In a world overrun with marketing messages, the next wave of marketing technology will cut through the clutter, building automated marketing campaigns that address customers’ wants and needs individually. The result: greater customer intimacy, improved loyalty, and higher revenues. Moving quickly will gain real competitive advantage for organizations that start planning for the future, according to a new report by Booz & Company.
Next-generation marketing IT is the new wave of technology-driven marketing. Consider a situation where, during a business trip, with a dead battery, a phone charger left at home and a big client calling in two hours, you visit your mobile operator’s nearest retail outlet to buy a new charger. Expecting to finish this quickly, you emerge 20 minutes later with a complete travel kit, including a spare charger, a battery, and a three-month trial subscription to the mobile company’s basic e-mail and Internet service package.
“During the interaction, the sales agent enters your phone number into the sales terminal, activating the customer relationship software to help the clerk recognize your individual needs and predispositions. The system then leads the agent to make you offers based on the statistical likelihood that you will be interested in that product or service,” explained Gabriel Chahine, a partner at Booz & Company.
This would not have been possible without the help of next generation marketing technology, which should be developed with three primary goals: The first is to instantly collect data from a variety of channels and then distribute relevant information back to those channels. The second is the capacity to compile and generate a coherent view of every customer taking into account his/her histories and preferences. The third is the creation of business rules that will govern every customer interaction. “To achieve a next-generation marketing strategy, CIOs must work closely with marketers to lay out the overall strategy, and then translate it into processes and rules that will occur at every point of contact,” stated Ramez Shehadi, a partner at Booz & Company.
In marketing, knowledge is power
Next generation marketing campaigns can go beyond traditional marketing’s rough efforts at customer segmentation by using IT to gather more refined perspectives on customers and their behavior. Messages and offers can be generated through dynamic, rules-based software engines, and tailored to a “segment of one”— making the right offer to the right consumer at the right time.
“Next-generation campaign systems will give marketers the ability to integrate data into their calculations from all touch points. Marketers can then design flexible, real-time “inbound” campaigns that listen actively and respond to customer behavior and preferences,” stated Chahine. This type of system maintains an ongoing conversation with customers, reacting to every customer action and learning more through each contact.
Designing a next generation architecture
Next-generation direct marketing demands a front-to-back rethink of the overall IT architecture, with the ultimate goal of better understanding the customer. Within the new architecture, all channels, including customer relationship management (CRM) and enterprise resource planning (ERP) systems must connect to a central integrated engine, which mediates between channels and the customer data and back-end processing. The central campaign engine should also contain the business rules that govern every interaction with every customer.
“Key to the success of the architecture is the creation of a flexible model of the metadata that controls customer information,” Shehadi said. This enables marketers to tap into any number of customer data warehouses, without the time and effort required to integrate all that information into a single database. It also allows every channel to tap into the same collection of customer information. A critical innovation lies in removing the typical siloed, channel-specific architecture on which most current direct marketing and campaigning technology depends.
The new architecture provides unprecedented flexibility as campaigns can be designed and executed without needing to be tied to individual channels. The business rules required by each channel are integrated by the system, allowing marketers to design cross-channel campaigns that can easily shift direction between channels.
The system is also designed to support all critical processes and workflows required by each campaign; from planning and the building of the rules engines to campaign execution and the orchestration of multiple campaigns. “Business users benefit further through increased usability with “dashboards” to aid in interacting with customers, managing campaign workflows, monitoring a campaign’s progress, and assessing its performance,” noted Chahine.
The path to the next generation
Next-generation campaign success depends on the design of the new system and how it is incorporated into an organization. Each step requires the willingness to rethink the overall marketing strategy, from the tactical processes involved in each campaign, and the IT tools required. The skills required to design and execute analytic campaigns must be developed and, the technologies required to enable those campaigns must be built. Most important, from beginning to end, the CIO and the CMO must work together as partners to design, build, and test the necessary infrastructure, and to expand it, step by step, throughout the organization.
“Sequence is critical. Capabilities should be built in multiple stages, with each subsequent stage dependent on the success of the preceding stage. Each stage involves a refinement of three general campaigning requirements: planning, analytics and execution,” Shehadi explained. It’s also critical to remember that next-generation campaign systems demand significant changes to marketing practices and processes. CIOs and CMOs must think carefully about their company’s real needs as they plan and design the system, and then evaluate the technology and software products on offer to see how closely they meet those needs.
“Careful evaluation should be taken into account when considering the degree to which an organization wants the system to support the marketing department’s workflow, and to what extent those processes need to be automated,” Chahine said. “The more complex the requirements, naturally, the more support and automation required.”
The decisions made about trade-offs between wants and needs will also affect how organizations choose their vendors. Whichever path organizations decide to follow, the time to think systematically about marketing technology is now. The fast mover in the race to next-generation marketing will gain a huge competitive advantage.
