Originally published by: Forrester on 2011-10-24 13:28:20. Written by Robert Brosnan | Suresh Vittal 

MARKETING RISKS SUCCUMBING TO TECHNOLOGY SPRAWL

To compete in the age of the customer, marketing departments must increase technology investments to facilitate the capture, analysis, and application of customer data. (see endnote 1) The knot of proliferating channels, rapidly evolving behavior, and uncertain return on investment (ROI) on marketing technology is so tight that marketers do not attempt to unravel it with a single technology. (see endnote 2) The result is a marketing technology landscape that is crowded, overlapping, redundant, and confusing.

Customer Obsession Requires That Marketing Up Its Technology Quotient

Our research shows that no single technology enables marketing organizations to engage customers on their preferred channels, improve loyalty, and increase responsiveness. (see endnote 3) Instead, marketers that obsess about the customer are forced to string together products that:

• React in near-real time. Inbound marketing improves marketers’ relevance and responsiveness at the point of a customer-initiated contact. (see endnote 4) To perform this feat in the ultra-fast environment of a website or call center, marketers must connect the customer’s interaction and purchase histories with both an arbitration engine and the presentation system. Integrating customer responses to outbound campaigns further complicates the effort. Marketers must purchase, connect, and optimize multiple systems and applications to achieve effective inbound and outbound cohesion of response.
• Integrate data from a growing number of touchpoints. The Splinternet’s fragmentation of customer behavior requires Customer Intelligence (CI) professionals to redouble efforts at data integration and customer recognition. (see endnote 5) Price and complexity prevent adoption of data warehouses capable of matching social comments, website visits, and location data with customer records. Bottom line: Marketers sacrifice a single customer view for the kaleidoscopic composite drawn from execution tools, agencies, and market insights.
• Deliver relevant, cross-channel experience. As customers take more-complex routes to purchases, companies that dynamically reshape touchpoints to support those routes will thrive. (see endnote 6) Testing and targeting tools allow CI professionals to deliver that relevance by integrating customer knowledge and behavioral cues. CI professionals must show marketers how the technology’s enhancements to customer journeys are worth the complication to marketing operations.

Marketing Loses Potency By Denying Its Technology Dependency

Marketing will never fully realize the goal of customer centricity as long as it fails to recognize that technology is strategic and essential. Marketers sell themselves short because they:

• Simultaneously outsource to and lack confidence in the IT department. Marketers — particularly CI professionals — are voracious consumers of customer data but regard the IT organization with suspicion. (see endnote 7) Why? Marketing and IT frequently fail to find common ground due to culture clash, the pace of technological change, and the lack of a shared business vision. (see endnote 8) As John Refford, vice president of strategic marketing technology at Natixis Global Associates, told us, “Marketers must reconcile their need for flexible and creative solutions to novel problems with IT’s values of process management and predictability.”
• Fail to coordinate a cross-role response to a complex marketing ecosystem. The redundant or overlapping collection of marketing and analytics tools bleeds strapped budgets and saps the incentive for marketing functions — such as Customer Intelligence, interactive marketing, and eBusiness — to join forces. Marketers tell us they need comprehensive suites. Yet a mix of cost, distinct buying groups, and uncertain ROI drives them to point solutions. (see endnote 9) Marketing needs to grasp that cooperative technology acquisition is as important as message consistency to an integrated customer experience.
• Allow outdated organizational silos to impede progress. CI professionals point to organizational silos as the biggest problem blocking success. (see endnote 10) This isn’t a surprise: The evidence is all around us. Marketing leaders often organize CI professionals, customer data, and marketing technology within individual lines of business or channels. The net result? Marketers design programs that reflect their own viewpoints rather than fully taking into account the customer’s history, needs, and beliefs.

