ALIGNING THE CMO & CIO by Ivaylo Tsvetkov

BIG DATA’S BIGGEST ROLE

NCE

ALIGNING THE CMO & CIO Greater Partnership Drives Enterprise-Wide Customer Centricity

Full Report | March 2013

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CONTENTS

Abstract

Summary of Key Findings

Expert Perspective

Detailed Findings - Marketing

Demographics - Marketing

Detailed Findings - IT

Demographics - IT

Leadership Committee

Executive Insights

148

Academic & Expert Insights

152

Affiliate Partners

153

About SAS

153

About CMO Council

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abstract Discussions about the dynamic between chief marketing officer and chief information officer have often centered around the technologies being implemented in this age of digital engagement. However, as organizations realize the importance of delivering on a more customer-centric overall business strategy, big data has emerged as the real glue that has permanently cemented the relationship between the two offices. The CMO Council and SAS set out to better understand the key challenges, opportunities and requirements that both CMOs and CIOs were facing in their journey to develop a more customercentric enterprise. Through the research, what has emerged is a picture of alignment around platform and technology, as well as the opportunity for even deeper connections around data and customer intelligence. Ultimately, there is significant room to improve the organization’s ability to capitalize on the opportunities that will emerge from a more customer-centric approach. Both marketing and IT believe that customer centricity must start with a corporate culture that focuses all strategies and programs around the needs of the customer. However, both CMO and CIO also agree that functional silos that have prevented either function from actually connecting and leveraging big data create a core challenge that must be overcome in order to reach a true state of centricity. It is clear that both CMO and CIO see data—or more specifically, big data’s role in delivering deep insights, understanding and intelligence about customers, markets and operational efficiencies— as critical to success. Yet more often than not, marketing and IT are struggling to partner on priority projects and lack a critical call to action from the CEO that helps clear the path for collaboration. The following findings are from an online audit of 237 senior marketers and 211 senior IT executives. Included in the full report, available for purchase, are best-practice profiles from 33 marketing and IT executives from brands including AIG Bank, Allianz Life Insurance, American Cancer Society, Brown-Forman, Citi, Commercial Metals Company, Conde Nast, Farmers Insurance Group, First American Financial, First Tech Federal Credit Union, Four Seasons Hotels & Resorts, GM, Hilton Worldwide, Intrawest, Lockheed Martin, Magnolia Federal Credit Union, Nexxo Financial Corporation, Omnicom Media Group, Outrigger Hotels & Resorts, Panasonic, PNC Financial Services, Rady Children’s Hospital–San Diego, Silicon Valley Bank, Transamerica Insurance & Investment Group, Wyndham Hotels Group and WellPoint. The online survey and interviews were conducted from the third quarter of 2012 to the first quarter of 2013.

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summary of key findings The growth and proliferation of digital engagement channels that reach from online to social and mobile experiences have inextricably linked the chief marketing officer and the chief information officer. The issue is that this link has been at varying degrees of connection, from tense cooperation to total collaboration. New titles including the chief marketing technologist and the chief digital officer have been floated as well, underscoring the criticality of the marketingtechnology connection. A recent study from Gartner revealed that investment into digital channels is surely on the rise, with enterprises with revenue in excess of $500 million earmarking some 12.5 percent of their marketing budgets to digital marketing. Some are even tripling that spend percentage as Adobe recently made headlines by sharing that its own digital marketing allocation reaches an astounding 74 percent of total marketing investment. In reality, this spend is not being limited to procuring digital advertising channels but is also being spread across the technology platforms, solutions and operational programs that are powering the digital marketing operations function. With this added investment into technology comes the question of who will control both platform and budget, increasing the likelihood of tension between CMO and CIO. But the rise of marketing technology and the impact (or backlash, more to the point) it has on the CMO/CIO relationship is not a new debate. And according to the headlines, the tension seems to be growing. In the CMO Council’s first glimpse into the relationship, “The CMO-CIO Alignment Imperative,” neither marketing nor IT believed they were highly effective partners, more often struggling to achieve common goals in the race to adopt and keep pace with rapidly evolving digital marketing capabilities. Despite their shared conviction that technology was the underpinning that shaped the entire customer experience, just 4 percent of marketers and 7 percent of IT executives felt they were very prepared to exploit these digital channels. More often, IT pointed to marketing’s tendencies to skirt around IT, deploying its own systems that often did not connect to legacy infrastructures. Marketing, on the other hand, pointed to the slow timelines, reluctance to deploy and a sense that marketing was simply not a priority for IT as core problems in the relationship. But since that first study, a boom in digital engagements that tie directly to bottom-line success and a resurgence in the importance of customer engagements through more personalized, datadriven experiences has shifted focus away from struggles over technologies and platforms to the very core of what can differentiate the product-centric from the customer-centric: data. Marketers agree that there is no shortage of data; in fact, data is seemingly everywhere and for many, the lure of collecting everything has led to a scenario where data repositories are overly bloated. Rather than fueling the enterprise with fact-based decision-making tools, the organization has slipped into a state of “analysis paralysis.” In this world where data is everywhere, it is easy to see why both IT and marketing executives feel the strain. Consider the following: • Currently, about 2.5 exabytes of data are created each day. • It is estimated that Walmart collects more than 2.5 petabytes of data every hour from its customer transactions. • The volume of business data worldwide, across all companies, doubles every 1.2 years.

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• “Dirty data” costs the U.S. economy $3.1 trillion dollars per year. • There will be a 40-percent projected growth in global data generated per year versus 5-percent growth in global IT spending. This boom in data—and the corresponding boom in spending to manage data—has powered the continued conversation that the CMO and CIO are at odds, battling over control of marketing technology and technology budgets. However, according to the 237 marketing executives and 210 IT executives surveyed for this report, the battle lines are not this clearly drawn, and the chasm between the two functions is not nearly as broad as headlines might be claiming. In fact, the two are fundamentally in agreement about key direction, strategy and even roles in the advancement of technology and the criticality of data across the organization. What is lacking is the mandate that customer centricity is the core value, goal and direction of the organization, eliminating any of the barriers to partnership and aligning both CMO and CIO around the data that powers the customer-centric enterprise. The State of the CMO/CIO Relationship The gap may be narrowing between CMO and CIO, despite clear indications that the road to alignment has not been easily travelled. According to both marketers (85 percent) and IT executives (85 percent) who participated in this study, the relationship between the two is critical to the execution of customer-centric programs. And those marketers who have been able to take steps to align and partner are singing the praises of their peers. “Joint goals, shared initiatives and success criteria tie our teams together, and there is very little ambiguity in what our goals are versus what marketing’s goals are,” says Jay Ferro, CIO for the American Cancer Society. “Watching the wall come down over the last year has been very rewarding. The CMO is my peer, and we both report to our staff president and COO. Over the next year, I see us continuing to focus on building our relationship as there are many opportunities to tie our annual outcomes to one another’s success.” Both also agree (80 percent of marketers, 88 percent of IT executives) that working with one another to achieve customer centricity is a priority—even if marketing (45 percent) and IT (32 percent) feel that customer-centricity sometimes means something different for their crossfunctional partner. “It’s a complete partnership between marketing and IT, and they’re equal partners in helping define the strategy and understand its implications in terms of technology and information,” notes Paul Kadin, Head of North America Marketing Operations and Strategy for Citi. “It takes equal doses of both perspectives to come to a conclusion about what we need to do next.” Marketing and IT also see eye-to-eye on the core aspects of what makes a customer-centric organization. Both groups (76 percent of marketers, 69 percent of IT executives) believe that working within a corporate culture that places the customer at the center of the relationship is key. Both also agree (40 percent marketers, 51 percent of IT executives) that big data is critical to executing on customer-centric programs. But marketing and IT also agree on the shortcomings of the organization, with both sensing that there is still a considerable distance to go until the organization can fully exploit the opportunity that lies in being a totally customer-centric enterprise. First, both agree that while a culture centered around the customer is top among the key attributes of customer centricity, marketing (33 percent) and IT (31 percent) also agree that the core centricity attributes have only been partially implemented in their organizations. © Copyright CMO Council. All Rights Reserved. 2013

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Both also agree (47 percent of marketers, 47 percent of IT executives) that the organization is only moderately prepared to fully exploit the opportunities that would arise through customer centricity. One major contributor to this lukewarm outlook is the continued plague of the siloed organization. Marketing (52 percent) and IT (45 percent) both identify functional silos that make customer data and profile development difficult as the top roadblock to customer centricity. This may answer the question of why neither marketing nor IT is overwhelmingly confident in the ability of their current touchpoints and channels to fully activate and engage the customer base; 48 percent of marketing and 45 percent of IT are only moderately satisfied in their activation and engagement potential. But it is around big data that we find the most common ground for the two functions—and also the strongest tie that will bind the two roles together. According to 61 percent of marketers and 60 percent of IT executives, big data represents equal parts opportunity and obstacle, as many are struggling to manage the complexity, flow, aggregation and analytics of the massive amounts of both structured and unstructured data flowing in to the organization. Big data has also added complexity to developing actionable customer profiles (according to 46 percent of marketers and 50 percent of IT executives). But while IT (39 percent) believes that big data has primarily focused importance on IT systems and data availability, marketing (52 percent) believes that big data has identified business opportunities. And while this, at least on the surface, indicates a divergence in outlook, it actually speaks more to where both marketing and IT believe they individually fit on the continuum of customer data and big data for the organization. The Marketing View Marketers view their role in the journey to customer centricity as being the primary architect of customer engagement strategies. There is also a sense that marketing is ready to take on the load of analyzing the aggregated data—brought from across the organization with the help of IT—into actionable intelligence that powers the customer-focused touchpoints across the entire enterprise. According to marketing, ownership of insights and competitive intelligence resides with the CMO. But the CIO should be ready and willing to tackle the advancement of marketing operational and measurement platforms, as well as work to optimize the security and availability of technology platforms. Interestingly, the majority of marketers (72 percent) believe that marketing is and should continue to be the group defining platforms, including critical systems that will analyze and monitor customer data and profiles. Yet 34 percent of marketers are only moderately satisfied with their current data and analytics platforms, while 37 percent are actually fairly unsatisfied. This would seem to indicate that there is an opportunity to collaborate with internal technology experts to identify better platforms that will work for the organization. And even as marketers believe they are bringing IT into platform conversations at the very beginning of the process, today’s technology and customer requirements may necessitate IT being brought in at the beginning of the customer strategy development cycle—and not just to discuss platforms and process. Marketing is also looking to improve the impact and efficacy of their measurement systems in an effort to better gauge and measure the impact of customer-directed programs. While data has added visibility and accountability across all functions that engage with and touch the customer (according to 44 percent of marketing respondents), marketing admits there is significant room for improvement when it comes to integrating the company’s ability to measure across all

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touchpoints, especially integrating online and offline analytic capabilities. Nearly half (46 percent) believe they are getting better at online and offline measurement and analytics integration, but 43 percent are still either struggling to integrate or are simply not integrated at any level. In fact, only 3 percent of marketers felt they had an integrated view of both online and offline measures. But in the end, despite all of the complexity and challenges that technology is adding to the marketing function, it is data that seemingly keeps the CMO up at night. As stated before, marketers agree with their IT peers that big data is critical to customer centricity, but marketers also believe that big data can give their company a competitive edge. Overall, 70 percent believe that big data—or more specifically, the ability to translate big data into insights—can create a competitive advantage for the brand as 30 percent believe it is critical and 40 percent believe it is important. Still, they believe it is only part of what creates a competitive advantage. The big data picture is riddled with holes as more than half (57 percent) of the marketers surveyed believe they are missing data that could be essential to the development of a more robust and actionable customer profile. When asked what they were missing, 71 percent indicated they would like to see more predictive analytics included in their data repository. In the end, marketers are unsure if they are ready to fully exploit big data, sensing they may not have the right talent to fully execute truly customer-centric programs. Some 60 percent of respondents are either not sure or already know they don’t have the right talent. And when asked to identify their weak points, 55 percent pointed to deficiencies in data analytics and intelligence modeling while 32 percent pointed to a lack of resources to manage IT integration. Interestingly, 34 percent felt they needed a liaison that could understand marketing, IT, finance and other marketing technology resources and strategies, which could function across both IT and marketing. The IT View While marketing struggles with platforms and is looking for a middleman between marketing and IT, IT is actually volunteering for more involvement—provided they have the bandwidth and budgetary support along with that deeper integration. CIOs agree that the CMO’s primary role in realizing a customer-centric enterprise is to be the architect of the customer engagement strategy, and they believe that IT should serve as primary champion of the engagement, measurement and collaboration technologies. According to IT, they believe the CIO’s primary contribution to customer centricity should be in advancing marketing technologies and platforms (55 percent), increasing the use and value of CRM systems by both marketing and sales (54 percent), and ensuring the integrity and availability of the technology infrastructure (53 percent). And similar to their marketing peers, IT executives believe they are being brought into the marketing technology conversation from the very beginning of the strategic conversation. However, they also see that while they are partners in technology advancement, they should be brought into the conversation as overarching customer engagement strategies are being discussed. In fact, some 62 percent of IT respondents indicate they want to be brought in earlier and more frequently, and 39 percent are actually pushing for more regular customer strategy sessions that involve both groups. Data again emerges as a core and prime opportunity for collaboration and deeper alignment. Similar to their desire to be more involved in customer engagement strategies, there is opportunity for IT to be far more involved in working with marketing to partner and develop a customer data strategy. When asked about the state of their partnership with marketing around big data strategies, 60 percent said there was only a limited partnership. © Copyright CMO Council. All Rights Reserved. 2013

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When asked about an optimized scenario, nearly one in every three respondents said the dynamic should be one of total partnership. Another 35 percent went one step further and defined the partnership as having IT aggregating data from across the enterprise while marketing focuses on understanding and managing the analytics. This belief in the roles and responsibilities of IT and marketing also falls in line with IT’s belief that marketing’s primary role in achieving customer centricity revolves around developing the engagement strategy, as previously stated, but also in gaining better customer insight and intelligence (69 percent) and understanding customer requirements and expectations (56 percent). One critical view into why this relationship is often challenged can be seen in the reasons that IT has had conflicts with marketing over technology deployments. Some 54 percent of IT executives admit there have been challenges, and chief among them is that IT (53 percent) has priorities other than marketing programs to attend to. There is also a sense that they are being held back because of budget as half of respondents felt that insufficient budget to fund a specific program led to the breakdown. But almost as important is the challenge that lies just below the surface as nearly a quarter of respondents admit there is simple no management mandate to push certain marketing projects forward, and there is often a breakdown in communication (27 percent) due to the lack of a shared or common language between the two functions. But this friction is not a case of just not seeing value in the relationship. In fact, IT views marketing as its partner in the advancement of analytics and data-driven decision making across the organization (62 percent), as well as a partner in being able to properly scope, test and deploy the right solutions and technologies (56 percent). However, the relationship has been strained thanks to budget battles (33 percent) and marketing not clearly outlining its goals and strategies (41 percent), which reinforces IT’s desire to be looped into the process sooner. Where the Relationship Can Go What is uncovered by both marketing and IT is that while they both see value, both want deeper collaboration and see data as a true point of collaboration and connection. What is lacking is not the will to partner, but the mandate to partner. This lack of top-down leadership became most evident when both marketing and IT were asked to identify the primary owner of the customer within their organization. The picture that emerges is one of chaos, ill-defined ownership and organizations without a clear center point that is dedicated to advancing customer centricity. According to marketing respondents, the customer is most often owned by sales, but not outright as ownership is spread across the CEO, CMO and sales, or is simply so ill-defined that respondents had no choice but to say there were multiple owners of the customer within their organization. IT had a similar perspective, with the customer being spread across a loosely connected web of CEO, CMO, sales and even service. What is missing is that singular voice that owns the customer and is committed to mandating that business decisions must be centered around the customer across all functions. Simply put, this is a wake-up call to the CEO being clearly issued by two of the office’s most critical functions. When you look at the responses of those marketers and those IT executives who describe their relationship with the other as a “total partnership”, what emerges is picture of what could happen with the right mandates and support. Key among the common traits that these totally partnered marketers and IT executives share is a belief that the CEO unequivocally owns the customer (24 percent of marketers, 30 percent of IT) and that sales most certainly does not “own” the relationship (only 4 percent of marketers and 5 percent of IT).

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Other core attributes that can be identified as the benefits of total partnership: • Both marketing and IT are highly satisfied with their company’s ability to engage customers through the critical customer-centric touch points (42 percent marketing and 30 percent IT). • Some 60 percent of marketing and IT say that the core attributes that define customer centricity have been deployed across their organizations. • Fewer than 20 percent of respondents (9 percent marketing, 15 percent IT) believe that functional siloes are the primary roadblock to customer centricity. Instead, they point to insufficient training (35 percent of marketers) or lack of budget (35 percent) are actually the top concerns. • Both feel very prepared (32 percent of marketers, 26 percent of IT) to address and exploit the opportunities that are produced thanks to customer-centric programs. • Both believe the partner function is a priority as 68 percent of marketing believes they are a priority for IT and 67 percent of IT says they believe marketing sees working with IT as a priority. • Marketing has total faith that customer-centricity is a priority for IT as 68 percent say that advancing customer centric projects is a total partnership. Marketers also feel they have a far more complete picture of the customer as 42 percent of marketers who are totally partnered with IT say that they are NOT missing any data. Interestingly, despite the clear benefits to partnership – and the benefits to a strong customerowner that sits in the CEO office – big data is still at the core of the bond between marketer and IT. Both still view data as critical to executing on a customer-centric program…and both see big data as a opportunity and an obstacle. Conclusion Regardless of the path to partnership these two roles take, both agree that big data is the biggest opportunity and component to customer centricity. And as the complexity that big data brings continues to proliferate, the strong voice of the customer that is collected by IT and interpreted and translated by marketing must be heard across the organizations. It cannot be trapped in silos or hoarded by a single team. Just as activists partner to democratize the web, it is the CMO and CIO who must work to democratize data, making it accessible and actionable across the enterprise. What is most obvious through these findings is that this will not be possible without partnership, and no partnership can flourish without support. Unlike conversations around individual channels like social, mobile or even digital, there is a clear and present repercussion if this relationship goes untended: the customer experience will be impacted. But making these levels of cultural and organizational shifts will not be smooth sailing. “It’s a huge change-management process to get everyone to think differently and put their own goals and objectives aside for a moment to think about the greater whole,” says Karen Larrimer, CMO of PNC Financial. But it is a shift that is essential to growth and exploitation of the age of the customer. It will require a new breed of CMO and CIO—both strategic in nature, wed to advancing analytics and customer data, and committed to the partnership. “I think that as you get real CIOs and real CMOs in place, you will see companies doing things in their marketplace that they never

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envisioned were possible because there was such a disconnect at one time,” says the CIO of one global hotel resort brand. Leaders across both functions are pressing for change, as noted by Caroline Basyn, CIO of Bacardi. “My hope is that we can have a relationship and partnership at a business level rather than just on a technology level.” But these leaders need even more air cover than their peers in the C-suite can provide. This shift to customer centricity and the enablement of the CMO and CIO to reorganize and reprioritize must be a movement led from the top. Robert Solomon, CMO of Outrigger Hotels, said it best, stating that ”Projects can be prioritized, but they’re only successful or completed when your business partners are aligned with your schedules and are able to assign the necessary resources. The role of both the CMO and CIO begins with the customers’ motives, and the appropriate technology is acquired according to the strategies developed to achieve those motives.”

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expert perspective The Four Imperatives to Achieving Customer Centricity By Wilson Raj, Global Customer Intelligence Director, SAS

Today's empowered new buyer is capitalizing on numerous social and digital channels and exerting tremendous pressure on the technology needs of marketing organizations. The real opportunity lies in how organizations have responded to this new paradigm and what they are doing to capitalize on these new opportunities. The key is integration—and traditional tools and approaches no longer produce the desired customer-centered results in our multi-device, multichannel world. This research shows that marketing and IT unequivocally agree that successful customer-centric organizations embody two vital characteristics: a corporate culture that places the customer at the center of strategy and processes, and expertise to make data-driven business decisions based on customer behaviors and insights. The onus is on CMOs and CIOs to partner in selecting the right technology that not only enables multichannel marketing and listening to your customers, but technology that truly integrates crossmarketing initiatives in order to improve your marketing and shape your overall business strategy. SAS has developed customer intelligence solutions to help organizations become customercentric in their business strategies. Our goal is to enable an integrated marketing management approach to solving critical challenges across marketing—including formulating customer-centric strategies, gaining insight from big data and analytics, optimizing customer interactions, and understanding the customer experience. With SAS, powerful analytics capabilities ensure your data won’t remain in a silo, but rather become integrated into your marketing and overall business strategy, unlocking the real value of customer data and big data. The true value comes from an integrated view of analytics and technology that connects marketing operations with multi-channel campaigns. This is where CMOs and CIOs can jointly calibrate the financial, operational and customer impacts of every single marketing activity. The result is that businesses not only create better customer experiences, but do so more efficiently and cost-effectively. To this end, SAS can help the CMO and CIO align around these four imperatives to achieving customer centricity: 1. Enable a single customer viewpoint. Successful customer-centric organizations tend to have a more centralized data- and information-management system for a single view of the customer. Marketing and IT must enable the different parts of the organization to gather customer interaction data from all internal and external customer channels in a consistent way.

In many companies, data is locked in various warehouses within the organization. There are customer records from the contact center, web analytics data on the website, and social media analytics from Facebook or Twitter. SAS helps bring all that together and uses smart, robust analytics to uncover possible opportunities, the right marketing action to take, and impacts on the business beyond marketing.

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2. Develop actionable insight by automated, predictive analysis of the data. The next challenge for marketing and IT will be for the analytics team to create actionable insights that support specific customer-centered outcomes. These customer analytics will need to run in real time for an ever-increasing number of customer segments and more elaborate micro-segments by audience attitude, location, channel and more. 3. Distribute contextualized customer insight to support specific marketing actions. SAS also helps marketing and IT to create output from the customer data that targets the employees and other partners who have the potential to interact with customers. More than just information, they need to agree on the answers and actions that are most relevant at a specific touchpoint and design interactions that are adaptable to different skill levels. 4. Deliver an outstanding customer experience based on insight, not only data. Like their partners in marketing, CIOs are recognizing the importance of the external customer as the primary driver of technology strategy. SAS provides marketing analytics and customer analytics technologies to help redirect IT's traditional focus on delivering value to the internal IT customer to align with marketing in its external customer centricity.

That change in IT focus puts the customer at the locus of IT planning, deployment and support. In addition, frontline agents and customer-facing systems can now consistently deliver answers to a specific customer need at a specific touchpoint to create a compelling and customized brand experience.

Fueled by advanced and predictive analytics, SAS® Customer Intelligence can also help organizations improve operational efficiency of channels, calculate customer value, analyze customer influence and more. The result informs an enterprise-wide customer strategy that empowers all employees with the knowledge to make a difference in real time. Organizations that best understand their customers and deliver experiences tailored to their needs will be able to capture an increasing share of each customer's share of wallet by increasing the value they bring to each customer in every interaction. By working as a fully aligned team across these four imperatives, marketing and IT will be powerful allies in unlocking customer value and driving profitable growth. For More Information We recommend this Harvard Business Review report: “Customer Intelligence Tames the Big Data Challenge”: sas.com/reg/gen/corp/1835252 To read more thought leader views on marketing, visit the SAS Customer Intelligence Knowledge Exchange at: sas.com/knowledge-exchange/customer-intelligence To get fresh perspectives on customer and marketing analytics from marketing, visit: blogs.sas.com/content/customeranalytics

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detailed findings—MARKETING Marketers point to culture and insights as the primary attributes and driving forces that can press an organization to evolve into a customer-centric enterprise. The top two responses—having business decisions based on customer behaviors and insights (67 percent) and a corporate culture that places the customer at the center of processes and strategy (76 percent)—are also inextricably linked as marketers understand that a culture of customer centricity enables the flow of insights and data about customer behaviors that will form the strategies and processes that revolve around the customer. Interestingly, just below the top two responses is the understanding that customer centricity will also involve cross-functional strategies and mandates, requiring the entire organization to develop customer-centric approaches. Across all top responses, it is clear that marketing understands that partnership and a strong mandate will need to be bolstered by insights and intelligence about the customer in order to develop customer centricity.

Q1. What are the key attributes of a customer-centric organization? 76% Corporate culture that places the customer 67% 55% 43% 41% 41% 40% 26% 16% 16%

at the center of all processes and strategy Business decisions based on customer behaviors and insights People, processes and technologies aligned around customer values Cross-functional strategies and mandates to develop customer-centric approach Highly relevant experiences that increase customer advocacy and loyalty Responsiveness to issues and challenges raised by customers Strong mandate for customer focus from CEO/President Delivery of relevant content based on realtime customer intelligence Strong, unified and consistent communication of brand value Value-added services to enhance customer experience

15% Friendly and helpful customer service 13% One-on-one engagements with the customer Budget to execute more personalized,

12% customer-centric campaigns

9% Personalized communications Pricing that is appropriate and seen as

9% reasonable in eyes of customers

access to online services and 5% Seamless self-service options

3% Uplifting advertising and brand messaging that communicates customer focus

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Only 9 percent of marketing respondents feel they have implemented these top attributes of customer centricity across the organization. The majority feels that some elements have been implemented, but success is not readily evident. Sadly, the reality is that a culture of customer centricity cannot be implemented halfway; it must be a total commitment made by the entire organization. However, 31 percent of respondents indicate that they have only partially adopted customer-centric attributes and are planning to implement others soon.

