How To Align Marketing Technology With Business Strategy By David Raab

How to Align Marketing Technology with Business Strategy

MarTech Boston August 19, 2014 David M. Raab

Raab Associates www.raabguide.com

draab@raabassociates.com

Strategy = method to a goal

Strategy Implications Strategy Statement: Attract large numbers of high-paying customers by creating a highly innovative product that can be sold via ‘buzz’ marketing.

Financial Margin • High

Number of customers • Add customers

Revenue / customer • High

Customer Value Image • Exciting • Advanced

Relationship Product • Unique

Internal Operations

Marketing • Build ‘buzz’

Innovation • Simplified

interface

Production • Quick

delivery

Customer support

Admin

Learning

Information & systems Competencies • Outsourced

manufacturing, • Channel training, • Design, • Marketing

Organization Product-based

Successful Strategies

• Steve Jobs’ Apple: insanely great products

• Amazon: customer convenience

• UPS: efficiency and reliability

• Southwest Airlines: low cost

Unsuccessful Strategies

• Steve Cook’s Apple: multi-color phones?

• Steve Ballmer’s Microsoft: copy Apple?

• JCPenny: high fashion or low price or in-shops or ???

• Radio Shack: only source for stuff nobody wants

Good Strategy: It’s All About Fit

• Resources

• Competencies

• Market needs

• Competitors

• Environment

Strategy Implications Strategy Statement: Attract large numbers of high-paying customers by creating a highly innovative product that can be sold via ‘buzz’ marketing.

Financial Margin • High

Number of customers • Add customers

Revenue / customer • High

Customer Value Image • Exciting • Advanced

Relationship Product • Unique

Internal Operations

Marketing • Build ‘buzz’

Innovation • Simplified

interface

Production • Quick

delivery

Customer support

Admin

Learning

Information & systems Competencies • Outsourced

manufacturing, • Channel training, • Design, • Marketing

Organization Product-based

Case Study: Strategy to MarTech Connection

• Business: – New company, disruptive tech, clearly superior

• Business Strategy: – Grow quickly by adding customers via partner sales

• Marketing Strategy: – Now: support partners via joint field events – Future: build company-generated lead flow via media, Web site

• MarTech Strategy: – Build for fast growth, future needs – Now: support field via self-service promotions – Future: support media via analytics, Web site via MA integration

• MarTech Choices: – Now: best-in-class end-user email, forms, selections – Future: flexible MA database, data warehouse outside MA

Strategy to MarTech Framework

Business Strategy

Marketing Strategy

MarTech Strategy

MarTech Architecture

MarTech Components

• Focus: Product vs service vs cost • Financial:

Margin vs number of customers vs revenue per customer • Value Prop:

Image vs relationship vs product

• Channels • Spending • Intimacy •User skills • Target metrics

(CPA, LTV, ROI, growth, etc.)

• System scope • Channel

integration • Execution

automation • Program

sophistication • Flexibility • Scalability • Cost • Staffing

• Shared vs siloed • Suite vs. best

of breed • In-house vs

outsource •Owned vs

rented • External

integration (CRM, Web, etc.)

•Database • External data •Data quality • Identity

association • Analytics •Decision

engines • Execution

systems (email, Web, social, events) •Management

(content, planning, budget, etc.

Strategy to MarTech Example

Business Strategy

“Offer low prices profitably in online retail by running with low operating costs” • Focus: Cost • Financial: Modest margin, high number of customers • Value Prop: Relationship (trusted source of best prices for standard products)

Strategy to MarTech Example

Marketing Strategy

“Attract price-conscious customers by stressing low prices and making highly targeted offers; key metric is marketing ROI (=promotion efficiency)” • Channels: limit to major channels (easier to optimize) • Spending: tie closely to profitability but grow over time to gain scale • Intimacy: track customers closely to allow targeted offers •User skills: modest (standard skills needed; keep costs low) • Target metrics: ROI is most important

Strategy to MarTech Example

MarTech Strategy

“Keep costs low by running tightly integrated systems, highly automated systems with limited scope (i.e., optimize in only a few channels)” • System scope: manage all marketing interactions through single system • Channel integration: tightly integrate channel data; loosely integrate promotions • Execution automation: highly automated targeting to add revenue and reduce costs • Program sophistication: modest sophistication; only need targeted offers • Flexibility: accept limited flexibility in return for lower costs of optimized processes • Scalability: high to accommodate required volume and avoid replacement projects • Cost: as low as possible • Staffing: small, highly skilled staff to run automated systems and manage

outsourced resources

Strategy to MarTech Example

MarTech Architecture

• Shared vs siloed: share all possible functions to reduce costs • Suite vs. best of breed: use suite to reduce costs, improve integration • In-house vs outsource: outsource to reduce costs; accept limited flexibility •Owned vs rented: rent at start but ultimately want to own to reduce costs • External integration (CRM, Web, etc.): highly integrated to capture and consolidate

data and to present targeted offers during interactions

Strategy to MarTech Example

MarTech Components

•Database: standard database; limit unstructured data unless clearly cost-effective • External data: limited use to reduce costs •Data quality: basic capabilities required • Identity association: basic capabilities required; primarily tracking known customers • Analytics: highly automated offer targeting, media optimization •Decision engines: must insert business factors into decisionis (e.g. inventory levels) • Execution systems (email, Web, social, events): use suite features if possible •Management (content, planning, budget, etc.): use suite features; need tight cost

management but otherwise only basic capabilities

What’s for lunch?

Does anybody really do

this?

Why Strategy Matters