Commentary & Analysis
Preview: Talking to the CMO Keynote Address at On Demand
Not long ago,
By WhatTheyThink Staff
Published: March 5, 2008
Not long ago, the only metric that mattered to corporations was shareholder value. In a challenging economy, however, the concept of accountability is critical in Corporate America. Previously one of the least accountable functions in an organization, marketing is entering a brave new world—one that requires a more strategic perspective of marketing effectiveness and where numbers often speak louder than words.
Dr. R. A. Lakshmi-Ratan
EVP & COO, DMA, Inc.
Chief Marketing Officer,
Ramesh A. Lakshmi-Ratan, Ph.D., Executive Vice President and Chief Operating Officer of the Direct Marketing Association (DMA), and Donovan Neale, Executive Director of the Chief Marketing Officer (CMO) Council, will share perspectives on what it takes for marketing executives to be successful in today’s complex environment in this morning’s ON DEMAND keynote session. Participants will gain significant insight into the role that a graphic communications organization can play in the world of accountability. In addition, Donovan Neale-May will share key findings from the CMO Council’s “Power of Personalization Study” being released today.
In case you can’t make it, there are some key themes that will emerge.
- It’s a multi-channel world. To be successful in the 21st Century, marketers must not just select and purchase proven instruments. Marketing executives are looking for more access to consumers along and are willing to go out on a limb and try new ways to connect with them. It’s a multi-channel world that includes the Web, podcasting, cable, radio, television, SMS, and direct mail. Twenty years ago, an attempt to reach 80% of the American population could be covered by placing an advertisement on the three major television networks. Today, it would take 150 to 200 advertisements to reach that same audience. The CMOs who embrace new media and communicate the right message using the right media will be the winners. For those in the graphic communications world, that means helping the marketing executive to communicate messages across a multiplicity of media channels.
- It’s a data-driven world. Marketers understand the critical importance of customer data. It's how companies generate the right customer data, manage and share data the right way, and use it at the right time that optimizes acquisition loyalty and profitability. This is what makes marketers successful. Companies in all sectors have skills in using it for acquiring new customers. They can purchase good prospect lists and leverage events and marketing initiatives for new business. At the same time, however, few are using it to target cross-selling, retention, and win-back campaigns or to reinforce relationships with customers. Marketers also know that it is less expensive to keep a customer than it is to acquire a new one. It’s time for the graphic communications service provider to show clients how they can use personalization tools to more effectively manage customer retention and cross-sell, up–sell, and re-sell products and services.
- It’s a personalized world that requires relevance and timing! Marketers know that to be effective in turning prospects into sales opportunities, the dimensions of timing and relevancy are essential. Tools for blending a relevant offer with a printed direct mail or e-mail are available, but marketers are also seeking tools so that if timing isn’t right for the hard sell they can stay in front of a lead without being annoying. One way is to create dynamic, data-driven microsites that can be accessed by personalized URLs (pURLs). When the lead responds to your marketing effort and gives you a little information, relevant content appears on the microsite. When you have more relevant content ready, you can contact the lead and inform him/ her of the new information available on his/her personal site. Leads will know how to find you when they want you, and they’ll have all the right information available for decision-making. Marketers need to understand that the consumer wants to be in control and that in today’s world they manage information that gets through. Multi-channel tools give graphic communications firms the ability to provide marketers with not just relevant communications, but the ability to establish a learning environment that appropriately times communications.
- It’s a world of accountability. There is substantial pressure in the C-suite to show marketing ROI. The old joke, "I know half my advertising works, I just don't know which half" isn't funny anymore. Marketers need to quantify how investments are working in real-time and make necessary adjustments on an ongoing basis. The good news is that the software suppliers have taken this message to heart. Print service providers (PSPs) and marketing service providers (MSPs) need to understand and embrace marketing dashboard capabilities from suppliers like MindfireInc, Pageflex, InterlinkOne, XMPie, and Responsive Solutions. This toolset can be invaluable in supporting the needs of the marketing community.
