Melding marketing and IT: Are you ready for the digital revolution?

Melding Marketing and IT: Are You Ready for the Digital Revolution?

February 2011

The ancient Greeks had a word for it: kairos—the supreme moment, the right time.

Right now, for many chief marketing officers, that moment—keyed to digitally bred real-time customer expectations—is slipping through their fingers. Marketing’s former lock on branding, messaging and positioning has been weakened by the increasing influence of peer-to-peer, crowdsourced and affinity-based interactions.

Tech-savvy and endowed with a kind of digital omnipotence regarding product and brand comparisons and deals, today’s customers have vastly different expectations than they did just a decade ago. Yet many marketers fail to grasp that they need to respond to the profound changes ubiquitous connectivity has triggered among consumers.

The emergence of massive online communities, social media, mobile marketing and interactive advertising has changed the ways customers want to deal with companies and, in turn, how firms can respond to customer needs. These digital channels and capabilities mean organizations can reach customers now—in real time, all the time, anytime. Just as the inventions of the telegraph and telephone effectively shrank distance, the digital revolution is compressing reaction time itself, forcing companies to step outside long-established comfort zones.

The ultimate promise of digital and interactive channels is personalization: bringing timely and relevant offerings and experiences to customers wherever they are, at that moment—kairos, if you will—when interest and opportunity translate into a sale.

But many companies lack the technologies, analytics capabilities, leadership and organization structures to capitalize on this seismic shift. A recent global research study, conducted by the CMO Council and Accenture Interactive, of more than 600 senior marketing and information technology executives found that just 11 percent felt very prepared to exploit digital marketing channels.

This article will examine the challenges “real-time marketing” presents and explore ways companies can leap ahead of their competitors in the use of digital, interactive customer channels that can create deeper and more profitable long-term relationships.

The right data, the right time
It sounds fairly straightforward: deliver personalized, relevant and timely offers and information to customers to influence their loyalty and buying patterns. But without the right data at the right time, this kind of real-time marketing remains a pipe dream.

Data in this case includes contextual information about the customer—background, location, interests, relevant communities and so forth—that enables companies to adjust the customer experience in real time. Companies need to collect data, integrate that information using real-time analytics to synthesize findings, and then use the knowledge generated to support ongoing relationships and more personalized products and services.

In short, the company with immediate access to the most relevant customer data wins.

Becoming a diligent data miner is one thing; making sure company representatives have immediate access to insightful customer information is quite another. Information can’t remain packed away in different organizational and functional silos anymore. Companies need a unified IT backbone and infrastructure that link data housed in the far reaches of the organization, often in different forms, as well as information held outside the company.

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Furthermore, leaders need to pursue technology-based solutions—sometimes across partnering companies—that enable them to crunch data better and faster, as well as predictive analytics that make it possible to personalize the customer experience in as close to real time as possible.

One online powerhouse that already plays a leading role when it comes to identifying customer interests and actively generating product recommendations recently raised its game noticeably. The company’s technological partnership with a social media player makes it possible for customers to link their accounts at both portals. As a result, the online retailer has improved its ability to suggest products by also taking into account the interests and activities customers list publicly on their social media pages.

Focused leadership
At first glance, the biggest challenge in meeting the needs of real-time customers appears to be technological. But strong, purposeful leadership also plays a critical role. In fact, the Accenture Interactive-CMO Council research suggests that in the crucial area of integrating marketing and IT efforts, much remains to be done (see chart). Unfortunately, many companies fall short in their attempts to meld marketing and technology in this manner, because leaders fail to ensure that marketing professionals work actively with the IT department (and vice versa) to make the needed changes happen.

The global study found that while some marketing organizations and IT departments are moving in the right direction, most are falling behind (see chart). The problem? Digital marketing practices and technology-based customer analytics solutions are simply changing too rapidly for companies to keep up. Lacking the required vision and leadership, the majority ends up taking baby steps toward creating an integrated and truly digital marketing function; by the time each step has been completed, it’s too late.

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These organizations risk losing out to more nimble and digitally confident online competitors that are led by savvy executives who, much like the Native American horseman an envious American general once observed, seem born to ride this bucking bronco.

To catch up, leaders have to make new investments in the talent, technology and processes needed to forge a new era of cooperation between marketing and IT—and make this transformation an organizational mandate. This new, aligned strategy must identify the investments needed for businesswide growth and optimized customer experience.