Q2. Have these attributes been adopted across your organization? 9% Yes, all top attributes are currently

implemented across the organization.

30% Yes, but to varying degrees of success Partially adopted with plans to adopt

31% all key attributes soon

6% Partially, but we no longer have the mandate

to implement all programs. 20% No, but we are improving. No, customer-centric programs are 4% not a priority.

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Marketing continues to be challenged by functional silos that make it increasingly difficult to connect and gather data to develop the insights so critical to developing customer-centric strategies. More than half (52 percent) of respondents believe that these functional silos are the chief challenge they face today, and despite marketingâ&#x20AC;&#x2122;s belief that a corporate culture which embraces the customer is the chief attribute of customer centricity, culture is actually a chief roadblock according to 39 percent of marketers.

Q3. What challenges do you face in achieving a truly customer-centric organization? 52% Functional silos make connecting customer 39% 35% 31% 28% 28% 28% 22% 9%

data difficult. Corporate culture not aligned around the needs of the customer Missing key technology platforms to manage data and customer profiles No common definition for customer centricity to unify functional goals and processes Front-line resources are not equipped to best manage customer issues. Insufficient expertise in data analytics and intelligence Sales-focused organization that thinks quota before customer Lack the budget to execute customer-centric programs Personality clashes with other key stakeholders

5% Other

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While headlines discuss the growing contention between marketing and IT, there has long been a struggle between marketing and sales. And as marketing struggles with adopting and executing more customer-centric campaigns and cultures, this rift may emerge as a key issue once again. According to 19 percent of respondents, sales is the primary owner of the customer in their organizations. While this was closely followed by 18 percent who believe the CEO is the owner of the customer and 17 percent who believe that responsibility falls to the CMO, this answer is significant as all too often there are anecdotal tales of insight, relationships and customer behaviors that are locked away in individual CRM or sales data repositories as sales, business development or account management teams fiercely hold onto the ownership role of the account. Interestingly, the control seems to fall at the sales rep level, and not even to the C-level, as only 4 percent of respondents identify either the chief revenue or chief customer officer as being in the ownership role. And while the C-suite is in control in many scenarios (45 percent of respondents attribute ownership to some office at the C-level), a surprising 14 percent feel that ownership of the customer is simply not defined and that ownership is spread across multiple functions, perhaps indicating no real center for leadership, mandate or strategy.

Q4. Who is the primary “owner” of the customer in your organization? 19% Sales 18% Chief Executive Officer/President 17% Chief Marketing Officer Undefined and spread across

14% multiple functions

task force 9% Cross-functional of senior leadership

6% Chief Operations Officer 6% Customer Service and Support 3% Chief Customer Officer 1% Chief Revenue Officer 1% Don’t know 6% Other

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The CEO and CMO again take leading roles in this move to a customer-centric enterprise as 63 percent of respondents highlight the CEO as a key stakeholder while 62 percent tap the CMO. Also playing leading roles: customer service (41 percent), sales (39 percent) the chief operations officer (33 percent), and the CIO (30 percent). Two key questions emerge from this question. First, as identified in the previous question, as sales tops the list of owners of the customer, it is again troubling that C-level executives fail to rank as highly as key stakeholders. Only 16 percent of respondents identified the head of sales/chief revenue officer as a key stakeholder, and only 13 percent highlight the chief customer officer. In fact, account reps and even key account reps (21 percent) are higher on the stakeholder list. Secondly, as we will see later in these findings, marketing openly admits that a key element to an optimized customer experience and delivering on the promise of being a customer-centric organization largely depends not only on the ability to aggregate and access insights, but also to have the right processes and technologies in place to enable those campaigns. Yet the CIO is seventh in the line of stakeholders, well behind sales, support and even internal marketing teams.

Q5. Who are the other key stakeholders in optimizing the move to customer centricity? 63% Chief Executive Officer/President 62% Chief Marketing Officer 41% Customer Service and Support 39% Internal marketing team 39% Sales 33% Chief Operations Officer 30% Chief Information Officer 21% Key account managers 20% IT team 16% Chief Revenue Officer/Head of Sales 13% Chief Customer Officer 12% Chief Financial Officer Undefined and spread across

7% multiple functions 6% Channel partners 6% Agency partners

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The majority of marketers identified a collection of live engagements and sales-driven functions as the key collection of touchpoints that evidence a customer-centric organization. Among the top responses were account management or sales resources (66 percent) and call center or service reps (64 percent), both very in line with previously stated beliefs around the ownership of the customer resting primarily with sales. However, and perhaps shining a light on a major opportunity for marketers, few respondents identified key marketing-driven engagement points where customer and brand intersect as critical touchpoints. For example, events—seen in other CMO Council reports as being a foundational element to successful demand-generating strategies—are only seen as a critical touchpoint for customer centricity by 19 percent of marketing respondents. And online advertising—a medium that can be both targeted and personalized for a more intimate and relevant experience based on an individual customer’s behavior and profile—is seen as the least critical touchpoint on the list, with only 9 percent of respondents selecting the channel.

Q6. What are the critical touchpoints that demonstrate customer centricity to customers? 66% Account management/sales resources 64% Call/service center 57% Corporate website, including eCommerce sites 29% Company-led social media pages 29% Online service or self-service solutions 23% Product evangelists/gurus Third-party reviews and commentary

20% about products or services

19% Events sponsored by the company 18% In-store service and agents Social media chatter outside of company-

18% led social channels

16% Live and virtual events staged by the company 16% Mobile apps and sites 16% Trade shows and conferences 13% Finance or billing resources Traditional advertising channels (i.e.

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REPORT

Marketers are only moderately satisfied with the ability of the critical touchpoints (as outlined in the previous question) to activate and engage customers, and 45 percent are either disappointed or neutral in their opinions. Less than 10 percent of respondents were highly satisfied. In reality, this may not be as shocking as the numbers reveal when you take into account what those critical touchpoints encompass. As previously stated, marketing sees sales and support as being the top two customer centricity-proving touchpoints, yet far too often, marketing is simply a stakeholder and not the owner of either of these processes. And as marketing does not see primary marketing touchpoints as being critical to customer centricity, this bland reaction is likely the best a marketer could hope for.

Q7. Are you satisfied with the ability of these touchpoints to activate and engage with the customer? 7% Highly satisfied 48% Moderately satisfied 30% Neutralâ&#x20AC;&#x201C;too early to make a determination 15% More disappointed than satisfied

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REPORT

All roads seemingly lead back to culture as marketers point to functional silos that make data aggregation impossible (49 percent), a culture adverse to change (42 percent), and a lack of common goals or strategies across key corporate stakeholders (41 percent) as the primary roadblocks to optimizing customer-centric touchpoints. And while part of the issue may be in the identification of the most critical touchpoints to start, the inability to leverage customer insight and data from across the organization and embrace a company-wide commitment to the customer is core to the issue. It is also of note that marketers understand that part of the disconnect back to the customer is at least partially due to disconnects in technology. One in three marketers believes their top roadblocks are actually technologies that do not connect with the organization’s legacy infrastructure. While this also likely contributes to the larger frustration—siloed data repositories—enabling technologies that make big data readily accessible is key to success but currently an elusive goal for many marketers.

Q8. What are the top roadblocks to optimizing these touchpoints? 49% Functional silos that make data aggregation impossible

42% Corporate culture averse to change No common goals or strategies across key

41% corporate stakeholders

37% Lack of budget to make improvements 34% Insufficient training of front-line resources Lacking strong leadership at the most senior

34% levels to mandate change

Technologies do not connect with legacy

33% infrastructure

Breakdown in communication between

25% marketing and IT

No marketing oversight or input on key

23% touchpoints

Senior management does not see problems

23% with current solutions

network with no controls on 18% Distributed brand alignment

14% Personality clashes between key executives controlling resources and touchpoints

8% No connection between corporate marketing and independent franchise or operators

7% Other

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REPORT

Marketers see their primary role as being the keeper of insights in the journey to customer centricity. An overwhelming majority (81 percent) say their top responsibility is top gain better customer insight, competitive intelligence and market knowledge. Additionally, 61 percent believe that understanding customer requirements and expectations—another piece of the customer insight and intelligence picture—is also key. Marketers also believe they should be developing strategies to best reach and engage the customer (77 percent) and working to align corporate resources and cross-functional teams to better serve the customer (60 percent). What is truly telling about these responses is that few—if any—aspects are outlined that marketers feel are not part of their responsibilities specific to achieving customer centricity. Even the lowest ranked response, knowing more about website utilization and visitation, was selected by one in three marketers. However, what is most revealing is how reliant on data—and how closely tied to technology (and by extension) and the IT team—marketers must be if they are going to be successful in mastering these responsibilities.

Q9. What are the key responsibilities of the CMO specific to achieving customer centricity? 81% Gaining better customer insight, competitive

intelligence and market knowledge 77% Develop the strategy to best reach and engage with the customer Understanding of customer requirements 62% and expectations Aligning corporate resources and cross-

61% functional teams to customers

Setting the tone and tenor of all customer

57% communications and experiences

Manage the key customer touchpoints to

55% ensure alignment

Getting smarter about using social media and

50% digital marketing technologies

Reaching and engaging with the market more

48% efficiently and effectively

Integrating and extracting more value out of

42% disparate and siloed customer databases Tying website and digital engagement

39% analytics to business outcomes and transactions

38% Adding more engaging and interactive

features to company and brand websites 35% Ensuring brand assets are more accessible globally to ensure brand unification 32% Knowing more about website utilization and visitor behavior

2% Other

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REPORT

Marketing believes that IT should be focused on advancing customer centricity by keeping systems running and bolstering back-end systems that enable engagement, customer care and insight gathering. But there also seems to be a missed opportunity specific to a strategic partnership to enhance the development of customer strategies. Marketing believes that IT should be focused on advancing platforms to aid in marketing measurement and campaign optimization (65 percent) and automating customer interactions (56 percent). Yet only 44 percent believe there is a role of IT partnering with marketing to develop comprehensive customer engagement strategies. Marketers (52 percent) are looking to IT to help deliver more timely and relevant data and information across some of the functional silos previously highlighted as key challenges. But some may be looking for a miracle as one of every two marketers would like to see IT help increase the use and value of CRM systems by both marketing and sales.

Q10. What role does IT play in achieving a customer-centric enterprise? 65% Advancing platforms to aid in marketing 56% 53% 52% 50% 46% 44% 40% 36% 32% 27% 27% 24% 22%

measurement and campaign optimization Automating customer interactions and improving customer care and handling Assuring the integrity and availability of back-end infrastructures and interfaces Delivering more timely and relevant transactional, behavioral and customer profile data Increasing the use and value of CRM systems by both marketing and sales Safeguarding and protecting customer data, brand assets and trademarks Partnering with marketing to develop comprehensive customer engagement strategies Managing and maintaining uptime across all technology platforms Piloting new ways to engage the market using mobile, Internet and POS technologies Improving the links and interactions between marketing, sales and channel groups Deploying improved solutions to enhance email deliverability and recipient response Developing new engagement channels to deepen customer intimacy and satisfaction Introducing closed-loop campaign measurement and tracking capabilities Scaling global websites and customer data repositories Furthering the use of social media and online listening and contact systems

6% Other

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REPORT

Most marketers are getting IT involved in the early stages of campaigns in order to make sure that technology resources are properly selected and deployed. A disappointing 27 percent only involve IT if they own a key touchpoint that needs to be involved in a campaign, potentially missing an opportunity to discuss key issues such as how to integrate results, data or insights gathered in the campaign into existing data repositories and insight engines. What is also telling is that 15 percent of marketers view IT as a largely functional or operational cog in the customer machine, saying that IT is involved only when something goes wrong, when infrastructure is impacted or in order to deploy a technology. Some 13 percent of respondents really have no interest in IT involvement and look to involve the team as little as possible or not at all.

Q11. At what point in a marketing campaignâ&#x20AC;&#x2122;s lifecycle do you involve IT? 45% From the very start so technology selection to deployment is seamless 27% It depends if IT owns a key touchpoint that needs to be involved in the campaign When company infrastructure will be 9% impacted or used

7% We involve IT as little as possible. 6% We do not involve IT at all. Once a deployment platform or a technology

4% has been identified, IT then deploys

Only when something goes wrong with

2% technology

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REPORT

Marketers give their organizations an average grade when it comes to opportunity readiness. Some 47 percent see their ability to exploit the opportunities presented by evolving into a customer-centric culture as just average. Only 6 percent feel they are very prepared, but 25 percent admit they are either very or relatively unprepared to maximize the opportunity.

Q12. Rate how prepared your organization is to exploit opportunities presented by achieving a customer-centric culture. 3% 1-Very Unprepared 22% 2 47% 3 23% 4 6% 5-Very Prepared

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REPORT

Culture and a lack of a strong mandate from senior management emerge as the key reasons that marketers lack confidence in their organizationâ&#x20AC;&#x2122;s ability to fully exploit the opportunities that customer centricity can present. Half of respondents say a lack of understanding of the opportunities from senior management is the key issue while 31 percent admit there is no management mandate to develop the channels that would ramp up customer-centric behaviors. Some 42 percent say they do not have the budget to execute on the programs that could fully exploit opportunities, and an additional 46 percent have also been challenged by the complexity of the solutions being deployed or by integration issues. On a positive note, IT does not appear to be a primary roadblock to success as only 18 percent felt that IT resistance and opposition to solution sourcing was holding the organization back.

Q13. If you rated organizational readiness as a 1, 2 or 3, what are the reasons you believe your organization is not prepared? 50% Lack of understanding of opportunity from

senior management 46% Solution complexity and integration difficulties

42% Insufficient funding to truly exploit opportunities Insufficient support from internal IT to

33% deploy the right technologies

No management mandate to develop channels

31% that ramp up customer-centric behaviors

Over-arching cultural resistance to change

28% across the organization

IT resistance and opposition to solution

18% sourcing

Insufficient solutions from external

10% marketing agencies to quickly engage 8% Other

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REPORT

While few marketers believe the dynamic with IT is contentious (8 percent), only 12 percent have reached a state of total partnership and alignment. On a hopeful note, total alignment may not be too far off. Some 39 percent of respondents feel they are aligned with IT but are still challenged to execute on key priority projects. More than a quarter of marketers surveyed also feel the dynamic is challenged by divergent priorities or limited budgets, echoing previous answers and sentiments indicating that budget and a lack of a core customer-focused, cross-functional strategy may be the biggest challenge facing many organizations.

Q14. How would you describe your relationship with your CIO/IT department?

39% Aligned but still challenged to execute 28% 13% 12% 5%

on priority projects Challenged by divergent priorities and limited budgets At the starting point to build a strategic partnership Total partnership and alignment between marketing and IT Nonexistent as IT rarely brings anything constructive to the table

3% Tense, lacking alignment or common ground

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REPORT

Even in the face of challenges and relationship strains, the majority views it as a critical dynamic. The majority, 85 percent, believes the marketing/IT relationship is critical, and an additional 10 percent believe that while it is not critical now, it is growing in importance.

Q15. Do you view this as a critical relationship? 85% Yes 5% No 10% Not now, but growing in importance

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REPORT

Data is the top value marketers see in the relationship between marketing and IT. More specifically, 63 percent of respondents believe that the ability to gather data from across the enterprise is the top value to the marketing/IT relationship. As big data plays a bigger role in marketing optimization, this realization is incredibly positive. Marketing is also looking to the relationship as a way to get far smarter about technology and hopefully selecting and deploying the right technologies that advance and speed engagements on a far faster timeline. Marketers also see IT as a potential partner-in-crime, as 49 percent see IT as being a strategic partner in making a business case for increased technology spend.

Q16. Where do you see value in the relationship? 63% Ability to gather data across the enterprise Constant improvement and advancement

53% of web tools and solutions

Faster adoption and implementation

53% of marketing technologies

Development of strategies leveraging

52% ITâ&#x20AC;&#x2122;s understanding of technology

Improved access to IT resources to

49% manage marketing platforms

Strategic partner in making business case

49% for increased technology spend

of performance optimization 44% Identification tools and technologies understanding of web performance 34% Deeper and analytics

32% Securing trust and reliability in the brand by securing critical customer data

20% The ability to tap into legacy infrastructure 3% Other

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REPORT

Even in the face of such a clear value—specifically, a partner in tackling big data—marketing admits that a collection of issues have combined to place pressure on the relationship. Budget emerges as a dominant issue as 30 percent of marketers point to some form of budget issue as being at the core of any strife in the relationship; 11 percent believe there is a budget tug-ofwar between marketing and IT, and 19 percent admit to a pressure to cut back on budget and resources. Despite previous indications that there is a lack of senior management understanding or mandate, only 1 percent feel that the senior team is actively pitting marketing against IT. However, marketing admits that a key contributor to a strained relationship is the lack of a common definition or language to secure cooperation and partnership.

Q17. What has strained this dynamic the most? 19% Pressures to cut back on budget and

resource utilization 16% Operational mindset is counter to strategic view marketing is taking on

11% Budget tug of war 11% Slow to act or react to marketing requests No common language or definitions to secure

10% partnership and cooperation

7% IT lacks authority to push agenda forward Compensation and performance bonuses

5% unintentionally drive goals in different directions. 5% Ongoing issues over ownership and governance

3% Legacy of tension between teams Friction put in place by senior management,

1% pitting marketing against IT

Personality conflicts leave the relationship

1% lacking. 10% Other

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REPORT

Marketing respondents have a real desire to be positive and believe that marketing is a priority, with 33 percent of marketers indicating a resounding “yes” and 42 percent recognizing that marketing is sometimes a priority, but it depends on time (and likely other priorities).

Q18. Do you believe marketing is a priority for IT? 33% Yes 23% No 42% Sometimes, as time allows 1% Marketing should not be a priority for IT.

While marketing may not always be a priority for IT, the customer is. Only 21 percent of marketing respondents believe the customer is not a priority for IT. However, marketing also admits that some of the disconnects that exist—such as a lack of common language, budget, senior management mandate and a culture that does not always revolve around the customer—have indicated that while the customer is a priority, customer centricity means something different for IT than it does for marketing.

Q19. Do you believe that the customer and customer centricity are priorities for IT? 35% Yes, they are our partner in aligning with the customer.

45% Yes, but customer centricity means something different for IT.

21% No

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REPORT

Q20. Have you had problems or challenges implementing marketing solutions or IT projects to further customer centricity? 57% Yes 23% No 20% Not sure

As marketing and IT work to improve the relationship and identify common priorities and goals, there are still signs of strain as 57 percent of respondents admit they have had some problems implementing marketing solutions or IT projects. And similar to the key contributors to any overarching issues or challenges to the relationship, budget, time and cultural alignment emerge as the top issues contributing to implementation problems. According to 44 percent of marketers, budget (or insufficient budget to fund key projects) has been the biggest obstacle between marketing and IT. Also high on the list of issues is a lack of time and resources, as well as the complexity of the solutions being implemented. However, there is a sense that IT may not have the right skill set required to best support and work with marketing as 41 percent see a lack of expertise as a key challenge.

Q21. If so, what were the biggest issues or obstacles? 44% Insufficient budget and funding for the project Lack of expertise and knowledge in IT

41% organization

Time and technical resources not available

35% to help

Marketing function not a priority for IT

31% department

Solution complexity and integration

31% difficulties

IT resistance and opposition to solution

27% sourcing

21% IT keeping marketing out of the loop No management mandate to push the project

21% forward

Marketing bypassing IT and working directly

18% with the vendor

Wrong solution that was not embraced by

13% users

Marketing resources taking control and

10% isolating IT 1% Other

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REPORT

Marketing is looking for a value-added partner, not a roadblock or an order taker. Among the top areas where marketing would like to see added support include IT being able to better understand the goals and mandates of marketing (28 percent) and to come to the table with strategic initiatives to advance customer centricity (26 percent). In sharp contrast, only 8 percent expected IT to simply tend to marketingâ&#x20AC;&#x2122;s requests or quickly move from tech identification to deployment (12 percent).

Q22. Where do you feel IT could better support marketing? 28% Better understand the goals and mandates 26% 12% 12% 11%

of marketing Come to the table with strategic initiatives to advance customer centricity Identify technologies that can enhance marketing insights Move from technology identification to deployment faster Identify technologies that can improve marketing performance

to marketing requests with a greater 8% Attend sense of urgency

3% Other

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REPORT

In a similar track to marketerâ&#x20AC;&#x2122;s ranking of critical customer touchpoints that demonstrate customer centricity, sales reps, account managers, service executives and call centers all represent key customer data repositories for marketers. Additional inbound points for data include corporate websites (60 percent) and company-managed social media channels (37 percent). These touchpoints represent large quantities of resource-dependent hearsay, leaving responsibility to sales, service or marketing reps to input valuable customer data through CRM or database systems. Interestingly, finance or billing resources rate relatively low on the list for critical data (16 percent); mobile apps (20 percent), online advertising (11 percent) and in-store experiences (14 percent) also rate lower than online service resources (29 percent) or social media monitoring (26 percent).

Q23. What do you consider to be the key customer touchpoints that provide customer data and insights? 67% Call / service center 64% Account management / sales resources 60% Corporate website, including eCommerce sites 37% Company-led social media pages 29% Online service or self-service solutions Social media chatter outside of company-led

26% social channels

20% Mobile apps and sites 16% Events sponsored by the company 16% Finance or billing resources 15% Trade shows and conferences Third-party reviews and commentary about

15% products or services

14% Channel partner websites 14% In-store service and agents 12% Live and virtual events staged by the company 11% Online advertising 9% Third-party purchased data Traditional advertising channels (i.e.

9% television, radio, outdoor, print, etc.) 8% Channel partner stores 6% Other

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REPORT

Big data has had big payoffs as 52 percent of marketers believe that data has identified new business opportunities for the organization. Data has also added visibility and accountability across all functions that engage with the customer (44 percent), improved customer engagements through personalization (35 percent), and proactively alerted sales or service to any customer issues before those issues became problems (33 percent). But data has also revealed some significant issues, ranging from added complexity in developing robust customer profiles to forcing changes to culture, processes and solutions in order to manage data and analytics. But this deluge of data has also highlighted the need for actionable data and insights versus a requirement for more data.

Q24. How has dataâ&#x20AC;&#x201D;both structured and unstructuredâ&#x20AC;&#x201D;impacted your operations? 52% Identified new business opportunities Added complexity to developing customer

46% profiles and intelligence

Highlighted importance of identifying

46% actionable data and insights in mass of data Added visibility and accountability across all

44% functions who engage and touch customer Allowed front-line resources to improve

37% customer service

Improved customer engagements through

35% personalization

Alerted sales/service to customer issues

34% before they became problems

Forced changes to culture, processes and

29% solutions to manage data and analytics

Increased investments into technologies

29% to manage data

Required greater cooperation and partnership 29% with IT

24% Uncovered where talent and skill gaps exist Provided clear profile and view into customer

23% requirements

Shifted ownership of customer data from IT

14% to marketing

Clouded roadmaps and created confusion as

10% data streams clutter databases

Paralyzed strategies due to over-analysis of

8% data

Opened brand to threats as data security

5% issues have mounted 2% Other

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REPORT

Marketers are keenly aware that gaps exist in their customer data profile picture. More than half (57 percent) indicate a resounding “yes” to missing important data points while an additional 30 percent say that it is possible, but they just don’t know what is missing. Only 10 percent of marketers feel they have everything they need for what is often an elusive comprehensive view of the customer.

Q25. Do you feel you are missing important data points to provide a more comprehensive view of your customer? 57% Yes 10% No 30% Possibly, but not sure what is missing 3% Not sure

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REPORT

The biggest gap in the big data wish list is in the area of predictive analytics and additional insights around customer lifetime value. Marketers would also like to add data points including online customer profiles or user-generated profiles (53 percent), customer service feedback or support (45 percent), and social media data (42 percent). Along the lines of wanting customer usage profiles, marketers would also like to see user preference or survey data folded into the customer data profile.

Q26. If yes, what data would you want to add? 71% Predictive analytics around lifetime value 53% Online customer profile/use profile 45% Customer service and support feedback 42% Social media data 42% User survey and preference data 35% Third-party demographic and profile data 24% Sales executive insights 20% Order history 19% Finance/customer payment data 14% Anything is better than what we have now. 12% In-store/agent exchanges

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REPORT

Interestingly, across multiple previous questions, very few marketers are actively seeking the addition of insights and data from traditional or offline channels. This is likely due to the complexity many marketers face when trying to integrate online and offline measurements across all campaigns. This challenge is also echoed as 43 percent of marketers feel they are either not integrated at all or are struggling with integration. Almost half (46 percent) are slightly more hopeful that they are improving but admit there is still room for improvement. Only 3 percent of respondents are fully integrated across online and offline channels—and across all functions.

