Happy New Year! We've noticed that 2017 is, once again, being touted as the "year of the customer." Well, "duh," so it should...Read More
Once upon a time all products wanted to be web sites. Now all web sites want to be Apps. We think that soon all brand experiences will want to be App-enabled. Indeed, Apps may well be eating the Web, or at least a big part of it...Read More
If you’re directly responsible for marketing technology leadership, the following explains tech concepts and what we believe should be the core competencies of a digital marketing manager. We hope this helps give you a road map of what you should strive to be competent in; that is, if you are charged with leading or managing customer engagement initiatives.
In our model of the core competencies for a digital marketer there our six areas of knowledge required:
1. Advertising Networks — an entire ecosystem has emerged for digital advertising.
2. Analytics and Metrics — data (increasingly “big data”) is the fuel of digital marketing, therefore acquisition, compilation, analysis, and leverage tools are essential components.
3. Content Marketing — content is one of the most potent marketing tools available including user-generated content and the tools of search engine optimization.
4. CRM/CEM — customer relationship management is not a single app or tool; rather CRM is comprised of a group of apps to facilitate conversations with your customers including eMail services, loyalty tools, and personalization tools for tailored online experiences.
5. Social Media — The social web has forever changed how customers connect with your brand and this includes the tools of Facebook, Pinterest, Digg, Twitter, Tumblr, Tout, and their APIs.
6. Internetworking — a good basic understanding of how the Internet works, including its principal protocols that run the different services; the world wide web, its past, present and future; and web platforms, including content management, application frameworks, APIs, integration of multimedia services, plus of course, the capabilities and differences in the leading browser tools.
From these six core competencies, there are a series of specific tools a digital marketer should at least be aware of, with deeper domain expertise in at least some combination of these dozen areas:
1. Ad Bid Management and PPC — strategies and tools for pay-per-click advertising.
2. Analytics (Marketing and Web) — this includes everything from A/B & Multivariate Testing (i.e., a mix of analytics and content marketing that embraces test-driven marketing); web metrics tools, traffic analysis, (e.g., Google Analytics, Omniture, or Webtrends); and behavioral analytics and modeling tools.
3. Behavioral Targeting — audience targeting/segmentation and data exchanges in ad networks, remarketing or interest-based advertising.
4. CMS and DAM — content management systems (principally for web content), digital asset management, content delivery networks, and metadata management including information architecture, ontology, and taxonomy management.
5. Databases and Big Data — relational databases and SQL, NoSQL data stores, and related processing tools.
6. Data Mining and Analysis — tools and techniques for cleansing, slicing and dicing, analyzing, and extracting actionable information from data store.
7. eMail Automation — the services and tools of conversing with your customers, prospects, partners, and suppliers.
8. Social Media APIs — tools that enable you to leverage social media platform capabilities to support services such as social sign-on; combining different capabilities of different services, often referred to as “mashups” (e.g., leveraging Google Maps for a store locator); and extending the capabilities of your own online services to integrate with social media.
9. SMO — that is “social media optimization” where the objective is to maximize content distribution, and increase (and measure others’) influence.
10. SEO/SEM — that is, “search engine optimization” and “search engine marketing” to maximize organic rankings as well as placement and position of messaging on engines such as Bing, Google, or Yahoo
12. Data Privacy and Security — this is a nearly mandatory domain of privacy policies, safe harbors, EU protection, regulations and governance, and best practices.
All of these topics are related to the online world (i.e., computer and digital devices and the Internet) these are languages, techniques, and tools of the digital marketer rather than specifics of how computers and networks operate. It is entirely possible to be competent, even a domain expert in these areas without having much of a mind for computational thinking.
Computational thinking is about understanding how computer machinery works in at least a fundamental way. This understanding can empower or facilitate problem solving, recognizing issues and opportunities in leveraging the digital world, and a “way of thought.”
Let's try an analogy. Perhaps, we can liken it to maybe understanding how an automobile works. Many people drive without a thought of how or why their vehicle operates. When the car fails to operate the way they expect (or simply fails to operate at all), a service call is made.
