Archive for July, 2011
Last Week we discussed the results from a CMO Council Research entitled “Mapping + Tracking: The Optimal Marketing Supply Chain“. This overview pointed out four key actions marketers could take to Obliterating Obsolescence:
- Leverage Digital Printing Strategies
- Cross Functional Collaboration
- Go-Green to Gain-Green
- Bringing in the Big Marketing Supply Chain Brains
While those are basic strategies any business can employ, we also know that before going down that path it makes sense to do some straightforward self assessment. Spend some time with the questions below and answer openly and honestly. As a marketing leader you are always looking for ways to ensure your organization gets better and better.
Marketing Operations Self-Assessment
- What inventoried items have become obsolete? Why?
- What regular processes do members of your marketing team do that are wastes of 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 everything in your marketing department run smoothly and perfectly what would it look like? What technology would be in place? What people would you have on your team? What results would you be reporting to your superiors?
I personally love question #10. Question #10 allows you to create the perfect world and once you can envision that world you can start to impact the day to day reality. Spend lots of time on #10. Create a real vision for what you can do and start chipping away.
My daddy always said if you don’t know where you are going then it doesn’t really matter what road you take. Question #10 is where you are going AND what road you will take depends on your resources and how you answered questions 1-9.
Now comes the challenging part. If you aren’t sure what your answer would be to #10, call us. At Mail Print we have helped many companies realize great results implementing new marketing technologies and procedures that they didn’t even know were possible. Read below about a nationally known, multi-million dollar company that has utilized a Marketing Asset Management system to unify their marketing message and cut-out obsolescence.
Ferrellgas, a Fortune 1000 energy provider, needed to manage marketing for their 900-plus locations more quickly and efficiently. In addition, they needed to increase the speed of their direct mail marketing production to ensure their time-sensitive messaging reached customers on time. Learn how Mail Print’s Marketing Communications Portal helped Ferrellgas reduce management time by 300 hours per month and speed production times from 10 days to 24 hours.
Research entitled “Mapping + Tracking: The Optimized Marketing Supply Chain” by the CMO Council, depicts a threatening picture of inefficiency and waste in the Marketing Supply Chain. This post summarizes this great research.
As marketers seek to provide the timeliest and freshest content to customers and prospects alike, old, over-ordered or un-utilized materials tend to be stored, destroyed or ignored, left to occupy costly space in offices and warehouses. High levels of waste can generally be attributed to limited access to material usage information, a lack of visibility into the operational process, and a general lack of forecasting and operational rigor. All of these factors combine to create an epidemic of waste that can be summed up most accurately as obsolescence.
Obsolescence is not excessive ordering of un-used collateral. Excess materials are merely a visible symptom. In fact, it is what cannot be seen—what is behind the scenes and invisible—that makes an indelible impact on marketing effectiveness and can derail, detract or damage the customer experience.
The shelf-life of marketing consumables and promotional materials has never been shorter or more challenging to manage. Marketers are spending billions of dollars producing, warehousing and shipping marketing literature, packaging, documentation, point-of-sale displays, premiums, giveaways, signage and hand outs. How well this portion of Marketing Operations is managed and controlled can materially impact go-to-market effectiveness, as well as the optimal use of marketing dollars in creating business value and competitive advantage.
The Ramifications of Marketing Supply Chain Inefficiency
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 criticality of content, yet 51 percent also admit to having sent out old materials containing out of date content. Why you may ask? For a small few, warehousing error (2 percent) can be blamed. 61 percent did not have new materials ready in time and 23 percent of marketers did not know that irrelevant, old material was sent. Are these marketers not interested in the customer or prospect experience? Or could it be more likely that they are without the tools and processes they need to get the visibility they desire?
Staging a Priority Shift
If content is constantly updating and changing to deliver the most relevant and timely information to prospects and customers, why are marketers not applying more rigor to managing the flow of these critical elements within the supply chain? Most simply do not view the reduction of obsolescence as a key priority (50 percent). As one marketer stated, “Waste is just taboo as a can of worms. To open it holds little reward and no compensation, so there is little motivation to start down this road.”
Yet transformation is on the minds of savvy marketers dedicated to operational efficiency and effectiveness. Additionally, there are very real strategies and opportunities to engage that can work to streamline the Marketing Supply Chain.
The opportunity lies with marketers to transform the Marketing Supply Chain operations and make significant strides to reduce obsolescence and in turn, redeploy budget that was once wasted on out-of-date materials.
- Leverage digital printing strategies – including Print On Demand (POD): 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 by reducing capital investment in inventory, storage charges, and waste. A POD strategy can further reduce costs by eliminating inventory, storage, and in-bound freight costs. POD also enables more current and customizable content through the application of Web-to-Print and 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.
- 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.
- 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 operates as a global green steward.
- Bringing in the Big Marketing Supply Chain Brains: If you are not good at developing process, bringing in a partner or business process consultant is certainly a valid option. As with all self-improvement programs, you should first start by taking a hard look at yourself. The first step in the process is to identify where marketing operations can be improved. 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.
Marketers must begin to look at individual symptoms of inefficiency with the Marketing Supply Chain in order to optimize budget allocation, operational management and delivery of the customer experience. Obsolescence is a serious challenge to marketers as they looks to maximize budget and operations. The good news is that a streamlined Marketing Supply Chain is possible. In these critical times where customer engagement is top of mind and budgets are restricting, waste and unchecked obsolescence are no longer issues left to other departments or hidden in a marketing closet. It’s time for marketers to take action.
Watch our post next week for a Marketing Operations Self Assessment Guide – 10 Questions to Help in Uncovering Opportunity for Efficiency in Marketing Operations.
Prompted by growing demands from CEO’s and CFO’s for greater accountability, marketers have begun to focus on improving the efficiency of marketing operations. They now recognize that improving the productivity of marketing operations can be a powerful way to stretch marketing dollars. The equation is simple. The dollars saved by improving the efficiency of marketing operations can be redirected to campaigns and programs that generate increased revenues.
One area of marketing operations that offers huge opportunities for improvement involves the procurement, production, storage, and distribution of marketing collateral documents. This part of marketing operations typically produces a significant amount of waste and is filled with processes that are highly manual and inefficient.
Reduce Cost By Streamlining Marketing Processes
To eliminate these wastes and inefficiencies, a growing number of companies are implementing marketing asset management (MAM) systems that automate the process of ordering, producing, and fulfilling requests for marketing assets and materials. In the right circumstances, these systems produce substantial cost savings and streamline the processes that surround the production and handling of marketing communications. This chart depicts the streamlined process using Marketing Asset Management:
To read more about how automated marketing asset management systems work and the factors that determine whether investing in an asset management system would be a good move for your business download “Is a Marketing Asset Management System Right for My Company?”
Direct Response Driven Sales Per $1 of Advertising
Notable Observations on the ROI of Direct Marketing
- Overall electronic media still enjoy a higher return than traditional mediums such as telemarketing, direct mail, newspaper, and even direct response television.
- No surprise, email has the highest performing ROI of all mediums. (For more information on this topic visit, Reach and Engagement: Email Marketing’s Big Challenges.)
- You’ll notice the slow, steady rise in the ROI of direct mail, and the decline of ROI in online channels, such as email and internet.
- Even the mid and some of the lower performing channels are still producing profitable campaigns.
So what does this all mean for marketing in the future? If the numbers provided by the DMA are averages, that means that within each category there are higher and lower ROI numbers. Some marketers are achieving great results, others not so much. My bet is the ones achieving positive profitability are the ones who are getting creative, trying new things, and conducting statistically significant tests to know what is really working and what is not.