Marketing Operations: Personalization in Sight

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1 Accenture Interactive Point of View Series Marketing Operations: Personalization in Sight Why operational effectiveness is essential for customer relevance at scale

2 Make every customer feel like one in a million Digital technologies empower companies to personalize marketing and customer communications in new and engaging ways. But enabling one-to-one connections with countless customers requires delivering customer relevance at scale. This starts with increasing the operational effectiveness of the marketing organization. Marketers have been evolving toward one-to-one marketing communications for over two decades. Now with the capabilities of digital and mobile channels, companies can move beyond direct mail and to deliver the next level of personalization which consumers have come to expect. They want personalized communications from companies that understand who they are, remember what they like and deliver what they need. Most companies have a vision for personalization, and many are on the path to executing it. Yet marketing organizations are struggling to operationalize the vision at speed and scale. Many are exhausted by the effort and have realized that working harder and applying more resources to the challenge is simply not sustainable. How can marketers deliver personalization to every customer, every time? Marketing organizations that are delivering personalization in a streamlined and agile way have recognized the need to change marketing operations for the digital reality. They have developed new ways of working that are powered by new operational disciplines and new technologies. In addition to becoming more productive, the leaders have lowered costs, reduced regulatory compliance risks and improved marketing spend effectiveness. All this while communicating with personalized messages to millions.

3 Taking a hard look in the mirror Recent Accenture research reveals a surprising self-assessment about marketing operations today. Nearly three-quarters of marketing leaders (73 percent) believe that marketing operations is extremely important or very important to achieving their marketing strategy. However, just less than half (49 percent) of executives rate their company s overall marketing operations as industry leading or above average. 1 Considering this widespread acknowledgment of its critical role, why the lukewarm satisfaction for marketing operations? The simple answer is because marketing executives are realists with keen insight into the challenges of their environments. Yet many are in a difficult position. Despite continued tight budgets, chief marketing officers (CMOs) are expected to improve both marketing spend effectiveness and operational performance. Marketing strategy execution is more complex than ever before. Digital transformation creates pressure for fresh, real-time content. Consumers expect consistent, omni-channel experiences on their terms. 1 Accenture, CMOs: Time for Digital Transformation or Risk Being Left on the Sidelines, June

4 Reflecting on success It is one thing for marketers to understand the influence of change; it is another to take action and to help achieve results. Consider how three leading companies across different industries transformed marketing operations to increase their effectiveness. From separated to streamlined A global pharmaceutical company needed to reduce marketing spend and regulatory risk. Yet multiple content production processes and agencies across countries and tremendous volume hampered progress. By increasing marketing operational effectiveness, the company reduced content production cycle times by 25 percent, enabled more than 20 percent reuse of existing marketing assets and reduced regulatory compliance risks. From bottlenecks to breakthroughs After a global telecommunications provider introduced new marketing processes, it reduced campaign cycle times by 20 to 35 percent. The company also transformed an inability to link marketing spend to promotions into new visibility into marketing investments, which supported better decision making and improved return on investment. From errors to efficiencies A U.S. insurance company wanted to increase the quality of customer communications as content production costs and regulatory fines were increasing. The company made changes to increase marketing productivity and reduce marketing costs. Where key communications were once consistently delivered late and in error, the changes drove a 15 to 25 percent decrease in communications cycle times and significantly reduced the cost of quality. Done well, improving operational effectiveness can result in business benefits beyond cost reduction, such as: Improved agility for shorter cycle times and faster times to market. Better brand consistency. Less wasted effort. Increased visibility into budget and spend. Reduced regulatory compliance risks. By reallocating these savings into growth drivers such as increased media placements or marketing program spend, organizations can help support the top-line revenue growth agenda. (See Figure 1.) As Angela Tribelli, CMO, HarperCollins Publishers, has said, First we put the operational side of the house in order Getting the operational basics right means everyone has more breathing space to focus on the bigger picture. 2 Figure 1: Reducing marketing operations costs can fuel growth drivers Typical spend allocation Cost breakdown of $1 million marketing spend: 30% media placement ($300,000) 30% creative concepting ($300,000) 40% production ($400,000) Transformed spend allocation Cost breakdown of $1 million marketing spend: 40% media placement ($400,000) 30% creative concepting ($300,000) 30% production ($300,000) 2 Keith Loria, The CMO Interview: Angela Tribelli, CMO, HarperCollins Publishers, March 10, 2014, accessed May 20,

