Alterian May 2009 Webinar - From Planning To Execution Presented By Market Sphere

© 2009 MarketSphere Consulting, LLC

From Planning to Execution:The Strategic Advantage of Efficient Marketing OperationsMay 21, 2009

© 2009 MarketSphere Consulting, LLC 2

Agenda

• Introduction• What’s on your CMO’s Mind?• Model for a Marketing Operations Center of Excellence• Metrics and measurement of marketing programs

– Results from 2009 Lenskold Group study

• What can I do next?• Questions and Answers

The Strategic Advantage of Efficient Marketing Operations


Marketing Planning to Execution ModelEfficient processes are critical to success

3


IntroductionExample of a high-level marketing supply chain

BUILDSUPPLY

TextGraphics

VideoAudio

PicturesData

Source: Existing, Created, Purchased

or Licensed

DEMAND

Product ManagersMarketing ManagersHuman Resources

SalesField Marketing

FinanceManufacturing

Corp. CommunicationField Offices

Foreign Offices

PLAN OBJECTIVESGATHER/ANALYZE INFORMATION

IDEATIONWRITE CREATIVE BRIEF

4) Produce

1) Create, gather, edit component materials

3) Review & Approve

5) Distribute

2) Integrate

6) Report and evaluate

REQUEST

ENTER WORKFLOW

Primary or Secondary Market Research-----------------------

Database Analytics-----------------------

Past Results

Knowledge Repository------------

KPI’s

CHANNEL

Mass AdvertisingDirect Response

Website & Social MediaCollateralPackaging

Point-of-Sale

FULFILLMENT

Response or Action

DigitalAsset Library

-----------Content Manager


IntroductionExample of a mid-level marketing process map

Business Unit-------------------

Need Identified

Marketing Planner---------------------

Review & Develop Marketing Charter

Creative Brief

Media Brief

Campaign/Program Development

ProductionIn Market/Go Live

Track & Report Results

Close Campaign/After-Action Review

A B C1 D

H G F E

Optimize Campaign

Project Brief

Agencies/Vendors

Other projects, including Customer Communications

Customer sales and campaign response data, ROMI analytics

Messaging & Media Plans

Corporate Marketing PMO

Financial Investment

C2

This chart represents an aggregate view of the flow of marketing campaigns through Corporate Marketing in a hypothetical company.


A marketing operations challenge A story from my past

$2.5 Billion global software company with 375 products/16 product lines

• Problem: Marketing materials needed to support field sales activities were almost never on-time, direct mail was dropping late, there was “chaos” and not order in the MarCom area as priorities changed hourly. Late fees were the routine and staff was stressed.

• Challenge: Establish a process that ensured all marketing materials are created and distributed on time to meet marketing objectives.

• Solution– Established standards and key milestones for each type of activity– Established a quarterly planning process – forward looking 4 quarters (2/2)– Built a home-grown Marketing Ops application that organized projects and

provided reports and status to all marketing stakeholders (published weekly on Monday)

– Enlisted EVP Marketing to support change


Transformational successProven results

HelpPeopleChange

ApplyTechnology

ImproveProcess

Result: 90-day changeover to a fully integrated plan, improved on-time delivery of projects from 50% to 89%, reduced rush and re-work charges $1.2 Million.

• 4 Qtr Planning Horizon

• Integrated Calendar

• Standards

• Management tool to track projects

• Reports based on Milestones

• Weekly Report & Red Flag Status

• EVP Support

• Deliver as Promised


What’s on your CMO’s mind?


Issues facing the CMO and Marketing

• CFO wants visibility into marketing performance– “What is all this money buying?”– CEO and Board demand more accountability– Sarbanes-Oxley compliance

• Disconnect between the languages of finance and marketing• Quarterly financial reporting• Turnover of C-level executives• CEO urges marketing to become a center of innovation and growth• Flat or reduced budgets and headcount in marketing, with expectation

marketing will deliver at same level of effort and quality• Staff turnover together with lack of “corporate memory” about marketing

strategies, plans and programs, assets

Internal pressures


Issues facing the CMO and Marketing

• The Challenging Economy• “Internet effect”

• 24x7 markets• Faster time-to-market• Consumers have more choice• New competitors where they did not exist before

• Traditional competitors have become more effective marketers• Proliferating communication channels• Social networking – how do I use it effectively?• Agencies as project resources versus long-term Agency-Of-Record• Agency staff turnover• Short-term, quarterly financial reporting for public companies

External pressures

10


CMO Council “Calibrate How You Operate” Study

• 60 percent of respondents believe that marketing operational transformation is an essential area of focus.

