[Bruce Brown is managing director of Unica Corporation's Asia Pacific operations.He oversees Unica's sales, marketing, and business development throughout the region.]
1. Can you shed some light on critical changes that are taking place in the marketing arena?
As the business environment becomes complex, firms are operating under tighter internal and external constraints than ever before. For example, on the one hand we have multiplicity of communication channels leading to a need for higher spend in these areas. On the other hand, businesses are increasingly demanding higher and higher accountability from the marketing spend.
The major forces that have contributed to this increase in marketing complexity are:
a. Product Proliferation
Marketers today have to deal with massive product proliferation and it’s not just the sheer number of products in each product category but the different models of the same product, giving customers an almost infinite number of options. For example, in the US alone, there are about 8000 digital camera model that consumers can choose from, making the job of the brand manager rather difficult. Such a clutter on the shelf space means that marketers must work much harder to become the preferred product for the customer.
b. Multiplicity of marketing communication channels
Unlike in the past, when there were limited options to reach out, consumers of today are bombarded with marketing messages through television commercials, mailings, web sites, email, billboards, and more. The number of messages each consumer receives has grown dramatically in just the last two decades. In 1985 it was estimated that the average consumer was exposed to 650 marketing messages every day. Today it is more than 8,000. This is due in part to the increased number of channels marketers and consumers can use. For example, traditional media has become extremely fragmented. In other words, there are more and more TV and radio stations, magazines, and newspapers in the world. In 1960 there were 5.7 average TV channels in each home, and a total of 4,400 radio stations and 8,400 magazines. By 2004, those numbers had grown to 82.4 channels, 13,500 radio stations and 17,300 magazines. In the 1980s, 80 per cent of an average marketer’s target audience could be reached with one 30-second, off-peak television ad. Today, accomplishing the same reach often requires literally hundreds of prime-time commercials. In addition to this traditional media phenomenon, new media have emerged and multiplied. The most recognisable examples include web sites, SMS and email. There are many others, such as dynamic point of sale promotions and in-store kiosks. These new media further clutter a consumer’s daily life with marketing messages. The challenge this clutter poses to marketers is obvious: getting a message to register with consumers is incredibly difficult.
c. Growing consumer expectation
The growing number of marketing messages is driving consumers to take steps to control how marketers interact with them. This is done in part through the adoption of new technologies that filter marketing messages, especially from new media. The most well-known examples are SPAM filters and web pop-up ad blockers. But tools are emerging that impact more traditional media, as well. Digital Video Recorders (DVRs), such as those sold under the TiVo brand, allow consumers to eliminate TV commercials when viewing their favourite programmes. Today DVRs are at a much lower adoption rate than SPAM and pop-up blockers (roughly 15 per cent as compared to over 50 per cent according to a recent survey), but it is clear that the desire to control advertising exposure is a growing trend. In addition to adopting new technologies, consumers are demanding that marketers adhere to new standards of behaviour that put consumers in the driver’s seat when it comes to determining when and how to send messages. Clearly articulated privacy policies and “opt-out” choices are now a required practice of any company seeking a genuine and positive relationship with its customers. As a result of both these new technologies and practices, marketers today must not only identify the right target for their message and plan a strategy to get through the clutter, but also consider whether that message will actually reach its intended target.
d. Regulatory constraints
Marketers now have to comply with more regulations than ever before. Some of these regulations, such as do-not-call (DNC) lists, strict anti-spam laws and the EU’s Data Protection directives are related to the clutter of marketing messages and consumers’ desire for greater control and privacy. The effects of this type of legislation are widespread. According to a recent survey, over half of marketers reported that such legislation will impact their direct marketing programmes more in the next two years than in the previous two. No matter what the nature of the regulation, the fact is that marketers have new process issues to consider.
e. Marketing is being made more accountable
Gone are the days when you spent half you money on marketing without knowing whether it worked or it didn’t. The increasing market complexity is continuously putting pressure on companies’ profit margins and as a result departmental budgets within each enterprise. Marketing is no exception. Marketing budgets are being scrutinised by top management and marketers are required to account for their investments and demonstrate, with hard numbers, the returns they are getting. In other words, not only are marketers being asked to do more with less, but they must justify decisions and investments.
That’s the reason why marketers have to move from handling by spreadsheets or handling marketing activities manually to some sort of system that automates that process – 1000s of different contacts that need to be tailored. You can’t do it manually. You need to do it fast, to be able to turn around that do that – contact the customer quickly is impossible if you do it manually.
2. You talked about proliferation of products. What about parity of products?
You’ve raised a very good point. The product orientation does not differentiate you from your competitors anymore. You see, there is just too much out there and therefore you will have to focus on what the customer wants. This trend of moving away from product focus to customer focus is most evident in the retail banking sector where you now have segment managers, not product managers.
