    Of the 235 respondents in a November IDC survey, nearly 40% had not implemented a marketing automation solution (yet). Not implementing a marketing automation solution may be the ultimate career limiting move for today’s marketers. Digital marketing has exploded in scope and complexity making it practically impossible to efficiently and effectively reach your target audience without a fully realized marketing automation infrastructure. If you haven’t gotten started you are already way behind the ball.

    40% have not yet implemented marketing automation
    Marketing Automation: Keys to Success
    Source: Marketing Automation: the Rise of Revenue, IDC #255860, Dec 2010. n = 234

    Marketing automation is a must have for today’s marketing and sales organizations. There is a wide array of online sources readily available to buyers that can significantly influence purchasing behavior. As a result, marketers must maintain a pervasive and continuously refreshing digital presence. Frequency is emerging as the most critical capability for sales and marketing organizations – frequency of outreach, analysis, and reporting. The cycle time for everything in marketing is under enormous pressure and companies that deliver more often, respond faster, and sustain their digital presence more successfully will be the winners.

    Keys to success:

    • Standardize your customer data
    • Deploy marketing automation
    • Review KPIs for marketing and sales to ensure alignment, visibility, and data integrity
    • Integrate data, workflows, and governance across the whole “response to revenue” cycle

    Top 3 places small companies (less than $1B) start:

    • Lead management
    • Campaign management
    • Content management

    Top 3 places large enterprise ($1B or more) start:

    • Campaign management
    • Lead management
    • Financial reporting

    Marketers must solve a stack of process, operational, and technical issues. It is a very complex and large scale problem spanning not only marketing and sales, but every other piece of the “response to revenue cycle, including: configuration, pricing, order processing, accounting, as well as service and support functions as well. The full scope of the customer relationship must be visible and measurable. Point solutions focused on particular marketing processes are great catalysts, but, IDC recommends companies take a holistic approach that ensures consistent data, workflows, and governance throughout the customer lifecycle.

    Categories: Tech Business & Marketing | Tags: , , , , , , , ,

    Dreamforce '10 – the don't Miss Event of the Year…for CIOs

    December 16th, 2010

    Gerald Murray Dreamforce '10 the don't Miss Event of the Year...for CIOs
    Gerald Murray, Research Manager, CMO Advisory Service

    December 16, 2010

    Salesforce.com held its annual user conference December 6th to 9th in San Francisco. It was unusual in that very little of the messaging from Salesforce.com itself was aimed at sales people. The company has clearly and emphatically hammered its stake in the ground as the cloud platform provider for the enterprise. Marc Benioff and other top SFDC execs spent all of the general session keynotes on four key ideas:

    • Platform
    • Cloud
    • Social
    • Mobile

    If that were a word cloud of the transcripts of the keynotes “platform” would be the biggest and boldest of the four. The company made several significant announcements about how it is enhancing and building out the enterprise cloud computing platform of the future – much of it aimed at CIOs and developers. First however, there were a couple of items that will be of interest to sales and marketing people:

    Full integration of Jigsaw. Jigsaw, the “crowdsourced” contact database will now provide dynamic updates to records, greatly reducing blank or incomplete record status and making it easier for sales and marketing people to contact the right individuals within their target accounts – to the extent that Jigsaw can provide clean data.

    Chatter Free. Announced earlier this year, Chatter is the SFDC collaboration app. SFDC cited user numbers in the 10,000s at NBC, Qualcomm, and Nikon, and 100,000s at Dell. With Chatter Free, limited Chatter functionality will now be available to people that don’t have SFDC licenses. Users can add SFDC features for $15/user/month w/o the need for a SFDC license. Salesforce.com clearly expects Chatter to make SFDC adoption a viral phenomenon. What Chatter adds to the picture beyond being “Facebook for the enterprise” is the ability to follow not only people, but groups, accounts, and contacts – potentially any record in the SFDC.com database. Chatter will help companies share tribal knowledge as well as better coordinate the outreach multiple business units may have with key contacts and accounts – both very good things that go way beyond being Facebook Friends with all of your customers and employees. Regardless of whether it drives more licenses, it sets the stage for the platform sell that’s coming next.

    Platform as a Service (the CIO part)

    Database.com. Significantly, SFDC claims database.com is open to any environment, any programming language, and any device. It provides relational data services, full text search, user management, row level security, triggered and stored procedures, authentication, support for APIs (db to db calls), as well as a myriad of other features such as the ability for each record to have a profile that supports followers and feeds (see http://wiki.database.com/page/FAQ for more info.) Touting the power of the cloud, SFDC presented statistics showing that in the last year the number of transactions grew 50%, the number of records doubled from 10 billion to 20 billion, and average response time decreased.

    Open Apex. Salesforce.com has launched an open programming language for the cloud that supports multi-tenancy. Now developers can work in the cloud to customize and enhance Salesforce.com apps as well as develop a host of other independent enterprise applications for any function – marketing, accounting, services, provisioning, HR, etc. This should fundamentally change the perspective of the IT department about cloud computing – it’s open, has its own IDE and database, supports web and mobile development. You no longer have to have code on premises to manage and customize your enterprise functionality.

