Challenges to overcome in moving to an interactive marketing model
There are several key movements in the marketing technology are that are driving solutions today. One is the proliferation of web-based marketing tools. Many vendors have developed or are developing tools in the personalization, ad management, web measurement, e-marketing, and campaign management areas. These tools have significant overlap, often solve a tactical short-term problem, and don’t provide support for the entire marketing process – thereby falling short of improving the bottom line. This generates significant confusion in the industry and leads organizations down a solution path that might lock out future business alternatives.
One of the issues with these web technologies is their pure focus on the web/email channel. Although the ability to target web pages, banners, and email is important from an overall marketing standpoint, the lack of integration with other marketing efforts (e.g. customer service, direct mail, targeted advertising) produces a channel silo model that ultimately results in a confusing message to the customer. More damaging is the fact that the marketing department’s knowledge of customer segments and appropriate customer actions is not well factored into the design and implementation of these products. Again, this may cause confusing messages for the customer when the web banner suggests a credit card upgrade, while the direct mail offers an insurance package. In the rush to the web, firms often put together tactical solutions that provide for messaging management but, in the process, provide a marketing platform that in effect is optimized for sending multiple confusing messages to the customer.
Touchpoint integration must be considered in the future
Another issue for organizations focusing on an interactive model is how to coordinate the statistical modeling and recommendation capabilities across the customer touchpoints. Many statistical modeling companies have reinvented themselves as web personalization, campaign management, and customer service recommendation applications. As a result, a firm is likely to end up with statistical modeling engines at several customer touchpoints that often don’t come up with the same conclusion about what is right for the customer.
New entrants into the customer marketing space are being announced every day. SAP, Oracle, and many other large firms are vowing to provide a complete customer management solution for their clients and thereby putting a new spin on the term “customer relationship management” or direct marketing that is adding more confusion to the industry and buyers of these tools and technologies. The number of small software startups, combined with the increasing involvement of larger players, suggest that the acquisition pace in this space will increase. As such, organizations need to consider carefully the business strategy, funding and approach of any software firms they work with as an integral part of the evaluation process – so future changes in the competitive landscape are considered in the technical strategy to support interactive modeling.
The most significant issues, however, in moving to an interactive marketing model are the “soft” impacts. Business processes, organization designs, customer metrics, and employee incentives must all be significantly re-evaluated, if not replaced, in an interactive paradigm. Customer valuation metrics must be agreed upon across the entire marketing and sales organization if we are to expect a consistent handling of customer interactions. Incentive programs must provide support for the customer life cycle and the overall value of the customer relationship, not the sales quota of the product being pushed by a certain product manager. Finally, senior management and even board-level commitment is required if the customer is to be treated as “king.” Without this level of involvement, the sweeping changes necessary to move the business strategy, organization and processes to a customer-oriented paradigm will be difficult, if not impossible, to achieve.
The business aspects of an interactive marketing approach must be carefully considered.
A solution path: The 80 for the 20
For firms moving toward an interactive marketing capability, one of the most pressing concerns is how to shift the business from the current method of operating without taking on a multi-year multi-million-dollar project. For firms needing to react quickly to a changing marketplace, the “solution path” might be critical to the viability of the firm.
Two solution paths have been demonstrated to provide the most success in making this fundamental shift. Although solution paths focused on data warehousing, decision support and business process engineering have all been tried, firms that take a channel or centralized marketing perspective most often return the results they need to stay competitive in the short term while planning for the long term.
A channel-focused approach grows a long-term solution by starting with a single channel, and can often be used as an incremental strategy in optimizing the customer interaction. Firms that take this approach integrate all the customer knowledge with a flexible interactive marketing capability on a single channel. Typically, this is a great way for firms to optimize the web experience in the short term. Most importantly, success in a channel-based approach includes the aggregation of all customer information and the leveraging of a marketer’s knowledge to shape the channel interaction. Also, success in a channel strategy includes the notification of the planned events to all other channels, so a call center, for example, can at least be aware of an offer on the web when a customer or prospect calls. Effectively, a firm taking a channel-based approach provides an incremental interactive marketing experience one channel at a time while ensuring some basic knowledge of customer and company activities is shared across the enterprise.
A centralized marketing-dominated solution path puts the marketing person’s knowledge at the center of any activity and seeks to drive this knowledge to all the customer touchpoints in a full integrated manner. Firms taking this path often lead with a customer management (e.g. campaign management) tool and seek to drive value by combining the marketing person’s knowledge with the customer interaction facing applications and business processes. One common example is the deployment of a campaign management application as a driver of who to contact in an outbound call center. Although firms that start with this strategy often have the best intentions, they tend to add more and more customer touchpoint integration into the initial phase of the project, thereby taking on a total integration effort. The resulting strategy often involves significant up-front investment and does not easily support any return on investment in less than six months, depending on the organization’s situation. Nonetheless, if a firm can be resilient in sticking within a fixed scope, a centralized marketing solution path can provide some quick wins while the bells and whistles are added in future phases.
In summary, the business value a firm can achieve as compared to the cost of moving towards an interactive marketing paradigm will continue to be the benchmark for making investments in this area. At the same time, however, the internet evaluation methods being used by Wall Street don’t suggest that profits are the only drivers of valuation, and subsequently, interactive marketing efforts are funded for varied reasons.
The key finding, however, is that the technical underpinnings and strategy used to support interactive marketing must be carefully planned for what will probably be a few years of the most significant change in the industry. Technical capabilities, competitive landscape and marketing goals are rapidly changing for firms wishing to “get closer to the customer.” On top of this, organizational design, employee incentives, and other core business aspects must be re-evaluated if not replaced to support a customer-focused strategy.
Finally, with this changing environment comes the need to deploy solutions in three-month time frames; effectively to ensure that the original vision and needs outlined during the planning process will still be valid at the time of execution and rollout. Time to market continues to be the pressing need, often at the expense of long-term results!