• Only 4.5 percent are satisfied with their current level of marketing operational visibility, accountability and output.

• Overall marketing operational effectiveness is considered the least developed operational area by nearly 50 percent of respondents.

2009 - Key Findings

This study was sponsored by Alterian. Visit www.alterian.com for a copy of the report.

© 2009 CMO Council

http://www.alterian.com/


Marketing Imperatives

• Demonstrate value - Identify more accurately and conclusively the return on marketing investment at all levels of detail

• Execute effective programs - Gather and analyze significant amounts of customer data to enable greater insight into what customers need, and how and when they buy

• Execute programs efficiently - Gather and analyze operational and financial data to improve the effectiveness of programs while driving down the cost of marketing

• Establish a corporate memory for Marketing - Preserve and protect staff knowledge and marketing intellectual property, as well as digital assets, to ensure legal and contract compliance, facilitate reusability and ensure continuity of plans and strategies across years

Marketing leaders address the pressures


The Case for a Marketing Operations Center of Excellence


The Business of Marketing

The “business of marketing” is --

the organization and management of internal and external supply chains -- to produce insight‐driven programs --

that launch on time and on budget -- are aligned to corporate objectives -- and demonstrate a return on investment at or above the company’s minimum acceptable rate of return*.

* Companies often use 12% as the “hurdle” rate.

MarketSphere definition


The Five Roles of MarketingMarketing Operations is the “Fifth Role” of Marketing

15

Brand

Life Cycle/Revenue

Voice of theCustomer

Product &Innovation

MarketingOperations


Marketing Operations Organization

• –

Five key responsibilities

Responsibility Advantage

“Chief of Staff” to the CMO Focus the CMO on strategy and innovation, but focus a senior officer on marketing operations, including finance

Marketing Governance Better manage the marketing investment portfolio and ensure alignment of investment with corporate goals

Project Management Office Better manage marketing process and ensure “on time, on budget” programs

Shared Services Eliminate duplication of resources and drive down cost of purchased services, improve productivity, and ensure consistency of brand and message across all programs, and communication channels

Enterprise Marketing Management Strategy

Ensure proper alignment of marketing staff, marketing operational processes and marketing automation with the objectives of the marketing department, and the company overall


Marketing Operations organizational conceptMarketing Operations chief should be equal to the others

17

XYZ Incorporated

Chief Marketing Officer

Voice of the Customer

Life Cycle/Revenue

Product &Innovation

Marketing Operations

Brand

SharedServices

Supply Chain/Purchasing

MarketingGovernance

Technology Support

MarketingPlanning / PMO

HumanResources


Planning and Project Management Office

• Create and monitor the annual Marketing Plan• Create and monitor the integrated Marketing Calendar• Work with Brand, Product, Voice of the Customer, and Life Cycle Marketing teams to

translate corporate objectives into action plans• Hold quarterly reviews in conjunction with the CMO• Operate a marketing resource management application• Monitor and publish reports and dashboards that combine customer, operational and

financial metrics and Key Performance Indicators

Managing the integrated project schedule

Measurement: On-time and on-budget performance of actions plans in conjunction with assigned managers


Marketing Governance

• Manage and control the marketing budget• Monitor and report financial and operations

metrics (KPI’s), and calculate ROI of marketing programs

• Translate “finance speak” into “marketing speak” and vice versa

• Ensure alignment and reporting of corporate objectives to marketing budgets and results

• Recommend to CMO the optimal allocation of marketing budget dollars (or other currencies)

• Audit financial performance of suppliers; ensure compliance with corporate purchasing guidelines

• Provide Sarbanes-Oxley compliance

Managing the investment portfolio

Measurement: performance against plan(s), forecast accuracy, increased year-over-year ROMI (return on marketing investment)

Corporate Objectives

Marketing Objectives

Marketing Budget

Programs & Activities

Results

Corporate objectives aligned with marketing budget and programs


Shared Services

• Manage marketing services– Graphic arts and writing– Web and e-mail operations– Marketing research and analysis– Traffic and production management

• Implement approved programs on the marketing calendar• Manage day-to-day relationships with agencies, oversee procurement• Manage or coordinate with other marketing-related functions like Customer Services,

Call Centers or Fulfillment, to ensure brand/message consistency, and awareness to marketing programs

• Maintain labor standards and attain optimal mix of staff, freelance and agency resources• Maintain service level standards and enforce brand consistency