Q27. How well integrated are your company’s online and offline analytic capabilities?

46% Getting better across the board, but still room for improvement

23% Struggling to integrate online with offline 20% Not integrated at any level Well integrated online, not well integrated

5% offline

3% Completely integrated across all functions integrated offline, not well integrated 3% Well online

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REPORT

Not surprisingly, marketing is not overly thrilled with the current state of their data and analytics technologies. Only 3 percent indicate they are “extremely satisfied” whereas 43 percent have some level of dissatisfaction (37 percent are fairly unsatisfied; 6 percent are very unsatisfied).

Q28. How satisfied are you with your current data and analytics platforms and technologies? 3% Extremely satisfied 34% Moderately satisfied 20% Satisfied 37% Fairly unsatisfied 6% Very unsatisfied

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REPORT

Marketing may not have anyone else to blame for the lackluster response about their satisfaction with big data management technologies. According to 32 percent, the platforms and technologies were identified and deployed by an internal marketing team whereas 40 percent said that marketing specifed needs and IT deployed. With marketing at the top of that decision tree, perhaps it is time to look at the voices being involved in the technology and platform research processes.

Q29. How were your analytics platforms identified and deployed in your organization? 40% Marketing outlined spec, IT selected and deployed platform 32% Internal marketing team selected and deployed Outside consulting group identified and 14% implemented platform

15% Other

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REPORT

Despite all the complexity, challenges, missing points of data and lack of satisfaction in current tools and systems, marketers still have faith that big data holds opportunity, but it is going to take time, effort and change to get there. The majority (61 percent) of respondents say that they have a more 50/50 outlook to big data—part obstacle, part opportunity, with a long way to go to reach an optimized opportunity scenario with big data.

Q30. Is big data an obstacle or opportunity for your organization? 5% Full Obstacle-It strains our data storage

capacity and our internal data processes and we’re unable to harness data for consistent, confident decision-making. 61% Part obstacle/part opportunity, but we have a long way to go. 19% Part obstacle, part opportunity, and we’re almost there. Full Opportunity–we have the storage, 15% processing capacity and skilled personnel to use the analytics we need.

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REPORT

Most importantly, marketers are in total agreement that big data is critical to customer centricity. While 40 percent say it is critical to improved decision making, 36 percent say big data drives the ability to personalize around the customer.

Q31. How important is big data to your ability to develop and execute customercentric programs? 40% Critical to improved decision making Data drives the ability to personalize

36% experiences

15% Mildly important 7% Not sure 3% Not important at all

The majority of marketers view big data as an opportunity for competitive advantage. Some 70 percent of respondents see the competitive edge, with 30 percent saying it is a critical advantage. Forty percent say it is an advantage, but just part of the overall brand picture.

Q32. Does big data—and the ability to translate it into insights—create a competitive advantage for your brand? 30% Yes, it is critical. 40% Yes, but it is only part of the picture. 20% Maybe, but we haven’t seen that happen yet. 6% No, it isn’t a factor. 4% Not sure

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REPORT

Marketers are torn, unsure of whether they have the right talent to execute on customer-centric programs. While 40 percent believe they are rightly staffed, 36 percent know they do not have the right talent, and 24 percent are just not sure. This falls in line with other CMO Council studies which indicate that marketers intend to heavily invest in training and up-skilling their digital marketing and data/analytics capabilities in order to more fully exploit new customer-centric engagement channels and strategies.

Q33. Do you have the right talent in marketing to execute customer-centric programs? 40% Yes 36% No 24% Not Sure

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REPORT

Marketers are looking to on-board and train talent to bolster analytics and intelligence capabilities, digital media optimization and insight gathering. Interestingly, marketers also feel that key talent that can bridge gaps between marketing and IT are also needed. Some 34 percent of respondents indicated they will need a liaison across functions that understands marketing, IT, finance and operations. An additional 36 percent believe that a dedicated C-level position focused on customer centricity is required, which leads to an important question: Why doesn’t the CMO occupy that spot already?

Q34. What skills does your organization need to achieve true customer centricity?

55% Data analytics and intelligence modeling 37% Channel strategy and management A dedicated C-level position focused on

36% customer centricity

Liason across functions that understands

IT, finance and operations • 34% marketing, Marketing technology resources

32% IT integration 30% Customer service and support Digital media and interactive marketing

25% leaders

Market experts with deep understanding of

20% cultural/geographic differences 19% Digital media optimization 18% Process management 18% Social media specialists

12% Mobile relationship marketing expert 4% Six Sigma black-belt process expertise 4% Other

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REPORT

demographics—marketing 1.

What is your title? 22% Chief Marketing Officer 13% Director of Marketing 12% VP of Marketing 9% Head of Marketing 4% SVP/EVP of Marketing 4% VP of Corporate/Marketing Communications 2% VP of Marketing and Sales 1% VP of Marketing Operations 1% VP Customer Experience Director of Corporate/Marketing

1% Communications 30% Other

To whom do you report? 40% CEO 11% CMO 9% President 6% VP of Marketing 5% COO 5% Head of Marketing/GM 3% SVP of Marketing 22% Other

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REPORT

How large is your company? 34% Less than $50 million 10% $51 million to $ 100 million 9% $101 million to $250 million 7% $251 million to $500 million 4% $501 million to $750 million 4% $751 million to $1 billion 13% $1.1 billion to $5 billion 19% Greater than $5 billion

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REPORT

What best describes your companyâ&#x20AC;&#x2122;s industry sector? 17% Professional services 12% Information technology 10% Telecommunications 6% Retail 5% Manufacturing 4% Banking 4% Travel and hospitality 3% Automotive 3% Education 3% Healthcare 3% Insurance 3% Media and publishing 2% Electronics and miscellaneous technology 2% Energy 2% Entertainment 1% Aerospace & Defense 1% Construction 1% Food and beverages 1% Government 1% Packaged goods 1% Transportation 1% Utilities 1% Wholesale/distribution 14% Other

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REPORT

In which region is your company headquartered? 56% United States 18% Europe 7% Canada 5% Africa 3% Middle East 3% India 1% Latin America/Caribbean 1% Japan 0% China 7% Other Asia-Pacific

In which regions does your company operate? 76% United States 54% Europe 47% Canada 33% Latin America/Caribbean 32% India 32% China 31% Middle East 29% Africa 26% Japan 39% Other Asia-Pacific

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REPORT

How large is your staff/team? 38% Less than 10 26% 10–30 14% 30–50 6% 50–100 6% 100–200 2% 200–300 8% More than 300

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REPORT

detailed findingsâ&#x20AC;&#x201D;IT CIOs believe that customer centricity starts with culture and is demonstrated by business decisions that are based on customer behavior and insights. According to 69 percent of IT respondents, having a corporate culture that places the customer at the center of all processes and strategies is the core attribute of operating a customer-centric organization. More than half also feel that making business decisions based on customer behavior and insights is key while 49 percent believe a core attribute is aligning the right people, processes and technologies around the customer.

Q1. What are the key attributes of a customer-centric organization? 69% Corporate culture that places the customer 54% 49% 44% 39% 36% 33%

at the center of all processes and strategy Business decisions based on customer behaviors and insights People, processes and technologies aligned around customer values Responsiveness to issues and challenges raised by customers Strong mandate for customer focus from CEO/president Highly relevant experiences that increase customer advocacy and loyalty Cross-functional strategies and mandates to develop customer-centric approach

28% Friendly and helpful customer service Value-added services to enhance customer

25% experience

Delivery of relevant content based on real-

21% time customer intelligence

Strong, unified and consistent communication

21% of brand value

18% Personalized communications Budget to execute more personalized,

17% customer-centric campaigns

16% One-on-one engagements with the customer Pricing that is appropriate and seen as

10% reasonable in eyes of customer

Seamless access to online services and self-

10% service options

Uplifting advertising and brand messaging

4% that communicates customer focus

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REPORT

IT executives feel that while some of the top attributes have been adopted, there have only been varying degrees of both completion and success. The slim majority (33 percent) admit that the key customer-centric elements they highlighted in the previous question have only been partially adopted, but they plan to implement others soon. An additional 29 percent say that while the attributes of customer centricity have been adopted, they have only yielded varying degrees of success. However, it is notable that the 20 percent of IT executives who believe that their organizations have not adopted these attributes but are on the path to improvement.

Q2. Have these attributes been adopted across your organization?

7% Yes, all top attributes are currently

implemented across the organization.

29% Yes, but to varying degrees of success Partially adopted with plans to adopt all key

33% attributes soon

Partially, but we no longer have the mandate

8% to implement all programs. 20% No, but we are improving.

No, customer-centric programs are not

2% a priority.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Functional silos are the top challenge that IT executives believe is holding back the organization from being a truly customer-centric enterprise. But just behind the very real issue of silos that can block the flow of data through the organization is ITâ&#x20AC;&#x2122;s belief that there is no common definition for customer centricity that can actually unify functional goals and processes. Notably, IT admits that the organization is missing key technology platforms to manage data and customer profiles (32 percent) and lacks the expertise in data analytics and intelligence (35 percent).

Q3. What challenges do you face in achieving a truly customer-centric organization? 45% Functional silos make connecting customer 39% 37% 35% 32% 28% 19% 19% 11%

data difficult No common definition for customer centricity to unify functional goals and processes Corporate culture not aligned around the needs of the customer Insufficient expertise in data analytics and intelligence Missing key technology platforms to manage data and customer profiles Lack the budget to execute customer-centric programs Front-line resources are not equipped to best manage customer issues Sales-focused organization that thinks quota before customer Personality clashes with other key stakeholders

3% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

The top spots—the CEO and the chief marketing officer—are the two leading owners of the customer. According to IT respondents, 20 percent say the CEO owns the customer while 19 percent say it is the CMO. However, what should be of bigger concern is that some 17 percent of respondents say that ownership of the customer is undefined and spread across multiple functions.

Q4. Who is the primary “owner” of the customer in your organization? 20% Chief Executive Officer/President 19% Chief Marketing Officer Undefined and spread across

17% multiple functions 15% Sales

Cross-functional task force of senior

11% leadership

8% Customer Service and Support 5% Chief Operations Officer 2% Chief Customer Officer 1% Chief Revenue Officer 1% Don’t know 3% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

The C-suite executives, with additional help from customer support and sales, are the key stakeholders in advancing a corporate agenda of customer centricity. The top spots include the CEO (60 percent), the CMO (50 percent), customer support and service (41 percent), the chief operating officer, and sales (both 39 percent). The CIO falls just outside these top five stakeholders (37 percent), despite previous statements that data and the development of platforms and processes that can cross silos and deliver critical customer intelligence is core to a customer-centric organization.

Q5. Who are the other key stakeholders in optimizing the move to customer centricity? 60% Chief Executive Officer/President 50% Chief Marketing Officer 41% Customer Service and Support 39% Chief Operations Officer 39% Sales 37% Chief Information Officer 36% Internal marketing team 26% IT team 26% Key account managers 23% Chief Financial Officer 21% Chief Revenue Officer/Head of Sales 19% Channel partners 15% Point of sale/in-store resources 13% Agency partners 12% Chief Customer Officer Undefined and spread across multiple

9% functions 5% Investors

1% Donâ&#x20AC;&#x2122;t know 3% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

For many organizations, the website is where marketing and IT most connect or most conflict over ownership or governance. But according to 63 percent of IT executives, the website is the top touchpoint that demonstrates customer centricity. Following closely behind are traditionally more sales-focused touchpoints like sales/account management resources (60 percent) and call centers/customer support (56 percent).

Q6. What are the critical touchpoints that demonstrate customer centricity to customers? 63% Corporate website, including eCommerce sites

60% Account management/sales resources 56% Call/service center 32% Company-led social media pages 27% Online service or self-service solutions 24% Events sponsored by the company Social media chatter outside of company-led

24% social channels

22% In-store service and agents 21% Mobile apps and sites 18% Live and virtual events staged by the company 16% Trade shows and conferences Third-party reviews and commentary about

15% products or services

13% Product evangelists/gurus 10% Channel partner stores 10% Finance or billing resources 9% Channel partner websites 6% Online advertising Traditional advertising channels

5% (i.e. television, radio, outdoor, print, etc.) 4% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

For the most part, IT executives are moderately satisfied with the ability of the top touchpoints outlined in the previous question to activate the customer—but in a time where “okay” may not be good enough, it is more telling that only 6 percent are highly satisfied. In fact, 49 percent of respondents are neutral in their assessment or are more disappointed than satisfied.

Q7. Are you satisfied with the ability of these touchpoints to activate and engage with the customer? 6% Highly satisfied 44% Moderately satisfied 37% Neutral–too early to make a determination 12% More disappointed than satisfied 1% Highly disappointed

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Eliminating functional silos and getting on the same page for a customer-centric strategy again emerge as the top roadblocks to optimizing the individual touchpoints that deliver on the promise of customer centricity. As IT executives indicated in question three, silos that make data aggregation difficult (46 percent) and no common goals or strategies (37 percent) make touchpoint improvements difficult at best. Budget also emerges as a key issue as 38 percent point to a lack of funds to enable improvements as a core issue. Interestingly, few see marketing as the problem (only 13 percent say there is no marketing oversight or input on key touchpoints), or perhaps few think marketing should be involved to begin with! What is curious is how few see the technology as a limiting factor as only 18 percent of respondents say that technologies not connecting with a legacy infrastructure is an issue (or at least a more challenging factor, considering that this issue may be at the core of what keeps functional silos segmented and separated).

Q8. What are the top roadblocks to optimizing these touchpoints? 46% Functional silos that make data aggregation impossible

38% Lack of budget to make improvements 37% Corporate culture adverse to change No common goals or strategies across key

37% corporate stakeholders

strong leadership at the most senior 31% Lacking levels to mandate change

25% Insufficient training of front-line resources Breakdown in communication between

23% marketing and IT

Technologies do not connect with legacy

18% infrastructure

Distributed network with no controls on

17% brand alignment

Senior management does not see problems

14% with current solutions.

No marketing oversight or input on key

13% touchpoints

Personality clashes between key executives

13% controlling resources and touchpoints

No connection between corporate marketing

7% and independent franchise or operators 5% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

The CIO should be the leader in advancing platforms to aid in marketing measurement and campaign optimization according to 55 percent of respondents. IT executives also believe the CIO should be increasing the use and value of CRM systems (54 percent), ensuring the integrity and availability of back-end systems (53 percent), and delivering more timely and relevant transactional, behavioral and customer profile data to the organization (51 percent). However, partnership with marketing is only selected at the middle of the list at best. Fewer than half of respondents felt that partnering with marketing to develop comprehensive customer engagement strategies was a key responsibility, instead opting for functions that are far more operational or tactical like maintaining up-time and automating engagements.

Q9. What role does marketing play in achieving a customer-centric enterprise? 77% Developing the strategy to best reach and 69% 58% 56% 55% 55% 52% 49% 46% 41% 39% 36% 36%

engage with the customer Gaining better customer insight, competitive intelligence and market knowledge Getting smarter about using social media and digital marketing technologies Understanding customer requirements and expectations Aligning corporate resources and crossfunctional teams to align to customer Managing the key customer touchpoints to ensure alignment Adding more engaging and interactive features to company and brand websites Knowing more about website utilization and visitor behavior Reaching and engaging with the market more efficiently and effectively Setting the tone and tenor of all customer communications and experiences Ensuring brand assets are more accessible globally to ensure brand unification Integrating and extracting more value out of disparate and siloed customer databases Tying website and digital engagement analytics to business outcomes and transactions

3% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

In line with the previous answer, IT is happy to turn customer engagement strategies over to marketing as 77 percent of respondents say that marketingâ&#x20AC;&#x2122;s primary role is to develop the strategy to best reach and engage with the consumer. IT also sees marketing as the center point for turning data and profiles into insights and intelligence as 58 percent say marketing is responsible for getting smarter about using social and digital channels, 56 percent say marketing should understand customer requirements and expectations, and 69 percent say that marketing should be gaining better customer insights, competitive intelligence and market knowledge. Yet despite this nod to marketingâ&#x20AC;&#x2122;s role in customer intelligence, only 36 percent feel marketing should focus on integrating and extracting more value out of disparate and siloed customer databases, perhaps in a nod that this is really the role of IT in this partnership around big data.

Q10. Specific to technologies and platforms that deliver customer-centric experiences at what point in the IT process do you involve marketing? 54% From the very start so technology selection to deployment to the customer is seamless

25% It depends if marketing owns a key

touchpoint that connects to the technology 6% Once a deployment platform or a technology has been identified, marketing develops campaigns around it we need content or branding to 6% When communicate with the customer

3% We involve marketing as little as possible. 4% We do not involve marketing at all.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

More than half (54 percent) of IT executives believe that marketing should be involved in identifying platforms that deliver customer-centric experiences from the very start so that platform selection and deployment are a seamless process. Only one in four respondents only engage marketing when that group directly owns a key touchpoint. In fact, only 7 percent of IT executives donâ&#x20AC;&#x2122;t (or only sparingly) involve marketing in the process at all.

Q11. What are the key responsibilities of the CIO specific to achieving customer centricity? 55% Advancing platforms to aid in marketing 54% 53% 51% 50% 46% 42% 38% 37%

measurement and campaign optimization Increasing the use and value of CRM systems by both marketing and sales Assuring the integrity and availability of back-end infrastructures and interfaces Delivering more timely and relevant transactional, behavioral and customer profile data Automating customer interactions and improving customer care and handling Managing and maintaining uptime across all technology platforms Partnering with marketing to develop comprehensive customer engagement strategies Developing new engagement channels to deepen customer intimacy and satisfaction Safeguarding and protecting customer data, brand assets and trademarks Piloting new ways to engage the market using

34% mobile, internet and POS technologies

Improving the links and interactions between

32% marketing, sales and channel groups

Furthering the use of social media and online

29% listening and contact systems

global websites and customer data 26% Scaling repositories closed-loop campaign 21% Introducing measurement and tracking capabilities Deploying improved solutions to enhance

18% email deliverability and recipient response 4% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Most IT executives give their organizations passing (albeit average) scores in the organizationâ&#x20AC;&#x2122;s ability to exploit opportunities presented by a more customer-centric culture. Nearly half see themselves in the middle of the road (47 percent) while only 6 percent feel the organization is very prepared.

Q12. Rate how prepared your organization is to exploit opportunities presented by achieving a customer-centric culture. 6% 5-Very prepared 27% 4 47% 3 19% 2 1% 1-Very unprepared

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Again, culture—or more specifically, the lack of strong leadership from the topmost ranks of the C-suite—emerges as the key reason that organizations are not fully in a position to capitalize on customer centricity. Some 47 percent of IT respondents identified a lack of understanding of the opportunity from senior management as the key culprit for their lackluster confidence while 43 percent point to a lack of budget to exploit opportunities. Again, marketing does not emerge as a key culprit in holding back the organization as only 13 percent point to marketing resistance and opposition to proper deployment of customer-centric technologies or platforms.

Q13. If you chose a rating of 1, 2 or 3, what are the reasons you believe your organization is not prepared? 47% Lack of understanding of opportunity from senior management

43% Insufficient funding to truly exploit opportunities Solution complexity and integration

34% difficulties

Insufficient support to deploy the right

33% technologies

No business case to support new applications

33% or strategies

No management mandate to develop channels

31% that ramp up customer-centric behaviors

Over-arching cultural resistance to change

26% across the organization

Marketing resistance and opposition to

13% proper testing and deployment 5% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

IT and marketing seem to be aligned, but according to 41 percent of respondents, the alignment is not always perfect as they are being challenged to execute on priority projects. An additional 23 percent indicate that the relationship is challenged by divergent priorities and limited budgets, a response well in line with previous sentiments of a lack of common definition and strategy across the entire organization.

Q14. How would you describe your relationship with your CMO/marketing department? 41% Aligned but still challenged to execute on 23% 15% 10% 7%

priority projects Challenged by divergent priorities and limited budgets At the starting point to build a strategic partnership Total partnership and alignment between IT and marketing Nonexistent as marketing rarely brings anything constructive to the table

3% Tense, lacking alignment or common ground

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

More than half of respondents admit there have been challenges when trying to implement technologies. And as reflected in previous answers, IT is clear that a lack of common priorities and budget constraints tend to be the biggest roadblocks to success. Some 53 percent say that IT has other priorities than marketing programs while 50 percent admit there was insufficient budget for the project. And again, we see that marketing is not resisting ITâ&#x20AC;&#x2122;s involvement; only 10 percent felt that marketing was opposing solutions sourced by IT, and only 19 percent said that marketing was taking control of solutions and bypassing IT, suggesting that the historical friction between the two groups may be thawing.

Q15. Have you had problems or challenges implementing marketing solutions or IT projects to further customer centricity? 54% Yes 30% No 16% Not sure

Q16. If so, what were the biggest issues and obstacles? 53% IT has priorities other than marketing programs.

50% Insufficient budget and funding for the project Lack of expertise and knowledge in marketing

28% organization

Marketing bypassing IT and working directly

28% with the vendor

Time and technical resources not available

28% to help

Breakdown in communication as there is no

27% common vocabulary

No management mandate to push the project

24% forward

Solution complexity and integration

22% difficulties

Marketing resources taking control and

19% isolating IT

solution that was not embraced by 12% Wrong users

10% Marketing resistance and opposition to solutions sourced

2% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Further proving the criticality of the CMO/CIO dynamic, an overwhelming majority (85 percent) of IT executives say that the relationship between marketing and IT is critical.

Q17. Do you view this as a critical relationship? 85% Yes 6% No 10% Not now, but growing in importance

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

According to IT, the value in the CMO/CIO relationship revolves around big data, specifically in having a partner in advancing analytics and data-driven decision making throughout the company. In fact, IT views several key points around big data as being at the heart of the relationship, including the ability to provide greater definition around data requirements (39 percent) and the development of insights into customer behaviors that can be shared with the organization (51 percent).

Q18. Where do you see value in the relationship? 62% A partner to advance analytics and data-driven 56% 51% 46% 44% 40% 39% 37% 35%

decision making throughout the company Ability to properly scope, test and launch marketing technologies through collaboration Insights into customer behaviors, especially those that vary by region Additional budget to fund customer data and technology investments Strategic partner in making business case for increased technology spend Clarity into key drivers to improving web performance and function Greater definition around customer data requirements New digital engagement channels to build our technology footprint Modernization of aging infrastructure systems to keep up with customer demand

1% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

It would seem that IT is pointing the finger of blame in marketing’s direction, saying that marketing is unclear about its goals and strategies, and this is leading to a strained relationship between marketing and IT. And while budget battles (33 percent) and IT being marginalized and treated like an order-taker and not a strategic partner (32 percent) are also issues, it would seem that not even senior management pitting marketing against IT (selected by only 6 percent of respondents) strains the relationship as much as marketing’s own murky strategy.

Q19. What has strained this dynamic the most? 41% Marketing is unclear about its goals and strategies.

33% Budget battles over marketing IT spend IT is treated like an order-taker, tasked with

32% just buying tech and installing it.

No common language or definitions to secure

26% partnership and cooperation

Ongoing issues over ownership and

21% governance

Pressures to cut back on budget and resource

21% utilization

Operational mindset is counter to strategic

15% view marketing is taking on

Rising resentment over delayed or rejected

15% technology deployments and investments Compensation and performance bonuses

13% unintentionally drive goals in different directions. 13% Legacy of tension between teams Overly demanding, expecting immediate

12% action on marketing programs

Personality conflicts leave the relationship

7% lacking.

Friction put in place by senior management,

6% pitting marketing against IT 3% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Despite any challenges that may exist, IT firmly believes (56 percent) that marketing and IT are partners in aligning with the customer. An additional 32 percent say that there is collaboration, but customer centricity has different definitions for marketing.

Q20. Do you believe working and collaborating with IT is a priority for marketing? 56% Yes, they are our partner in aligning with the customer. 32% Yes, but customer centricity means something different for marketing.

6% No 6% No, marketing will continue to work around IT.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

For marketers looking to improve the relationship, IT suggests approaching them earlier in the process to collaborate on strategy (even though IT earlier stated that marketing doesnâ&#x20AC;&#x2122;t understand its own goals or strategies). IT also recommends developing a common mandate and strategy that is (or can be) supported by senior leadership. What isnâ&#x20AC;&#x2122;t IT looking for? Only one in four IT executives would like marketing to apply more reasonable timelines on deployments and implementations, and only 11 percent would like to see more involvement by marketing in data security measures.

