Archive for January, 2011
There is an epidemic that threatens the Marketing Supply Chain. The CMO Council’s recent report “Mapping + Tracking: The Optimized Marketing Supply Chain” paints a clear picture of inefficiency and waste in marketing operations.
As marketers seek to provide the most timely and fresh content to customers and prospects, old, over-ordered or un-utilized marketing and sales materials tend to be stored, destroyed or ignored, left to occupy costly space in offices and warehouses. As the CMO Council discovered, high levels of waste can generally be attributed to limited access to material usage information, a lack of visibility into the process used to create the materials, and a general lack of forecasting and managing current and future material usage. All of these factors are creating an epidemic of waste that can be summed up most accurately as obsolescence.
Obsolescence Threatens Both Marketing Budgets and Customer Interactions
There are two key aspects to investigate while discussing impact of obsolescence: the impact on budget and the impact on customer or prospect experience. Marketers admit to the importance of communicating with relevant, timely messaging, yet 51 percent also admit to having sent out old materials containing out of date content. Why? According to the CMO Council study, 61 percent did not have new materials ready in time, and 23 percent of marketers did not know that irrelevant, old material was sent.
This seems to indicate that while marketers care about the customer or prospect experience, they are likely without the tools and processes they need to eliminate marketing obsolescence.
Why Aren’t Marketers Reacting Faster?
We know most marketers are highly focused on both protecting their budget and the prospect/customer experience. So why are marketers not applying more rigor to managing the flow of their critical marketing materials and sales collateral within the supply chain? As the study found, most simply do not view the reduction of obsolescence as a key priority (50 percent). As one marketer stated, “Waste is just taboo and a can of worms. To open it holds little reward and no compensation, so there is little motivation to start down this road.”
However in the current business climate, where organizations are cutting budgets and trying to run more lean and nimble, savvy marketers are seeing opportunities to redeploy budget that was once wasted on over-produced, out-of-date materials. Let’s look at four elements of putting in place your optimized marketing supply chain.
Four Elements For Obliterating Obsolescence
1) Leverage Digital Printing Strategies:
Digital printing technology has come of age, enabling economic production of all quantity ranges. Smaller production runs result in a lower total cost of ownership for your marketing and sales materials by reducing your investment in inventory, storage charges, and waste. A Print On Demand (POD) strategy can further reduce costs by eliminating inventory and storage costs completely. POD also enables more current and customizable content through the application of variable data printing (VDP). Marketers can send personalized messages with up-to-date content, and eliminate the fear of materials with out of date or off-strategy content being stockpiled in inventory.
2) Cross-Functional Collaboration:
Marketers are working more closely with cross functional teams in finance, sales, procurement, warehousing and operations to better forecast and eliminate over-ordering. Far too many marketers indicate that orders tend to revolve around a “cost per piece” target or guesses at utilization levels. Through collaboration across various functional areas, marketing will be able to better forecast, monitor and manage Marketing Supply Chain operations.
3) Go-Green to Gain-Green:
When it comes to the reduction of obsolescence, the more impact made on waste reduction, the greater the green-gains. Obsolescence creates an environmental impact that goes beyond paper. A lack of process, visibility and measurement in the Marketing Supply Chain often necessitates rush ordering which creates additional shipping, handling and logistical demands that all impact emissions, natural resources and carbon footprint. By applying a clear strategy that is focused on reducing obsolescence, marketers can transform the Marketing Supply Chain into a greener operation that optimizes spend and reduces environmental impact.
4) Start With a Self-Assessment:
When you’re ready to move forward with optimizing your company’s marketing supply chain, the first step is taking a good hard look in the mirror. Check out Rhonda Basler’s post It’s Time to Engineer the Marketing Process for a great list of questions you can ask yourself to quickly identify issues with your current marketing supply chain.
Finally, there’s good news: optimizing your marketing supply chain doesn’t have to be a one-person gig; it may be a great idea to bring in a partner or business process consultant to work with you on analysis and implementation.What challenges are you experiencing? How are you improving your marketing management? Join the conversation by adding a comment.
Theoretically, a marketing department should be constantly testing, reviewing their budget, and moving money to the best performing initiatives. Unlike other forms of media, which can prove influence, but are challenged to prove profitability, direct marketing has an advantage in that it can produce exact ROIs.