How Marketing Can Transform Technology From Overhead To Differentiator

Many marketing organizations treat technology as a necessity for the back office. But marketers at leading businesses use technology to set their products and brands apart by:

• Taking charge of marketing technology strategy. To build marketing capabilities that match consumer behavior, marketing must own the technology strategy — not offload it to IT. Building a road map allows marketing to develop a unified approach across functional areas and implement technologies at the pace it deems necessary. By offloading strategy, marketers risk competing for priority on IT’s calendar, or worse: being force-fed technology acquired by IT as part of a broader enterprise software sale.
• Growing competence with technology and change management. More channels, more data, and more-complex execution demand greater technical skills within the marketing department. Technological innovations also introduce iterations of process standardization, optimization, and automation. Marketing’s lack — or even avoidance — of a technology development process often leads it to outsource the function. (see endnote 11) Too often, however, marketers actively reject change when leadership allows others to develop its technology ecosystem.
• Treating engineering as the future of marketing innovation. Consumers increasingly expect businesses to recognize, respond to, and reward them for their attention throughout their relationship. It is just as important for marketers to engineer customer experiences as it is to engineer the organizations that produce them. As Perianne Grignon of X Plus One Solutions told us: “Great marketers are able to blend systems and people. Technology and content. Left and right brain. They know how to pull the levers between the two.”

HOW TO GET THERE: BUILD THE MARKETING TECHNOLOGY OFFICE

For marketing to build a technology strategy, implement and develop those technologies, and better integrate and act on the customer data it captures, marketing resources must be organized within a central framework that can act at the speed that marketing requires. We call this framework the marketing technology office (MTO), defined as:

A center of excellence that leads technology strategy, develops marketing technologies, and evangelizes innovative uses throughout the marketing department.

Customer Intelligence Should Own The Marketing Technology Office

To staff the office, marketing organizations should use Customer Intelligence’s strengths in technology and associated business process frameworks. CI professionals are well positioned for the job because they:

• Excel at using customer data to attack marketing problems. CI professionals are at their best when they bring analytical approaches to high-level problems, such as customer lifetime value or cross-channel attribution. (see endnote 12) Yet Customer Intelligence teams also operate at ground level, including daily management of data collection methods — such as direct mail response, web analytics, and social sentiment — and integration efforts.
• Understand marketing’s need to accelerate its operations. CI professionals provide brands and channels with speed and agility through segmentation, prediction, and course corrections to active campaigns. Jonathan Mendez, CEO of Yieldbot, told us: “The pace of business is fast with the Web and accelerating with social. To move at the speed of user-driven media, marketing needs to own its technology stack. We see organizations where that hasn’t happened yet miss opportunities and lose business.”
• Share IT’s characteristics and values. Marketers can use CI teams’ attributes to bridge the gap to IT. Data management and analysis require CI professionals to engage in planning, requirements gathering, and process management — activities that IT values. Many have a background in database development, regularly rub shoulders with IT counterparts, and are equally comfortable in analytical marketing and IT process management.

The Marketing Technology Office Within Industry Verticals

The marketing technology office’s core responsibilities — strategy, technology development, and data management — are common across industries, but the product of its work varies widely. Examples of the marketing technology in practice include:

• Consumer packaged goods (CPG): building a bridge to the customer. With the advent of digital, mobile, and social, marketing technologists enable CPG firms to engage and educate the customer throughout the buying process. Eric Long at Newell Rubbermaid told us: “Because our products are so complex, no one else is able to bridge between the in-store and online experience. Yet as the supplier/manufacturer, we have to. The consumers are already functioning in a cross-channel environment, trying to learn about our products.”
• Retail: dialog across channels. In the evolution from single- to multi- to cross-channel, retailers invested in campaign management tools to create a consistent dialog with customers regardless of how they interact with the business. The marketing technologists at a major retail chain developed a custom marketing attribution system to better understand purchase behavior of products placed in reality TV shows. The tool allowed the business to calculate the ROI of the investment and understand the buying patterns for large appliances.
• Media: competitive advantage from customer preference. Netflix, iTunes, and Hulu dramatically transformed media distribution by using collaborative filtering to make media discovery better than an in-store experience. Marketing technologists, in possession of detailed customer knowledge, provide these companies with sustainable competitive advantage from the experience of the service itself, not just the product’s convenience and price.
• Finance and insurance: leveraging a distributed sales force. The financial industry possesses a surfeit of transactional and customer data but, until recently, had little ability to leverage the data in service of larger branding initiatives. With the advent of distributed marketing systems, the extended sales force and field marketers have the capability to build personalized marketing collateral and multistep campaigns for their prospects and customers. The marketing technology office coordinates the flow of data, business rules, and assets from the home office to these extended agents.

