A segment of one. That’s what Mike Rhodin, IBM‘s SVP of software solutions defines as, “the Holy Grail of marketing,” and he says technology is going to get us there.
Fueled by a heady cocktail of data, analytics, and automation, the evolution currently underway in the marketing industry is engendering an even greater change—a transformation both in the methods brands use to communicate with consumers as individuals, and in the thinking behind IBM’s newest online integration solutions.
“Using traditional direct marketing techniques, you were taking a rifle shot,” Rhodin says. “Reduced segmentation is driving a fundamental shift in how money is being spent in the marketing profession.”
Primarily known as a tech company, IBM’s close alliance with the chief information officer (CIO) is to be expected; but considering where the industry is going, Rhodin says he sees the CMO as a “potentially very large buyer of information technology in the future.”
Rhodin says this “inflection point for marketing” drives Smarter Commerce, IBM’s suite of end-to-end solutions, from Web analytics and digital marketing software to procurement and supply chain management.
Smarter Commerce hit the market a little less than two years ago after a series of rapid-fire acquisitions, including DemandTec’s real-time pricing capability in February 2012 and Tealeaf’s behavioral analytics function in June. Once integrated with IBM’s existing Web analytics solution Coremetrics, and Unica, its marketing campaign automation tool, Big Blue was ready to go to market.
A sweet, C-suite marriage
“CMOs are acknowledging—and embracing—the need to leverage analytics to create competitive differentiation, simply by using better information to understand the clients they’re dealing with,” says Rhodin, who posits that the trend toward automation based on analytics will continue to empower CMOs, giving them new insights and deeper perspectives into the brands they helm.
“We’re seeing an interesting inversion in many organizations—the CMO as a peer of the head of sales or the CMO working as the head of sales,” Rhodin says. “Over time, the CMO is moving into a position to know all channels.”
CMOs are also getting into territory normally headed up by technologists. A January report from research firm Gartner predicted that by 2017 CMOs will spend more on IT than CIOs will.
IBM has willingly taken on the role as a sort of marriage counselor to facilitate this shift by organizing CIO/CMO forums around the world and conducting original research, such as the 2012 State of Marketing Survey (see sidebar below).
Technology plays an increasingly dominant role in marketing, says Yuchun Lee, VP of enterprise marketing management for IBM Industry Solutions, because marketing needs to be more personalized—and the solutions needed to manage and monitor that engagement require a technological backing.
This marks a shift from the way brands used to approach marketing campaigns, which were largely designed to spread the word about new products. Lee sees this as the old-world paradigm for getting customers in the door.
Knowing the customer
Making decisions based on customer intelligence, an issue that keeps marketers up at night, is at the heart of what IBM is trying to facilitate, says Craig Hayman, general manager of industry solutions for IBM Software Group. According to IBM’s CMO study, marketing professionals cited the need for brand authenticity, omnichannel engagement, and long-term relationship building based on customer insights, as the three issues that are consistently top-of-mind for them—and the ones they feel the least prepared to handle.
“Marketing professionals are understanding that it’s not just about running a single email or social campaign or about ad spend activity,” Hayman says. “Rather, it’s about all those things in the context of objectives.”
And only by making channel decisions based on greater marketing goals can brands keep consumers’ attention.
“Marketers in general are struggling to be relevant to their customers, and we believe that’s the most important thing any organization can do: to stay relevant,” Lee says. “To do so, one must understand the wants, needs, and desires of the individual customer.”
Imagine a prospect in the market for a new car, more specifically a Jaguar—even more specifically a red Jaguar with the new all-wheel-drive feature built in. The brand knows this because the prospect has been looking at that particular set of parameters on the company website. Now, all Jaguar has to do is send an automated message to that individual with a personal invitation to go to her nearest dealership when the new red Jaguar hits the lot; a segment of one.
“It’s shooting in the dark if you don’t have analytics,” Rhodin says. “It’s why in the past marketing was all about segmentation—because marketers didn’t have the data or the analytics to go below that.”
While one might argue that combining automation with a human touch is a contradiction, Rhodin disagrees. “There is so much information floating around about all of us, and if you correlate all that, you can gain enormous insight into the individual,” he says. “And the more insights you have, the smarter you become.”
Automation is crucial, however, because though marketers may have access to real-time information, there simply aren’t enough human resources to monitor and execute on the deluge of incoming customer data.
“Analytics is giving new-world CMOs a clearer understanding of the data so they can use facts to make decisions about where to spend their money,” Rhodin says. “It’s also driving changes in the professionals themselves, who have to become more literate in and understand analytics in a way they didn’t have to before.”
While the Smarter Commerce suite appeals to large online and brick-and-mortar retailers—IBM counts Staples, Home Depot, and Radio Shack among its clients—other less obvious industries, like telecom and financial services, also need to take Big Data seriously. Being smart with data is sector-agnostic, Rhodin says.
“Take telco, which uses our technology for churn management so they can detect when customers are about to change their contract, and then give them unique offers personalized to each individual in real time,” he says. “Or look at banks; they’re notorious for not integrating data across silos—so CMOs at banks can now leverage the information they have about customers’ mortgages, investments, credit cards, and credit lines, for cross-sell and upsell using automated campaign software.”
Beyond Smarter Commerce, IBM has invested in creating analytics-based curricula at more than 200 business schools, including Yale, Fordham, and Northwestern. “We’re doing it to build the profession from the ground up for the next generation of professionals,” Rhodin says.
The ultimate goal, Hayman says, is to create a smarter solution for self-aware marketers to meet the needs of educated consumers.
“Companies that are authentic, engage with consumers, and do something with the insights they gain,” Hayman says, “those are the companies that will prevail.”