- It’s good to be green! With the emphasis on the environment, consumers expect dealings with marketers to be environmentally friendly. Digital print combined with multi-channel communications is a “greener” go-to-market approach. You can help marketers avoid printing large quantities of collateral or other materials that quickly become obsolete. With digital print solutions, marketers can leverage 1:1 communications for direct mail campaigns. They can send relevant messages to specific target markets versus generic mass-mailings. Postcards and self-mailers can be used rather than letters, envelopes, and inserts. Pieces can be designed using lighter basis weight materials, and FSC-certified paper and print products can contribute to conservation and responsible management of the environment.
“The Power of Personalization”
More than 700 senior marketers worldwide participated in the CMO Council’s “Power of Personalization” study, which explored the various effects of customized content, collateral, and personalized Web interaction on marketing effectiveness, customer acquisition, retention, and business outcomes.
According to Neale-May, “CMOs are clearly gaining more confidence in the process of personalization and are increasingly willing to direct more of their marketing budgets to personalized communication tactics. Nevertheless, many marketers’ programs have been deemed unsuccessful because of a lack actionable customer data used in campaign planning – as well as because of inadequate analytics used in assessing post-campaign effectiveness.” Neale-May also noted that a surprising 38% of the survey respondents said they didn’t even know whether personalized communications had outperformed traditional mass-marketing tactics.
Many of the findings from the “Power of Personalization” illustrate marketers’ relatively low level of adoption of personalized communications techniques, despite their increasing interest and emphasis on personalization strategies going forward.
A large number of respondents (43.5%) indicated only a low usage of personalized communications in their customer acquisition and relationship management programs. Another 39.4% of respondents said their usage was moderate, while only 17.1% indicated a high level of usage.
According to the study, 55.1% of respondents planned to increase their 2008 marketing budget allocations for personalized communications more than 10%, with 25.3% allocating more than 20% of their marketing budgets to personalized communications. Another 21.8% were undecided on allocations.
In terms of gauging the success of personalized communication initiatives, top measures of program success included conversion and close rates, quality and volume of leads, customer feedback, e-mail opening and forwarding rates, and Web site traffic and page views.
Data issues are central to the challenge facing marketers that are embracing personalized communication strategies. 49.1% of respondents blamed inadequate systems and infrastructure for limiting personalized communication initiatives. Lack of customer data and insight and cost and complexity were also cited as major contributing factors by 46.2% and 43% of respondents, respectively.
Winning Strategies for Personalized Communications
Those surveyed by the CMO Council identified several key methods their companies used to better reach their target market through personalized marketing initiatives. The top methods included:
- Individualized e-mails and letters (top choice with 66.1% of respondents utilizing)
- Opt-in, permission-based marketing programs (46.5%)
- Targeted database marketing leveraging personal profiles (43.5%)
- Personalized e-mail promotions based on timing of signup and regular intervals thereafter (40.1%)
- Print on-demand collateral incorporating personalized content (30.5%)
- Variable Data Printing (VDP) (31.6%)
- Marketers see the best personalization opportunities in e-mail and Web content delivery, with 52.3% choosing e-mail campaigns among their “top three” opportunities and 38.8% choosing Web content programs.
- Respondents said the top benefits of personalization included making offers more relevant and meaningful to prospects, building closer relationships with customers, and increasing the company’s overall marketing effectiveness.
- In creating personalized communications initiatives, respondents cited the customer’s purchase history as their chief consideration (46.8%), with value/profitability of relationship and type of customer (individual or business) second and third (41.7% and 40.8%, respectively).
- While the number of respondents using personalized URLs (pURLs) only constituted 25.6%, an additional 22.1% claimed to have tested, but not incorporated, pURLs, more than any other personalized communications tool.
The Message for THE PSP/MSP
There is growing pressure to quantify the financial value of each marketing investment. ROI means accountability for the marketing executive. In the face of a difficult economy, ROI is not a passing trend. As audience members hear the words of Dr. Ramesh Ratan and Donovan Neale-May, they will clearly get the message that marketers need and want to engage in relevant and customized messaging with consumers that provide a return on marketing investment. It is time for the PSP/MSP to understand and embrace customized communications tools that deliver business results.