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1 The State of Campaign Management in the United States and the United Kingdom To better understand marketing challenges, Accenture surveyed marketing professionals in the United States and United Kingdom in by J. Patrick O Halloran, Theodore Ansusinha, Shep Parke, and Mark Giometti Accenture In recent years, many companies have embraced CRM tools and techniques for their sales and customer service functions. Although it s early in the process, these companies are beginning to see some payoff from their efforts. Many are reducing their costs to serve customers. Others are improving their responsiveness to customers requests for help. Still others are enhancing the ability of their sales forces to manage their prospect pipeline, respond to sales opportunities more quickly and effectively, and are converting more of the right kinds of deals. A select few companies are doing all of these. Unfortunately, in their quest to improve sales and service, many companies have ignored a critical link in the customer-management chain: marketing. In fact, the exclusion of marketing from CRM efforts has, in many cases, severely limited companies ability to generate greater benefits from their CRM applications. As CRM has taken root in sales and service, it has become more obvious that new marketing processes and technologies must be adopted and integrated with existing CRM efforts if CRM is to fulfill its potential. To get a better understanding of the challenges that today s marketing executives face, the effectiveness of companies marketing efforts, and organizations experiences with emerging marketing automation tools, Accenture conducted a survey of marketing professionals in the United States and United Kingdom in (See sidebar for methodology and respondent demographics.) The goal of the survey was to gain greater insight into five key issues: Challenges in creating and executing effective campaigns Marketing campaign effectiveness Measuring campaign performance Campaign cycle time Ways to improve campaign effectiveness The findings of the survey were certainly illuminating. For instance, a large majority of marketing executives in the United States and United Kingdom reported having trouble capturing the attention of customers given the noise and clutter in the marketplace, and are struggling to develop a single view of the customer. Furthermore, measuring the return on their marketing investments, implementing marketing technologies in a timely manner, and increasing marketing and advertising ROI are among the challenges most frequently encountered by marketing executives in both countries. The survey also noted that a majority of marketing executives cited access to more accurate and fresher data, better integration between customer touch points, a better overall customer strategy, and more collaboration both within the function and with the sales and customer service departments as their most pressing needs. The following sections explore these and other survey findings in more detail. Marketing Campaign Creation and Execution Challenges Marketing executives face a number of significant challenges in their efforts to uncover, attract, and motivate prospects to buy their company s products or services. In speaking with our survey participants, we were able to get a better understanding of what those challenges are, how frequently they are encountered, and the severity of impact on respondents businesses. Frequency of Challenges The challenges that marketers most frequently encounter when creating and executing marketing campaigns run the gamut from problems with data access and technology tools, to connecting with prospective customers and identifying campaign ROI (Figure 1). A large majority of respondents (70 percent) said that capturing customer attention amidst the noise and clutter in the market today is a challenge they encounter regularly not surprising, given the barrage of marketing messages received daily by consumers. A large percentage of executives also noted that they re often challenged by an inability to measure the return on investment of campaigns, and by the time it takes to implement the technology tools and infrastructure that are required to do the job (68 percent each). Two-thirds cited frequent or occasional problems with trying to increase the return on advertising and marketing expenditures, while 65 percent identified being challenged to develop a single view of customers derived from all interactions with the company. While respondents generally agreed on the challenges they typically encounter, there are some differences between executives in the United States and in the United Kingdom. Just 58 percent of U.S. executives said they frequently encounter problems related to a lack of a Research Methodology and Respondent Demographics We interviewed by telephone 175 marketing and customer relationship managers in the United States and United Kingdom in the spring of The largestgroupof respondents (40 percent)comprises senior marketing executives, and about one-third of participants are specialists i.e., managers of aspecific marketing function such as direct marketing or marketing analysis. Finally, about one in four is responsible for managing customer relationships or another function. Respondent companies, selected in part for their size, tend to be large. More than half (58 percent) have 5,000 or more employees, while just 12 percent have fewer than 1,000 employees. In our sample, the mean number of employees is about 5,200. For the most part, the senior marketing executives we interviewed are from slightly smaller companies than are the marketing specialists and customer relationship managers. Participants represent a diverse mix of industries, which we broadly categorized in six groups: automotive (19 percent); consumer products (19 percent); financial services (17 percent); power and utilities (14 percent); services (13 percent); and high-tech and other companies (18 percent). Respondents also are split geographically, with 57 percent from the United States and 43 percent from the United Kingdom. 