Marketers are tasked with defining the best strategies and programs to drive marketing success and identifying the role of media channels in order to do so. Then they must track those efforts to divine what works best and which tactics to abandon.
Direct Marketing News convened a select group of senior marketing leaders in a closed-door roundtable discussion, sponsored by Marketo, in San Mateo in February, to get at the heart of some of these challenges. Participants discussed topics including the structure of their own marketing programs; the role of content; challenges in integrating messaging across channels; and how marketers are using digital efforts — particularly mobile, social and video — separately and collectively to nurture engagement and further loyalty with customers.
Direct Marketing News: What is your marketing strategy and how are your marketing programs structured?
Elizabeth Rector (Cisco Systems): Part of what we are doing is looking at how we can be more strategic in and of the channels, so we’ve integrated. We had a lot of segmented groups [in the past], but now we have an integrated marketing team whose sole focus is to understand the marketing mix.
One of the things that we have been doing … is really aligning around key campaigns instead of one-off, siloed product announcements. We’ve been working with Forrester and a tool called Tech Marketing Navigator. It’s a starting roadmap and then we can fine tune from there, but it surveys about 20,000 tech suppliers, and it asks across about 35 marketing vehicles which are most influential in awareness, consideration and purchase.
We can get a sense of, ‘okay, tech print is big, search is big, your website is big’ and develop our budgets around that. Then we’re going to retroactively optimize and understand our ROI for that. We’re trying to get a little more integrated and thoughtful about the mix and very detailed on the ROI.
Dave Smith (Mediasmith): We start, with all of our clients, with a target audience. Every client that we work with knows who their target audience is, they’re absolutely sure who their target audience is, and for half the clients we take on, we change who their target audience is.
For Napster, when they became a paid service, they came to us and said it is 16-to-22 year old males. And we [initially] said yep. That’s the target audience for people who are downloading music. We came back ten days later and said 25-to-44 year old adults.
There’s this whole thing about who’s the target and getting agreement on the target, and then mapping that to their media patterns, paid, owned and earned.
A lot of clients don’t think about their owned media. They say, ‘I’m not in the media business.’ But they have a website. They have LinkedIn discussions going on that they’re not even controlling. They have Twitter feeds that they’re not controlling. They have Facebook pages and if they are controlling [them], it’s probably outside of marketing. They have all these owned assets. When they think about communication, they think about paid media. It starts with a target audience and then it goes to ‘where are they?’ Then talk about message deployment, rather than buying media.
Paul Albright (Marketo): There’s a lot of discussion on growth and marketing seeing themselves as a growth engine. It’s also thinking about this persona, the audiences that Dave talked about, then putting that in perspective. I work backwards from that and think ‘what are the campaigns’ or ‘what are the investments that I need to make in order to maximize growth?’
Then we categorize them into four buckets: inbound interests, outbound marketing, sales contributions (how much reps are contributing to the pipeline), and referral.
You start with those four buckets of pipeline contribution … then figure out per segment. Is it an enterprise segment? Is it a vertical segment? What’s the right mix across those four buckets, and then how do you start to spend your dollars in order to maximize growth?
Marketing is seen as more of an engine for growth, not just a cost center, and must play a deeper role going forward. The buyer no longer buys from a sales rep. The buyer’s buying through search and social. It’s marketing’s job to throw the net over those people at the time they’re starting to do their research.
Vivek Palan (Acxiom Corp.): One of the things that we’ve been seeing is there’s an interesting dichotomy between the time that is scheduled, socially designated, the use of social media, and the way that marketers have been budgeting against that. A recent study by Nielsen [indicated] that people are spending over 22% of their time online on social media versus, around 7% to 8% of their time on email. When you look at how marketing budgets are allocated, it’s not proportional or anywhere near what those numbers represent.