Take the case of OCBC bank in Singapore – they are increasing adopting EBM – where instead of making similar offers to a “segment” which may comprise of a 100,000 customers, what they do is monitoring specific events, transaction or things that the customer does – and they have 100 of business rules that are in place. For instance if a customer’s average quarterly balance crosses a certain threshold, it triggers some kind of communication. Similarly when the average account balance suddenly deviates, it triggers a service call from the bank to explore what this deviation might mean to the customer. The principle here is to “win the customer at the moment he needs the service”. Of course this requires a lot of training on the front office on what to say and what not to say
3. What is the role of new and emerging technologies in transforming the way marketing is
Technology has enabled the real shift to what we call “addressable marketing”. In the past, most of the emphasis was really about brand marketing or awareness marketing. Organisations have realised that they need to focus on their customer base. As a result, we need marketing to be more able and more accountable. We want it to be able to the return on investment on all activities. So the focus is now shifting to addressable marketing, which means targeting the customers with something that is likely to be more relevant to them. This is possible because you’ve done the analysis and you’ve looked at their propensity to buy something. In addressable marketing, we use technology to measure whether the customer responded, to which campaign did he or she respond, how long did he take to respond and so on and so forth. Having done the homework, you contact them through technology channels like SMS or email. You may even ask them how, at what time and where they want to be contacted. When you contact your customers in the way they wish to be contacted and with an offer that excites them, you are no more bothering them and invading their privacy. In fact you are providing them with a service. So technology is helping companies become more customer-centric. It is really enabling marketing to do more, and measure it tangibly.
4. What is Enterprise Marketing Management?
Enterprise Marketing Management (EMM) is software that helps marketers reduce costs, boost productivity and grow revenue across brand, interactive and direct marketing operations. EMM consists of customer analytics for understanding and anticipating customer behaviour; interaction and campaign management for implementing and executing timely, consistent communications across customer touch points; lead management to ensure leads are delivered and acted upon; and marketing resource management (MRM) for managing budgets, creative production, marketing content, and other resources. Individually or as an integrated solution, these capabilities reduce time-to-market through automation, improve customer strategies and targeting through analytics, and prove the value of marketing through closed-loop measurement and reporting.
EMM provides support for customer analysis, demand generation and strategic planning and resource management. Additionally, a complete EMM offering provides the ability to measure the performance, profitability and bottom-line impact of marketing efforts. Customer analysis includes capabilities such as data mining and predictive modelling, which provide a richer, deeper understanding of customers across all interaction touch points. It also gives organisations the ability to monitor and track segment behaviour and trends over time thereby enabling better targeting and increasing the likelihood of response to specific marketing activities. Demand generation solutions focus on acquiring, retaining and growing customer value. Strategic planning and process management solutions, sometimes called Marketing Resource Management (MRM) or Marketing Operations Management (MOM), help marketers create plans, coordinate the execution of those plans and analyse the results. These solutions streamline processes and centrally store marketing information such that marketers can quickly and easily see how their marketing efforts and plans are progressing – from tradeshows, advertising campaigns, direct mail, events, and more. By using these capabilities, marketers are able to measure the performance of all their marketing efforts, assess their profitability and bottom-line impact and optimise their investments and operations. In addition to customer analysis, demand generation, strategic planning and process management, a complete EMM solution must provide the ability to measure the performance, profitability and overall impact of all marketing efforts.
5. What according to you is the single biggest requirement that an organisation must take into consideration when adopting EMM?
A pre-requisite for doing a successful marketing automation campaign management is making sure that you develop the analytical skills. I see a lot of organisations who haven’t gained that expertise. Analytical capabilities help the marketer to customise the offer to an individual by revealing what the customer might want at various times. Such information will enable you make offers that are relevant and therefore more attractive. If you’re setting out on this path, you have to make sure that you have this capability whether you develop it in house or outsource it.
6. Using examples, can you elucidate the advantages of EMM over traditional marketing approaches?
EMM technology helps marketers bring together disparate parts of marketing; planning, designing, executing and analysing. By automating and supporting each of these areas, EMM lets executives, marketing managers, analysts, field marketers, creative designers, achieve increased effectiveness, efficiency and accountability. Here are a few examples that describe EMM in practice in planning, designing, executing and analysing.
Planning with EMM: A major retailer of electronic goods recently purchased and implemented an EMM solution to streamline and manage marketing processes and track overall marketing effectiveness. Using EMM, they are automating marketing planning, managing marketing project workflows, facilitating collaboration, optimising assets, and most importantly, notifying and alerting marketers of changes in their marketing programmes and key performance indicators (KPIs) giving the marketers greater control over the outcome of these initiatives. As a result of using EMM, this organisation has increased visibility into all marketing initiatives, improved marketing velocity and productivity and has been able to enforce best practices and processes across the organisation, resulting in significant cost savings and increased revenue.
Designing with EMM: A large resort real estate company and ski resort operator that uses EMM to identify previous guests for a specific resort who have a high likelihood of revisiting the resort from mid January to the end of April – when ski vacation bookings are slow. Individuals likely to respond were included in a targeted multi-wave "come back" campaign. The results showed that the people the models predicted would visit during this period responded to offers and booked at a rate roughly 133 per cent above those included but not identified by the models. Additionally, the booking rate was 5 per cent with an 8.5 per cent increase in skier revenue, and an increase of 3.5 per cent in actual skier visits.
Executing with EMM: A leading specialty retailer uses EMM to execute a targeted email communication to all individuals who have made an entertainment purchase online within a specific time period. Email content is dynamically selected for each individual. With EMM in place, this communication runs every Tuesday without manual intervention. In terms of results there are consistent weekly click-through rates as well as a distinct increase in customer profitability and loyalty.
Analysing with EMM: A US-based mortgage division of a diversified European financial services provider was able to minimise losses when it quickly identified a significant increase in mortgage holder attrition, using EMM technology. After further investigation, the company determined that monthly programmes targeted at mortgage holders were not effective in retaining customers. With mortgage rates changing almost weekly, the organisation needed to respond faster to competitive market conditions to maintain its customer base. By
leveraging templates, analytics, and automation found in their EMM solution, the organisation was able to rapidly execute more effective marketing programmes in order to combat competitive pressures and decrease attrition.