134 crmproject.com

2 Insight White Paper * Ranked by the percent of respondents who note the challenge to be "extremely problematic" or "very problematic" to their business Figure 2 Most Problematic Marketing Campaign Challenges* 70% 67% 75% 68% 65% 72% 68% 65% 72% 67% % 58% 75% 58% 59% 57% 58% 51% 68% 57% % 51% 65% 57% 6 49% 57% 54% 60% 56% 50% 64% 5 42% 68% 5 54% 51% 50% 48% 52% 50% 51% 49% 4 40% 48% * Ranked by percent of total respondents who experience the challenge frequently or occasionally Figure 1 Most Frequent Marketing Campaign Challenges* single view of the customer, but three-quarters of U.K. professionals cited this as a recurring problem. Similarly, 68 percent of U.K. executives said they often have problems transforming overwhelming amounts of data into actionable customer insight, compared with 42 percent of U.S. respondents. In one instance, the reverse is true: 63 percent of U.S. respondents compared with 49 percent of U.K. executives said they frequently have trouble getting campaigns from idea to execution in a timely manner. It appears there is more consensus among U.K. executives than their American counterparts in the types of challenges they regularly encounter. Impact of Challenges The frequency with which a challenge is encountered is only part of the story. The other part involves how problematic that challenge is for the business. To probe this issue, we asked participants to tell us how much of an impact each of the challenges identified earlier had on their organization. The results are illuminating (Figure 2). In general, the challenges that respondents most frequently encounter also cause the most trouble for respondents organizations with one glaring exception. While 70 percent of respondents cited regularly encountering difficulty cutting through marketplace clutter to capture customers attention, just 40 percent said that challenge has a major impact on their organizations. In essence, respondents feel that marketplace clutter is a frequent annoyance, but one that doesn t significantly impede their ability to do their jobs effectively. Other challenges, however, are having a big impact on marketers efforts, according to survey participants. Fifty-five percent cited not having a single view of the customer as one such challenge, while nearly the same percentage noted their inability to measure the ROI of their campaigns. Other challenges that hamstring marketing s efforts are the lack of management tools to monitor the entire marketing process; lack of customer profitability information to help target campaigns appropriately; difficulty increasing the ROI of advertising and other marketing expenditures; and the time it takes to implement necessary marketing technology tools and infrastructure. As was the case with the frequency of challenges encountered, there is some disagreement between U.S. and U.K. respondents on the level of impact of these challenges (particularly in regard to the lack of real-time access to data on which campaigns are based). However, the amount of discrepancy between the two groups on the issue of impact is much less pronounced. 55% 52% 59% 54% 51% 57% 48% 46% 50% 47% 45% 49% 46% 39% 56% 46% 48% 44% 44% 51% 35% 44% 47% 41% 4 41% 46% 42% 38% 45% 41% 35% 47% 40% 4 36% 39% 35% 44% 38% 39% 38% 37% 3 41% 36% 4 26% 28% 22% 38% Severity of Challenges To accurately determine which challenges have the greatest influence over respondents companies, we considered both a challenge s Defying the Limits 135

3 The State of Campaign Management in the United States and the United Kingdom * Ranked by a problem severity score calculated as follows: (% experiencing problem frequently or occasionally) x (% finding problem extremely or very problematic) x (0.1). Figure 3 Severity of Marketing Campaign Challenges* impact on the business and the frequency with which the challenge is experienced a measure we call the severity index. To arrive at a severity measure for each challenge, we multiplied each challenge s frequency percentage by its impact percentage, then divided that figure by 10 to create a number suitable for a scale of one to 1,000. The higher the number, the more severe the problem (Figure 3). Using this method of problem measurement, two challenges to creating and executing marketing campaigns stood out over all others as the most severe: measuring the return on investment (scored at 366) and achieving a single, company-wide view of the customer (360). Other key, though somewhat less severe, challenges include implementing the technology