5 Through the smoke and mirrors The barriers to change real and perceived are entrenched in the marketing organization. Fully three-quarters (78 percent) of the respondents to Accenture s CMO research believe that marketing will undergo fundamental changes over the next five years. 3 Because of several barriers, many marketing organizations have been slow to refine their marketing operations even though they acknowledge the need to do so. (See Figure 2.) These barriers have their roots in marketing s traditional position in the business. Consider that most organizational areas, such as finance, human resources and supply chain management have already refined their operations through multiple generations of enterprise resource planning (ERP) projects. However, these projects passed marketing by for a number of reasons. In some cases, this occurred because marketing was thought of as too unique even too creative for such process and technology-driven structures. Even so, technology challenges are not the only barriers to improving operational effectiveness. The marketing function attracts big ideas people who typically focus on design over process discipline. They often act as right-brain creatives before they think like left-brain project managers. As a result, marketing teams tend to be less oriented toward thinking about efficiency and effectiveness. However, with digital transformation increasing the workload on organizations, there is a critical need to increase the operational effectiveness of marketing. Throwing more money at the problem, either with more employees or more agency partners, is not a sustainable solution. Until marketing organizations refine their operating models, they will continue to struggle to keep up with the volume of work required to scale their personalization strategies. Figure 2: Which of the following have been the most significant barriers that prevent your organization from furthering performance in marketing operations? Lack of technology and tools 21% Inefficient business processes 20% Lack of funding 18% Lack of integration with other business functions 17% Lack of skills 16% Insufficient senior leadership 9% (Source: CMOs: Time for Digital Transformation or Risk Being Left on the Sidelines) 3 Accenture, CMOs: Time for Digital Transformation or Risk Being Left on the Sidelines, June

6 The art of the possible in marketing operations The operational side of marketing has never been more connected to delivering the marketing strategy and to driving customer relevance. Delivering customer relevance at scale requires three elements: delighting customers, re-orienting the business and flexing the platform. Next-generation marketing operations require both a reorientation of the business with an updated operating model and a flexing of the platform with new technologies. Think robust, scalable and fast. To get there, marketing organizations must make changes across these recommended four areas of the marketing operating model: Processes Most marketing organizations have evolved into their current operating model with little attention paid to the design and effectiveness of current processes. However, without a standardized and industrialized set of marketing execution processes, most organizations are doomed to slower cycle times, higher labor costs and increased costs of quality. Technology Just as ERP systems have increased the productivity of organizations financial, human resource and supply chain management, technology can also help increase the operational effectiveness of marketing. Capabilities provided by MRM (marketing resource management) software enable improved workflow management, increased marketing spend management and visibility into the operational metrics and performance of the marketing organization. Organization/People Misalignment of organizational roles and responsibilities is also a barrier to meeting the challenges of personalization at scale. This causes missed opportunities for reducing duplicative work efforts, capturing economies of scale and utilizing leading practices across local, regional and global marketing activities. Governance To help achieve maximum operational effectiveness, an empowered governance structure needs to provide the leadership and direction over marketing operations. This structure will provide the necessary stewardship and decision-making capabilities to achieve continued optimization of the organization s operating model, to direct the future technology investments and to confirm compliance with the legal and regulatory policies governing marketing and customer communications. With a high-performing operating model and the new digital marketing capabilities working together, organizations can achieve the personalization goals at scale that have eluded many for years. It s a big responsibility an art, a science and a balancing act between too generic and too personal but personalization powered by streamlined marketing operations is the future of marketing.

7 Three steps to a next-generation marketing operations model There are exciting opportunities for marketing organizations that rethink how they work to become more efficient. Success begins with three key actions. 1. Assess where your organization is today. Marketers should take an objective view of the current state of their marketing organization. Conducting this assessment includes asking questions to understand the key issues and desired outcomes. 2. Create a capability blueprint and operating model. With a view of the current state, marketers can then create a realistic blueprint for their future vision. The operating model transforms the blueprint into the necessary processes, organizational elements, technologies and governance. 3. Develop a road map. Marketing organizations can change the operating model through a well-disciplined road map, which typically involves an 18- to 30-month timeline of quick wins, long-term initiatives and continuous change management. It includes a business case, which is critical for program approval and accountability.

8 To learn more about marketing operational effectiveness, please contact: Rob Davis About Accenture Interactive Accenture Interactive helps the world s leading brands delight their customers and drive superior marketing performance across the full multichannel customer experience. As part of Accenture Digital, Accenture Interactive works with over 23,000 Accenture professionals dedicated to serving marketing and digital clients to offer integrated, industrialized and industry-driven digital transformation and marketing services. or visit accenture.com/interactive. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 293,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, Its home page is Copyright 2014 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks. Information regarding third-party products, services and organizations was obtained from publicly available sources, and Accenture cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this article should not be viewed as professional advice with respect to your business.