Filling the gaps

Our research also uncovered several additional obstacles companies face when attempting to use digital channels, social media and other interactive capabilities effectively (see chart). For example, spending often fails to keep up with needs or, worse, goes to the wrong areas. As a result, while executives may loudly proclaim the benefits of leveraging digital channels, they often make little in the way of coordinated investments.

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One company’s experience perhaps sums up the issue for most industries. It proceeded reactively, financing one-off technology projects and implementing programs incrementally. But these moves actually made the problem worse by creating more complexity without a corresponding increase in transparency. Such uncoordinated efforts make it harder to put together an integrated, holistic solution to drive relevant and real-time consumer experiences.

Companies also face an expertise gap. Most don’t have the talent and leadership they need to solve the problem. Bluntly, they need fewer people with isolated IT and marketing skills, and more general business managers who really understand business recommendations and the optimization of customer relationships.

Companies that succeed at real-time, digitally empowered marketing are instantly recognizable. They deliver personalized and relevant experiences to customers through the channels and in formats that consumers demand. They work hard to achieve consistent communications and brand experiences across both digital and offline channels, and have the capacity to track and respond quickly to customer behavior across every point of contact.

Real-time marketers focus on becoming more data-driven, and on creating a more measurable and transparent marketing department, one where managers base strategies, campaigns and budgets on verifiable insights into markets and customers. Such firms also develop systems and processes imbued with the agility and flexibility to respond to changing customer preferences, business conditions and market opportunities.

Pushing the envelope
One consumer electronics retailer is pushing the real-time marketing envelope with a Twitter-based service that allows it to quickly tap into the expertise of its employees. As a result, the organization’s own techies and product experts can answer customer questions rapidly, resolve service issues and troubleshoot problems, all in real time, whenever customer concerns arise. The service provides a significant competitive advantage, one that effectively positions customer service as an important element of marketing strategy.

One clear difference between successful real timers and other players can be seen in the management team’s knowledge and understanding of online technologies. A generation gap of sorts separates those companies that get the promise of digital, interactive channels in transforming how they conduct business with customers and those that don’t. As a result, even though increasing numbers of people now live and work in an always-connected way, many companies continue to treat the phenomenon as a fad or minor issue.

First steps, lessons learned
As a critical first step, companies need to acknowledge and get a feel for the size and heft of this transformation. It’s big, comparable in potential scale and scope to other major market disruptions, like television or the automobile. Companies also need to map out a detailed change path—one that includes some immediate, short-term paybacks but also plots a course several years into the future. And they should factor some experimentation into this mix—pursuing small, manageable chunks of digital capabilities, which can enable them to measure business returns before making larger investments.

While no hard-and-fast rules exist for successfully navigating the digital world, six experience-based suggestions can provide insights.

Nurture an appreciation for ambiguity

Digital developments rarely proceed in a straight line. Instead, winning products and applications emerge from a combination of vision, luck, serendipity and sweat-drenched effort. In such an environment, doggedly adhering to a traditional business strategy will virtually ensure that a company gets continually blindsided.

Instead, leaders need to create new organizational structures that are nimble and responsive to an environment packed with uncertainty. One leading consumer products company is moving toward an “open marketing” model by shrinking its core marketing team, whose members then lead a network of specialized external partners. This way, the company always has immediate access to the latest thinking and newest approaches regarding real-time digital marketing.

Put digital decisions on the board’s agenda

As the Accenture Interactive-CMO Council study shows, many companies continue to fall short when it comes to capturing digital’s promise. For instance, one prominent company simply outsourced the issue to a couple of vendor employees, with predictably disastrous results. In fact, the change required represents a fundamental transformation in the way business is done, mandating nothing less than a CEO-level endorsement of, and engagement in, both the strategy guiding the change ahead and its robust execution. Anything less will likely spur a series of one-off efforts that simply increase organizational complexity and inefficiency.

Rethink investment approaches

Moving toward now marketing requires companies to maintain a delicate balance of risk, innovation and learning. Although going digital will involve significant technology investments, the return-on-investment cycle will probably not follow that of a standard technology rollout. If a “typical” payback curve is gauged annually, a digital ROI could take five years or longer, and may not produce returns at all.