Laura Ramos (Xerox Corp.): A lot of our spending mix and our attention gets spent towards the brand. Interbrands looked at our brand and told us it’s a $6.5 billion asset. You take that and you unite it with the fact that we purchased a services company called ACS, which now counts with the traditional Xerox services for about half the revenue. We’re no longer the copier company. How do you convey that Xerox is now … something else? That’s where a huge amount of our attention is being spent.
Greg Johnson (HP): You face some very similar challenges to what we face. If you go around to all … customer segments and go around to different countries, everybody thinks of us as a printing company.
We haven’t been a printing company as a dominant aspect of our business in years. Social media tends to extend people’s existing knowledge. Your job right now is actually to establish new knowledge. In doing so, you have very little choice but to begin with places where the narrative is one that you tell the world … [and] bring to light through examples. Then you can activate social media. [Social] is not terribly successful. There’s not really a good case study out there to date as a means of establishing a new story.
Brett Billick (Virgin America): When it comes to media or marketing strategy, and then media as a part of that, it has evolved. It depends on our resources internally, our budget, and where the fish are. When we talk about who the target customer is, that’s a big part for us. Sixty percent of our base is California. We definitely have very high tech, design and fashion. Those are the industries that a lot of our guests are involved in. But we’re the challenger brand and our issue is … brand awareness.
We use PR quite a bit. We then try to, with a very small budget, amplify the message with social media. We use digital much more than we use out-of-home. We hardly ever use print, and certainly focusing on our email channel as well and really building that core base.
David McSpadden (Franklin Templeton): When we think about our brand versus our direct marketing, it starts to get very blended. We end up doing a limited amount of television, very strategically focused.
We use print tactically. Part of the reason we’ve been moving away from print is we think for certain communications, it’s a good billboard reminder, but if we’re trying to engage an advisor, which is our client, to learn more about our product, print’s a flat medium, a two-dimensional medium, whereas something that’s online, if somebody’s interested, we can take them further.
Organizationally, we made sure that we had all of the facets of our marketing mix come back through our department. Three years ago, we made a big play and I pulled the website over into the marketing group, so that we had clearer control over that. It had been in our IT department. The challenge for us is, we manufacture mutual funds. There are a lot of different funds that manufacture that product. We’re a commodity. How do you differentiate your product?
A lot of that is finding out not just what we do, but what is the client’s challenge? Assuming we have the target audience correct, we think we do, what’s on their mind and how do we aggregate our product together in a way that we can thematically address that client challenge? Then we look at the media mix and the ecosystem that we have, and figure out within that campaign, within that idea, what’s the best way to express it.
Direct Marketing News: How are you allocating spending across the marketing mix?
Laura Morris (CafePress): We need to start considering the ROI channels, not just in dollars, but in the information that they bring us back about the customer and allow us to leverage another channel.
For instance, a channel like SEM or social where it’s very hard to tie back to conversions, we may be able to gather information that helps us better define the target audience, and then leverage that through channels like email by customizing an experience based on things like a search term someone converted on or time on a site.
Johnson: It is not only information, but almost high value actions from all the digital channels. So much of this is just figuring out how to get people actually participating in the conversation with you.
We look at click-through rates and downloads by persona and you can start to figure out where they go, what they look for … and you’re seeing what’s working. You’re nurturing their interest and looking at click-through rate and conversion rate … That’s why content marketing is becoming so critical.
Kara Trivunovic (StrongMail): Marketers have gotten spoiled by the fact that digital media is so trackable, that we think we should be able to attribute revenue back to every single action. If you look at print and TV, we were completely content with the idea of an impression. There is definitely some value to the impression that a digital media can provide. It isn’t necessarily directly tracked back to a dollar amount.
Tracey Eiler (Cloud9 Analytics): We’re a $5 million company. My budget’s about $110,000 a month. I’ve worked in bigger companies with bigger money, but I have to tell you, it’s liberating to have so little to spend because I have fewer choices and I have to be relentless about what I’m going to spend money on. I’m a big believer of Maslow’s hierarchy of needs, and I am way down at food and shelter. I think about it in two buckets: I think about it in demand, and I think about it in awareness. Period.
