Marketing Automation:

Transcription

1 Marketing Automation: An Essential Tool to Engineer a Better Marketing Model for the Manufacturing Industry A Frost & Sullivan White Paper

2 frost.com The Need to Build a Better Mouse Trap... 3 Retooling for a Brave New World of Business Opportunity... 3 Marketing Velocity... 3 Business Model Innovation... 3 Shift in Buying Behavior... 4 Revenue Margin Optimization... 4 Operational Effieciency... 4 Marketing Automation: The Necessary Lever to Raise Revenue Growth... 4 Nurturing the Ecosystem... 5 Dynamic Customer Engagement... 5 Availability of Intelligent Data... 5 Marketing Automation Spotlight: Oracle... 6 The Bottom Line... 7 contents

3 Marketing Automation: An Essential Tool to Engineer a Better Marketing Model for the Manufacturing Industry THE NEED TO BUILD A BETTER MOUSE TRAP The manufacturing industry is vast and has a multitude of sectors within it, each of which has an extensive supply chain and unique challenges when it comes to marketing and sales. With the advent of hyper-connectivity and the Internet of Things, the availability of abundant information online has radically transformed the buying behavior of the entire manufacturing value chain, down to the individual end user. Traditionally, manufacturing has had a highly product-centric view of its business. The industry as a whole has traditionally approached its marketing and sales with a laser focus on the virtue of the product. This approach has a serious pitfall, as it has been highly dependent on the customers understanding of the specifications and properties of the product. Packaging used to be a key differentiating factor. However, that is no longer the case as tech-savvy customers, armed with a variety of connected devices, have started using the wealth of information available over the Internet to determine what product best meets their needs. This has forced marketers in the manufacturing industry to give more importance to customer engagement than ever before. They need to promote the value their product brings to the customer instead of just evangelizing the product features. Where Frost & Sullivan s paper, Marketing Automation: The Secret Sauce to Marketing-Driven Sales Growth and Empowerment, discussed in detail the value proposition of Marketing Automation solutions, this white paper will discuss the primary challenges faced by the marketing and sales organizations within the manufacturing sector. We will also highlight the unique ways in which the value proposition of marketing automation can help participants in the manufacturing market overcome these challenges and strive toward establishing meaningful and renewable relationships with their customers. RETOOLING FOR A BRAVE NEW WORLD OF BUSINESS OPPORTUNITY To better understand the factors that are forcing this seismic shift within marketing organizations of the manufacturing industry, we will first provide more context to the challenges faced. Marketing Velocity: In general, the product development lifecycle within the manufacturing industry is far more accelerated than it used to be a decade ago. Marketing departments within the industry, therefore, are constantly trying to keep up with the pace at which new products are released and new features are added to existing products. For marketers within the industry today, shrinking customer acquisition and retention windows have made it increasingly challenging to create, keep track of and present marketing collateral across various channels, and effectively engage with customers and partners in a timely way. Business Model Innovation: According to the latest available E-Stats data from the US Census Bureau, e-commerce shipments approached half, or 49.3%, of all manufacturing shipments in This is up from a revised 47.9% in Further, according to the Bureau s research, US manufacturers reported e-commerce shipments amounted to $2.7 trillion in 2011, up 15.3% from a revised $2.4 trillion in Total shipments were $5.5 trillion in 2011, up 12.1% from a revised $4.9 trillion in Manufacturers today have to think beyond selling products as they have been traditionally. The rise in the digital economy has put a lot of pressure on manufacturing companies to devise new business models for effective customer lifecycle management. They are being judged on the efficacy of the business model to produce the 3