tools and infrastructure marketing needs on a timely basis (314); increasing the return on advertising and marketing spending (309); and capturing the attention of customers in a noisy, cluttered marketplace (280). The severity of challenges differs for U.S. and U.K. executives. While inability to measure campaign ROI is the most severe challenge for the U.S. group (with a factor of 330), the lack of a single view of the customer tops the list for U.K. respondents (with a score of 440). Similarly, taking too long to implement marketing IT tools and infrastructure received a severity factor of 400 from U.K. participants, but just 250 from the U.S. counterparts. And, while transforming overwhelming amounts of data into actionable customer insight scored a 307 in severity for U.K. executives, it rang up just a 160 among U.S. professionals. The top obstacles to effectively creating and executing marketing campaigns also vary greatly by industry group, as do the degree to which they challenge managers in those industries. The most severe challenge for financial services firms is the time it takes to implement technology tools and infrastructure for marketing (533). For the auto motive industry, it s the inability to integrate or coordinate campaigns with other customer touch points (383). Managers in the consumer products industry are most challenged by the need to develop a single view of their customers (455). Power/utilities companies also are most pressured by a lack of a single view of the customer, along with the inability to measure campaign ROI (417 each). For service industry executives, the most severe challenge is not having real-time access to data for designing, analyzing, and executing campaigns (392). And for firms in the high-tech/other industries group, their inability to measure the return on campaign investment (354) is the most severe challenge. Marketing Campaign Effectiveness Although marketers have a difficult job, many believe they re succeeding in spite of the challenges they face. Half of the respondents described their marketing campaigns as effective, 35 percent called their marketing campaigns very effective, and 6 percent said their campaigns are extremely effective. Just 8 percent rated their marketing programs as largely ineffective. From a geographical perspective, there are some albeit not dramatic differences among respondents self-ratings. Nearly all U.K. managers (97 percent) describe their marketing efforts as primarily successful, compared with 88 percent of U.S. respondents. The biggest differences can be seen in the percentages of respondents rating their efforts effective and not at all effective. Fifty-six percent of U.K. respondents said their campaigns are effective versus 46 percent of U.S. executives. And, while 4 percent of U.S. professionals said their campaigns are not at all effective, no respondent from the U.K. shared this view. These results may reflect differences in consumers and market environments between the two countries, or perhaps higher expectations for campaign performance among U.S. companies. It also may indicate that U.K. firms have more effective marketing campaigns than U.S. companies. Levels of campaign effectiveness also vary by industry group. Respondents in the consumer products group rated their campaigns the most favorably, with a strong majority (64 percent) describing their marketing efforts as extremely or very effective. Representatives of the high-tech/others group are the most critical of their programs none rated his or her company s campaign as extremely effective, and just 26 percent called their marketing programs very effective. These respondents are also twice as likely as other managers to rate their campaigns as downright ineffective (19 percent versus 8 percent average). Three other industry groups financial services, automotive, and power/utilities share similar views of their marketing campaigns, with about half of the respondents in each group describ- 136 crmproject.com

4 Insight White Paper ing their campaigns as simply effective. Managers in the services group stand out somewhat, with nearly two-thirds (65 percent) calling their campaigns effective and none rating them as ineffective. Converting respondents ratings to interval values on a scale of 0 to 4.0 (where extremely effective is four and not at all effective is zero) generates even more illustrative statistics on campaign effectiveness. With this approach, the consumer products group has the highest self-rating of marketing campaign effectiveness at On average, companies in the high-tech/others group rated their campaign performance the lowest at The remaining industry groups range from 2.32 in the automotive sector to 2.43 in the services group. Measuring Campaign Performance Just how do these executives know whether their campaigns are effective? Most respondents measure their campaigns in some way, although the techniques and metrics used vary. Four measures stand out as being the most commonly used: response rate (cited by 79 percent of all respondents), revenue generation (78 percent), customer retention (69 percent), and profit generation (66 percent). Indicators used less frequently to measure marketing performance are level of sales activity (15 percent), brand awareness (5 percent), and cost of customer acquisitions (2 percent). Five