Q21. Where do you feel marketing could do a better job of engaging and working with IT? 62% Approaching IT earlier in the process to 48% 41% 39% 34% 29% 28% 25%

collaborate on strategy Develop a common mandate and strategy that is supported by senior leadership. Bring business-level rationale and specifics for projects and requests. Regular strategy sessions and meetings at most senior levels of IT and marketing Have all parties engaged around the table, including agencies and outside consultants. Allocate budget to support additional resources required to attend to marketing needs. Get smarter about systems and solutions to speed requests and eliminate waste. Apply reasonable timeframes to deployments and implementation. Participate more actively in data security

11% measures and help educate staff. 1% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

IT believes it is very involved in data aggregation but less involved in developing analytics. But 23 percent admit that while they are involved as needed, it is typically only when marketing requests something.

Q22. How involved is IT with the identification of data streams, aggregation and analytics of customer data, and delivery of insights to the organization? 16% Highly evolved and at the center of

identifying, aggregating and processing data 37% Very involved in data aggregation but less involved in the analytics side 19% Only involved in maintaining uptime integrity of corporate digital or technology sources as needed, typically by request of 23% Involved marketing

6% IT gets involved when something goes wrong.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Added complexity has been the primary byproduct of the influx of structured and unstructured data according to half of the IT respondents. But IT also recognizes that big data has elevated the importance of IT systems and data availability across the enterprise. With this new complexity and increased importance also comes a call for new talent to manage these systems according to 35 percent of respondents. And IT seems ready to deal with the influx of data as few respondents indicated that issues around increasing headcount (16 percent), data flow clogging systems (13 percent), or the complexity clouding roadmaps (14 percent) have been issues that have created a negative impact.

Q23. How has data—both structured and unstructured data—impacted your operations? 50% Added complexity to developing customer 39% 35% 30% 30% 29% 28%

profiles and intelligence Elevated the importance of IT systems and data availability Changed the profile of talent needed to manage systems Added visibility and accountability across all functions who engage and touch customer Requires greater cooperation and partnership with IT Demanded additional investments in infrastructure and storage Forced changes to culture, processes and solutions to manage data and analytics

25% Identified new business opportunities Enabled IT to take on more strategic

22% conversations at the C-suite level

Highlighted importance of identifying

22% actionable data and insights in mass of data Increased headcount to manage data and

16% requested

Shifted ownership of customer data from

16% IT to marketing

Clouded roadmaps and created confusion

14% as data streams clutter databases

Clogged and slowed systems with rush

13% of data being collected

Required investments into advanced tools like natural language processing and pattern 6% recognition Opened brand to threats as data security 4% issues have mounted

2% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

An opportunity to further partner—this time around big data—seems to be missed as IT respondents admit that IT and marketing only have a limited partnership when it comes to strategies around data management. Some 60 percent of respondents believe that each group has its own roles to execute, again pointing to previous sentiments around a lack of shared vision, mission or mandate. Only 17 percent of respondents enjoy a state of total partnership that includes strategies and measures for success.

Q24. How closely do you work with marketing in developing strategies to manage data? 17% Total partnership: CMO and CIO develop 60% 14% 9% 1%

joint strategies and measures for success Limited partnership: We each have our roles to execute corporate strategies. Forced partnership: We come together when we have to but otherwise rarely engage. Partnership in name only: There is little common ground and no common mandate. Not partners but rivals: There is a battle for budget, technology and ownership of the customer and their data.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

As noted in the previous question, marketing and IT have a limited partnership when it comes to data management strategies. However, 35 percent of IT executives indicate that this may be just fine, stating that marketing should own the data and intelligence and rely on IT to help aggregate the data from across the organization. However, there is a growing number of respondents who would like to see a deeper partnership with marketing around the big data demands of the organization as 31 percent believe that there should be a joint partnership between the two functions.

Q25. Who should own and manage customer data and the intelligence drawn from that data? 35% Marketing should own the data and 31% 23% 6% 3% 2%

intelligence, relying on IT to help aggregate It should be a joint partnership between IT and marketing. No single team should own this process. Customer centricity is a company-wide process. Operations should centralize and own the process, with IT and marketing supporting IT should own the entire process, from aggregation to intelligence distribution. We likely need a new role that just focuses on customer data and insights.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Likely a symptom of not sharing a core mission or mandate that is issued from a CEO committed to customer centricity, IT admits that marketing, at least on occasion, makes requests of IT that are not in line with IT mandates. However, when you consider that IT has previously stated that marketing should own customer data and intelligence and that the hallmark of customer centricity is making business decisions based on this customer data and intelligence, it would stand to reason that marketing and IT should be better aligned, not making requests that fall outside eitherâ&#x20AC;&#x2122;s corporate, customer-centric mandate.

Q26. Does marketing make requests of IT that are not in line with IT mandates? 18% Yes, all the time 59% On occasion 12% Rarely 10% No, never

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Falling in line with IT frustrations that they are seen as “order-takers,” 54 percent of respondents admit that marketing technologies tend to be outlined by marketing and selected and/or deployed by IT. A significant number of respondents say that internal marketing teams are actually selecting and deploying their own solutions.

Q27. How are marketing technologies, platforms or solutions identified in your organization? 54% Marketing outlined spec, IT selected and deployed platform 33% Internal marketing team selected and deployed Outside consulting group identified and 8% implemented platform

5% Other

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REPORT

Not surprising, 65 percent of respondents say that problems have emerged from this solution identification process, especially considering that nearly one in every three respondents said marketing was circumventing IT in the process.

Q28. Have challenges emerged as a result of this process? 65% Yes 22% No 13% Not sure

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

A broad range of issues have emerged thanks in part to the processes currently in place to define and adopt marketing technology platforms. Of the 65 percent of respondents who admitted there had been challenges, 41 percent believe the wrong solution was deployed due to a lack of communication. One-third said the technology that was deployed was not compatible with existing infrastructures, and nearly one in three said the solution was too complex, did not integrate into existing marketing tools, or was not really what marketing expected or needed.

Q29. If yes, what were the primary challenges? 41% Communication was not clear and wrong 33% 31% 31% 31% 14% 14%

solution was deployed. Technology was not compatible with existing infrastructure. Solution complexity made the system impossible to support or use. Solution did not connect or integrate to existing marketing tools Tools were not really what marketing needed or expected Incremental price increases from third party in order to repair/service tools Unreasonable timelines were set by marketing to deploy technologies.

5% Other

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REPORT

IT executives admit they have a long way to go when it comes to fully realizing the opportunities in big data. In fact, 60 percent feel big data is both an obstacle and an opportunity for their organization. At this time, only 17 percent of respondents feel that big data is a complete opportunity and that they have the right storage, processing, capacity and skilled personnel to use the analytics the organization needs.

Q30. Is big data an obstacle or opportunity for your organization? 5% Full obstacle—It strains our data storage capacity and

our internal data processes, and we’re unable to harness data for consistent, confident decision-making. 60% Part obstacle/part opportunity, but we have a long way to go. obstacle, part opportunity, and we’re 18% Part almost there. Full opportunity—we have the storage, 17% processing capacity and skilled personnel to use the analytics we need.

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Even with the recognition that there is still a long road ahead, IT executives remain committed, with 51 percent of respondents saying big data is critical to improved decision making and another 23 percent saying it drives the ability to personalize experiences.

Q31. How important is big data to your ability to develop and execute customercentric programs? 51% Critical to improved decision making 23% Data drives the ability to personalize experiences

12% Mildly important 9% Not sure 6% Not important at all

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REPORT

Part of what could be making the journey more difficult to traverse is talent. Some 66 percent of IT executives are either unsure or know they do not have the right talent within their current IT teams to execute on a customer-centric mandate.

Q32. Do you have the right talent in the IT department to execute customer-centric programs? 35% Yes 33% No 33% Not sure

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

Overwhelmingly, IT sees a deficit in data analytics and intelligence modeling talentâ&#x20AC;&#x201D;although previous responses would indicate that IT may believe this talent should actually reside within the marketing team. Along with analytics talent, IT would like to see a position created that serves as a liaison across functions like IT, finance, marketing and operations. IT is far less interested in bringing on process gurus as only 4 percent indicated they could use the assistance of a Six Sigma Black Belt expert. However, 37 percent would like to see additional expertise in channel management and customer service and support join their team.

Q33. What skills will the organization need to achieve true customer centricity? 60% Data analytics and intelligence modeling Liaison across functions that understands

42% marketing, IT, finance and operations 37% Channel strategy and management 37% Customer service and support

A dedicated C-level position focused on

35% customer centricity

35% Digital media and interactive marketing leaders 27% Predictive analytics knowledge 23% Marketing technology resources 22% Advanced database architects 20% Digital media optimization 20% Social media specialists Market experts with deep understanding of

19% cultural/geographic differences

10% Mobile relationship marketing expert 4% Six Sigma black-belt process expertise 1% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

demographics—it 1.

What is your title? 33% Chief Information Officer 16% VP of IT 9% Head of IT/Technology 8% VP of Marketing Technologies 7% Director of IT 6% SVP/EVP of IT 3% VP of Technology 1% VP of Insights/Analytics 19% Other

To whom do you report? 43% CEO 14% President 12% COO 11% CIO 5% CMO 3% SVP of IT 0% VP of IT 13% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

How large is your company? 27% Less than $50 million 4% $51 million to $ 100 million 7% $101 million to $250 million 5% $251 million to $500 million 12% $501 million to $750 million 15% $751 million to $1 billion 14% $1.1 billion to $5 billion 16% Greater than $5 billion

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

What best describes your companyâ&#x20AC;&#x2122;s industry sector? 13% Professional services 9% Information technology 7% Electronics and miscellaneous technology 7% Retail 7% Telecommunications 6% Media and publishing 5% Manufacturing 4% Banking 4% Education 4% Government 4% Insurance 2% Entertainment 2% Food and beverages 2% Healthcare 2% Packaged goods 2% Pharmaceuticals 2% Travel and hospitality 1% Aerospace & Defense 1% Automotive 1% Construction 1% Consumer durables 1% Energy 1% Health insurance plans 1% Transportation 8% Other

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

In which region is your company headquartered? 64% United States 10% Europe 9% Canada 4% Latin America/Caribbean 4% Africa 3% Middle East 1% India 1% China 1% Japan 4% Other Asia-Pacific

In which regions does your company operate? 80% United States 49% Europe 43% Canada 32% Latin America/Caribbean 23% China 20% Japan 18% Africa 18% Middle East 16% India 35% Other Asia-Pacific

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

How large is your staff/team? 36% Less than 10 26% 10–30 12% 30–50 11% 50–100 7% 100–200 6% 200–300 3% More than 300

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

LEADERSHIp COMMITTEE—MARkETING Richard Smith

Adriana Eiriz

Nancy Jones

Robert Solomon

SVP & Chief Marketing Officer AIG Bank

Chief Marketing Officer Allianz Life Insurance

Patrick Blair

Chief Marketing Officer WellPoint

Paul Kadin Head of North America Marketing Operations and Strategy Citi

Deborah Colby

VP of Marketing First Tech Federal Credit Union

Nicholas Caffentzis GM of Strategic Alliances GE Heathcare IT

Stuart Foster

VP of Marketing Hilton Worldwide

Ian Arthur

Chief Marketing Officer Intrawest

Lanet McCrary

Chief Marketing Officer Nexxo Financial Corporation

SVP & Chief Marketing Officer Outrigger Hotels & Resorts

Karen Larrimer

Chief Marketing Officer PNC Financial Services Group

Jane Stackpole

Head of Market Strategy Silicon Valley Bank

Michael Babikian

Chief Marketing Officer Transamerica Insurance & Investment Group

Robin Korman

SVP of Global Loyalty and Partnership Wyndham Hotel Group

Anonymous

Chief Marketing Officer Life Insurance Company

Anonymous

Chief Marketing Officer Life Insurance Company

Anonymous

Vice President, Head of Marketing Financial Services Company

VP of Marketing and Business Development Magnolia Federal Credit Union

MORE RELEVANCE GREATER RESONANCE TM |

REPORT

LEADERSHIp COMMITTEE—IT Jeff Palm

Ken Corriveau

Jay Ferro

Albert Oriol

Chief Marketing Officer American Cancer Society

Chief Information Officer Rady Children’s Hospital–San Diego

T.J. Graven

Gabrielle Wolfson

Chief Information Officer Allianz Life Insurance

VP, Chief Information Officer Brown-Forman Corporation

Tracy Nolan

SVP & Chief Information Officer Commercial Metals Company

Joe Simon

Chief Innovation Officer Omnicom Media Group

Chief Information Officer Panasonic

Anonymous

Chief Innovation Officer Hotel Resort & Brand

Anonymous

Chief Technology Officer Conde Nast Publications

Senior Vice President, Chiefs Information and Operations Officer Life Insurance Company

Shohreh Abedi

Anonymous

Chief Information Officer Farmers Insurance Group

Chief Information Officer Medical Device Company

Larry Godec

SVP & Chief Information Officer First American Financial

Marco Trecroce

SVP & Chief Information Officer Four Seasons Hotels and Resorts

Haden Land

VP of Engineering & Chief Technology Officer Lockheed Martin

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LEADERSHIp COMMITTEE—ACADEMIC Anindya Ghose

Associate Professor NYU Stern School of Business

Robert Rose

Author, Speaker, Senior Analyst Digital Clarity Group (DCG)

David Large

Vice President of University Advancement University of Fredericton

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executive insights—MARKETING Richard Smith Senior Vice President & Chief Marketing Officer AIG Bank

At AIG Bank, customer centricity is not a destination; it is a journey. There is no finish line or limitation to being customer-centric, and it is something that can always be improved. Richard Smith, Chief Marketing Officer, embraces this journey by teaming up with the CIO and creating a customer-centric culture that spreads across the organization. The customer’s objectives should be the focus of every decision and action made in every organization. That is why AIG decided to make customer centricity a part of their organizational culture. Implementing this mindset allows the customer to be at the center of all processes within the organization, and all objectives are focused on what the customer wants. “I would define customer centricity as having a strong service culture within the organization and designing your processes, systems, operations, marketing tools and functions around solving customer problems and providing solutions to customer needs,” Smith says. Coming from an organization that started with very little consumer business, AIG had to undergo a huge transformation in order to successfully conduct consumer-directed business. Their employees had to understand the importance of being customer centric and what benefits that could bring to the company. To prove why this mindset was critical to success, customer feedback was reviewed by management and employees. “Looking at this feedback helps make the case as to why we need to change and helps us identify the benefits of making those investments and taking the time and effort to change our mindset to become more customer-centric,” Smith says. “I think that was one of the key things that we used in order to help drive that change.” More challenges that arise with improving customer centricity are the investments and decisions made based on those investments. It takes time to see a return on some investments, and it can be difficult to decide which investments will be beneficial and which will provide greater risk than reward. “You have to take into account the return on investment,” Smith explains. “In some cases, you have to build that over time in order to make sure you are really getting the results you need to grow with the business. You need to make sure that you’re not just making those investments for the sake of making them.” Along with the employees, AIG seeks to change the mindset of the consumer so they can see how customer-centric the organization is. According to Smith, the most successful way to prove to the consumer that you are a customer-centric company is by providing transparency. Allowing the customers to see the processes and operations that are involved with the bank’s services is what helps them become more willing to understand and trust the organization.

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“By giving customers a view into your operations and how you provide them with the services you provide them, you’re showing them that you’re willing to put everything up front and provide them with the best service possible,” Smith says. Smith wants to work toward understanding customers more in a holistic way. Although technology is providing more customer insights than ever, it still does not provide a 360-degree view of the customer’s relationship with the organization. The customer could own several products in one household, but because those products exist across different lines of business, there is no way of properly tracking them. “Looking at multiple products in one household is an important metric for us,” Smith says. “But because they can be located under different names, etc., sometimes it’s difficult to get that holistic view of the customer.” Since most of AIG’s customer data acquisition is done online, it is important for Smith and the CIO to be in constant communication. If marketing owns the customer and makes the decisions, then IT is what makes those decisions actionable. “We work together on any sort of data or infrastructure project, technology project—everything from the website to customer service systems,” Smith explains. “For anything that touches on customer experience, we would work directly together.” IT and marketing have recently grown out of two separate departments and into a collaborative team at AIG. Since digital and mobile marketing have taken off, the marketing and IT departments have almost grown to depend on each other for a successful campaign. “Now that so much of what we do is being done online and so much of the customer interaction is taking place online or through technology, our partnership is critical to the user experience,” Smith says. Smith looks forward to the next step in the journey and continues to influence the customer-centric mindset throughout his organization. By providing customers with a transparent look into what they have to offer, Smith and the CIO plan to strengthen relationships with current customers while building new ones along the way. “We continuously improve areas of our service and the way we’re thinking and try to strengthen our organizational culture to be more customer-centric,” explains Smith. “That requires a change in mindset throughout the organization. It’s been a positive journey, and we still have more progress to make.”

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Nancy Jones Chief Marketing Officer Allianz Life Insurance

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Jeff Palm Chief Information Officer Allianz Life Insurance

Within this B2B organization, the CMO and CIO work hand-in-hand to better define and serve the end customer. With strong support coming from the top, these two are making great progress on their journey to becoming a more customer-centric organization. “Like many companies, we’ve had a lot of emphasis on customer experience and are looking at how to improve customer interaction, from consideration and purchase to ongoing service,” Jones says. Palm explains customer centricity as a company-wide point of view on how each touchpoint—direct and indirect—impacts the customer. He feels the first step in customer centricity is defining the end customer. They follow by exploring the various initiatives and technologies in play to determine what each means to the customer, how each touchpoint affects the customer experience, and the impact of each. As a B2B company, Allianz distributes products through financial professionals, who in some ways are the first customer. As a result of this structure, the enterprise has many layers when looking at customer centricity. “A big element of being customer centric is knowing the customer upfront and understanding the behaviors, trends, data and analytics,” Jones says. “By Through being more closely tied in with IT solutions, this is where marketers have increasingly more opportunity. We can then identify the right product, the right program and the right context to make offers based on the needs of the customer.” From a strategic perspective, marketing is the owner of the customer at Allianz. However, customer service and distribution play a major role in processing the business. “Everybody really has a part and owns various pieces of the end process, but our targeting operating model at Allianz is a market management-centric model, which focuses on the customer. , and T that’s driven out of the marketing function,” Jones says. Palm contributes, “Marketing owns the customer. Granted, other people touch the customer for various reasons in an end-to-end business model, but I like the notion of having it anchored somewhere, and in my view, that is in marketing.” Corporate and senior management mindsets pose a challenge during their journey of becoming more customer-centric organization, though educational programs have shown progress in this shift. “It takes time to evolve a culture and the mindset of the employee base,” Jones says. “Our goal is to ensure everybody from the very top to the very bottom and across every function has the same understanding of who the customer is and what we are actually trying to do to support them.” An additional roadblock may be the enterprise’s legacy systems, which make data mining complex. Nevertheless, both marketing and IT are in agreement that marketing leads the effort to manage the use of customer data while IT is the architect and keeper of andthe raw data. “There’s a notion of a data owner and a data steward, and generally speaking, one is a business person, and one is a technology person. Technology is responsible for the stewardship of all the data in our company; however, ownership responsibilities still reside with the business,” Palm says. “Technology is more of a support function than say marketing, especially relative to the customer,

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so there may be a layer or two of insulation between us and direct interaction with the customer. We are not quite as customer facingcentric in that regard, but hopefully we are proceeding forward instead of backward.” Appropriate investment is a key element in customer centricity, which ties highly to IT solutions to support marketing initiatives. “We tend to be project focused in the way we invest; projects are generally designed to either augment a capability such as, building a better general ledger system, launching a new website, or automatinge a system, etc.,” Palm says. “I think you’ll find a lot of them are not necessarily customer centric in their orientation. They are more around executing a particular project. Therefore, I would say appropriate prioritization of investments is key.” Jones adds, “Clearly you have to be able to demonstrate your customer centricity by building the appropriate support tools and service models to make it easy to do business with us. But often, we don’t always think about how project sit fits into the overall picture of what the customer’s needs are and what they expect. Our goal is to make that a discipline.” Having robust research, analytics, modeling and mining abilities are also critical to the success of becoming more customer centric. “The data is only as good as the people who use it, but having clean data easily accessible is imperative on the front end in helping people understand and know the customer,” Jones says. “Also, that same kind of data helps on the back end in servicing. Given the complexity of some of our businesses, getting the data the way we want to use it and having it easy to use, model and manipulate is always a challenge. This is something that we are getting better at.” Palm says, “Every now and then over the last couple of decades, something has come up in technology that turns out to be the next great thing and is a reality. And there are some terms you can look at that were all the rage for a little while, and then they turned out to be nothing but hype that eventually fizzled. Take “Big data” for example. I think Bbig data falls into that category in that, despite what some people may tell you, it is still on its training wheels as people are trying to figure out how to think about it. IAnd it could go one of two ways. It could take off like crazy and be the next big thing, or it could fizzle out and be a passing fad for thinkers. But without any sort of practical, tactical implementation, the jury’s is still out regarding big data.” At Allianz, data is gathered from transactional systems and funneled into a series of locations— operational data stores—that then feed into a data warehouse. Some of the data that’s gathered from those transactional systems is then acquirable and usable from a combination of the operational data stores and warehouse. In addition, they would ideally like the data stores to be other sources of information beyond just transactional systems. ROI made to improve the customer experience is measured across the enterprise through financial metrics, quantitative and qualitative metrics, and consumer research. Teams tasked with specifically driving the customer experience get measured and compensated based on their results. “Often as you improve customer interactions, you’re reengineering processes or approaches, which allows you to save money for the company,” Jones says. Due to a strong emphasis on customer experience at the top, both the CMO and CIO at Allianz feel valued by their C-suite peers.

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“I think our CEO has a strong view of the aspects of improving the consumer experience. It starts at the top, having the C-suite be supportive and understand the value of customer centricity,” Jones says. “The CIO role is a hand-in-glove partner with my team. From developing products to digital capabilities our interaction and from mobile platforms to our CRM systems, we cannot do anything without him. I, and I view him as a partner. I view the role as being a strategic partner at the table and helping us understand what the trends and opportunities are based on what we are trying to drive from a business perspective.” Palm adds, “My perception is that the CMO role is highly valued in the C-suite, and the notion of customer centricity is obviously something that gets a fair amount of airtime. However, generally speaking, I would say the CIOs and the CMOs probably have a bit of an under-appreciation for what the other actually does. I think in order to continue to enhance a strategic partnership between the two—not just here at Allianz, but in general—we probably need to make sure that CMOs and CIOs develop a greater appreciation and understanding of what the other does in their organization. I do not know exactly in what areas this relationship will grow, but I know it is going to deepen quite substantially.”

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Patrick Blair Chief Marketing Officer WellPoint

WellPoint is looking to create a more seamless experience for its members. In order to do so, all functions need to work from the same data set. As the company becomes more data-driven, CMO Patrick Blair develops a deeper alignment with the CIO. As a health insurance company that focuses on the Medicaid population, it is extremely important that the customer is at the center of all of the company’s business initiatives. “Whether it’s a clinical program that focuses on high-risk pregnancy or diabetes, we put the member at the center of everything we do,” says Blair. “We constantly look at various opportunities to improve business performance from the perspective of the customer.” Aligning all functions to become more customer-centric has been a big part of leadership discussions over the past six months. WellPoint executives are in the process of mapping member touchpoints throughout the entire organization. “We haven’t evolved to the point where we have a single business owner of the customer relationship, but it’s something that we’ve talked a lot about,” he says. “In our business, we are very much a service-oriented company that has many different touchpoints with a member. We have individuals who touch members through clinical engagement, service or physician relationships. As the CMO, in some ways I am the de facto owner of the customer relationship, but I certainly look to my business partners that lead other functions in the company to help me understand how to best help them engage the member in whatever they’re trying to accomplish.” The organization’s traditional marketing department is tasked with building awareness and customer retention. Because the organization touches members with health issues in a multidimensional, multifaceted way, an ongoing relationship with each member is established. “The customer experience becomes a lot about building trust and having members look to us as a resource for their health,” notes Blair. “We have a very strong understanding of who our customer is, but we haven’t brought all of that information together to create a seamless, consistent experience whenever someone interacts with the company.” Having a consolidated, longitudinal view of all customer interactions across the organization is key. There is a vast amount of disparate data sitting in balkanized systems, and people across the company are looking at different information that is intended to provide a consolidated view of a customer. “We need to provide consistency through one source of truth or one system of record, which everyone across the organization can use to see all outreach, interactions and transactions associated with a member in one central place,” Blair says. “When you are organized in this way, customers have a better experience.” In order to accomplish this, data sets and a technology platform that would allow executives to see member interactions in a holistic way is required. The organization’s goal is to be efficient with resources and not create uncoordinated interactions with customers. “Because technology is at the center of every engagement, I find myself working with the CIO quite a bit,” he says. “We discuss what tools are available and ask, ‘Are we looking at a CRM package, or

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is this something we can do with our core administrative systems? Do we need to build or buy this?’ I find myself working with him more than I have in the past because everything is becoming so datadriven.” IT was once more oriented to infrastructure, such as hardware, software and implementation, but has now become a much bigger, more relevant aspect of the organization and is becoming increasingly more important. The CIO finds solutions to deal with the fact that the healthcare industry is entering the world of big data and is key to finding the right warehouse strategy. Blair believes the CIO’s teams have evolved from purely being a technical resource to becoming strong business analysts. Current organizational planning includes marketing and IT sitting down early in the strategy process to lay out initiatives and where technology can enable these. “The relationship that has evolved from a world of an arm’s-length transaction to a much deeper collaboration,” Blair says. “IT has moved from an internal trading partner to a business collaborator.”