We are going after big companies, 5,000 sales reps and above. We’re going after really two people, or two groups of people in those firms: the analytic sales ops types that are trying to make data all make sense of what’s happening in the pipeline for their sales execs, and the sales execs themselves.
I can’t reach those sales execs. They don’t answer the phone. They’re on planes. They don’t want to talk to people like me. They don’t read content. They talk to each other. Our efforts are about raising awareness with them that a solution like this exists, that they don’t have to use their crummy spreadsheets anymore and that their buddy Joe over at that other big company’s using us, and linking them together.
This is all about lots of email nurturing, lots of content marketing, and the next up thing is really going to be community development. When we are able to pull together groups of sales executives, which we’ve been lucky enough to do in a forum like this, it’s magic. It’s very personalized. It’s not personalized in the way of a personalized email. It’s personalized in the way of John knows Harry who knows Sue, who when Sue makes the call then Harry shows up.
Smith: As far as what’s the media mix, there is no answer. We have 17, 18 clients that we work with primarily, and it’s literally different for each one.
Almost everybody starts with a primary medium. If there’s enough money, they tend to use television or video because it communicates the best. Now a lot of that is moving to video on the Web. Interactive of all forms [is] important, leading with Web display, because you get that rich media, interactivity and two-way communication.
Even though there are dozens of choices out there, it’s very difficult for most marketers to wrap their minds around more than three, four, five primary vehicles. Things like print and things like radio used to be the number two or number three options. There are three or four things that we think of before we get to print or before we get to radio. One is video. Another is Web display. Search you have to have. If you’re not in mobile, you better get there. Then there’s that social thing. All of the sudden you have bandwidth issues.
Johnson: The conversation starts with the content. What are you trying to express? Then you need to ask where do I want to story-tell? You don’t want to get stuck in filling media buys.
Direct Marketing News: What is your content strategy?
McSpadden: We tend to plan in two factors. One is what’s our overall brand strategy and plan, and that’s a much longer term, three-, four-, five-year commitment. The other is what are our more short-term campaigns and themes? That is done in close collaboration with our sales team and in conjunction with what we’re seeing in the marketplace.
Everybody knows the volatility of the market over the last several years. Being at the heart of that, we’ve been trying to anticipate both hearing what the clients are saying now, but also recognizing that all market cycles are short-term and anticipating what the needs would be in the future and helping our clients plan for that move in the market.
Palan: There’s a whole other opportunity around these newer channels that is opening up a lot of possibilities. Are you more likely to trust what an advertisement says or what a friend of yours says or somebody who’s even a virtual stranger who writes a very thoughtful review on the Internet?
For me, it’s definitely the latter, and our studies confirm the same. There’s an opportunity to generate a marketing campaign or a strategy around a set of influencers. Once you have this, a set of influencers or a social sales force if you will, then there’s a question around why things like Pinterest are becoming very popular. It’s because it allows this new paradigm … around discovery models, where people can discover things when they are bored or they don’t know what to look for, or to see what their friends are doing, because they want to keep up with the fashion and they want to be able to relate to people they look up to in their social groups.
Morris: Sometimes what you’re investing is, for lack of a better term, a certain “geekiness.” Geek is the new black. Marketers now know SQL. We’re not just meeting and reviewing creative layouts. If you can leverage the social networks that are out there for person-to-person contact, you get a lot out of that without that spend. Likewise, from your own database, finding more creative ways to segment your customers and build dynamic content on your direct site, as well as through your channels. A lot of that can be done without external spend.
Rector: We look at influencers across kind of a broad spectrum. We are developing a holistic approach. When we talk about print we probably focus less on a paid advertisement and more on the PR aspect, because the trust in a story written in a top-tier print publication … that’s an influencer.