Given the parlous state of the economy, this ambiguous, long-term-investment approach will likely cause considerable organizational pain. But setting the wrong expectations will be even more detrimental to moving forward as the plug is pulled on early “failures.” Given the potentially protracted return timeline, companies should choose projects that promise to deliver the greatest returns and take them on in bite-size pieces.

One high-tech firm has earned a reputation for identifying and capitalizing on innovative business ideas from everywhere, and one way the company stays on innovation’s cutting edge involves its wiki-based collaborative platform. A dedicated team assesses ideas submitted by employees to find the killer concepts the company needs, and then it helps involved employees develop the business plans in support of each idea’s feasibility. Ideas generated by the process have already led to the startup of multiple new company business units.

Abandon best-of-breed systems and focus on flexible platforms

The digital revolution could ultimately deliver true “segment of one” personalization. To make good on that promise, however, companies need a unified data backbone, one capable of delivering the highly relevant data that generates valuable customer insights. In turn, this information enables marketers to tailor content to individual customers.

However, because many companies operate on a hodgepodge of best-of-breed systems, most lack an integrated technical infrastructure. Today, marketing and IT can no longer implement solutions that address only the needs of their respective functions. Moving forward boldly requires leaders to develop a unified, companywide vision of the end state required to make now marketing a reality.

Don’t just mine customer data—engineer it

Data mining digs up lots of facts but few real insights. Teams instead need to “engineer” information, drawing insights and understanding from a variety of internal and external sources to create and deliver the most relevant customer experience in real time.

For instance, an auto insurance company offers a free iPhone GPS-based app that enables customers to record information such as an accident’s location and time; lets them take and send damage photos; and makes it possible to submit the necessary insurance forms from the scene. The app also offers ways to locate collision repair shops as well as contacts for local authorities. It saves time and money, and it increases customer satisfaction by reducing uncertainty and making a difficult situation more manageable.

To continue providing customers with the best digital experience, companies must constantly anticipate and respond to evolving consumer needs across an expanding array of media and digitally enabled touchpoints. But getting there requires developing capabilities that provide an end-to-end customer view.

One effective way to engineer data focuses on understanding actual consumer intent by evaluating search queries and scanning for potential customer-triggered “events” on websites and elsewhere. By puzzling out the meaning behind search query data from onsite search engines, teams can gain invaluable insights into what consumers actually seek.

A number of technology platforms make this type of analysis possible at scale, enabling companies to provide the best customer experience possible. As a result, firms can readily serve “long tail” consumers in ways that address their individual needs instead of simply recommending mass-market offerings.

Rethink your talent management models

Much the way the transistor’s invention eclipsed vacuum tube expertise, companies today face a digital talent divide. Finding, attracting and retaining tomorrow’s digitally savvy leaders will force organizations to step outside of their current comfort zones as they search for people capable of dealing with the high uncertainty levels this new digital marketplace creates, and who understand and can act to capture the enormous value at stake.

The digital revolution is taking place now, in real time, irrevocably changing the rules that define company–customer relationships. To win in this intense new competitive arena, firms need to break down the internal barriers that prevent the free flow of customer-relevant information, and instead cultivate a new breed of leaders capable of accelerating company performance to life speed.

About the authors
Tim Breene is the senior managing director of Accenture Strategic Initiatives and the CEO of Accenture Interactive. Since joining the company in 1995, Mr. Breene has held a number of senior positions, including Accenture’s chief strategy and corporate development officer, group chief executive of Accenture Business Consulting and managing partner of Accenture Strategic Services. Mr. Breene is based in Boston.

Brian Whipple has been with Accenture for more than 10 years, serving in a variety of strategic and consulting roles. Mr. Whipple was also the chief operating officer of an advertising and marketing services firm; the managing director of the northeast region for a Fortune 500 global technology services company; and a senior vice president and managing director of one of the world’s largest direct marketing agencies. Since 2010, he has been managing director of Accenture Interactive. Mr. Whipple is based in Boston.

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Melding marketing and IT: Are you ready for the digital revolution? - Accenture Outlook  
The ultimate promise of digital and interactive channels is personalization: bringing timely and relevant offerings to customers wherever they are, at that moment when opportunity and interest translate into a sale.
challenges of real time marketing, accenture outlook
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