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Paul Kadin Head of North America Marketing Operations and Strategy Citi

Customer centricity is a constant focus within the banking industry because trust and loyalty from customers are essential for success. Citi adopts a customer-centric attitude within every operation performed. But if marketing is the brain of customer insight, IT is the backbone. Paul Kadin, Head of North America Marketing Operations and Strategy, elaborates on how the CIO is crucial in driving customer insight into every strategy determination. Customer insight is the driving force behind every decision made at Citi. In order to achieve loyalty and trust, Kadin believes customer centricity must be the intention behind every internal operation. “Customer centricity entails injecting customer insight into all important decision making,” he says. “Whether it is resource allocation decisions and prioritization, strategy determination or individual tactic development, customer insight is critical in every decision we make.” At Citi, the only way to truly include customer insight in every decision is for everyone within the organization to collectively own the customer. It is the responsibility of everyone to view their interactions with customers as a resource toward driving improved customer centricity. “The customer really needs to be seen as a responsibility of everybody,” explains Kadin. “Marketing can be a source of insight, but it cannot be the only department that utilizes the data.” Once that customer data is received, it is gathered and analyzed by the decision management team to provide insight into customer attitudes and behavior. A critical part of the process is selecting what data of all that is collected is most relevant and how can it be operationalized. “The challenges lie in bringing the data together and making it actionable,” Kadin says. “Shortage of data isn’t an issue—it’s the synthesis and integration of all the information to create some clarity of insight that we can act on.” One of the key measures used is the Net Promoter Score, which Citi uses across the entire organization to help establish priorities and set actions to be taken.. “Getting everybody to speak the same kind of language and having the methodologies line up has been a very important step toward improving our customer centricity,” he says. “It’s a good example of finding a metric that creates consistency in people’s analysis of the issue as well as their measurement of progress.” Along with a consistent metric system, Kadin believes a completely equal partnership and full cooperation from both marketing and IT are essential in measuring and achieving customer centricity. IT provides not only accurate knowledge about the customer, but also tools that make that knowledge available for the benefit of the organization. Without customer insight or the ability to use it properly, customer centricity is nonexistent. “It’s a complete partnership between marketing and IT, and they’re equal partners in helping define the strategy and understand its implications in terms of technology and information,” Kadin explains. “As the strategy moves into execution, there is a very close partnership between the business and IT in determining what sorts of technical resources are necessary.”

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Through the close partnership of IT and marketing, Citi continues to identify new ways to synthesize data to enhance their customer centricity. The collaboration of the CIO and CMO, along with a customer-centric mindset, are the tools needed to achieve accurate and actionable insight. “The cooperative relationship between IT and marketing is really quite excellent and very trusting,” says Kadin. “It takes equal doses of both perspectives to come to a conclusion about what we need to do next.”

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Deborah Colby Vice President of Marketing First Tech Federal Credit Union

First Tech Federal Credit Union serves a very unique customer circle. As a not-for-profit organization, the company’s entire customer circle is comprised of loyal members. First Tech’s mission is not centered on being profitable, but on delivering the type of experience their members expect from them and returning value to that membership. Vice President of Marketing Deborah Colby understands that in order to make customers happy, they need to maintain a consistent customer-centric mentality and a shared language with the CIO. In the credit union industry, it is important that every employee is adept at connecting with the customer. At First Tech, Colby believes the customer does not belong to just one division of the company, but to everyone. Since all of their customers make a commitment to become members, the customer experience is crucial for business success. “There are certainly divisions of our organization that have more one-on-one connections on a daily basis, but the expectation is set in our organization that every individual owns the member experience,” Colby says. “We bring that experience to fruition through teamwork and collaboration.” First Tech is very transparent with their customers. They utilize the Net Promoter Score and publish their satisfaction scores to their customers. This commitment to releasing feedback about the company to members provides motivation to stay dedicated to meeting customers’ needs. “We talk about the Net Promoter Score as an aspect of loyalty,” Colby explains. “We use it as a gauge for loyalty, and it’s available to members through what we say we’re going to deliver as a part of our brand platform and the service they feel every day.” Colby believes customer centricity would not be where it is without the CIO. Although the partnership developing between the Colby and the CIO are in its beginning stages, she understands it is critical to achieving customer satisfaction. The biggest hurdle for the two to overcome in order to work together as a team is the language barrier. The CIO is a highly focused IT role, and the CMO is a highly focused marketing role; because those roles are becoming more and more intertwined with one another, communication can make or break the relationship between the two. “The CIO and I are in a teenager stage simply because we each have to learn each other’s language,” Colby says. “The CIO and CMO don’t often speak the same language due to their completely different roles. What’s missing in our organization—and probably in many other organizations—are CMOs or CIOs that can ride both of those lines.” In the end, the customer decides whether the organization is truly customer centric or not. Colby believes direct feedback from customers is the best possible metric for measuring customer centricity. With the help of the CIO, Colby plans on letting the customers make the decisions at First Tech. “The proof that you’re a customer-centric organization lies in your customers and their loyalty and satisfaction with the organization,” Colby explains. “That is proof of how your members are feeling about you because ultimately, whether we think we’re doing it right is not the point. Our members and customers have to tell us we are.”

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Nick Caffentzis General Manager of Strategic Alliances GE Heathcare

When competing in the healthcare industry, organizations must understand how broad their customer base is and how to mold each and every interaction with a customer so it meets their particular needs. At GE Healthcare, customer-centric initiatives are put in place to meet the objectives that are important to individual customers. Nick Caffentzis, General Manager of Strategic Alliances, pilots this development to measure customer centricity holistically while individually meeting customers’ needs on a personal level. When looking at improving customer centricity within the organization, Caffentzis believes it is important to pay close attention to why the customer is looking for a particular service. With this information, the organization can infer beyond the obvious expectations and into exactly what the customer wants without them having to say it. “For us, customer centricity is much more around understanding how customers buy, what’s important to them as they buy, as well as trying to do as many different types of research as possible around what’s important to them from an offering standpoint,” Caffentzis says. While some organizations believe everyone must own the customer, Caffentzis believes this can be detrimental. When too many people own the customer in an enterprise, data can become ambiguous and inconsistent. To prevent this from occurring at GE Healthcare, Caffentzis attempts to segment information in terms of the related divisions within the company. “We don’t have a single data repository for all of the different types of customer information that we collect,” Caffentzis explains. “Some of the product-level information sits with marketing and product management, and the historical and revenue-type information resides with finance and IT.” One aspect of big data that Caffentzis is currently working to improve is the ability to look at the customer base holistically across the different regions of the world. Every customer has specific expectations, so it is difficult to hone in on the general performance of the company and create a holistic measurement for customer satisfaction. “In certain regions of the world, our customers are fairly complex in terms of their organizational structure,” Caffentzis says. “Getting a holistic view of what we do with a customer today is challenging.” GE Healthcare relies heavily on their different tools to measure customer data and performance. Currently, they are utilizing Marketo as a marketing automation tool as well as Salesforce.com and SAVO as sales enablement platforms. They also use the Net Promoter Score to measure the success of their relationship with the customer. “We’ve piloted some approaches around how to measure whether or not we are profitable with a customer and whether that customer is more or less profitable with us versus other companies,” Caffentzis explains. Over the years, Caffentzis believes the CIO role has grown from an IT implementer to a decision leader. The CIO is becoming accepted as an individual who is not just restricted to internal functions, but also able to contribute to external actions. As this role continues to grow and evolve, the CMO/CIO relationship will benefit as a result.

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“Previously, other functional leaders would come to the CIO with ideas on what they wanted and look to the CIO for implementation,” Caffentzis says. “Now, the CIO is becoming much more of a proactive advocate and developer of solutions that we use both internally and externally. CIOs are now driving discussions rather than just reacting to them.” Going forward, Caffentzis plans on utilizing the knowledge of the CIO to assist not only in the implementation of marketing projects, but also in the brainstorming and development processes as well. “Our CEO and CMO are driving a discussion about understanding our customers’ businesses, and they’re looking for the CIO to be a partner in how we create the approaches that allow us to know if we are understanding the customer and how we can share that with them,” he says. “This partnership and collaboration will lead to enhanced knowledge of the customer and heighten customer centricity throughout the organization.”

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Stuart Foster Vice President of Marketing Hilton Worldwide

A number of different teams drive customer initiatives across the Hilton brand. Stuart Foster, the company’s Vice President of Marketing, oversees the marketing team for Waldorf Astoria and Conrad hotels. In this capacity, Foster and his team both work seamlessly together with the Hilton HHonors Loyalty team to communicate and provide offers to motivate customer retention. Through cutting-edge technology platforms and a robust customer data warehouse, Foster is able to drive loyalty and increase sales. Consequently, his relationship with the IT function is close, and the role of the CIO is valued by the C-suite. As a key player in the service and hospitality industry, Foster believes no other industry could be more consumer-centric. In fact, customer experience is so important that one of the key drivers for success continually measured at Hilton Worldwide is the satisfaction index. It is measured and analyzed on a daily, monthly and annual basis and is even tied to team member compensation. For these reasons, data and insights play an extremely important role in shaping the customer experience. Across the enterprise, customer data is jointly owned by the actual properties and the HHonors team. The HHonors database consists of almost 120 million people and contains specific fields of customer data, such as locations visited, frequency, preferences and spending habits. The organization also uses outside data from partners such as airlines and American Express to complement their own database. “Having access to the specific fields of customer data allows me to really zero in within the 120 million to a really efficient group of people that I want to target for direct activities,” says Foster. Due to such a robust customer database, the time it takes to analyze the data and then articulate a motivating offer can be limiting. Additionally, customer-centric strategies sometimes fall behind the desire to drive immediate revenue. “At the end of the day, loyalty is our greatest friend,” he says. “If we can drive loyalty and get repeat guests, it’s proven that as they come back, they will spend more. It’s less expensive to motivate somebody a second, third, fourth or fifth time. However, sometimes we are more focused on driving that new customer than we are driving the repeat purchase, and I think that’s because we can let short-term sales objectives get in the way of long-term guest recruitment.” Customers who are members of True Waldorf Service receive pre-arrival offers based on their historical spend. Through offers like this, the brand shows its dedication to service principles. “It’s not only customer satisfaction that we measure—it’s the actual revenue that those customers spend in the hotel,” Foster says. “They’re spending about 40 percent more when we contact them on a personal basis and show that we know more about them than they realize, and therefore, it customizes their stay. They’re much more satisfied with the hotel. They’re much more likely to come back, and they actually spend more.” In Conrad Hotels, the brand just launched Conrad Concierge, which is able to hotwire guests directly into the hotel’s services. Through their smartphone or tablet, guests can access all of the services of the hotel, such as in-room dining, transportation, amenities, housekeeping, reservations, wake-up calls, etc.

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“All the services that you would normally pick up a phone and ask for are now available for guests to access directly through their personal devices, and that’s where we’re using technology to provide a very personalized customer experience in a very innovative way,” he says. “No one else is doing this in the same way we are.” The CIO is an extremely valued role at Hilton and was once considered beneath the president of the company but is now on the executive committee in a position considered equal to the president. “The role is extremely important because of the vast amount of hotel operating and CRM systems— all these different systems need to work together,” notes Foster. “The IT function has definitely evolved. They are the people we work with on a daily basis at all levels, from manager to director through senior vice president.”

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Ian Arthur Chief Marketing Officer Intrawest

At Intrawest, customer centricity takes place in a different environment. Since Intrawest competes within the hospitality and tourism industry, their consumers don’t just buy a product—they commit to a service. To maintain optimal satisfaction among their guests, Intrawest combines their marketing and technology to become as guest-centric as possible. Ian Arthur, Chief Marketing Officer, uncovers why it is so important to have the guest as the number-one priority and to work side by side with the CIO in that endeavor. The key objective in achieving customer centricity is to ultimately obtain dedicated customer loyalty. The guests at Intrawest are not just paying for a product; they are investing in a vacation experience. The best feedback source on how satisfied their guests really are is their return rates. “In our organization, customer centricity is the ability to enhance a guest’s vacation experience and drive higher levels of service by truly understanding exactly what our guests want,” Arthur explains. “That is absolutely critical to building loyalty. It’s also very important to have a clearly defined brand so that once you make that promise, you can deliver it to the guests. And that, of course, drives the loyalty factor.” The customer or guest is shared across the enterprise at Intrawest. Different divisions within the organization share ownership by contributing their expertise to the overall customer experience. “Data resides in our enterprise warehouse, which has data managers that actually pull the data and respond to requests from finance and other people, so this aspect is essentially owned by IT,” Arthur says. “If you’re talking about our guests, what their wants are, what their preferences are, who they are, the building of personas, etc., that’s owned by marketing.” Although big data is the buzzword and hot topic addressed at many organizations today, Arthur does not believe this is a big issue at Intrawest. “Each group—whether it’s a sales team, marketing team or finance team—needs to understand the data they need to pull and know where they need to pull it from,” Arthur explains. “As long as there is a clear vision of the objective and the steps to reach that objective, the only data that should be acquired is that which is necessary to reach the objective. Any other data is irrelevant and is not needed to make good, quantifiable decisions.” Several different platforms are used to measure customer satisfaction at Intrawest. The Net Promoter Score is utilized to obtain customer satisfaction and loyalty numbers, Salesforce allows information to travel and be shared throughout the organization, and guest services departments are implemented to show guests how important customer satisfaction is to the organization. Intrawest tries to go above and beyond the expectations of their guests by reaching them at every possible level and having a communicative relationship with them. “We touch our guests from the dreaming phase of their vacations all the way through the completion of their trips,” Arthur says. “Afterward, we follow up by asking whether they’re satisfied with what they’ve received from us as a company through all of our brands.” Although the CIO is not on the executive team, he plays a critical role in customer outreach and engagement. Arthur and the CIO work closely every day and successfully integrate their expertise together in order to continuously improve the customer experience.

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“The CIO is a very, very important part of the puzzle, and we work very closely together,” Arthur explains. “We communicate multiple times every day and work together on many projects, so the CIO is an integral part of our success.” Arthur believes the CMO’s relationship with the CIO has evolved as technology platforms have evolved. Now that cloud computing and social media are becoming more popular and convenient to the public, marketing has had to collaborate with IT to keep up with these standards. “One of us supplies the vision, and the other supplies the technical expertise to achieve that vision,” he says. “That is basically the nature of our relationship within the organization.” Arthur continues to make sure his guests are the number-one priority at Intrawest. His partnership with the CIO is what helps the organization consistently improve and provide better service to their guests. The ultimate goal is not just to have guests leave with a fulfilling experience, but to have them come back over and over and continue to leave with that same fulfilling experience. “It’s not a campaign; it’s a culture,” Arthur says. “Our motto is to provide the best experience again and again and again. Everybody’s involved with providing our guests with the best experience possible.”

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Lanet McCrary Vice President of Marketing & Business Development Magnolia Federal Credit Union

Customers have high expectations for their financial service providers. They want continuous access to their accounts and expect quality service immediately, so it is important for organizations in this industry, like Magnolia Federal Credit Union, to place customer centricity at the top of their priority list. Lanet McCrary, Vice President of Marketing & Business Development, elaborates on the importance of teamwork between IT and marketing when creating the best possible customer service culture. When evaluating customer centricity, the first step is understanding exactly what the customer is looking for in their service. Every customer wants fast and reliable service, but there are different expectations between one customer and the next. McCrary believes customer centricity is defining those differences and developing practical ways of delivering unique, personal service to each customer. “Customer centricity is basically providing products and services that are meeting the needs and desires of our members,” McCrary says. “It means looking from the member outward, trying to figure out how we can provide those products and services.” At Magnolia, a collaborative team of four executives comes together to discuss the direction of their customer service initiatives. This management team is made up of McCrary, the Vice President of IT, the Vice President of Operations, and the Vice President of Lending. Through innovative teamwork, they make decisions based on their members’ feedback. “The four of us get together and look at what products and services our members are either looking for or need, or something that we need to create for a particular segment of our membership,” explains McCrary. “The overall objective of these meetings is to directly identify those products and services that the members are looking for and trying to tie that in with the goals of the organization.” One of the issues they discuss relates to the issue of integrating their customers’ goals within the organization. To be truly customer-centric, the goals of the customers and the organization need to be somewhat aligned with one another. Some technology changes have been implemented in response to customer feedback. A lobby tracking system was created to make sure their members were being efficiently assisted in the lobby. Another improvement was added to their call center so their members would have access to more representatives. Although digital assistance is the latest technology, McCrary is finding that members do not want to do everything online. They receive most of their customer feedback through satisfaction surveys that they distribute quarterly. “We do a quarterly member satisfaction survey, and we have seven areas that are scored from zero to five,” explains McCrary. “We want to make sure we’re meeting the satisfaction of our members, and if we aren’t, we want to know what we can do to fix it.” The [VP of IT] CIO is a fundamental player in the executive team at Magnolia. By working together for 13 years, McCrary and the [VP of IT] CIO have been able to develop a close and communicative relationship. Their constant attention to addressing customer feedback and collaboration on new projects shows how teamwork is essential to building a customer-centric environment within the company.

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“The [VP of IT] CIO is completely responsible for all of our computer systems and all of the technology in the credit union, including how things would work with new products and services, making sure that it’s programmed properly, and ensuring that we have the right equipment,” says McCrary. “She is a very vital part of our organization, and I think we make a good team.”

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Adriana Eiriz Chief Marketing Officer Nexxo Financial

Nexxo’s Everyday Financial Services (EFS) platform enables retail banks, as well as other providers, to expand their alternative financial services. Nexxo’s platform, which is available in self-serve kiosks, teller-assisted desktops and mobile, gives a consumer-focused experience across those three channels. Consumers register only once, are remembered on return visits and can complete a variety of transactions. Adriana Eiriz, Chief Marketing Officer, elaborates on how her organization is built on customer centricity and how the CIO plays a part in bringing that perspective to practice. Nexxo captures customers’ transaction histories in a fully compliant way, which allows financial service providers to see a unique portfolio view of their customers and offer personalized promotions. Nexxo’s platform is already integrated with bill payment providers and check cashers. That paves the way for financial institutions to expand to new channels quickly and easily. “The more customer-centric we are, the more successful our products become, so it’s important for that dynamic and experience to be at a very high level,” Eiriz explains. “That’s how we view our business; customers are central to everything we develop and offer.” What separates Nexxo from other financial organizations is the development of a platform that is completely customer-centric. “Nexxo’s technology captures consumers’ profiles and transaction histories giving retailers the unique ability to build loyalty and form valuable relationships. Thanks to this portfolio view of the self-serve consumer, providers can target promotions and pricing to expand usage of the full suite of transactions,” Eiriz says. “The EFS clients who utilize our platform can access their customers’ information in one single place, and by doing that, they get a better and deeper understanding of that customer, and what services they prefer.” It is important to clearly understand what the customers want before implementing any final decisions when it comes to their services. It can be very fast and easy to assume what the customers want and use that as a reference. However, this causes organizations to lose touch with their customers and ultimately lose their customer-centric focus. Receiving constant feedback and understanding customers is what makes customers feel satisfied with the service and become loyal to the organization. “When we don’t have the opportunity to be in touch with the customer, we fall into assumptions about what customers want and need,” Eiriz explains. “If that is the case, we test different scenarios that help us evaluate if our assumptions are accurate or not.” According to Eiriz, the true proof of customer centricity is determined by how loyal their customers are. Their success is measured by whether their customers keep returning and transacting. By making services easier and more convenient for their customers, they are displaying how important customer satisfaction is to them. “The best way to show how much we care for the customer is to draw on the historical experience or the transactions that the customer has had in the past,” Eiriz says. “This shows them that we’re paying attention and want to transform their future transactions into an easy and convenient experience.” Because their business is centered around the customer experience, data is important at Nexxo.

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“The more data we have available, the more we understand how our businesses are performing,” she says. “And if we understand how our businesses are performing and we can identify where we’re not doing the right thing, we have the opportunity to shift directions quickly and see immediate changes.” The CIO plays a huge role in the success of the organization, and Eiriz partners with him to acquire the technology that is most relevant to the customer needs. “Our CIO spearheads the design of the actual technology and the customization of what our EFS clients’ ask and need us to develop. He is an integral part of the C-suite and shares with our board of directors the advances and technical initiatives being developed,” Eiriz says. Eiriz believes the best way to stay customer-centric is by placing the customer first and making this focus a goal for the organization. By listening and being responsive to their feedback by improving or adding features, there is almost always a guarantee that customers will become more loyal to that service. “Identifying the customer’s needs and behavior brings loyalty and repeat business,” Eiriz says. “At the end of the day, customers returning to continue to transact shows us we’re doing something right.”

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Robert Solomon Senior Vice President & Chief Marketing Officer Outrigger Hotels

Outrigger Hotels competes within an extremely technology-driven industry. Robert Solomon, Chief Marketing Officer, explains how keeping up with the technologies that provide the most valuable customer experience requires a constant conversation between the CMO and CIO. Outrigger Hotels strives to implement their customer-centric values into their practices and corporate culture. As a strong competitor in the hospitality industry, Outrigger Hotels is expected to keep up with the most updated technologies in order to achieve optimal customer satisfaction. “We have to look for the point of intersection where consumer needs, competitive needs and the right balance between investing in new technologies while keeping the old is achievable,” Solomon says. There is no one stakeholder in charge of defining the overall customer experience within the executive suite. Rather, the role is more suited for an extended team. The rule of the “unidentified stakeholder” is implemented so the team can come to an internal agreement about the customer experience rather than attempt to control or define it. Through platforms like social media, the organization is able to constantly measure their customer centricity and how it can be improved. “In order to be globally successful in driving customer relationships and business performance, you must start with a local marketing strategy,” Solomon explains. “With globalization come the issues of compatibility with different mobile technologies and payment systems, and we address this issue by staying connected with international business partners and keeping up with technology. Once we are able to utilize these technologies, an analysis of the data determines whether our strategies are successful.” Because the organization deals with such a close customer interface, there is an ongoing balancing act of readjusting strategies and platforms. Solomon feels the relationship between the CIO and CMO must be close and involve constant communication in order to keep up with the fast-paced environment. “Projects can be prioritized, but they’re only successful or completed when your business partners are aligned with your schedules and are able to assign the necessary resources,” Solomon explains. “The role of both the CMO and CIO begins with the customers’ motives, and the appropriate technology is acquired according to the strategies developed to achieve those motives. We let the business drive the technology and the technology enable the business, not vice versa.”

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Karen Larrimer Chief Marketing Officer PNC Financial Services Group

PNC puts customer insight at the forefront of all operations. When it comes to marketing, the customer is what drives the decisions and, ultimately, the sale. Karen Larrimer, Chief Marketing Officer, has played a chief role in transforming the consumer organization from a product-focused organization to a customerfocused organization. With close collaboration between marketing and the CIO, PNC has achieved success and positive customer feedback from its marketing makeover. Many organizations look at their productivity as the main metric for measuring success, and until recently PNC was among them. Larrimer, along with other leaders in the organization, brought a new perspective and shifted the focus from the product to the customer. This new focus has not only created a more enjoyable and intimate experience for the customer, but it has also tightened the alignment between Larrimer and the CIO. “Our way to becoming a great marketing company was through customer insight and information,” says Larrimer, “Partnering with our CIO really meant creating a more flexible, scalable customer information system than we had previously.” PNC employees make sure to place customer focus at the top of their priorities. Every level of engagement is seen as an opportunity to gain more insight and knowledge about the customer, which they can then integrate when making decisions and taking action. However, this type of mindset is an ongoing process and certainly is not accomplished all at once. “It’s a huge change-management process to get everyone to think differently and put their own goals and objectives aside for a moment to think about the greater whole,” explains Larrimer. “That’s what you have to ask them to do, but it’s a process to get them there.” PNC measures their customer engagement based on the Human Sigma philosophy. The whole goal behind Human Sigma is to measure the employee and customer experience as an engagement and not as two separate entities. In this process, the focus is on engagement instead of satisfaction. Larrimer also looks at the recommendations provided by previous customers, which are important because they are influenced entirely by the customer and their firsthand experience with the organization. “We get a pulse for whether our customers would or would not recommend us, which is something that tips you over on the loyalty scale,” says Larrimer, “We look not only at whether they are happy and engaged, but if they’re also willing to tell other people about it.” The big issue arises when trying to obtain the maximum amount of useful information from all the customer data collected. The customer data warehouse houses all of the structured data. Bringing in the unstructured data and finding a way to successfully marry the data to make actionable decisions is a work in progress. “We need to figure out how to marry the structured and unstructured data and pull in the right data so as to not overwhelm ourselves but make sure we have data that can be useful and relevant for customer interaction,” explains Larrimer. Once some type of data alignment is achieved, a challenge arises in trying to make that data relevant to the customer. As long as customers view an organization as relevant to them and their lifestyle, they will most likely stay loyal to that organization.