Direct Marketing News: How are you using technology and digital channels like social, email, display and mobile to segment?
Billick: We’ve had a very high penetration of program members. They tell us who they’re traveling with. They tell us their preferences. We know where they live, of course. We know a lot of things about them in terms of behavior.
What we try to do is match what we know about them from a profile perspective, from a traditional CRM perspective, and then we also take the time to try to match what we know about them from an influential perspective. We’ve done some studies with Razorfish … looking at how people look and engage across channels, and how does that apply to their lifetime value, and ultimately try to come up with a new lifetime value which is traditional RFM metrics with social media influence. You can just do influence in terms of ‘I have a loud voice’ or you can do influence in terms of ‘I have a very trusted voice.’ It may not be loud, but it’s really trusted. We’ve done a lot of experiments around that to try to understand our database. We were the first airline to launch the ability to earn points through the Facebook Places and Foursquare check-ins. What we found is people who did that are tremendously high value and have a ton of influence. We get a lot out of that from them sharing to their network with the right incentive.
Direct Marketing News: Are you advertising on Facebook?
Billick: A little bit. It tends to be a fairly expensive channel, so we’ve been focusing a lot on search lately as more of a distribution channel. We certainly try to balance display.
Direct Marketing News: What about email and mobile?
Billick: Email is tremendously powerful. That’s one of the advantages of the frequent flyer programs. It’s low cost of entry, so you get a lot of names very quickly, and we have high distribution on our websites. We’re able to capture a lot of new members.
Trivunovic: There’s tools out there … to identify who are your best customers based on how they’re engaging, and what they’re doing with your business, and what their lifetime value is.
We’ve worked with a number of clients where we’ve been able to help them support programs where they can do a word of mouth program. We can identify then within the program to see who had the most reach, so then ultimately who drove the most conversion, whatever that conversion was. Was it to download a white paper? Was it to buy something or recommend a friend?
Direct Marketing News: How are you currently generating leads?
Smith: It’s really different for b-to-b and consumer. Consumer search is still there. [The] Google display network is super-efficient. Facebook can be super-efficient from a consumer standpoint and we will overlay on that a number of targeting technologies that we deploy in combination with a demand side platform, a DSP, to buy exchange inventory that makes sense.
LinkedIn is one of the most effective ways from a b-to-b standpoint to generate leads. I think the lead gen process in b-to-b is kind of broken. The old method of white papers and doing stuff like that really doesn’t work as well. There’s a big hole right now for somebody to come along in the technology space and use the same kind of tools that we’ve been using in consumer, and come up with new ideas in lead gen for b-to-b.
Ramos: When you talk about lead generation, it’s one thing to be in a $5 million company with seven sales people, and it’s another thing to be in a $22 billion company with thousands of salespeople.
We get a majority of our revenue from customers we know. We need to retain those customers and cross sell to those customers, particularly when you bought this whole new side of the business. Now there’s all kinds of services for them that they didn’t know you for doing before. It’s a huge challenge.
When you ask ‘what does the content look like?’ ‘what does the marketing mix look like?’ and ‘what are you doing in terms of demand generation?’ — a lot of that is focused on sales enablement. From the content perspective, some of the most powerful things we do are related to telling customer stories and thought leadership.
Albright: Something to consider is the share of wallet, and what is the amount of spending for new customer acquisition versus existing customer expansion? Then create your spend strategy along the right lines. If you can get your customers and your market to come to you because you have good content and then you can nurture them, that’s the most efficient way.
Eighty percent of our revenue is coming from people or customers that are new accounts. If you measure it well enough, then you’ll have the confidence to raise your marketing spending.
Most companies are spending 25%, 30% in marketing what they’re spending in sales. But if marketing is extremely efficient and you can hold marketing as accountable for creating interest and creating real revenue as you are sales, then you’ll have the confidence to raise that.
Your quotas can go up along with that because now sales is spending a much higher percentage of their time closing business, and marketing is doing a much better job developing and qualifying that.