4 frost.com desired marketing and sales outcomes. These outcomes need to be geared toward nurturing customers new and old to achieve a constant source of recurring revenue through existing customers, while adding new customers all at the same time. Shift in Buying Behavior: The Internet of Things and information availability has allowed customers to yield immense power. Manufacturers have to come to terms with the fact that now it is the customer that defines the value of the product in the marketplace. Marketers in the manufacturing industry have to constantly compete with a mind-numbing amount of freely available information across the Internet that is attracting an increasing amount of attention across devices and which the marketer has limited control over. This shift has affected the mass consumer market as much as the corporate buyer. It has been daunting for manufacturers to cede so much branding control away to the customer. Reducing the Susceptibility to Unpredictable Market Forces: The manufacturing sector is highly vulnerable to any kind of external changes, such as natural catastrophes or a shift in the political or economic condition of a country. These variations can have an enormous impact on the operations of the company. The volatility in supply chain can have a colossal impact on the revenue margins of the manufacturer. In order to minimize the impact of these external events on the functioning of a company, the manufacturer has to establish relationships with the buyers and collaborate with them to sense the demand in that particular region. There is a dire need for customer intimacy to establish relationships that go beyond social and economic factors of the region. Over the long term, it is that customer intimacy which will determine the real impact on revenues for the manufacturer. Frost & Sullivan s research in big data analytics and marketing automation has clearly shown the rapidly growing need to be predictable in today s business environment. The ability to monitor, measure and benchmark demand triggers enables organizations to be much more predictive. The ability to be more predictive helps mitigate the risk of susceptibility to unpredictable market forces and supply chain disruptions. This, in turn, also leads to higher profitability and helps marketing secure a prominent seat at the Sales and Operations Planning (S&OP) table. The marketing and sales teams have traditionally been product-centric in their conversations with the customers. However, as customers are so much more engaged and informed, their interaction across multiple channels has a huge impact on the operational efficiencies of marketing and sales. For example, as a new product is launched, the marketer should be able to benchmark the sentiments of the new product against the old one, while gauging the interest levels and identifying key trigger points. If the product is well-received, the marketer should be able to modify the supply chain to speed up the production process, while the customers interest level is at its peak. Operational efficiency is highly critical to stay competitive in today s compressed product lifecycles. MARKETING AUTOMATION: THE NECESSARY LEVER TO RAISE REVENUE GROWTH This paper has discussed the strategic imperative for marketers within the manufacturing industry to transform themselves into becoming highly customer-focused, dynamic and nimble, while shedding the old perception of being overly product-centric and static. As mentioned earlier, Frost & Sullivan s paper, Marketing Automation: The Secret Sauce to Marketing-Driven Sales Growth and Empowerment, discussed in detail the value proposition of Marketing Automation solutions, and this section will dive into specific pieces of the value proposition from which the manufacturing industry stands to gain the most. 4

5 Marketing Automation: An Essential Tool to Engineer a Better Marketing Model for the Manufacturing Industry Nurturing the Ecosystem: Manufacturing companies, especially the ones that manufacture durable goods, have to manage relationships with their channel partners to propel the supply in the right direction and at the right pace. Their biggest challenge is coordinating and managing the relationship with suppliers so that the manufacturers may effectively nurture that relationship and not only generate realistic demand with the concerned suppliers, but also have that fulfilled in a timely way. The same is true for the supply chain. It needs to work in tandem with the manufacturer and provide materials as and when required. A break in this chain can be catastrophic for the entire ecosystem, which makes the manufacturer-supplier relationship that much more important. Marketing automation software (MAS) is an excellent tool for nurturing as it allows you to keep track of the conversations with the suppliers, segment different types of channel partners based on their priority or importance, maintain individual profiles, measure and benchmark the progress of the conversions, and generate highly relevant content for inbound as well as outbound marketing across the sales channel downstream. Dynamic Customer Engagement: A marketing automation solution fully leverages the power of the Internet, allowing manufacturing companies to engage with the customer base in a highly interactive way. MAS can be easily configured to collect and store information about how customers interact with the manufacturer s website, how they use the product, and their opinion on it. MAS gives the manufacturer the ability to pull all the data together to create distinct customer profiles. The tool gives marketers critical behavioral information and, in so doing, facilitates highly meaningful conversations with the customer. MAS not only helps with customer segmentation, but also allows marketers to generate dynamic responses when they are having a dialogue with customers. This leads to marketers being better equipped to drive lead conversions. It empowers them to be more proactive than reactive. Availability of Intelligent Data: Manufacturing companies have ample data from the back office. This data is usually about the product, warranties, technical specifications and invoices, among other things. From a marketing and sales perspective, the biggest challenge is that this data is highly transaction-specific. Marketing needs information that can be swiftly capitalized on to lead to more business opportunities, while also keeping customers engaged and interested. Marketing has a very short window of time, usually the first 90 days after an initial transaction, to maximize the effectiveness of a conversation. After this window has passed, the ability to cross-sell or up-sell to a customer diminishes significantly. In order to increase the probability of generating more revenues within those 90 days, it is very important to have a personalized and targeted conversation with the customer leading up to the relevant offer. To carry out such personalized and highly relevant conversations with customers that would ultimately result in informationrich leads that can be passed to the sales team to pursue, the marketing team needs highly meaningful customer data in almost real time. Manufacturers can speed up this process by carrying out product registrations in the marketing automation tool prior and in addition to doing so at the back office. The tool captures all the data so that marketers can collaborate with the sales team and access profile-specific information as and when needed. Additionally, any customer profile information already created within the system, including triggers that the customer interacted with during a marketing campaign, add further intelligence to that conversation. 5