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“When you talk about relevance and resonating, to me, it’s our technology that is going to make all the difference in how we obtain the right information to approach our customers,” Larrimer says. “Marketing has a good, strong partnership with our CIO, and we have definitely partnered on many of the company’s big initiatives,” Larrimer explains. “I think we were in alignment because PNC’s goals were centered around customer information and insight as the way to become a great marketing company—and technology was critical to our success.” With the 2013 plan in motion, Larrimer has high hopes for the new year. With customer focus at the top of the to-do list, she believes PNC will continue to be a tough, customer-engaging competitor in the financial world. “The actions that we’re taking have to result in a more loyal customer,” Larrimer says. “It is our belief that through all of the turmoil that the financial services industry is going through, the company with the most deeply engaged, loyal customers will come out winning.”

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Jane Stackpole Head of Market Strategy Silicon Valley Bank

Silicon Valley Bank (SVB) has based its business model on the concept customer centricity. Head of Market Strategy Jane Stackpole defines customer centricity as designing programs and products around what is valued by specific customer segments and is now implementing a segment-focused strategy across the organization. IT is an increasingly important part of the equation. Silicon Valley Bank is a boutique commercial bank. “We’re exclusively focused on technology, life science and clean tech companies, plus the venture capitalists who fund them,” Stackpole says. “Clients’ needs vary considerably by industry sector and company size, so SVB has organized its business around key market segments. Our bankers specialize – and develop deep expertise – in a specific sector. Our specialization helps us think about what really matters to clients in each segment. This degree of focus has allowed us to achieve an overwhelming market share in our target markets.” B2B financial services are typically “sold” rather than “bought”, and SVB is no exception. Sales has primary responsibility for both client acquisition and ongoing relationship management. “CFO choose their banking partners based on more than just the terms of a loan. They’re looking for a long-term partner, so sales people able to provide deep and relevant insights are key,” she says. SVB believes client satisfaction critical for long-term growth in profits. It relies heavily on Net Promoter Score metrics to measure client satisfaction and loyalty and gauge progress over time. It further enhances its understanding of the client perspective through studies of key touch points, product functionality and topical focus groups, plus outside syndicated studies that provide impartial competitive benchmarking. While SVB’s segmentation strategy was driven by Marketing, it relies heavily on IT. “We are much smaller than the money center banks, so we also have a smaller IT budget,” she says. “A few years ago, we built a lot of our capabilities in-house. We’re now a “buy” shop rather than a “build” shop, and focus on integrating best-in-class applications.” IT actually has a big role in ensuring clientcentricity at SVB. Product capabilities and the online banking user experience are critical to client satisfaction. The CRM system and the data warehouse enable tracking and understanding of customer relationships. Major infrastructure upgrades such as moving from a dollar-based to a multicurrency back end have enabled SVB to rapidly grow and scale, especially internationally. Marketing at SVB also partners with IT on its own systems. It has achieved a moderate degree of automation through several independent systems, including the CRM, email, market research and events management systems. But that will change in 2013. SVB is planning to implement a marketing automation that will enable greater integration and deeper insights. At SVB, IT is a critical partner to Marketing in terms of both marketing automation and and supporting the company’s customer-centric mission.

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Michael Babikian Former Chief Marketing Officer, Current Chief Executive Officer Transamerica Brokerage

With a customer base reaching both the B2B and B2C circles, Transamerica Brokerage must be conscientious of the various needs and expectations of its customers. The close collaboration of the CMO and CIO is a critical step to achieving optimal customer centricity at Transamerica. Michael Babikian, current CEO and former CMO, understands how keeping the customer in mind at all times can mean the difference between a satisfied customer and a loyal customer. Although the customer’s use of the product or service is the final step in the business process, it should be the first step considered when making important decisions within the organization. In product development, the consideration of multiple constituencies and scenarios in all stages— conception to promotion—is critical. Customers are the underpinning of a successful organization and their objectives, as well as their issues, need to be a top priority. “From the time we’re designing products to the implementation and rollout of that product and marketing it throughout the entire value chain and process, we think of the impact that we’re going to have on the customer and build inward from there,” Babikian says. “We start out with the customer first.” What is unusual about Transamerica’s shift in customer centricity is that it started out with IT having true ownership of the customer by gathering, managing and protecting the customer data. Now that marketing and IT have aligned their objectives around the customer, there has been a shift of responsibility. This has resulted in a partnership between marketing and IT—allowing the data to be used to experiment and solve. “If I was asked months ago who owned the customer, I would’ve said the CIO,” he says. “Today, we’re setting up cleaner sandboxes where data is set up for particular purposes, and marketing owns the customer data to a large extent now.” Several new strategies have been adopted to improve customer centricity at Transamerica. They have brought in some outside firms to assist in implementing customer-centric initiatives throughout the organization. And instead of focusing on the obvious factors that may contribute to competitors’ decisions, such as what customers are saying, Transamerica looks to go beyond what the customer is saying and look at behaviors to predict customers’ future needs. “We aren’t developing products based on what competitors are doing, but rather gleaning insight from what our customers are doing based on their behavioral trends,” Babikian says. Babikian also hopes to go beyond the stereotypical improvements that differentiate them from their competitors. Improvements in making the process faster, cheaper and easier are important, but they are not always the best solutions for the issues customers are currently facing. Other improvements include allowing the customer to have more control and giving them peace of mind by guaranteeing them satisfaction. “The customer is going to see us developing solutions that work in today’s environment and focus on the problems that they’re facing today,” explains Babikian. “Not necessarily just developing and delivering something that’s going to be faster and cheaper.”

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Another change that has been implemented to improve customer-centric practices is a collaboration of the CIO, CMO and operations officer, as well as the product development and sales teams, to brainstorm solutions. This newly developed team was put in place to integrate the knowledge of each division to create a group of head decision makers who can brainstorm best customer-centric practices together. “Today, it’s an engaged, empowered approach where you have the whole team developing a solution together,” Babikian says. “They go out to the marketplace together, and customer centricity is built in from all of those disciplines at the same time.” Currently, Transamerica sends out quantitative surveys to their customers and receives data through what customers are saying and doing. An issue with having so much customer data and so many outlets to use that data is separating the insignificant data from the data with meaningful information that can be used across the enterprise. “I think big data will become a bigger challenge moving forward because of the volume of additional data that is added in on a day-in and day-out basis,” he says. Babikian views his relationship with the CIO as a vital aspect of improving customer centricity within the organization. However, with marketing going digital, there can be a struggle to understand each other’s language. The partnership between the two must be created carefully and with the customer in mind at all times. “I look to the CIO as a strategic partner,” says Babikian. “I know that hasn’t always been the case, certainly within our organization or many organizations, but going forward I think it is an indispensable relationship that has to be forged very carefully.” As the partnership grows, the CIO is becoming more integrated into the decision-making process rather than just the implementation process. Babikian believes without the CIO’s relationship with marketing, Transamerica would not be where it is today. “The CIO has become a strategic partner with the rest of the executive team,” explains Babikian. “From a marketing implementation perspective, it’s very tough to do any kind of marketing today without the cooperation of the CIO.”

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Robin Korman Senior Vice President, Global Loyalty and Partnership Wyndham Hotels

Wyndham Hotels has been working hard to identify and understand its customers. Since the organization is 99-percent franchised, some people would say their customers are not consumers, but the franchisees. Robin Korman, Senior Vice President of Global Loyalty, looks to improve customer centricity by ensuring there is a laser focus on the travelers’ needs and satisfaction. The first step in becoming a customer-centric organization is carefully defining it. Korman defines customer centricity by understanding specifically what a customer expects from an organization and what unique benefit it can deliver. “Customer centricity is looking at your product and marketing as well as the customers’ actual experience from their point of view. You need to understand how they see you within the competitive set, where there are gaps in what is offered in the marketplace and how your product or service can realistically fill an unmet need,” Korman says. At Wyndham Hotel Group, the “customer” has historically been defined as the individual or groups who franchise the company’s brand names such as Days Inn, Super 8 and Ramada, and the “consumer” defined as the traveler – the end user of the product. As a marketer, Korman’s goal is to focus on the consumer as the customer through the company’s loyalty program. The loyalty program uses information that guests choose to share as well as stay history to attract nonmembers to join the program and create relevant offers to existing members. By increasing member stays and driving more revenue into the hotels, the program can increase engagement with the franchise “customer”. “The gap between member and non-member spending is getting larger,” Korman explains. “It’s really just using the data to show that when you do focus on thehigh potential members, , you can drive more stays and revenue more cost-efficiently. The loyalty program a lifecycle communication system with the member that is triggered by their stage in the program and their stay behavior, . creating a more personal and unique engagement with themember. “We’ve created real-time triggers around encouraging engagement,” explains Korman. “For example, if we see that your points are going to expire in three months, we’ll trigger a conversation through email inviting customers to stay with us in order to keep their points.” Another way Korman is altering the perspective of the organization toward customer centricity is by embracing their partnership with TripAdvisor, a website that features hotel ratings and reviews provided by customers. In November 2011, Wyndham Rewards was the first hotel program to feature Tripadvisor ratings and reviews next to each property on its website. Since 87% of travelers surveyed by PhocusWright agree that TripAdvisor hotel reviews “help me feel more confident in my decisions.”, Korman understands the value of the customer’s opinion and the effect it has on future customers. The reviews provide a transparent look into how Wyndham hotels are meeting customers’ expectations. “It’s about trying to create a feedback loop so we can see whether we’re delivering as expected by the customer,” Korman says. “Creating that transparency motivates our hotels and Wyndham to improve our performance.”

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Data is accessed and analyzed by various departments within Wyndham Hotels Group including IT and a newly created Business Intelligence group. Wyndham Hotel Group has just embarked on a multi-year project to to improve the accessibility and organization of the data. While led by Business Intelligence, it is a cross-departmental mission which involves all areas of the organization from IT to brand marketing, loyalty, revenue management, ecommerce and operations. “We believe It will probably take threeyears to really clean up and assess the data and then get it into an easily accessible database with business rules governing access and use,” Korman says. Although both Korman and the CIO share many responsibilities regarding the developing infrastructure of the organization, their dynamic is more of a problem-solving relationship than an everyday collaboration. They come together when big issues arise and look to each other for suggestions and solutions. “The interactions with the CIO occur when we get a roadblock to getting what we need or want in the timeframe we need it,” Korman explains. Both Korman and the CIO work together to improve data quality so better analysis will drive better decisions. They strive to increase franchisee satisfaction by driving more member stays which increase franchisee revenue. . “By ensuring the consumers are happy, we’re going to make the franchisee happy because we’re creating more stay behavior,” Korman says. “That stay behavior is only going to improve if we make the consumer happy first.”

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Anonymous Chief Marketing Officer Anonymous Insurance Company

With a constant mindset to put the customer experience first, one insurance company is focusing to increase their level of customer knowledge and general business intelligence. The future of customercentricity strategies will include increasing the level of sophistication in aggregating customer insights and campaign delivery. The company is making strides to put customer data at the heart of corporate strategy so that this knowledge can be leveraged through offers, customer touchpoints, support processes and service experiences. Properly staffing and assigning the customer experience role has been a struggle until recently, when a head of customer experience role was established. “We have a customer-centric mindset, but the level of sophistication at delivering is something we are improving,” he says. “There are a lot of items on the project docket for the company, and customer centricity is something that we want to get into a rhythm of living, not just having it be another project.” Although customer data across all functional areas has not been consolidated to form a datadriven picture of customers, a general customer persona from a combination of psychographic and behavioral segments has been developed to frame the dimensions of the organization’s customers. This is used as the overarching framework for everything from product promotion strategies to customer acquisition strategies. Key roadblocks for implementing a culture and mandate for customer centricity have been organizational capacity and demand. An additional roadblock is discretionary budget for research, which would supply a constant update on customer knowledge for more robust, informative actions. “Carving out the time to achieve all we would like has been a challenge,” he says. “To meet and exceed the expectations of your customer, you must be available in all appropriate channels, and the customer’s experience should be indicative of your customer-centricity strategy.” Transactional data is currently stored in a data warehouse and business intelligence systems. Future tools that will allow for faster aggregation and interpretation are being considered, but the customer experience is currently measured primarily through repeat purchase data and the lifespan of a sole policy, as well as customer survey data gathered both regularly and independently. Employee payouts are aligned with some of these measures. Rather than marketing or IT owning responsibility for the customer experience, he believes that the whole organization is responsible for the customer relationship. However, he says the role of the CIO is valued by the C-suite boardroom within the organization. “The CIO provides technology tools and data that enable other functional areas and business leaders to acquire new customers and keep repeat customers,” he says. “While marketing’s interaction with the corporate CIO is somewhat rare, I do think that relationship is improving and will continue to improve as the CIO function becomes more and more involved in the business application and as we become a more customer-centric enterprise.”

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Anonymous Chief Marketing Officer Life Insurance Company

With adoption being driven by the top and a close working relationship with IT, this life insurance company is at an excellent starting point on their journey toward becoming a more customer-centric organization. The immediate future holds the integration of new technology platforms to leverage customer data and improve measurement of customer satisfaction. The company’s CMO, and his CIO counterpart will continue to align, keeping customer centricity at the forefront. “Customer centricity begins with a good understanding of your customer in terms of their needs, wants, behaviors and attitudes toward your brand, says CMO. “From there, customer centricity is proactively reaching out to your customers with the right message at the right time, targeting the right person. This is where we are trying to go but are not there yet. We have aspirations to be customer-focused and are just beginning our journey.” Customer centricity adoption is being driven by the top of this organization. “The top is always the best place to start—if you can get CEO buy-in and support and have the CEO of the company be the champion of it, then the buy-in through the rest of the organization is a lot easier,” he says. “In our case, we are very fortunate that our CEO realizes the importance of this and has been a very strong supporter of it.” When it comes to initial roadblocks, the organization is looking at where to lay the first brick. In addition, they have not yet define which aspect of the organization truly owns responsibility for customer data. “The runway ahead of us is clear, but the plane is just not ready to take off yet,” he says. “We provide good customer service and are very reactive in what we do. Our customers recognize us for that, but we’re not proactively engaging them, and we don’t really know that much about them, so it’s a bit of a challenge.” The marketing department is currently breaking customer centricity down into key areas, with one strategic component being information management, which involves compiling and unifying the customer data that sits across 20 different systems. The next area includes analytics and insights, which is really turning the data into useful information and applying segmentation models and predictive modeling to it. The next piece is around campaign delivery, or developing the right types of campaigns to reach customers proactively based on the data. A steering committee of multiple key executives and a project management office oversee the overall program’s structure and design. “The key stakeholders in developing customer campaigns would definitely be IT,” said CMO. “Our sales group would be another key stakeholder, as well as our senior leaders [management team] because they see this as a growth opportunity for the company and the marketing group.” Customer data is currently being pulled from disparate systems, but in the future they plan to have an enterprise data warehouse to drive the customer relationship and business performance. The CMO believes this will enable the company to go from having a decentralized data management system to a single view of the customer, although it will be a long process. He also hopes to begin measuring the customer experience with much more rigor. “Today, we measure the customer experience by a quarterly customer satisfaction survey, but we’re planning to move to something much more comprehensive and sophisticated starting first quarter,”

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he notes. “Employees within the organization are not currently compensated specific to customer experience measures, but this could also change in the next year.” The CIO also has a great deal of responsibility and is a critical partner in this process. “Not only is the CIO responsible for the technology, strategy and deployment, but also the contact centers,” he says. “This is an important piece if you are going to be customer focused, especially in the insurance industry, because most interactions with your customers take place over the phone. In order to be a consumer-focused company, a certain set of capabilities must be in place, and a lot of those capabilities involve technology and having clear insights and learning tools around your customer behavior. We recognize the CMO-CIO alignment as a critical step in this process. We are focused on ensuring broad-scale adoption and buy-in; being customer centric cannot be just a marketing agenda item; it really needs to be embraced by everybody.”

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Anonymous Vice President, Head of Marketing Financial Services Company

Many organizations believe customer centricity is simply asking what the customer wants and delivering that desired experience. However, the Vice President and Head of Marketing believes that customer centricity does not stop there. He intends to explore the customer’s objectives further and build a deeper relationship with the customer through personal engagement and communication. At the company, customer centricity goes further than looking at the obvious feedback from each customer. They pride themselves on understanding their customers and anticipating what their customers would expect in the future. “Customer centricity means knowing the customer well enough to not just ask them what they want from your company, but well enough to develop the ability to arrive at conclusions without the customer telling you what they want,” he explains VP and Head of Marketing. “You need to have an intuitive understanding of what the customer does and what they need. The only way to do that is to spend quality time with your customer.” What makes this company unique from most companies is its two groups of customers. They have customers who use services and customers who pay for the services. Those two groups provide two separate sets of customer data utilized by two different departments within the organization. “The salespeople are the primary interface to the paying customers, and the marketing group is the primary interface to the users of our products,” he says. “The salespeople own the relationship with the paying customers, and we own the user data.” In order to understand the customers and be able to anticipate their expectations, the organization really needs to have a 360-degree view of customers’ thoughts and behaviors. This can be extremely difficult with a limited budget available for the latest technologies and capabilities. They believe this roadblock can be prevented by aligning all of their current technologies to obtain the most accurate customer data. “We have lots of touchpoints with customers; some of them are personal, and some of them are digital, such as click-throughs and downloads,” he explains. “It’s been hard for us to connect all the dots of all those touchpoints because they are measured and tracked through different systems that don’t always connect and communicate with each other.” Currently, the financial services company relies on annual surveys to provide basic information about their customers. They use these surveys as a metrics system to see what needs to change and what has been working. Then, instead of quantifying those surveys and treating all customers the same way, the executives sit down and discuss the results so they can understand each customer on a deeper level. “Within the survey, there are several key questions that we ask around areas such as usage and satisfaction,” he says. “Then, all of those survey results get presented and disseminated around the whole company. People talk about it, and that feedback is used in planning sessions where we look at the scores that we’re not satisfied with and develop action plans around how we’re going to improve.”

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In developing a customer-centric brand, the CIO plays a crucial role in the C-suite. When actionable decisions are put in place, it is his responsibility to make them a reality. Even though the CIO has a different customer focus than the CMO, their collaboration is critical to improving customer centricity throughout the organization. “The relationship with the CIO is very tight,” explains the VP and Head of Marketing. “He’s valued, important and a key player in the success of our organization.” Although the proper technology to achieve optimal customer data is not readily available, the VP and Head of Marketing continuously looks for new capabilities to improve customer centricity. Treating every customer the same may be the easy way out, but he believes it is not the best way to retrieve data and ultimately provide outstanding service. By learning the differences between each customer and molding to their particular needs, the financial services company can build high satisfaction and trust from their customers. “The first step is to anticipate the customer’s needs: What kind of products and services do customers need? How do they need them to be delivered? How do you need to communicate to the customer about it? How do you provide that service to them? The more questions you can answer, the more customer-centric you become,” he says.

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ExECUTIVE insights—IT Jeff Palm Chief Information Officer Allianz Life Insurance

Nancy Jones Chief Marketing Officer Allianz Life Insurance

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“There’s a notion of a data owner and a data steward, and generally speaking, one is a business person, and one is a technology person. Technology is responsible for the stewardship of all the data in our company; however, ownership responsibilities still reside with the business,” Palm says. “Technology is more of a support function than say marketing, especially relative to the customer, so there may be a layer or two of insulation between us and direct interaction with the customer. We are not quite as customer facingcentric in that regard, but hopefully we are proceeding forward instead of backward.” Appropriate investment is a key element in customer centricity, which ties highly to IT solutions to support marketing initiatives. “We tend to be project focused in the way we invest; projects are generally designed to either augment a capability such as, building a better general ledger system, launching a new website, or automatinge a system, etc.,” Palm says. “I think you’ll find a lot of them are not necessarily customer centric in their orientation. They are more around executing a particular project. Therefore, I would say appropriate prioritization of investments is key.” Jones adds, “Clearly you have to be able to demonstrate your customer centricity by building the appropriate support tools and service models to make it easy to do business with us. But often, we don’t always think about how project sit fits into the overall picture of what the customer’s needs are and what they expect. Our goal is to make that a discipline.” Having robust research, analytics, modeling and mining abilities are also critical to the success of becoming more customer centric. “The data is only as good as the people who use it, but having clean data easily accessible is imperative on the front end in helping people understand and know the customer,” Jones says. “Also, that same kind of data helps on the back end in servicing. Given the complexity of some of our businesses, getting the data the way we want to use it and having it easy to use, model and manipulate is always a challenge. This is something that we are getting better at.” Palm says, “Every now and then over the last couple of decades, something has come up in technology that turns out to be the next great thing and is a reality. And there are some terms you can look at that were all the rage for a little while, and then they turned out to be nothing but hype that eventually fizzled. Take “Big data” for example. I think Bbig data falls into that category in that, despite what some people may tell you, it is still on its training wheels as people are trying to figure out how to think about it. IAnd it could go one of two ways. It could take off like crazy and be the next big thing, or it could fizzle out and be a passing fad for thinkers. But without any sort of practical, tactical implementation, the jury’s is still out regarding big data.” At Allianz, data is gathered from transactional systems and funneled into a series of locations— operational data stores—that then feed into a data warehouse. Some of the data that’s gathered from those transactional systems is then acquirable and usable from a combination of the operational data stores and warehouse. In addition, they would ideally like the data stores to be other sources of information beyond just transactional systems. ROI made to improve the customer experience is measured across the enterprise through financial metrics, quantitative and qualitative metrics, and consumer research. Teams tasked with specifically driving the customer experience get measured and compensated based on their results. “Often as you improve customer interactions, you’re reengineering processes or approaches, which allows you to save money for the company,” Jones says.

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Due to a strong emphasis on customer experience at the top, both the CMO and CIO at Allianz feel valued by their C-suite peers. “I think our CEO has a strong view of the aspects of improving the consumer experience. It starts at the top, having the C-suite be supportive and understand the value of customer centricity,” Jones says. “The CIO role is a hand-in-glove partner with my team. From developing products to digital capabilities our interaction and from mobile platforms to our CRM systems, we cannot do anything without him. I, and I view him as a partner. I view the role as being a strategic partner at the table and helping us understand what the trends and opportunities are based on what we are trying to drive from a business perspective.” Palm adds, “My perception is that the CMO role is highly valued in the C-suite, and the notion of customer centricity is obviously something that gets a fair amount of airtime. However, generally speaking, I would say the CIOs and the CMOs probably have a bit of an under-appreciation for what the other actually does. I think in order to continue to enhance a strategic partnership between the two—not just here at Allianz, but in general—we probably need to make sure that CMOs and CIOs develop a greater appreciation and understanding of what the other does in their organization. I do not know exactly in what areas this relationship will grow, but I know it is going to deepen quite substantially.”

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Jay Ferro Chief Information Officer American Cancer Society

This 100-year-old nonprofit organization revolves around supporting, engaging and educating its constituents. Due to this high level of customer centricity, IT and marketing have little ambiguity when it comes to their goals and are strategically linked together. Everyone that engages with the American Cancer Society is considered a constituent; the customer could be someone who is battling cancer, a survivor, a caregiver or a volunteer. Having a lifesaving mission makes customer centricity a top priority. “We are not an IT organization, we are not a finance organization, and we do not make widgets. We are trying to save lives, so customer centricity is the absolute top priority of what we do,” says Ferro. “As one of the largest health nonprofits, we are absolutely dependent on our very generous donors and volunteers.” Customer or constituent data is jointly owned by marketing and IT within the organization. The CIO plays a role in partnering with marketing, fundraising and all other departments to make sure they have the tools and data needed to fulfill their part of the mission. “Our constituent or customer, in this case, is absolutely the lifeblood of what we do. We are continually striving to engage, educate and inform them,” he says. “Traditionally speaking, marketing has been the steward of our constituents, and IT is the steward of the data in terms of what is captured and how it’s utilized. But we are all responsible for our own piece of the organization.” A key roadblock to continuously implementing a customer-centric culture tends to be time restraints on the team. “It gets easy to fall into departmental silos at the rapid pace we’re moving.,” Ferro explains. “Nevertheless, we try to make communication a priority to avoid these types of conflicts, especially between marketing and IT.” A CRM platform allows access to customer data and key insights and is the backbone of the organization. In addition to the day-to-day blocking and tackling, IT also supports marketing’s engagement strategies, such as the use of mobile campaigns during one of their largest annual events, Relay For Life. “Joint goals, shared initiatives and success criteria tie our teams together, and there is very little ambiguity in what our goals are versus what marketing’s goals are. Watching the wall come down over the last year has been very rewarding,” Ferro says. “The CMO is my peer, and we both report to our staff president and COO. “Over the next year, I see us continuing to focus on building our relationship as there are many opportunities to tie our annual outcomes to one another’s success.”