However, for those who do have some understanding of how their car operates, there is likelihood they will get better performance and longer life out of their vehicle. So, it’s not incumbent upon a driver to understand what fuel injection, or ABS, or cams, or turbochargers do. But its at least reasonable to understand that there is an engine, powered by fuel (gas or electricity); which powers a transmission that uses gears to propel and sustain the vehicle’s motion; which transfers that propulsion to axels through drive shafts; and the axles hold the wheels with brakes to move and stop the vehicle. That is a reasonable level of vehicle competency.
You don’t need to be an auto mechanic to drive a car, but understanding how a car works will save you money, and ensure your car lasts longer – yielding a better return on your investment.
Similarly, we think digital marketers should at least understand, at a high-level, the components of the "vehicle" for marketing and commerce in a digital age that we call the Internet and its principal service, the World Wide Web. Looking back at the lists above, you will find the components of this vehicle.
Incidentally, this stuff above is not just for the digital marketer -- it represents the core of our work. This is the expertise that we maintain and continually improve here at C[IQ]. So, if you think you may be a bit short in some areas, feel free to get in touch. We love to coach, teach, and help.
Well, you know our old saw by now; we promise to increase frequency of posting. But the fact is [A] we're honestly being hammered by a trio of major client deliverables all converging from three different parts of the country (S.F., D.C., and So.Cal.) at the same time which has us totally appreciating what an Iron Chef goes through; and [B] we just can't bring ourselves to blather; the majority of what we're tracking is worthy of micro-blogging and thus ends up being pushed through our Twitter account (and its very easy to fire off 140 chars). But occasionally, we come across something worth a longer comment.
And so it is this morning (at least for myself.) Its notable because one of the three client projects I am cramming on to finish has a CFO who is convinced that Loyalty programs are essentially a financial drain in that they reward people who are already committed to repurchasing. OK. It seems to us that for the right brand, and product or service type that's the point; switching costs are near zero, and retention marketing is everything. So catch a whiff of this...
Starbucks Corp.'s fiscal fourth quarter earnings increased by a better-than-forecast 34% on sales that increased by a double-digit percentage (per the Wall Street Journal). Starbucks has recorded stronger sales trends in the U.S. than most of its competitors. Same-store sales rose 8% in the U.S., driven by a 5% increase in transactions.
Here's the thing: Starbucks CFO and Group VP of Global Business Services, Troy Alstead noted in an interview that in addition to accelerated drive-through times and new food offerings, their loyalty program was responsible for increasing repeat customers and rising sales. That's right: Starbucks is tying their increase in sales to their loyalty program. From what we know of the internal workings at Starbucks CRM efforts they have plenty of analytics and data to back this up. And presumably that's how they reached this conclusion (acknowledging there were two other factors: food offerings and drive-through improvements). But the point here (at least for us) is clear: a loyalty program that appears to do exactly what was hoped: positively effect customer wallet-share.
The numbers speak for themselves. Overall, Starbucks reported a profit of $481.1M up from $359M a year earlier. And net revenue rose 13% to $3.8B. Hmm, a CFO reports a direct causal link between a loyalty program and business growth. Imagine that.
Now, to be intellectually honest there is one more observation to make (and then I need to jump back to that client's deliverable) ...the key to Starbucks loyalty program invokes the two principal watchwords of the digital age: ease and convenience. We think what makes Starbucks program so effective is not just accumulating points to earn free drinks or food, rather its the fact that their loyalty mechanism (once a card, now a phone app) makes it easy and convenient to buy and reload their digital wallet. We'll have to muse about loyalty program vehicles another time.
We attended the CRM Conference last week in Chicago and reached the end somewhat blown away (and not by the wind). The revelation that left us with a bit of a vacuous stare concerned the challenges we understand exist for large-scale retail in knowing and engaging their customer.
You see, based on work we’ve been doing with well-known brands, we had come to assume that certain tenets about taking on digital initiatives for relationship and retention marketing are well understood. Well after several hallway and reception chats, maybe that assumption is not such a good one.
We were fortunate to have some candid conversations with some of the best brands and retailers who disclosed some of their internal challenges. That led us to think it would be worth reiterating six of those tenets of CRM initiatives below.