In my own marketing practice, I find myself continually striving to get more and more from email. I add new campaigns, improve existing ones, add triggers, automation and work flows and I do positively move the needle, but I can’t seem to get a really big impact. Why? A story in numbers proves it out:
- The most recent ROI statistics published by the DMA gave these outstanding numbers: Email returned $43.62 for every $1 invested. (1)
- But of the people on your email list, 30% will not get your email because of ISP blocks. (2)
- 85% of people will stop reading your emails after the third message (2)
It’s pretty easy to see why 65% of marketers indicate they will be spending more on email in 2011. (4) Email marketing produces a phenomenal ROI. The problem is that improvements in targeting and timing don’t solve the problems of “reach” and “engagement.”
How Far Can Email Marketing (Alone) Take Us?
Email investments should be maximized until you run out of reach. How do you know when you have “reach” and “engagement” issues with current customers and prospects?
- You don’t have an email address in the database and have not been successful in appending one
- The email address hard bounced
- There is no engagement after “x” number of email attempts (I leave this as “x” because it varies widely based on the sales cycle and product or service you are selling.)
Now, what do you do? You test a new approach to improve the reach and engagement with your target audience. For large audiences, that can be social media, online advertising, print, television, or radio. For targeted audiences, direct mail is a highly viable option. Although email returns $43 for every dollar invested and direct mail looks small in comparison at just $11 for every dollar invested, I bet most CFO’s will take $11 for every $1 invested all the time. Furthermore, direct mail can be automated to behave in the same way as triggered email, so there is no need to pull lists manually of opt-outs, hard bounces or the unengaged.
Reaching the Non-Re@chable and Diseng@ged
Finally, you may ask, “So why would I send them a direct mail piece?” Allow me to connect the dots:
- Use a Personalized URL (PURL) to get an updated email address
- Determine if the unengaged via email respond to the same offers in direct mail
- Ask for channel preference, so you better know how to communicate (Only 37% of marketers know what channels their customers prefer to use) (3)
- If a high-value customer is unengaged, isn’t it worth trying to engage them through a different medium?
Testing new ways to expand the reach and engagement of email marketing will be the biggest challenge for direct and online marketers in 2011. Want more information? Here’s a great article from B2B Magazine: “Using email to boost customer engagement.”
(1) Direct Marketing Association 2009
(2) Email Experience Council
(3) Forrester/ExactTarget, 2009
(4) StrongMail 2011 Marketing Trends Survey
Yesterday, I was part of a packed house to hear Lawrence Kimmel, CEO of the Direct Marketing Association, discuss new marketing trends for 2011 and beyond. His analysis of the future is as scary as it is exciting, because it will require that we as marketers analyze the way we currently do things, and evolve to match the new realities of our economy, global market, and technology.
One particularly pointed comment Kimmel made was that as a whole, marketers have devolved from affecting the “Four P’s” (Product, Price, Place and Promotion) of our companies’ go-to-market strategies to focusing solely on the Promotion component. This limits the positive value we bring to our companies, diminishes our role as leaders in our organizations, and threatens the success of our companies.
So how can we as marketers take back our roles as important innovators, profit drivers, and strategic thinkers in our organizations? How do we regain our Swagger? Here are three suggestions, with comments from other marketing leaders:
Marketers need to advocate tolerance for exploratory solutions.
We now know that we are not going back to any previous state of economic expansion and spending any time soon, and business leaders are also realizing that cost cutting and efficiencies are not enough to grow the bottom line. Marketers have an opportunity to be a respected player as analysts and investors start to exert pressure for better results driven by top-line revenue growth. However, as Steve Jones, former CMO at The Coca Cola Company and principal at (r)evolution, points out, it is essential that marketers develop within executive management a tolerance for exploratory and insightful solutions.
“[Marketers] need to make the case for managed risk taking. They need to demonstrate that they understand the company agenda, can explore possibilities responsibly without betting the farm or burning unpredictable sums of cash. They need to make the case that the landscape has been shifting since we all put our heads down in September 2008. New players from India are providing better services; new producers from China are increasing quality products; new middle classes are emerging that we need to penetrate. Consumers have completely shifted their attitudes and values and need to be approached in a new way. And marketers need to act like business leaders, not flakey ad guys.”
Marketers need to regain credibility by understanding the new landscape and creating a new marketing model.
Jones contends that marketer’s credibility is questionable because they haven’t figured out the true value of new technology. “They haven’t figured out how to use it in a way that new young consumers want to use it. To regain credibility and respect, marketers need to take back responsibility for understanding how to use the digital and Web technology as a meaningful marketplace.”