6 frost.com MARKETING AUTOMATION SPOTLIGHT: ORACLE Having seen how marketing automation solutions bring very tangible benefits to marketers, let s take a quick look at how a leading vendor in the market is helping manufacturers succeed at their marketing initiatives. Oracle offers a number of tools in its marketing cloud that have empowered marketing and sales teams across industries. These tools help companies transform the way they have approached their digital marketing initiatives to deliver highly targeted and personalized customer experiences. Oracle Marketing Cloud for Manufacturing: Oracle Marketing Cloud for Manufacturing offers a comprehensive suite of tools for targeting, engagement, conversion and analytics. It gives marketers a complete view of customer profiles in order to design and deliver personalized content based on their digital body language. Oracle Marketing Cloud for Manufacturing augments social media interactions of customers, thus enhancing their digital profiles in the tool. Analytics gives customers the ability to measure the return on investment on marketing activities, helping marketers optimize their campaigns continually. Some of the features highly relevant to the manufacturing industry include Oracle Eloqua Profiler, Sales Alignment, Oracle Eloqua Engage, Marketing ROI, Benchmarking and Oracle Eloqua Insight. Real-Time Decision Engine: Real-time decision engine provides tools to combine business rules and self-learning predictive models through a decision management framework. The engine will present personalized content based on the customer s purchasing behavior in real time. Based on the responses, the engine has the ability to move people through the nurture cycle. It also gives marketers the ability to put customers through the appropriate nurture stream based on the outcome of the various tests, such as A/B testing or multi-variate testing of the content. Social Relationship Management: Manufacturing companies are typically not equipped with the skills required to respond to social conversations. Considering the abundance of social channels and media out there, Oracle provides a tool to cut through all the noise and track relevant topics, trends and brand conversations from the most important social channels. This automated sentiment scoring helps marketers identify the customers intent and thus enables them to highlight the most interesting product to the customers. Digital Advertising: Digital Advertising is an exciting new feature in Oracle Marketing Cloud for Manufacturing. AdFocus allows marketers to include paid media in their marketing campaigns. Unfortunately, one-third of all ads are served to unintended targets. Oracle Marketing Cloud for Manufacturing ensures that manufacturers do not have to waste their time targeting content to an unintended audience. The tool allows marketers to map the ads dynamically to the individual digital body language so that the content received is highly personalized. Manufacturers can target different supplier channels based on their lead nurture stage. With over a decade of experience in the marketing automation space, Eloqua has established several successful use cases across industries for effective customer engagement, lead conversion and marketing ROI measurement. Oracle Marketing Cloud for Manufacturing is proactively focused on the manufacturing sector and is well-equipped to cater to its unique channel needs to create marketing campaigns that will transform the way manufacturers have approached digital marketing. 6

7 Marketing Automation: An Essential Tool to Engineer a Better Marketing Model for the Manufacturing Industry THE BOTTOM LINE This paper has shown how the transformation of the marketing function within the manufacturing industry is critical for its continued growth. The changing market landscape demands that manufacturers engage more with customers at a personalized level. They need to understand the customer s motivations and concerns in real time to generate demand for their products instead of continuing to push a very product-centric message into the marketplace that might miss the target more times than not. We also discussed how the vendor community, exemplified by Oracle Marketing Cloud for Manufacturing, is making great strides with the modern marketers to deliver integrated and highly personalized customer experiences across multiple marketing channels. MAS solutions are highly effective tools that drive significant revenue performance by empowering marketing to work with sales to significantly increase lead conversions and help manufacturers better manage conversations and collaboration across the entire value chain. 7

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