A model for more efficient operations

Measurement: reduction in the cost of operations, internal brand stewardship score, “internal customer” satisfaction – service delivery level



• MS-Office is the technology workhorse of Marketing, especially MS-Excel

• The move to Customer-centricity drove the need for Customer Resources Management, Sales Force Automation and customer analytics

• Email combined with websites, micro sites and landing pages has emerged as a “lower cost” communication channel, which continues to drive the need for campaign management, email processing software and web analytics

• Compliance and the need to manage and share knowledge, and protect a company’s intellectual property, is driving the need for marketing systems of record

• Applications and data are often managed in their respective silos of marketing functionality (i.e., direct marketing owns campaign management, IT owns the website, customer services owns CRM)

Introduction

21


Marketing Automation EcosystemA not-so-integrated set of technologies that support Marketing

COMPANY

SALES MARKETING FINANCE

Lifecycle MarketingDemand Management

Customer Service

MarketingCommunicationsMarketing Svcs

Sales OperationsMPM/

Analytics &Research

Brand/ProductManagement

CompanyWebsite

MarketingData Mart

AnalyticTools

CompanyIntranet/Extranet

KPIDashboards

Procurement------------

Accounting

En

tity

Fu

nct

ion

Sys

tem

CRMCampaignMgmt **

Optionally, could connect directly to an ERP system

for replenishment of packaging & print materials

(i.e., user manuals)

SFADatabase

SalesEnablement

LegendCRM: Customer Relationship MarketingERP: Enterprise Resource PlanningKPI: Key Performance IndicatorsMOM: Marketing Operations ManagementSFA: Sales Force Automation

VENDORSAGENCIES

Knowledge ManagementRepository

Content ManagementRepository

Corp. CommPR

PR/MediaManagementApplication

DigitalAssetMgmt

MarketingOperations

Mgmt

MARCOM Self-Service

EMPLOYEES

CorporateInfo Systems

Channel &PartnerMgmt **

CUSTOMERS

© 2007 MarketSphere Consulting LLC

Rented Lists/External Sources

**Note: Companies operating Partner & Channel Management programs use PRM solutions.

Ver 2.2



• An enterprise marketing management strategy defines a goal:

– Alignment of technology to support corporate and marketing objectives

– Role-based application functionality– Marketing data in a central repository

o Enables analytics and insightso Promotes reusability of contento Assures complianceo Promotes knowledge managemento Establishes a “corporate memory” for the

marketing organization (a logical marketing system of record)

• Process and organizational alignment are key success drivers

• Long-term horizon for full realization of benefits

Put into practice

Measurement: Reduced risk of non-compliance, reduction in production cycle times, reduction in “on boarding” time, cost savings, brand consistency, department productivity improvement


Role-based EMM Model (Sample Retail Client)U

ser

Co

mm

un

ity/

Pro

cess

Ap

plic

atio

ns

Uti

litie

sL

og

ical

MK

TG

S

ys O

f R

eco

rdN

etw

ork

MarketingOperations(Aprimo)

Digital Assets

CustomerAnalytic

Data Mart

Product Master

EmployeeStorage

Leader Planner Implementor AnalystBuyer/

Controller

Manage &Approve

Plan ExecuteBuy &Pay

Show &Tell

Analyze &Learn

Store &Protect

Master DataManagement

E T L Data Cleaning

Security/AccessControl

MRMApp

DAMApp

Product Lifecycle

MgmtAdobe CS

MicrosoftOffice

Analytics(OBIEE)

AribaS A P

Supplier

CustomerHub

CRM

R D B M S

Integrated Portal/Secure Access

Ethernet

CircularAutomat’n

SOA Services

MS-SQL-SVR/ORCL/Terradata

Includes MRM, ECM

WebExperience

Tools

Incl. Dashboards & Reporting

Co

rpo

rate

D

atab

ases

Desktop Applications

WebContentMgmt.

Financial(GL/PO/AP)

Store SalesTransactions

MarketingAnalytic

Data Mart

MarketingKnowledge Repository

Private LabelPLM

C D IInsight

PromotionsMaster

File

ServiceProvider


Strategic Advantage

• Prepare for the economic rebound to come in 2010 and beyond– Ensure marketing programs and budgets are aligned to corporate objectives– Implement central governance and project management– Streamline and rationalize marketing processes– Reorganize the marketing department to compete in the new economy– Measure marketing programs and calculate their ROI

• With an efficient operation, you can:– Compete more effectively in a 24 x 7 marketplace– Compete at a lower unit cost– Launch products into the market quicker– Launch marketing programs faster than your competitors– Preserve and protect the company’s intellectual property– Continue to drive growth with limited resources

Gaining strategic advantage through efficient marketing operations


Strategic Advantage

• Strategic advantage comes from being highly effective marketers – generating programs that achieve incremental year-over-year growth through insights and smart targeting.