Jeffrey Hayzlett, former CMO of Kodak, suggests that marketers should be prepared for the landscape to constantly change and welcome the challenges and opportunities that it brings. “Marketing is such a dynamic field, and with technology evolving rapidly, it is becoming ever more complex with even more creative outlets. I think the best marketers are those that embrace change while knowing their brand and what it means to customers. They should constantly be learning about themselves, the market, customers, and new technology they can utilize.”
Marketers need to maintain their focus on both strategic idea generation and measurability.
Few executives will argue that new initiatives that are well-researched and thought-through are bad ones. What tends to drive everyone crazy is when it cannot be determine if those new ideas were a success or failure, and whether or not they warrant additional testing or financial investment. This is when marketers look like creative geniuses, but financially irresponsible. Marketers can gain the respect of their peers by making strategic contributions to the organization that lead to the expansion of revenue-generating initiatives and the quick dismissal of great ideas that failed.
What are you doing to retain or regain your Marketing Swagger? Let us know in the comments section!
Throughout the past year, I have attended or presented at a variety of conferences such as the Marketing Profs B2B Marketing Conference, the Integrated Marketing Summit, the DMA’s National Center for Database Marketing conference, and various industry specific events. I can say that I am continually impressed by the content and quality of these events. There is just nothing like taking the time to focus on improving your personal skills and techniques, sharing ideas with your peers, and learning from others.
There was one topic noticeably lacking at all of these events. With the economy still on a flat trend, marketers are still not talking about how to improve the operational aspects of direct marketing. I know, that coming up with the next big idea is how marketers are wired, and typically how they are incentivized and rewarded. But, this is the perfect time to help your company (and get kudos to boot!) by focusing on marketing process efficiency.
Improving Marketing Efficiency with Time Savings
Decreasing the length of time it takes to accomplish something saves time. We only get 24 hours in a day and can’t make more. So when marketers figure out how to cut an hour out of a routine marketing execution, what do you do with the time? Hmmm… maybe come up with the next big idea. The problem is that many creative marketing folks have difficulty thinking in straight lines. By their very nature, they think differently from everyone else in the organization. So no one in your department is good with streamlining processes? It’s probably time to get some help either within your organization or with the help of a business process consultant.
Saving Money While Making Marketing Process Improvements
Yes marketers, it is possible to love purchasing, supply chain and sourcing personnel. And if you can’t quite get to love, maybe you can get to respect. Often, these individuals have some of the best general business sense you’ll find. Although they are focused on reducing cost and finding the best price available, it is short-sighted to think that they are not focused on value. My experience is that they will listen and participate in helping you find a solution that saves both time and money, and delivers the quality you need to fulfill the image of your brand.
Think Like a Process Engineer
If you are not good at developing process, bringing in a partner or business process consultant is certainly a valid option. But, I am a firm believer that just like all self-improvement programs, you should first start by taking a hard look at yourself. The first step in the engineering design process is to identify where marketing operations can be improved. Challenge yourself with these questions and make a list of areas for improvement:
- What do you do that is a waste of your time and skill set?
- If you could change the way you buy ads, deploy email, manage printed materials, trigger direct mail, hire talent, create copy, or plan your next move, what would that look like?
- How could you streamline your workday?
- What marketing processes have failed in the past?
- Do you ever cross your fingers, hope, and pray that nothing goes wrong when deploying a campaign? If the answer is yes, it goes on the list.
- Would it improve your results if marketing campaigns could be deployed faster? If so, what does an ideal timeframe look like?
- Is the work flow in your department planned, or hap-hazard? How about between departments?
- What have you done more than twice this week?
- If you could waive your magic wand and have technology do part of your job, what part would that be?
- What else could you do if you were not doing the same repetitive tasks?
- What new things should you be doing, but seem to never have the time?
By completing a self-assessment, you’ll identify your marketing process hiccups and what you could be doing if those hiccups were streamlined or eliminated. From there you can decide if you can tackle the improvements yourself, call in strategic sourcing or consult with a partner outside of the company.
50% of marketers surveyed by the CMO Council say that eliminating waste and obsolescence in their supply chain operation is not a key priority to the overall marketing operational function.
Source: Mapping + Tracking: The Optimized Marketing Supply Chain, CMO Council
I do see more people with titles that include the terms marketing and operations, but more often than not, marketers look outside of their department to operations or strategic sourcing to handle improvements in efficiency. Isn’t it better if it starts with the marketers themselves?