    Ruby on Rails. Web development is native to the salesforce.com cloud platform. Java support is provided by vmForce and acquisition of Heroku provides both a hosting platform and an IDE for native Ruby on Rails development in the cloud. This greatly eases the process of making enterprise apps web and mobile ready.

    “Now we’re finally a real platform company”

    SFDC now comprises: salesforce, serviceforce, chatter, jigsaw, database.com, appforce, siteforce, vmforce, Ruby, Apex, Eclipse IDE, ISV force, and more. The mantra heard repeatedly from senior SFDC execs was that Salesforce.com is now a real platfom company.

    The big picture for Salesforce.com is to provide all the layers of the IT computing environment as a shared service that is managed, tuned, updated, and upgraded automatically. This greatly reduces the administrative overhead for IT while providing all the application and data control they need to rapidly respond to business requirements (and not having hundreds of rogue DIY projects all over the place.) All good things, but the risk is whether the platform can be trusted to provide all that without failure or outage or providing a conveniently centralized target for cyber attack.

    While SFDC sets its sights on becoming all things to all people in the cloud, it is not intending to be the single source for automating the response to revenue process. Recent IDC research shows that 75% of SFDC customers also use up to five other sales and marketing automation solutions (see Marketing Automation: The Rise of Revenue, IDC #225860, Dec 2010.) The Expo floor featured representatives from the entire sales and marketing ecosystem – marketing automation, customer intelligence, list and database management, sales enablement, forecasting tools, proposal tools, and many others. As a result, customers will continue to be in the position of cobbling together “best of breed” solutions, and having to integrate the data, systems, and workflows required to manage and measure the performance of the customer creation process.

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    The Complexity of Multi-Path Marketing

    November 5th, 2010

    logo idc eag The Complexity of Multi Path Marketing

    Rich Vancil

    November 5, 2010

    In our most recent survey of CMO’s, we asked: “What is your primary Voice by which you go to market? Is your Voice that of: product line; industry; solution; campaign (or theme); customer segment; or job role?” The responses were evenly spread across these six voices. Which basically translates to: “As an industry, we go to market with all those voices at once”.

    I see so many executives struggling with this complex messaging ambition. Mar-Comm executives like to refer to this ambition as their “messaging architecture” but frankly I don’t see many of these architectures that would pass the building inspection: it’s just too complex.

    Now, add to this a second dimension: the media in which your voice is carried into the market. Today’s marketer has dozens of choices of media to choose from: from traditional advertising to social media tools. Obviously.

    Finally, add a third dimension of time. New IDC research shows that the average cycle time of creating a new tech B2B customer — from initial marketing all the way through to a closed deal — is over 17 months.

    And so now you have six voices, perhaps 35 different mediums of choice; and 17 months of engagement time. What do you get? In the first place – you get overwhelmed with choice! In the second place, what you do get is about one closed deal for every 2000 contacts that you started with at the very beginning of your campaign.

    I once had a job as an assistant product marketer and my boss gave me a direct task: “Fax those new product fact sheets to our top 100 clients, today”. One medium, one voice, and one dimension of time. No decisions on my part. I was a skilled faxer, and quite poorly paid.

    But now you are the boss and “they’re paying you the big bucks”… So, how are you going to figure this out?

    This is the challenge of multi-path marketing and I believe that it is a bellwether issue for senior marketers. Over the past several weeks I have been interviewing some of our industry’s top marketers about this issue, seeking their approaches. Here is what I am hearing, and some guidance on process approach:

    1) The objective of all of this is greater “Personalization”. Get the right message and content to the right person in the right time, place, sequence, format and voice. Now, to accomplish this, you might think to install the marketing content and execution tools in the part of your marketing apparatus that is closest to the customer: the channel partner or field seller. Counter intuitively, the opposite is happening.

    2) Personalization begins with centralization. To make personalization happen, the best marketers are moving content production, tools, and process “Upstream” — that is, away from the field and deeper inside the central machinery of the marketing operations areas. Content and asset management tools and sales enablement portals are helping this process.

    3) Yes, there still needs to be local execution decisions: translation and choice of media are the two primary areas. But the field marketers who are most successful in these decisions are supported by those robust content management tools way up-stream at headquarters.

    4) An additional element that adds to the complexity of multi-path (and multi-geography) marketing execution is the contribution of agency partners. Agencies will add their own flavor of voice and media choices – which may cause a global campaign to become very “un-unified” quite quickly. Several large tech vendors are moving towards agency consolidation to help alleviate this.

    In a recent head-to-head with a CMO I asked: “From a marketing perspective, what is your single biggest challenge for your $20b company?” His reply: “We need to ensure that the marketing messaging that we create here at the top is effectively threaded into our execution all across and down through the organization”.

    In a nutshell, that is the challenge of multi-path marketing.

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