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T.J. Graven Vice President, Chief Information Officer Brown Forman Corporation

Customer centricity is not just a priority for the corporate culture of Brown Forman—it is essential to their corporate anatomy. T.J. Graven, Chief Information Officer, believes the customer and consumer are one in the same, and customer satisfaction is one of many products of a close relationship with the CMO. At Brown Forman, understanding a customer goes beyond point of sale. Competing in the wine and spirits industry, customer centricity enters into the realm of understanding what, where and why customers are purchasing a particular product. “In our role as a three-tier business, it’s easy to manage the value chain and the partners in the value chain, but as a brand owner, it’s extremely important that we put the consumer first,” Graven says. Marketing may own the customer, but measuring customer centricity requires a collaboration of many different departments within the organization. “We have people driving consumer insights from all over the company,” Graven explains. “I don’t think there’s one clear owner of consumer information within our company. There are a lot of contributors to this big picture – and we want more of our people thinking about our consumers.” Since customer centricity is one of the top priorities at Brown Forman, the organization has learned how to break through the three-tiered environment and reach out to the customer through the front of the organization. By reaching out from the front office, the organization is able to retrieve more specific information, such as demographics and account characteristics, required to understand exactly what drives business. “As I try to shift our IT investments, attention and focus from things like ERP and traditional data warehousing toward sales force automation and understanding our consumers, things are moving to the front,” says Graven, “I’m trying to shift my investment more toward the front office because they’re closer to the consumer, and that’s where we’re driving value.” When refocusing a system or strategy of an organization, the IT and marketing departments must be in sync. Global brand programs and plans are developed and then translated by different marketing teams throughout the world to make the messaging more relevant to their specific markets. Because there are so many different countries and markets, the information can become overwhelming. Graven is currently working on resolving this issue by narrowing down the captured information based on relevance and efficiency. “We focus on very specific elements of information and capturing those in an efficient way that will allow us to measure the effectiveness of our programs and where we’re making investments in the marketing space,” Graven explains. Although big data is not currently a big issue for the organization, Graven believes the difficulty of deciphering consumer data occurs when structured and unstructured information are organized and used to make important decisions. Brown-Forman turns to social media sites, such as Facebook, to see in real time when consumers are buying certain products and how that activity correlates to the promotions and ad campaigns running during that time.

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“We’ve spent a lot of time hunting and gathering information that doesn’t allow you to analytically provide a robust environment to understand your consumer,” Graven says. “We’re working to rectify that by creating governance around the process of collecting information and creating repositories for it so it can then be mined in a more efficient way.” The close partnership of Graven and the CMO has played a crucial role in measuring the company’s customer centricity. By sitting in on each other’s meetings and sharing resources, they work in total alignment toward a common customer-focused goal. “I am part of the marketing leadership team and have good visibility to the priorities of the group,” he says. “Because of that, marketing and IT are able to work together in ways where we traditionally haven’t been able to.” Graven believes the role of the CIO will stray away from staying behind the scenes and begin teaming with the CMO to focus on more front office goals. This transition will not only make sales and marketing more successful, but it will also give the executive suite the access it needs to better understand the consumer. Furthermore, Graven believes his role as CIO would not be successful without the work of the CMO. Constant communication and teamwork between both roles is required in order to drive a successful, customer-centric organization. “The Chief Marketing Officer and the Chief Information Officer speak different languages, and it’s a relationship that you have to build working together,” Graven says. “We’ve developed a really good professional relationship, and through that I think our work on both sides has been better.”

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Tracy Nolan Senior Vice President and Chief Information Officer Commercial Metals Company

Tracy Nolan, Senior Vice President and CIO for Commercial Metals Company, feels the organization differentiates itself from more prominent companies in the commodities industry by being completely focused on the customer and customer service. In order to achieve such customer centricity, he drives the use of big data to provide marketing with critical customer insights. He describes IT’s relationship with marketing as a partnership in driving business performance. “The customer is of critical importance to all of us; everyone across the enterprise is responsible for the customer and has insight into customer data,” says Nolan. “However, the functions closest to the customer are our sales force and marketing teams.” Within the organization, data aggregation and distribution across the enterprise has been a challenge. Consequently, finding solutions to this has been a major focus for the last year and a half. A “listen, launch and learn” approach is exercised, and customer input and questionnaires are used to garner feedback on the tools customers need to do business (or …need to be successful in their business). Nolan says the role of information technology has become increasingly important. The company uses several technology platforms, including a CRM product for tracking sales and collecting customer data about behaviors and buying patterns. In order to pass on the correct offers to customers, IT looks to combine all customer knowledge gathered across different platforms. “Our customers understand that no matter where they go in our organization, we hear them and will partner with them with one voice throughout the organization,” he explains. “Therefore, it is critical that our technologies provide a seamless, 360-degree view of the customer.” In terms of cost, IT must move from a traditional project-based focus to continuous improvement to deliver the highest value to the customer. “When it comes to customer centricity, IT aims to become a part of the customer lifecycle,” Nolan says. “It takes a considerable amount of communication and tracking to ensure that IT strategies continue to have a positive impact on the customer. You have to bridge a project with clear-cut ROI to maintain continuous improvement in the metrics that are important to driving the overall strategy.” Nolan describes IT’s relationship with the CMO as growing stronger and stronger. Almost two and half years ago, there was no relationship, but he has worked to cultivate a strategic partnership. “It’s a partnership where we are both looking at ways to drive business performance higher and higher,” he says.

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Joe Simon Chief Technology Officer Conde Nast

For Conde Nast, the customers are both the advertising clients and readership, which makes customer centricity twofold. Nevertheless, Joe Simon, Conde Nast’s Chief Technology Officer, believes that being customer-centric is a brand trait that is critical to the multi-brand organization’s success. “We are very focused on the end customer and the experience they have with our brands,” Simon says. “We look at what we can do to enhance and extend their experience across all platforms, including print, web and mobile. The experience should reflect the quality of our brands.” Working with agencies and advertisers to create a customer-centric experience is a bit more complicated, however, as Simon says they need to think more about the segmentation and messaging of their advertisements, which is a top priority. The hallmark of Conde Nast is said to be their enterprise-wide drive to be extremely customer focused. These days, the organization’s abundance of customer knowledge comes from the web and their move to incorporate more digital platforms. For IT, gathering customer data in a way where it can be easily leveraged across multiple segments is a priority. “The big difference today is that we know more about the customer than we have before,” he says. “The kind of data we have on behavior is a lot more granular than we ever had on print. There has been amazing enhancement in our depth of understanding around the customer.” While big data is generating a lot of buzz, Simon says that if you consider the term outside of its technology implications, it actually makes it easier to focus on specific areas of the customer experience. The capabilities they now have enable them to combine behavioral data across platforms that are more real-time and actionable. “We make sure that the technology we put in front of the consumer really takes into consideration their view and experience,” he says. “Whether it’s purchasing something or browsing, we aim to make the experience as simple as possible.” As a multi-brand company, segmentation across the brands can sometimes be a cultural challenge. One solution is to offer subscription bundles in both print and online, as well as cross-segment offerings. Joint meetings with consumer marketing, editorial design, IT and sales are often held around providing company-wide solutions, many of which involve technology. “The role IT plays is becoming increasingly significant as we deliver more and more value in providing solutions,” Simon says. “Our relationship with the consumer marketing group and the CMO is evolving and getting stronger.”

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Shohreh Abedi Chief Information Officer Farmers Insurance

An enterprise-wide approach is taken when it comes to driving customer centricity at Farmers Insurance, and the relationship between IT and marketing is critical. These two functions work together to build a data management platform, leverage customer knowledge and insights, and increase business performance by creating an experience that is centered around the consumer. Customer centricity is such a critical priority at Farmers Insurance that a charter and dedicated group were recently formed to ensure and enhance the customer experience throughout the enterprise. The Chief Operations Officer, who works closely with the CMO and always keeps the customer in mind when developing and building out new campaigns, oversee these initiatives. Although agencies are the primary distribution channels, the organization believes a connection with the end customer is key, and they strive to be accessible via any channel at anytime, anywhere. “Across the organization, every single person has the responsibility to think from the customer’s standpoint,” Abedi says. Everyone acts as if they are servicing the customer regardless of their role or level in the company” A current priority for IT is building a master data management platform to organize data collected from web and digital channels. The CMO is leading the charge for that need and will assign ownership of the database once complete. “As the head of IT, I am the funnel for each of the business units, and I have a very close working relationship with my group and the CMO,” she says. “Everything that we do as an organization has an IT component to it. At the end of the day, it’s the data that makes you successful. Having this data easily accessible to draw intelligence, profile and action properly is really the key. A 360-degree view of the customer is important.” Another critical platform for driving business performance within the organization is social media. A great amount of unstructured customer data is mined from these outlets. Abedi believes companies are listening much more to the CMO than years ago, when they were viewed more as an advertising and branding unit. She feels than CMOs have much more influence these days when it comes to business decisions.

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Larry Godec Senior Vice President and Chief Information Officer First American Title Insurance Company

At First American Title Insurance Company, the enterprise-wide mandate to become more customercentric comes from the top. All functions collectively drive growth and revenue by offering the customer a more seamless and enhanced experience. “It all starts at the top, so if the CEO and COO are behind it, then it is certainly incumbent upon all of the operators—whether it’s the business function or technical support—to follow suit,” Godec says. “If and when roadblocks do come up, it is very easy to get around them just by pointing back to the corporate strategy.” From a technology and spend standpoint, First American’s CEO made the decision to be less internal facing and become more customer-facing. “About two years ago, the CEO changed the direction of the corporation from cost cutting to growth. Coming out of the housing slump, we are now more focused than ever on our customers. Every revenue-generating division is going to be coming to IT looking for new and better technology to help them grow,” Godec says. “We track every dollar spent on customer-facing technology, and the goal is to reduce doing ‘run-the-business’ infrastructure projects and really focus dollars on ensuring that our technology is easy for our customers to use.” Within the organization, the customer relationship is primarily owned by the revenue-generating departments. IT is there to support those departments and come up with new ideas to enhance current customer relationships and drive additional business. “From my vantage point, it’s really the revenue-generating business units that control data for the customer, and IT is the manager of it,” he explains. “We’re the custodians.” When it comes to new technologies, Godec believes that it’s all about mobile. In the last 18 months, the organization has rolled out multiple new technologies. One product, called myfirstAm, gives real estate professionals an easy-to-use mobile and desktop solution for obtaining property characteristics. They can order title insurance directly from their iPad or phone and receive status updates on the progress of the closing. “We provide automated alerts throughout the closing process, which real estate professionals love,” Godec says. “The platform also delivers all documents electronically, so it’s very robust, easy to use and customizable.” He also enjoys getting into the field to talk to customers and sales representatives about how they perceive the technology. “I like to communicate with them to demonstrate our interest in assisting them and that we are listening,” he says. “I hear what their needs are and in many cases we are able to implement those changes quickly.” When it comes to big data, both structured and unstructured, Godec sees a great opportunity and is looking for a single dashboard to pull together all customer data for a 360-degree view. “It’s a good opportunity to consolidate data from our CRM system, our production systems, claims systems, and other internal and industry sources,” he says. “Our IT and corporate marketing teams analyze social data and are currently monitoring Facebook, Twitter and other media to locate people

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talking about First American. We’ve already been able to see several conversations and direct them to the appropriate customer service or sales rep, which has resulted in additional business.” Within the organization, the role and responsibility of the CMO is valued by the C-suite and personally by Godec, the CIO. “Our CMO and I work very closely on our customer-facing technologies,” he says. “She is instrumental in rolling them out internally and in the market. Again, our CEO really changed the focus to a more customer-centered one. These initiatives have resulted in having me work more closely with our CMO. That is just going to continue, and we will work more closely together over the coming years.”

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Marco Trecroce Senior Vice President and Chief Innovation Officer Four Seasons Hotels and Resorts Within the last two years, improving technology has moved to the forefront of Four Seasons' roadmap. Marketing was a self-contained business unit with its' own approach to delivering IT projects before the arrival of Marco Trecroce, the company's first CIO, who has influenced the organizational IT structure by integrating more IT resources with specialized skills to help marketing deliver on a series of complex projects. IT now works with Marketing as their internal customer and together they are working in tandem to tackle guest-centric initiatives. Within the organization, customer centricity adoption is not driven by a singular person; rather, being guest-centric is a part of the company-wide culture, which is mandated in their global brand perspective. “We have a very strong culture around guests, which we call being guest-centric,” he says. “It is deeply embedded in our values as a business and in everything we do within each hotel.” Marketing is tasked with optimizing loyalty and understanding the customer better to create guest programs or campaigns. They own the customer database globally and are responsible for maintaining the quality of customer data. However, each individual hotel takes it one step further by executing these programs and applying customer knowledge by being aware of guest names, allergies, preferences and more. “Our properties do a very good job of guest recognition,” Trecroce says. “For example, we try to proactively meet the guests and use their names as much as we can in all their stays. This is engrained in the culture and our standard operating procedures around the globe. In ownership of the guest, you have to maintain a balance between global marketing and local execution.” Due to the majority of brand initiatives having huge technology implementation requirements, the relationship between marketing and IT is tightly aligned. “Marketing cannot operate efficiently unless technology solutions are implemented correctly, so we are highly aligned in driving these initiatives,” he says. With a few roadblocks in respect to culture, the primary obstacles in solution implementation are cost, time and centralizing customer data. As a sizable global company, information can easily be decentralized, which poses a challenge in the modern world of technology and vast amounts of customer data. “There is so much customer information available these days that unfortunately, it can become decentralized,” Trecroce explains. “There is customer information sitting in marketing globally, as well as massive amounts of information available on the net and via social media. We are working toward operational strategies to harness and centralize all of this available customer data.” Looking to the future, customer centricity remains a top business priority for all functions. “Customer centricity is a business priority, so it's a priority for the marketing team and for me as the CIO,” explains Trecroce. “Each year, we tend to have an initiative that we focus on, and even though we've always been very customer-centric, we're putting more of a focus on it in 2013. I'll be working with my colleagues in marketing around taking customer centricity and customer loyalty to a new level and bringing in select technologies that will help our hotels really understand our customers better. We also look to provide our guests with easy-to-use tools and technologies for sharing with us more about what they want.” © Copyright CMO Council. All Rights Reserved. 2013

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Haden Land Vice President, Engineering & Chief Technology Officer Lockheed Martin Information Systems & Global Solutions-Civil Product Line

The advanced technology available at Lockheed Martin provides the organization with a transparent look into customer data. Being heavily involved with cloud computing, big data and enterprise portals, the organization views its state-of-the-art devices as a key to their customer centricity. Haden Land , Vice President, Engineering & Chief Technology Officer for Lockheed Martin’s Information Systems & Global Solutions-Civil (IS&GS-Civil) Product Line believes that even if all the right data is acquired, it is meaningless without the proper tools to turn that data into actionable insights. Many organizations believe in placing their company goals as the top priority, and customer centricity starts and ends with putting the customer at the forefront of their thinking. Lockheed Martin takes this a step further by looking at the customer’s expectations first and meeting those expectations to the best of their ability. “We have a heavy focus on understanding the customer’s mission and objectives, and everything we do is centered around enabling those objectives,” Land says. “Customer centricity is all about being a partner in the endeavor of delivering on the customer’s mission and achieving their objectives.” As CTO for IS&GS-Civil, Land provides a strategic framework for customer communication. It is his goal to successfully align the organization’s technology and resources to meet the expectations of the customer. He also provides visionary insights on next steps to begin planning ahead. With all of this responsibility, he maintains his focus on making every step as transparent as possible for the customer. “Being very transparent with customers is important,” he explains. “Making them aware of both the opportunities and risks involved helps them form a strong, trusting partnership with your organization.” Sometimes problems arise in developing transparency with the customer when there’s a lack of communication and consistency. Everyone needs to understand the customer-centric methodology and execute that consistently across the organization. Lockheed Martin relies on a secure dashboard and an accurate metrics system to create a consistent platform that drives customer relationships and business development. “We are heavily focused on providing information in a secure fashion using state-of-the-art devices,” Land says. “We understand the importance of mobility and all the collaborative support necessary to maintain that relationship with our customers.” At Lockheed Martin, customer insight is gathered by aggregating data obtained both internally and externally. Land believes this extra step is essential to gaining optimal insight into customer relationships. “I think the key is to strike the right balance,” Land explains. “If you just try to run your business and execute your mission with the information you have and that you manage without leveraging all that’s available, you’re shortchanging your goal. The key is striking the right balance between internal business information and external data that’s available to everyone.”

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Some improvements Land is currently looking into focus on the way data in currently obtained. He wishes to break down some barriers, such as language, that may act as a roadblock from retrieving the best content available. He is also looking to go beyond what customers are saying in surveys and questionnaires. He wants to look at their behavioral responses to their interactions with various systems. The path they take through a system, along with the decisions they make to reach a particular goal, can be extremely helpful when looking at ways to appeal to all customers. “I think getting better at understanding the less obvious factors about the way people interact with systems or the gestures that they make, that path that they take through the Internet and what we can learn from some of that is an opportunity that we haven’t fully exploited,” Land says. Currently, the relationship between Land and his communications team is strong and constant. They collaborate on innovative measures and strategies and work to brainstorm solutions to existing roadblocks. “The communications team works hand-in-hand with me on my external speaking engagements, of which I do a lot, as well as external writing, opinions and columns,” explains Land. “We share a very strong partnership as it pertains to me specifically, and that holds true for others in our organization as well.” Daily collaboration is necessary and almost critical to the organization. Land plans to eventually have not only a two-way collaboration, but a three-way dialogue between himself, the communications team and the customer. “Going forward, I suspect we’ll be in a scenario where we’re looking at more customer engagement and involve the customer in some of the interactions,” says Land. “This will help ensure that the messaging, marketing and collateral that we develop are aligned with some of the evolving objectives on their side as well.” When looking at improving customer centricity, Land plans to focus on expanding the partnership with current customers, as well as engaging with new customers through open dialogues on how to achieve their objectives. At Lockheed Martin, it takes the collaborative effort of both Land and the communications team to make this vision possible. “You really need to leverage the relationships that you have today and build that relationship with the current customer,” explains Land. “You must work with the customer to influence the requirements to be in a good position to provide them with the best value solution.”

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Kenneth Corriveau Chief Information Officer Omnicom Media Group

As an advertising agency, client retention and acquisition demand innovative solutions, causing IT to play an integral role in business performance. Kenneth Corriveau, Chief Information Officer of OmniCom Media Group, feels that as client needs continue to evolve and require innovative technology solutions, the relationship between IT and marketing will grow closer. “We are all about our clients and our relationships, which makes us very client focused,” Corriveau says. “Customer centricity is part of everybody’s responsibility. It is a constant conversation with all individuals in all groups. I view it as being sticky with the client.” He feels that since the account teams work directly with clients, they could be considered the owners of the customer or client. However, customer data is owned by IT or the analytical group that leverages the data. In addition, big data is something that the organization has dealt with for years. Aggregating and sorting data in order to leverage this knowledge to benefit the client is always being addressed and improved. With respect to advertising, campaigns are determined based on the client’s needs, and performance is measured in a multitude of ways, including client sales reports, direct feedback and positive messaging in the marketplace. “We focus on the media aspects of advertising, and we look at it in two ways,” he says. “First, we look at the way we view our clients and focus on creating solutions around their needs and challenges. Second, we look at the individuals in the marketplace or the targets our clients are trying to reach.” As the organization attempts to win new clients or to fulfill current client needs, it is concurrently providing support and technology solutions ranging from traditional to digital. “As more marketing dollars are allocated for technology solutions, I see IT and marketing working closer together,” he says. “In the past couple of years, we have become more tightly knit, and this will continue as technology proliferates.”

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Albert Oriol Chief Information Officer Rady Children’s Hospital San Diego

When it comes to driving business value, a number of initiatives are currently being implemented by Rady Children’s Hospital’s CIO, Albert Oriol, in collaboration with his executive peers. Together, they aim to centralize customer data as opposed to the traditional and historical practice of looking at data in silos. “As an integrated delivery system that focuses on pediatrics and family care as a whole, we take pride in our family-centered care model,” he says. “The way we approach customer centricity is first and foremost with quality interactions and top-notch services. Although we certainly keep the customer at the forefront, it's an evolution for us.” Improving customer engagement is important to the business. A number of initiatives are currently being implemented, and innovative tools are being explored in collaboration with the COO, who also wears a marketing hat. In order to bring services to the patient wherever possible, mobile is being actively investigated. “We have realized that the more engaged are customers are, the better they take care of themselves and the better outcomes they have when it comes down to their own health,” he says. “A number of different technologies help us ensure that our services keep getting better. For example, mobility is becoming increasingly important to the organization as it gives customers access to information and the means to communicate more readily with their providers.” In comparison to the number of competing priorities with healthcare reform and a host of additional external forces driving organizational priorities, there are few internal challenges in terms of implementing a customer-centric culture. “I think like everybody else in health care these days, we are faced with having to do more with less, and that obviously means we have to think differently about how we accomplish our mission of taking care of patients while ensuring that the patient experience is great,” Oriol explains. “Making sure that we are not spread too thinly so that we can keep the customer at the forefront can sometimes be a challenge.” From the members of the care team and patient financial services to registrars and IT, it is clear that everybody is responsible for the patient’s overall experience. However, for the most part, the physician is the owner of the customer. The custodian of customer data is the health information department, which reports to Oriol. When it comes to using customer data to drive better business value, this is something they are looking to delve into. “Whether you call it big data and analytics or something else, this is certainly something that's on our radar,” he says. “We are utilizing our data right now more on the clinical side, and as we get better at it, I think its uses will be very expansive. It is still early for us in the game, so we are learning as much as we can.” Oriol feels the company’s COO is supportive and understands the value of technology, and this is beneficial to their working relationship. “I think we are going to continue to get stronger and more interdependent,” Oriol says. “This organization has had a realization over the last two or three years that there is not a strategic initiative being undertaken that does not involve technology or data as a critical component of success. As a result, we are seeing much earlier engagement from my team in helping to craft direction and solutions. I anticipate that's going to continue.” © Copyright CMO Council. All Rights Reserved. 2013

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Gabrielle Wolfson Chief Information Officer Panasonic Corporation of North America

Panasonic is a unique organization with a wide array of products across different industries. The company’s relationship with the customer varies depending on the distribution channel. Gabrielle Wolfson, Chief Information Officer for Panasonic Corporation of North America (PNA), understands that because their customer base stretches across industries, the relationship with the CMO must be tight in order to keep up with the various marketing and brand management strategies across multiple technical platforms, including social media. Currently, the information systems organization is collaborating closely with the CMO and the PNA business to brainstorm ways to further engage with the customer. This will provide a better understanding of their potential to add value to the consumer market, as well as their B2B customers. “We still target the end customer in our B2B solutions. And we’re working with our sales companies and the channel partners to keep current with the markets and develop new business models,” Wolfson says. One of the biggest challenges PNA faces throughout the organization is opening up to possibilities. With the digital environment constantly changing and drawing in customers with the latest technologies, IT must be diligent in pursuing the most cutting-edge platforms. “Nowadays, if the technology is out for six months, it cannot be labeled as cutting-edge or new anymore,” Wolfson explains. “We need to be capable of accepting these new ways of reaching the market, making them business as usual and keeping an open mind to innovation.” Big data seems to be the hot topic at many organizations these days, and the struggle between recognizing structured and unstructured data and making it relevant has been a burning issue across the industry. Wolfson sees big data not as an issue, but as a chance to improve current data platforms and possibly improve customer centricity. “I don’t think big data is an issue; it’s an opportunity,” Wolfson says. “But I think you have to plan for big data; you can’t leverage the existing technology or infrastructure that you have in place and extend it to cover or address big data requirements.” Wolfson believes PNA needs to continue to work through the different levels of data management maturity across its businesses in order to maximize the benefits from big data analytics. The amount of information received varies across the different parts of the organization, and this can be a challenge when trying to gain a holistic view of customer insight across the enterprise. “We need to take the time to prioritize and understand the value that big data could bring to the individual businesses and leverage that to gain insight,” Wolfson explains. The collaboration between the CMO and CIO needs to be continuously centered around how to enhance engagement with customers. Wolfson believes that having marketing work with the CIO to leverage social media is the key to having that interaction with the customer. This initiative will not only open up a dialogue with the customer, but also strengthen the relationship between the CMO and CIO.