1. Digital Shift vs. Transition
A common theme we heard through out the conference is that adopting and adapting to the digital age was expected to be more of a transition rather than a sudden shift. CMOs expected there to be a window of opportunity to gradually introduce digital innovations. The reality, however, is that for many retailers and brands, their marketing technology assets are falling woefully behind. The real trouble is that for many of these large brands and retailers, there is no shareholder appetite for making the necessary upgrades (read: investments) to bring up-to-date the systems necessary to leverage new technologies that would enable them to keep pace with their competitors.
This is in effect a shift, not merely a transition. And the disturbing truth is that difficult but intellectually honest conversations need to start today within the Board room first and with shareholders next. It’s no fault of management at any level; the acceleration of digital innovation has put everyone on a technology treadmill that no one really appreciated just three years ago.
2. Pay Now or Really Pay Later
Given the first tenet, it should be obvious that the potential cost of continuing to stave off significant capital commitments to re-factor a Brand’s marketing and information technology will likely result in exponential growth of those costs. Kicking the can down the road is no longer an option. But here is a more insidious side effect of delaying the inevitable of completely re-factoring your technology base: The subsequent cost is going to be far more than capital commitment. The real cost will be diminished customer base, dilution of your brand, and a depreciating market share. If you intend to be in business in five years, let alone a market leader, it is time to have the “re-factoring” discussion. But there is a silver lining explained next.
3. The Capital Commitment Reality Distortion
Another observation we came away with from CRMC is that CMOs are led to believe there are unrealistic costs associated with making moves to upgrade at least and re-factor at most. We feel compelled after this conference to diffuse that reality distortion field. You see, one of the upside results of all this digital shift is the arrival of new technologies that are fundamentally changing the technology model for customer engagement, knowledge, loyalty, relationship, and retention systems.
Consider one quick example regarding the heart and soul of your marketing technology: the customer marketing database. Several well-established, highly capable, and expensive marketing database companies have and continue to produce marketing databases based on legacy technology using something called a relational data model. The relational model remains a solid approach for a variety of requirements. And yet there is rapidly emerging new data models, well suited for the new kinds of unstructured data that is rapidly being amassed in this digital age (think: the customer data associated with a Facebook account, for instance). We simply want to observe that these new technologies bring with them a substantially changing (read: “shrinking”) investment requirement.
The reality is, marketing technology capital outlays may not be as difficult or large as CMOs may be led to believe. While significant investments may be required for some situations called “re-factoring” in many instances, much can be achieved by tuning existing systems (and more likely the related processes) and augmenting with new technology where required. Reinventing the company in a digital age may be imperative, but we know from experience there are ways to adopt and adapt without necessarily committing to wholesale re-factoring (or as our CTO likes to call it, “forklift upgrades.”)
4. CRM is Not About Intellectual Navel Gazing
We also discovered that management was perplexed that on the one hand they have an in-house army of data analysts (or an outsource militia ;-), but on the other they still are not engaging any better with their customers. Simply put, its one thing to have lots of data analysis, its quite another to leverage the resulting customer intelligence into actionable engagement initiatives. We heard multiple stories about the ease with which companies can now amass enormous data stores—especially with new web traffic and behavioral tracking capabilities, but then find themselves drowning in data they don’t know what to do with. The key is acting upon the findings, and ideally in a more automated fashion. How does that work? The analytics should produce triggers that drive engagement campaigns. This means making three things work better together:  your customer marketing database;  your analytics tools and  your campaign management and messaging tools.
OK, so it seems bizarre that this would occur, right? Not really. What we know is that in larger organizations there is typically a matrix management structure, rigged with inertia from consensus building requirements. Frequently, stakeholders drive these initiatives in somewhat or even considerable isolation. Without a chief systems architect of sorts, there is no holistic visibility on the individual technology decisions. Moreover, without all stakeholders engaged and an integration strategy really well thought out before the investment is made, technology often ends up partially implemented, not integrated, or even left sitting on a shelf. We even witness situations where by the time the original technology investment is properly implemented, there has been so much change in the original system acquired that significant updates or alterations costing nearly the original price are required to just to maintain the value in the utility of the solution.