Use The MTO To Reshape Marketing For Customer Centricity

The marketing technology office has core responsibilities in technology management, service to marketing functions, and vendor management (see Figure 1). On this foundation, the office can:

• Push transformation in the brands and channels. The marketing technology office subsumes some IT services: data management, segmentation, channel development, etc. Instead of a simple substitution, the office uses services to drive innovations in the brands’ and channels’ programs. Scott Brinker, CTO of ion interactive, told us: “When you have the IT department doing the implementation, they’ll do what marketing tells them to do. But marketing technologists will prompt the brands to explore other possibilities. This is a new kind of creative thinking.”
• Evangelize innovations throughout marketing. By playing a lead role in both technology strategy and the application of customer data, Customer Intelligence professionals take a unique part in teaching their peers about those possibilities. As Darren Herman, chief digital media officer at The Media Kitchen, told us: “Internal evangelism is 50% of the role. They have lots of vision and are practical. They can educate through lunch-and-learns, blogging, or sitting with the brand teams. They are the people on the ground, exploring and teaching others about the possibilities.”
• Expand the scope of the marketing technology stack. By combining strategic planning with day-to-day operations, the marketing technology office is able to apply technology within and beyond marketing. David Williams, CEO of Merkle, pointed out: “Someone has to look at these platforms and understand what they can inform. We have clients today who use the marketing database to inform pricing and merchandizing decisions.” Leveraging the data, partners, and tools such as Portrait Software’s Portrait Miner, the office contributes to campaign optimization, attrition analysis, and risk management.
• Lead vendor and partner selection. Marketers, given the short-term nature of campaigns, often have little experience with the long-term implications of technology platforms. The marketing technology office leads the technology selection process, partnering closely with IT. As John Refford told us: “A partnership is needed. IT departments have one to two decades of experience with the selection process. They understand integration. They can ferret out requirements or contractual obligations that marketing might miss.”

Hire A Diverse Staff To Manage The Multiplicity Of Touchpoints

While the office oversees marketing technology, it’s not simply a collection of design-savvy developers. To meet the explosion in channels, devices, and touchpoints, build a team that blends skills in analysis, programming, and user experience (see Figure 2). Roles include:

• Chief marketing technology strategist. Although titles vary by industry, the chief marketing technology strategist oversees the operations of the marketing technology office and liaises with key constituents in and outside of marketing. Reporting to the CMO or to the vice president of Customer Intelligence, this role also maintains a dotted line to the CIO in order to emphasize good relations with and close connections to the IT department.
• Marketing technologists. Marketing technologists include web developers, database administrators, and application developers. These individuals manage the day-to-day operations of the office, overseeing the flow of data, execution of marketing operations, and development and integration of marketing technologies. Most often, these resources reside in the IT department, partnering with marketing via the MTO. A few organizations, those where frequent customer interactions drive the customer experience, employ marketing technologists directly, at the cost of less collaboration with IT.
• Marketing scientists. The marketing technology office is primarily concerned with technology strategy, development, and operations. Some organizations, however, choose to centralize data modelers, analysts, and statisticians within the office rather than delegating those resources to channels or business lines. Organizations can also take a hybrid approach, centralizing overall marketing performance analysis within the office and allowing functional areas to employ marketing scientists as needed.
• User experience professionals. As marketing technology develops customer interfaces, the marketing technology office also contains user experience roles, such as interaction designers, interface designers, or user testing specialists. Like marketing scientists, user experience professionals may report to other areas of the organization — say, customer experience or IT — rotating in temporarily during application or website design projects.