percent of respondents all from the U.S. indicated that they can t measure the performance of their marketing campaigns. These organizations are mostly small companies and generally rated their marketing campaigns as ineffective. More than two-fifths (41 percent) of our survey respondents use all four of the key performance measurements. This practice is more prevalent in the United Kingdom, where 45 percent of respondents reported using all four measures, compared with 38 percent of U.S. firms. The top measure of marketing performance used in the United States is revenue generation (cited by 75 percent versus 81 percent by U.K. respondents), while the most commonly used measure of campaign effectiveness among U.K. firms is response rate, used by virtually all U.K. managers (91 percent, versus 70 percent of U.S. respondents). In general, there s greater consensus on the use of measures among U.K. participants than those from the United States, and U.K. respondents use more measures than their U.S. counterparts. U.K. firms are more likely than U.S. companies to use a variety of other, less scientific measures in addition to standard financial and customer response figures. As one executive remarked, We have an emotional attachment to what we do. Therefore we have certain [other] measures that we need to track. Although the four most prominent performance measures in our survey are the same across all six industry groupings, preferences for their use vary by sector. Revenue generation is the most frequently used measure of campaign performance in the services (87 percent) and financial services (83 percent) groups, while the automotive and consumer products industries favor the use of response rates (85 percent each). And, reflecting the pricing wars that have followed deregulation in most areas, power and utilities companies rely on customer retention rates to determine campaign effectiveness (88 percent). There is no clear front-runner for performance measurement in the hightech/other group, whose companies rely with about equal frequency on revenue generation (74 percent) and response rate (71 percent) to assess marketing effectiveness. This group is also the least likely to use profit generation as a measure of campaign performance. Not surprisingly, the larger the company, the more performance measures it uses particularly financial metrics that help them understand how their significant investments in marketing are paying off. For instance, 83 percent of companies with more than 7,500 employees use revenue generation as a campaign performance measure, compared with 72 percent of companies with fewer than 3,500 people. Similarly, 69 percent of the largest companies evaluate their campaigns with a profit-generation yardstick, versus 57 percent of the smallest companies. Firms using three of the four key performance measures favor financial measures. Essentially all of these companies (98 percent) use revenue generation to measure campaign effectiveness, and three-quarters (74 percent) also use profit generation. On the other hand, companies using one or two of the four main performance measures are focused on nonfinancial measures, relying on response rate (76 percent) and customer retention (49 percent) more than revenue (37 percent) or profit (15 percent) generation. Time to Complete Campaigns Nearly 60 percent of managers reported that they frequently struggle with shortening the time it takes to create and launch a marketing campaign. Furthermore, 43 percent said the fact that it takes them too long to get a campaign from idea to execution is negatively affecting their organization s ability to do its job. How long is too long? We asked participants to tell us how long it takes them to create and execute a typical marketing campaign, here s what we found. The average participating company takes two and one-half months to conceive of and launch a marketing campaign. However, while firms in both the United States and United Kingdom have similar average times, there is more variance in marketing campaign cycle time among U.S. companies (Figure 4). Indeed, 23 percent of U.S. organizations (versus 11 percent of U.K. companies) said they create and launch marketing campaigns in less than one month. On the other hand, 25 percent of U.S. respondents (compared with 9 percent of those from the United Kingdom) reported that it takes them more than four months to develop and execute a given campaign. A plurality (43 percent) of U.K. respondents said their campaign cycle time is between two and four months. From an industry perspective, marketing campaign cycle times vary. Continually under the gun to reach today s mobile and finicky consumers with innovative items, the consumer products industry is the most adept at quickly moving a campaign from the drawing board to the streets: Just 9 percent of consumer goods respondents said their campaign cycle time is more than four months, while 21 percent noted it s less than one month. Financial services also moves quickly. The power and utilities industry, with a less active product-innovation engine and customers with Defying the Limits 137