And this leads to the next tenet (a sensitive and difficult one to discuss from our vantage point).
5. Being Intellectually Honest Can Be Hazardous to (Some) Vendors
It is with trepidation that we call out the elephant in the room, but we see this issue so often that it’s really starting to irk us. You see, some consultants appear to believe they are in a conflicted situation when assessing a client’s marketing technology and making recommendations. On the one hand, they know they must be as objective and honest as possible, and yet on the other hand it is imperative that they maximize the lifecycle of their client relationship (read: generate as much revenue as possible). The result is – more often than not – a set of recommendations that can enable the consultant to continue work, extending the engagement into a next phase. Simply stated, at the risk of being willing to offer advice which results in a single engagement, they may not be completely forthright.
This tenet suggests that companies should guard against the proverbial promise of “that’s available real soon now,” or “I’m sure it will only cost X” (with the unspoken knowledge that they will make it up in the proverbial claim of “changed requirements”). And that leads us to our last tenet for the day.
6. Up Front Clear Business and Marketing Requirements Are Imperative
Companies are racing to catch up with or pass competition, and feel they must rapidly evolve to serve their customers in a digital age (especially those “millennial” types), but without a real plan to do so. On the one hand, it is very good to have recognized the need to rapidly innovate, and it’s awesome to be able to try something literally by visiting a website and signing-up. But make all of that a part of a thoughtful strategic planning effort. But that ends up “firing” before you aim, let alone are ready. In other words, in order to best address all of these tenets we’ve mentioned today, we believe a solid “RFP” process is essential.
The RFP (Request for Proposal) requires planning, both strategic and tactical. The RFP process drives requirements gathering up front; it enables you to gain visibility on what you have, and what you need vs. what you desire; and it allows you to acquire real market intelligence on trends, what’s available, the competition, and a more genuine sense of cost. However, there are three important points to be made about the RFP process.  The RFP need not result in an immediate decision nor does it require you to proceed to implementation necessarily. It can simply be used as an intelligence gathering and strategic planning tool.  Too often the RFP is flawed in development because it lacks the domain expertise required to know the right questions to ask based on the requirements gathered.  Turning to an outside domain expert to assist, facilitate, guide, and marshal the entire RFP process is particularly important given that your business is not CRM or marketing technology, whereas their business is exactly that. It is not enough to look to outside experts to craft your RFP. The marshaling process (recruiting responses; managing submissions; assessing and scoring proposals, and guiding you through either [a] application of the resulting intelligence in your strategic planning, or [b] actually selecting a solution or vendor) is the most important, time-consuming step in the process of RFPs. However, up-front clear business and marketing requirements are the most valuable results of an RFP process. Gathered correctly, your situation and needs will be far more informed, and you will gain tremendous insights (internally and outward looking) in the process.
We note, in a shameless blog plug, that we at C[IQ] Strategies have all spent years (actually decades) on your side of the table. We understand your challenges, processes, change agency, and your half-acre of hell. We do RFPs. And we do them more thoroughly, more thoughtfully, with higher value results than anyone. Ask our clients. We insist on a no-nonsense approach to this work, and are here to help you cut through the reality distortion fields, regardless of who or what causes them. In some cases, clients have brought us in just to facilitate strategic planning and requirements gathering apart from, and prior to, any formal RFP process. Good idea, actually. Here’s the really nice part: We don’t have the overhead of those big brand name consultancies that ultimately assign their junior “consultants” to the project. With C[IQ] you work directly with the partners here who’ve spent 20+ years on the same frontlines you find yourself on today.
Marketing technology for the digital age need not (and should not) unduly leverage or bankrupt your business. Determining whether you are in a “re-factoring” situation in order to have your own intellectually honest discussion with your Board and ultimately your shareholders is important, if not imperative. Navigating this ever-changing technology landscape requires looking to experts who have literally “been there and done that.” Hi there, we’re here. Talk to us. You, too, may be a bit bewildered by the fact we not only listen, we actually hear.