• It also comes from operating a highly efficient marketing organization – generating incremental year-over-year cost savings through cost management and productivity improvement.

Gaining incremental savings through efficient marketing operations

Incremental Savings

Incremental Growth

Shareholder Value

Free cash flow


Metrics and Measurement of Marketing Programs

© 2009 Lenskold Group, Inc.


Lenskold Group ResearchKey Findings – 2009 Marketing ROI and Measurements Study

2009

Marketing ROI &

Measurements Study

The fifth annual research study on marketing ROI and measurements, featuring an assessment of current economic conditions and marketing operations on managing marketing

effectiveness and growth.

“ We consistently see that the high performing marketing organizations tend to have advantages in marketing operations, strengths in generating insights, and ROI discipline.”

• 24% of companies report using some measure of ROI, marketing profitability, or similar measure

• For firms that consider themselves “highly effective and efficient marketers” this number is 54%

Source: 2009 Lenskold Group / MarketSphere Marketing ROI and Measurements StudyAvailable at www.lenskold.com.

http://www.lenskold.com/

http://www.lenskold.com/index.html


Marketing ROI Performance Trend

35%

35%

24%

6%

Does your firm calulate marketing profitability, ROI?

No Somewhat Yes Don't Know

• Number reporting the use of ROI and profitability metrics has remained steady since 2008

• Organizational pressure from senior management is quite high

• Firms using ROI are more likely to report expecting greater growth than competitors

• Firms reporting that they calculate ROI are 3 times more likely to report marketing as “highly effective and efficient”

Much greater

Somewhat greater

About the same

Somewhat slower

Much slower

0 5 10 15 20 25 30 35 40 45

How would you describe your firm’s expected growth relative to primary competitors?

Traditional Metrics Financial Metrics

ROI Metrics

Highly effective

Somewhat effective

Not effective, but efficient

Not effective or efficient

No clear read

0 10 20 30 40 50 60

Which statement best describes your marketing effectiveness and efficiency?

Traditional Metrics Financial Metics

ROI Metrics

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Marketing Operations Capabilities

• Over half (59%) report dedicated marketing operations team

• Highly effective and efficient & greater growth more likely to have marketing operations team

• Firms reporting they have dedicated marketing operations report

– Use customer data to improve effectiveness

– Use data/facts to improve spend decisions– Understand profit drivers to prioritize

budget

59%38%

3%

Does your firm have a dedicated marketing operations team or person in place to manage

resources, systems and processes?

Yes No Don't know

Yes

No

Don't know

0% 10% 20% 30% 40% 50% 60% 70% 80%



All Others Highly Effective & Efficient

Yes

No

Don't know

0% 10% 20% 30% 40% 50% 60% 70%



Slower Growth Greater Growth

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Lenskold Group Research

• Marketing Operations teams found to have broad range of diverse responsibilities• “Highly effective and efficient” & “greater growth” companies are more likely to have

marketing operations team

Key Findings – 2009 Marketing ROI and Measurements Study

Marketing project or program management (PMO)

Marketing governance (i.e., budgeting/finance)

Shared services (marketing communications, traffic logistics, purchasing)

Marketing technologies and/or systems

Vendor relations (non-agency suppliers)

Agency relations

Other

Don't know

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Which of the following are responsibilities managed by the marketing operations team or person?

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What can I do next?


Ideas for Next StepsHave patience, be persistent

• Learn as much as you can• Participate in vendor webinars• Attend industry conferences• Read “Enterprise Marketing Management”

by Dave Sutton and Tom Klein• Gather research from Aberdeen, Forrester,

Gartner and the CMO Council• Join a LinkedIn Forum (Marketing Operations,

MOCCA, Chief Marketing Officers)• Find a corporate objective that would benefit

directly from a more operationally efficient marketing department

• Review and improve existing marketing processes (pre-automation)

• Partner early with IT and Finance• Enlist an executive sponsor who will benefit from

improved operations• Design a roadmap detailing the steps to be taken• Remember change management!

• Have patience, but be persistent

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Questions and Answers