5 The State of Campaign Management in the United States and the United Kingdom Time Total U.S. U.K. Less than 2 weeks 2 weeks to 1 month 1 to 2 months 2 to 4 months More than 4 months Figure 4 15% 31% 3 18% 20% 27% 25% 25% 8% 37% 4 9% Duration of Time to Conceive of and Launch a Campaign Length Highly Effective Effective Ineffective Less than 1 month 1 to 2 months 2 to 4 months More than 4 months Figure 5 52% 51% 40% 19% 32% 46% 56% 66% 16% 4% 4% 16% Campaign Effectiveness by Length of Time to Completion Improvements Total U.S. U.K. More accurate, fresh data Integration among customer touch points Better overall customer strategy Tools to foster collaboration Tools to control the process Segmentation & modeling tools Figure 6 68% 60% 79% 67% 61% 75% 65% 57% 75% 59% 52% 68% 58% 5 64% 56% 51% 6 Improvements Needed for Campaign Effectiveness fewer choices of providers, as well as the generally large and bureaucratic automotive companies tend to be the slowest in getting campaigns off the ground. Importantly, we ve found that the time it takes to complete a marketing campaign is inversely related to its effectiveness (Figure 5). More than half (51 percent) of our respondents who have a short campaign development and execution process (i.e., taking less than two months from idea creation through execution) rate them as extremely or very effective, compared to just one-third of the managers whose campaigns are long (taking two months or more to complete). Yet, while there is obviously a point at which too long a marketing cycle time is ineffective, there is also a point at which too short a cycle is ineffective: Companies with very long (more than four months) or very short campaign cycle times (less than one month) are four times more likely to report having ineffective marketing campaigns than others (16 percent versus 4 percent). One of the principal reasons that a long campaign cycle time impairs campaign effectiveness is the perishable nature of data. The longer it takes to get from idea conception to campaign execution, the less likely it is that the data on which the idea was based is still accurate and fresh. Ways to Improve Campaign Effectiveness Despite the largely satisfactory grades that respondents give their marketing campaigns, most also recognize the need for improvement (Figure 6). Executives noted that they could improve the effectiveness of their campaigns by having access to better data, addressing a number of internal corporate issues, and adopting better tools. For example, a strong majority of our survey respondents (68 percent) said fresher, more accurate data could help their campaigns not surprising given the large percentage of respondents who reported having a significant percentage of suspect data. The desire for better data seems to be stronger in the United Kingdom than the United States. A majority of respondents also believe that several internal changes would bolster campaign performance. Sixty-seven percent cited the need for better integration of the various customer touch points, which would help them create a more complete view of each customer and maintain consistency among their marketing messages. Sixty-five percent believe their marketing campaigns would be more effective if they were centered on a better overall customer strategy. And 59 percent said their campaigns would perform better if they had a faster process for developing and executing them. While managers are aware they must overhaul their marketing processes to foster lasting customer relationships, they also recognize the important role technology plays in this transformation. Among the professionals we surveyed, more than half cited their need for specific tools to foster collaboration between departments (59 percent), to control the campaign process from creation through execution (58 percent), and to segment and model their markets (56 percent). Conclusion In today s world, customers are becoming less loyal to brands. They use new sources of information to build impressions and make decisions in buying a product or service. Yet, as is clearly indicated by the survey results, marketing executives are not equipped with the tools they need to keep up with the changing customer expectations, achieve greater share of wallet, and maximize the lifetime value of customers. To achieve the level of efficiency and effectiveness in marketing that customers and the marketplace demand, companies must address their shortcomings in marketing campaign management and ability to collaborate with other customer-facing functions. It s time for companies to embrace the new organization structures, processes, and technologies that are needed to help marketing executives improve the way they do business and, in the process, take yet another step toward fulfilling the promise of CRM. J. Patrick O Halloran is the global managing partner for Customer Insight with Accenture s Customer Relationship Management practice. Theodore Ansusinha is a partner in Accenture s CRM practice and specializes in helping companies to use customer insight to positively shape real-time customer interactions. Shep Parke is an associate partner in Accenture s CRM practice. Mark Giometti is a partner in the Accenture Financial Services practice. 138 crmproject.com Excerpts from The Ultimate CRM Handbook: Strategies and Concepts for Building Enduring Customer Loyalty and Profitability by John Freeland by Accenture. Reproduced with permission of The McGraw-Hill Companies, Inc.

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