Ramos: I’m envious of the model, but that is a really tough model for a company that’s 70-plus years old with thousands of salespeople. There are some very entrenched behaviors. Coming in and saying, ‘Hey, use this technology and system,’ isn’t going to work.
Salespeople get trained on what? Sales methodologies. I think the new one’s called “The Challenger Sale.” Where in any of that is the part that says, ‘Go into your blah, blah, blah system and look for the new leads?’ Until you get ‘pursue the sale’ lined up with ‘here’s the opportunities we’re bringing to you,’ I think that gap will continue to exist.
Johnson: It is all based on value exchange. How do you actually create that value exchange throughout all of those touchpoints to keep people either with you or with their communities and you, and use that? We haven’t really figured out how to codify that to a smart framework that’s going to align the organization. But that is the essence of what we need to do.
Direct Marketing News: How do you resolve owning and safeguarding the customer experience when the data is spread across the company, and are you trying to find ways to centralize that information? Is part of that getting a handle on the technology needed to do so?
Smith: Marketing departments need to change how they’re budgeting for people. We need technology people inside the marketing department. Marketing is going to spend more money on technology than IT in the next year. We have all these technologies that we’re throwing against it and there aren’t engineers sitting in many marketing departments. We need technology people that are also trained in marketing and understand our language.
Morris: You need data lovers that are marketers; people who are fascinated by the structure of a relational database and the way that you can use that. I can go into a database and just stare at it and devise new methods of triggered messaging.
I’m a little more in the trenches than a lot of you here and you need people like that in the trenches that maybe start out with a pure marketing focus, but have that love of information and a real passion for your customers that can translate into a passion for their data.
Eiler: I think there’s a soft-skilled aspect of this also that I’m seeing with analytic types that I work with in marketing that I’ve stolen from other teams, that great financial analyst or that great IT person who’s a lover of data, who thinks marketing’s really cool. They often are missing the skill of being able to answer the business question. I’ve been to so many meetings where they’ve explained all this data. Okay, so what are we supposed to do? I think we have to do coaching for these folks, because it’s a brand new career.
Morris: We have data spread out all over. You might be working with an agency to define your influencers. You might have email data in an ESP.
How do you make sure that you’re owning all of that throughout the phase of relationships? Data will become as valuable as your brand or your service.
One thing that will be crucial is making sure that whatever vendor you’re using, that you’re not losing any of that unstructured data. You’re finding a way to integrate it and tie it back to a customer or a product or its appropriate place.
A simple example is in email when you switch an ESP and you have all this campaign and response data. Sometimes in a haste to make a quick switch, you’re just bringing over something like a flat unsubscribe table. You want to make sure you’re not losing two months of response information.
Direct Marketing News: So how do you navigate and evaluate the scope of the tools out there? What helps you to choose the best possible technology solutions?
Billick: It’s hard to wade through what the best in class solution is. It goes back to objectives. If a partner is able to bring on different pieces, it really makes a big difference for us. We’re mid-stage as a company, so that’s the preference right now as we’re laying the groundwork. We’re building our portfolio of partners now.
Eleven is our brand agency of record, but we use them for a lot more than that. We integrate a lot of things across our channels with the campaigns and the work we’re doing with Eleven.
Trivunovic: It’s hard because there’s so many of them cropping up, and so many new technologies are coming to market as quickly as they’re disappearing. It’s hard for brands to know ‘who do I trust’ and that they’re going to be around to partner with for the next three years, or five years, or 12 months.
Johnson: What just connects the dots between these two conversations though is there’s all of these new technologies, all of these things that you want to try out, but you have to own the data that’s attached to any of it. At some point we have to own the data store, and have all of these new vendors come in and do the provisioning on top of that.
We share similar issues with the folks at Xerox. There are so many different teams against so many different segments in so many different regions that there’s a portfolio of technology. It’s truly insanity.