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“Having real-time understanding of customer reactions to our marketing campaigns, different initiatives or brand management is very critical for us,” Wolfson says. “Leveraging technology to achieve this dialogue with the end customer is really the foundation of the relationship between the CIO and the CMO.” Although the CMO/CIO relationship seems like a simple fix to inspire collaboration within the organization, it can be a struggle for some companies. Because both roles speak completely different languages, it can be difficult to communicate and work together as a team. Wolfson believes both roles have to work on communicating and learning from each other. This should be a process that continuously improves while strengthening the relationship. “I think that collaboration between the CIO and CMO is very much an educational process that goes both ways,” Wolfson explains. “I would say our relationship has grown tremendously over the past few years, and we’ve learned a great deal from each other based on the opportunities that we have had to work together.” Looking forward, Wolfson sees her relationship with the CMO as a growing business partnership. As they continue to build their relationship, she feels they will also strengthen customer centricity throughout the organization. “I think the relationship is going to get stronger and stronger as digital opportunities grow and technologies evolve,” Wolfson says. “I think this partnership will grow even tighter, and we need each other to bring value to our business.”

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Anonymous Chief Innovation Officer Hotel/Resort Brand

Achieving customer centricity is not a one-stop shop for one hotel/resort brand. According to the company’s former Chief Information Officer, customer centricity is a mindset that is never fully achieved, but one that is constantly growing and changing. In order to effectively work toward it, strong collaboration between the CMO and CIO is a necessity. With a customer base of 28 million, the brand is constantly analyzing their audience as well as their competition. The CIO’s goal was to differentiate the company through personalization and customization. “We wanted to differentiate ourselves from our competition based on our knowledge of our customers and really target promotions and campaigns that were relevant to them,” she says. “We stayed away from the mass mail approach that a lot of people try to use because it has a very low return rate.” The company launched a program launched a rewards program that showcased its ability to personalize content for consumers. The program unified all the different hotels to create a consistent experience for the customer. The more they stay and spend at any property, the more rewards they can earn. A customer can also move up within the program and join different tiers depending on how much they spend. This allows the customer to feel as if they belong to an elite club whenever they visit one of the company’s properties. “It’s totally a cultural immersion, which means you’re going to manage the guest experience at all points of interaction in a consistent fashion so that the guest knows—regardless of where they are staying—they’re part of that affinity group,” she explains. The former CIO believes the key to becoming a customer-centric organization is not to have one person believe they own the customer experience; in order for an organization to revolve around the customer, everyone within that organization must take ownership of managing the customer experience. “I think to work toward true customer centricity, everybody needs to own and manage the experience because all of the touchpoints have to unify and rally together to create that differentiated experience,” she says. “It’s all about the experience.” When analyzing data across the organization, it’s crucial to not focus on the ownership of the data, but to make sense of it. The importance of the data is measured based on its accuracy and relevancy. “The issue is not the big data; the issue is relevant information,” she says. “Big data is more of a consultant annuity program. At the end of the day, what you really care about are the meaningful nuggets of information that enable you to serve a customer in the moment.” The company looks for something extra when measuring customer satisfaction. Surveys can show if a customer was satisfied or pleased with their experience, but they are not able to show the genuine “wow” reaction that the company strives to achieve. That experience is the conversion factor that

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transforms a one-time visitor into a loyal customer. Customer centricity is not settling for the satisfied customer; it is seeking what could be improved to bring out the “wow” factor. She also emphasizes the importance of each part of the organization striving toward unification within the company. No one department can support customer centricity all on its own; each department within the organization relies on one another to create a customer-centric environment. “The most important part of implementing customer centricity is the partnership with the business,” she explains. “It’s not IT. It’s not about innovation. None of these can stand on its own. It’s vital that it involves the partnership with the business—that’s the game changer.” Her collaboration with the CMO enabled the company to reach a new level of success. Integrating the departments is a new development that allows everyone within the organization to see all of the phases of customer centricity, which is vital to entering the next stage of hospitality management. “I think that as you get real CIOs and real CMOs in place, you will see companies do things in their marketplace that they never envisioned were possible because there was such a disconnect at one time,” she says. The former CIO understood the value of customer centricity and how a close partnership with the CMO would give deeper insights into the customer experience. Customer centricity is not an action that is performed, but a mindset that is implemented in all aspects of the organization. “Customer centricity is what the word means. It’s about the customer; not a system,” she says. “It’s a state of mind and a philosophy. How do you give the customer a consistent experience at all points of interaction? That’s true customer relationship management.”

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Anonymous Senior Vice President, Chief Information and Operation Officer Life Insurance Company

This enterprise is moving from an operationally efficient strategy to a more customer-centric strategy. The CIO acts in dual a capacity, overseeing both technical systems and new business processing and servicing. Customer centricity is being driven by a function that is new to the organization—the CMO. The CIO and CMO are closely aligned and will continue to deepen their relationship as new systems are put into place. The enterprise’s CIO defines customer centricity as the experience, preferences and engagement of customers, as well as the impact business changes have on these. “At the end of the day, what are the needs of the customer in terms of your offerings? What’s the reputation that you built with the customer, and how do they talk about you when you’re not in the room?” he asks. This CIO also runs a big part of operations that include new business processing and servicing. The owner of customer centricity across the entire enterprise is somewhat unclear. From a servicing standpoint, insurance administration or policy-holder servicing owns the customer experience. However, when the data from these interactions is consolidated, he feels it will soon belong to the marketing department. “We have a new CMO, a function that we have not had before, who wants customer data and aims to understand the customer experience,” he says. “Data is decentralized today, but I think there a need for it, and ultimately that implies where the ownership will reside. That’s where it should reside.” The organization is moving from an operationally efficient strategy to a more customer-centric strategy. The role of IT was all about doing things faster, cheaper and accurately, and now performance goals related to simplifying the customer experience have been set. “We have done a lot of work over the last year, but we know we have a long way to go,” he says. “Asking for feedback before we design a product and having a consistent dialogue is not in our DNA. It is going take us a while to get there, but we recognize where we are short and are making investments to close those gaps.” Most large investments are measured against the alignment of this new customer-centric strategy and the net impact on the customer experience or the customer relationship, and the CIO plays a big role in this process. Starting next year, compensation specific to customer experience measures will be in place. Ultimately, the chief operations officer, which oversees both the CIO and the CMO, is the key stakeholder in customer experience development and investments. Lack of information about customer needs and wants, as well as mechanisms across the board to capture data about the customer experience, tops the list of roadblocks to implementing this new culture. “Currently, we do not have the systems in place because until now, capturing customer experience and customer needs data has not been important to us,” he says. “There is a lot of infrastructure that does not exist that must be built out.”

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Operational mindsets have also been hard to break, and getting out of the “how fast and cheaply can we do it?” mode is another barrier. “We must understand that spending a little more time with a customer who you value may have a stronger business case in the end than saving money because you got the person off the phone 13 seconds earlier or quicker,” he says. “So that’s the mindset shift in going from an old strategy to this new strategy. That’s just change, and it takes a while to sink in.” Since the CMO role is new to the organization, the CIO is looking forward to expanding the relationship and aligning on customer-centricity initiatives. “Our new CMO is a very qualified person who has a bit of an uphill battle,” he says. “We have a lot of people in the organization that don’t understand what a CMO does, nor how they fit in. However, there is a healthy curiosity about what he can do for the company.”

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Anonymous Chief Information Officer Medical Device Company

At this medical device company, the customer can be a number of different individuals, including distributors, a hospital administration department, a doctor who uses the actual product and the patient, who is the ultimate beneficiary of the product. Even though a patient may not know the brand or be involved with any transactional commitment to the product, he or she is still considered a customer. The chief information officer for the company explores the types of customers and how the CIO/CMO relationship can be influential at every customer level. As CIO, the individual has mainly dealt with technology functions and implementing what marketing says is right for the customer. Now that the role of marketing has become much more integrated with technology, however, he has made customer centricity one of his top priorities. “Customer centricity is increasingly becoming a priority for me in my job as a CIO,” he says. “If I look three years ahead, I would say that it is likely the only focus I will have. This is changing because we are increasingly becoming a customer-aware company as opposed to a self-aware company.” IT is not the only department feeling this shift in customer centricity; the customers are feeling it as well. As a result, new ways of communicating with the customer, receiving feedback and interpreting that feedback will need to be in place in order to effectively use that information to further customer insight. “Customers now need to be aware of the fact that they have a voice and a seat at the table,” he explains. “This comes with its own responsibilities, so we’ll need to ask ourselves how to understand and appreciate their voice at our table and allow it to inform things that we do for them. There will be a challenge ahead of us in terms of managing through the change and retraining our own thoughts and behaviors.” He feels the organization will put practices in place that exude customer centricity and hope customer feedback will indicate whether or not it is working. He believes the proof of effective customer-centric efforts lies in the reason behind why a customer chooses to do business with them over another company. “How they choose us would be a pretty good determinant of how customer-centric we are,” he says. “Would they choose us if they had a choice? And if so, why? Understanding that will be the yardstick to measure the proof.” When measuring and retrieving customer data, the CIO believes one type of platform is not sufficient to provide the optimal amount of useful information. Technologies like CRM, Business Analytics and Informatics are used in order to further develop customer insight across the enterprise. “We don’t look at one specific technology and lean on that exclusively to give us insight,” he explains. “Instead, we choose to go broad. I would rather see our team look for insights on a broad and shallow scale than a narrow and deep scale.”

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The relationship of the CMO and CIO at this company has grown a great deal over the past couple of years. Before they decided to come together for a business partnership, marketing was the main decision maker for the customer, and IT was viewed as more of a supporting role to marketing. Now that the expertise of both roles is critical to improving customer centricity, the CIO and the CMO have come together to create a council to address the issues and plans revolving around customer centricity. “Two years ago, we did not have a relationship with the CMO and the marketing heads,” he says. “A year ago, the CMO and I chose to change the landscape and created what we call our digital marketing strategy sweep, where the representation includes the heads of our marketing and IT departments and a couple of other people that are critical in the decision-making process.” Looking into the future, this CIO believes this leadership council is going to act as the rock that continues to implement customer centricity. Along with the other members of the council, he plans on enhancing customer centricity to gain a greater understanding of customer insight across every customer level. “Today, the guardrails for what can be done, the consistency of what should be done from a brand perspective, and the guidelines and priorities of what must be done are all decided in the strategy council,” CIO says. “It’s a strong forum that has come into existence, and we’ll continue to get leverage over the next several years.”

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Anonymous Chief Marketing and Strategy Officer International Insurance Company

Insurance companies often have marketing efforts for both B2B and B2C, and these efforts will vary based on country, region and business line. Insurance companies also tend to have agents or brokers to generate sales on a local level, which is beneficial in terms of understanding local consumers’ needs. For one CMO, the company’s overall strategy and mission are global, but the deployment of various initiatives must be done locally. In most cases, the company has local CEOs and CMOs, and under the global brand they bring together best practices and ideas for setting the strategic framework, implementing governance measures and seeking opportunities for economies of scale. However, once these come together, the marketing strategies are deployed at the local level. “We rolled out new brand guidelines in 2011, and while we have focused our efforts on the US market today, we have a common look and feel across the globe and are fairly compliant to our standards,” she says. “But at the end of the day, we have to think about how we take the brand promise, character and personality that we have developed in the U.S. and adapt it in a way that resonates in local markets around the world, which involves aligning closely with our businesses in all regions. It’s a constant evolution in terms of moving from centralized to decentralized efforts and finding the right balance, but we believe that our marketing campaigns need to take place closest to the customers—in the local markets.” With respect to the obstacles the company faces specific to local marketing strategies, she says it can be difficult to strike the right balance in what needs to happen globally versus what should be done and tailored locally. Having that balance as well as governance in place is an important part of the mix for any global organization. To gather data and measure the success of their efforts, she says the company has a series of reports that are reviewed on a global level, as well as monthly dashboards that provide information about KPIs such as sales by country. Country teams and business lines review their results at a more granular level on a daily basis. For online efforts, they focus on KPIs such as visits, sales conversions, cost per lead, cost per sale and return on marketing spend. “We perform significant post-campaign analyses to ensure we’re meeting financial hurdle rates and making the right investments,” she says. “In terms of figuring out the right marketing and channel mix, it’s driven by listening to what customers want and what their preferences are.” For the company, online and other digital activities are part of the overall mix, but the interplay between channels is critical since customers often aren’t comfortable going through the entire process online when making an insurance purchase. They often want to be able to speak to a person, so the company tries to measure interactions between the channels. Furthermore, she believes digital must be part of the overall mix so that customers can use it in combination with other channels based on where they are in the purchase cycle. The company is still building its capabilities in social and mobile and is gaining better insights into consumer use of these channels, which can vary from one market to the next.

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“Social media is an important part of what we’re looking at for 2013; we’re still testing and learning, and we’ve recently hired someone to build global best practices for social. Currently, the channel is used more from a corporate perspective,” she says. “The same is true for mobile—we know it will completely change our marketing mix, but we’re still learning more about it and how to best include it in our efforts.”

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ACADEMIC & ExpERT INSIGHTS Anindya Ghose Director of the Center for Business Analytics NYU Stern

As associate professor at NYU Stern Business School, Anindya Ghose has studied and taught countless sessions on customer centricity. His insights around CMO/CIO alignment and customer centricity are essential to furthering knowledge on the subject and strengthening the collaboration that occurs in the C-suite. Although customer centricity has a universal definition, Ghose believes the concept should be altered depending on the type of customer. There is a distinct difference between a customer that is buying a product for the first time and a customer who has been buying a product again and again. Ghose views customer centricity as a specific focus on those high-value, loyal customers and treating them separately from other one-time customers. “Customer centricity means that an organization is going to be customer friendly, providing good service and new products and services for a handful of special customers,” Ghose says. In order to implement this type of customer centricity for loyal customers, a strategic team of strong decision makers needs to be formed first. Instead of forging a simple partnership between marketing and IT, Ghose believes it should be more of collaboration of data scientists across multiple departments within the organization. “In order to achieve optimal customer centricity, you need a very specific, hand-picked team of individuals from marketing, sales, IT, analytics and so forth,” explains Ghose. “It shouldn’t just be a marketing or IT-driven agenda; there should be a team integrated across all of these areas.” Even with a strong team of data scientists, retrieving customer data can be difficult if there is not a clear distinction between average customers and loyal customers. The tremendous hydrogenating between customers makes it difficult for certain data measuring tools to achieve their full potential. When setting a clear line between the different types of customers, the organization can provide special benefits for their loyal customers while at the same time providing a motivational tool to attract average customers to become loyal ones. “If you don’t have people with skills in analytics, you’re not going to be able to do a good job in distinguishing your average customer from more diverse, heterogeneous customers,” Ghose says. “If you don’t recruit the right people with big data understanding, then you’re not going to be able to really implement a good customer-centric culture.” In this new era of digital technology, marketing is beginning to rely on IT much more heavily than before. Because of this new dependency, marketing and IT have had to combine their expertise in order to keep up with the latest digital marketing trends. Today, so much of the business relies on the strength of the CIO and his/her capabilities in a business environment that is so focused on being digital. Before, the CIO was thrown back and forth between trying to invest in the best marketing practices while at the same time trying to find the

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cheapest way to do so. Today, Ghose believes it is important to utilize the CIO’s skills and combine that knowledge with other departments within the organization. “One of the biggest contributions that IT can have is not just in providing the infrastructure for collecting the data, but also in actually analyzing the data,” says Ghose. “They need to work handin-hand with people from marketing and sales.” With any organization, teamwork plays a key role in developing a stronger customer-centric mindset. Each division in the company works with a different side of the customer, and combining all of those perspectives is what truly drives customer centricity. “Marketing people bring their own experience and vision from what they see in the field, and IT will be able to bring in skills in data sciences,” Ghose explains. “The organizations that do this well are going to be the ones that really excel with customer centricity.”

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Robert Rose Author, Speaker, Senior Analyst Digital Clarity Group (DCG)

Certain aspects of defining customer centricity vary across different organizations, but some factors should never change and should be practiced universally. Robert Rose—author, speaker and Senior Analyst for Digital Clarity Group—discusses the key to successful customer centricity and strengthening customer engagement. Most organizations strive to put their customers first, and although this is an important priority, Rose believes more is required in order to accomplish optimal customer centricity. Because customers are expecting more from companies these days, organizations have to keep up with these needs. Rose believes the key to customer centricity is in improving availability to their customers. “Customer centricity is truly just starting with why you’re in business in the first place,” Rose says. “Customers now expect to be able to communicate with companies across myriad touchpoints. The way this manifests itself is by reorganizing our efforts around giving consistent, relevant and valuable content to these customers in all the ways they expect it.” Several organizations believe providing transparency to their customers and making their customer centricity scores available to their customers are the best ways to prove they are customer-centric. However, Rose does not think this is necessary. He says the customer should feel happy and satisfied with the service they receive, and their loyalty will be the proof. “The magic is that the customer should never see it, but rather just feel better about the company in general,” explains Rose. “The key elements start with a great product and service, but now also include consistent and facile management of great content, and true integration of customer-centric attitudes across every customer touchpoint.” Rose understands the tendency for organizations to want a certain department to own the customer experience. He also says this is one of the biggest roadblocks to implementing a customer-centric culture in an organization. Organizations should learn how to integrate the customer into every division and collaborate based on their engagement with the customer. “I work with so many large companies where marketing people aren’t even allowed to speak with customers because sales ‘owns’ the customer,” Rose says. “This is insanity. The biggest roadblocks that I see in my work with global companies is the siloed nature of today’s marketing organization, in concert with this idea of departments ‘owning’ the customer relationship. The key is working to de-silo the content processes and, either through the creation of specific roles or adding responsibility to existing roles, give content, marketing and technology a strategic seat at the management table.” IT plays an integral role in bringing this integration to the forefront. Rather than acting as a department that just receives orders and then delivers, IT should really be involved with, and just as responsible for, engaging with the customer and sharing their insights on customer-centric initiatives. “I truly believe in the power of IT as long as they are empowered to not just be the office of ‘no’ and only responsible for creating efficiency in the business,” Rose explains. “IT should be a strategic figure in the deployment of these initiatives.”

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While big data has been a focus of conversation for many marketers, according to Rose, big data is not yet the issue. Many businesses do not know what to do with the little information they already have. He believes the largest missed opportunity common among businesses is the ability to ask the right questions. Instead of trying to obtain as much information as possible about the customer, he says organizations need to figure out what questions will open the doors to data that no other organization possesses. “Ninety-nine percent of businesses do not have and will never have a big data challenge” Rose says. “But the real key is regardless of whether you have a small data or big data, the ability to ask the right questions. This will be the real magic of big data, predictive analytics and other similar strategies.” When it boils down to improving customer centricity, the collaboration between all divisional teams is necessary. Although marketing and sales have commonly been the ones to drive the customer experience, IT must learn how to spearhead the initiative to enhance customer engagement and integrate a customer-centric strategy throughout the organization. “From my perspective, it all starts with a great story, the ability to tell it well, converse with customers fluently across any channel, gauge the experience effectively and derive great insight to feed our strategy going forward,” he says.

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David Large Vice President of University Advancement University of Fredericton

David Large, former Professor of Marketing at Telfer School of Management and current Vice President of University Advancement at the University of Fredericton, a private online university, believes customer centricity starts at the top of an organization. He sees the marketing and IT relationship as vital to business performance and feels that the CMO-CIO tandem is an extremely valuable part of the C-suite. “Whether it's a product, service or advice that an organization is providing, the organization exists because of a customer,” Large says. “Customer centricity has to be included in all significant business decisions, and the call for its adoption needs to come from the CEO rather than from the CMO. I think the CEO should get that message out there so the CMO is not seen as a lone voice.” Large feels customer ownership is organization-wide, with each function owning the customer at some point in the customer lifecycle. IT plays an important role by capturing the customer experience and maintaining customer data from cradle to grave. He feels there needs to be a constant message from executives to employees that reinforces customer centricity so that the correct customer data is gathered and regularly updated. “IT plays an important role in developing, managing and maintaining customer centricity across an enterprise through a comprehensive database,” Large explains. “You can’t know your customers, detect their media sensitivities, understand their experience or have a good sense of measurement without a functional CRM system.” As for roadblocks in the road to customer centricity, Large feels all functions need to work together to understand what is required, when customer hand-offs occur, and how to reinforce the message to employees. “It's a never-ending push,” Large adds. “I know that people get caught up in their day-to-day responsibilities, running their own organizations and making sure they're really ticking along. But if the top people in marketing and IT are not talking to each other on a daily basis, there will be trouble.”

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AffILIATE pARTNERS CTIA

CTIA–The Wireless Association® (www.ctia.org) is an international organization representing the wireless communications industry. Membership in the association includes wireless carriers and their suppliers, as well as providers and manufacturers of wireless data services and products. CTIA advocates on behalf of its members at all levels of government. The association also coordinates the industry’s voluntary best practices and initiatives, and sponsors the industry’s leading wireless tradeshows. CTIA was founded in 1984 and is based in Washington, D.C.

Qualtrics

For a long time, the only people with access to Qualtrics survey software were our closest friends and a bunch of Scott’s MBA students. It was our research clients who pushed us to open up the system… and gave us the feedback needed to make it both the easiest to use and most sophisticated research suite on the market.

Marketwire

The only fully integrated North America-based global newswire, Marketwire Inc. is a full-service partner to IR, PR, and MarCom professionals seeking premier distribution, media management, multimedia and monitoring solutions. Marketwire’s customer-centric corporate philosophy focuses on being the best by infusing every aspect of its business with the following core attributes: precision, adaptability, innovation, and simplicity. Marketwire delivers its clients’ news to the world’s media and financial communities. With a reputation for technological leadership, Marketwire offers innovative products and services -- including Social Media, Search Engine Optimization, Dashboard Mobile Financial, News Dashboard coverage reports, exclusive access to networks such as the Canadian Press Wire Network, Easy IR and Easy PR workflow solutions, and more -- that help communication professionals maximize their effectiveness while ensuring accuracy and best practices. Having merged companies (Market Wire and CCNMatthews) in April 2006, and enjoying a combined history of 25-years of service, Marketwire is now majority-owned by OMERS Capital Partners, the private equity arm of one of Canada’s largest pension funds.

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about the cmo council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council's 6,500plus members control more than $300 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 20,000 global executives in more than 110 countries covering multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia-Pacific, Middle East, India and Africa. The council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), LoyaltyLeaders.org, Marketing Supply Chain Institute, Customer Experience Board, Market Sense-Ability Center, Digital Marketing Performance Institute, GeoBranding Center and the Forum to Advance the Mobile Experience (FAME). More information about the CMO Council is available at www.cmocouncil.org.

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Driving Revenue Through Customer Relevance Aligning the CMO and CIO to Achieve Agile Intelligent Marketing

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The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Contents 3 Introduction 9 Summary of Key Findings 19 Top Line Findings 22 Accenture Perspective 26 Detailed Findings – CMO 49 Detailed Findings – CIO 72 Executive Insights 116 Academic & Expert Insights 130 About

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Introduction Marketing organizations worldwide are in the midst of a fundamental and transformational journey. Call it crossing the Digital Divide to a new world of customer relevance. For those who get it right, the end reward will be very profitable. For those who fail to meet the digital demand, the end may prove to be swift and costly. In today’s complex and competitive digital world, customers are empowered to research every alternative, make their own decisions and transact on their own terms. Expectations around value, price, quality of products and services, and hassle-free access to what they want and when they want it -- have gone through the roof. Customers are no longer satisfied with lobbying complaints or voicing their opinions. Instead, customers are acting with their dollars, turning away from those companies who can not provide the experience, channel of engagement and immediate service they require. The era of price wars and cheap promotions has given way to the era of customer experience as a key competitive advantage. Consider the results of recent customer behavior studies that indicate a single negative experience would cause 60 percent of customers to pull their business from a brand. Old business models and channels of influence and interaction no longer deliver the same results. And, further, the consequence of failure in this new digitallypowered landscape can now be quantified in dollars and cents. Now, more than ever, technology and new digitally-driven businesses processes and competencies are at the core of this transformation. In this rapidly-evolving, customer-centric landscape, marketers are challenged to elevate their game by raising the relevance of their companies’ offerings, interactions, and communications. Marketers must seize the opportunity to more effectively engage with customers across a growing multiplicity of touch-points and channels, to more finely tune, target and personalize communications, to more deeply embed data-driven insight into every interaction and process, and to increase the productivity, ROI and measurability of marketing. But, to truly be successful, marketers can’t do it alone. Enter the imperative for alignment, collaboration and integration with the CMO’s greatest ally: the CIO. Like many challenges facing CMOs today, enabling this transformation to digital is a journey that requires not only new competencies and capabilities, but also much greater levels of cross-functional alignment. Marketing has already made significant strides in enabling tighter integration and collaboration with front-line sales, service and support organizations. And, it is obvious that these relationships are essential to improving the relevance and effectiveness of customer engagement and insight. Now, in order to fully capitalize on a seamless customer experience, today’s futureforward enterprise will seek a much closer alignment between CMOs, CIOs and their respective organizations.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

The CMO Council believes there is a global imperative for marketing and IT organizations, which too often have been polarized and adversarial, to find common ground around the business of innovating more efficient, effective and measurable ways to target, acquire and stay intimately connected to customers. The need for greater synchronization, partnership and collaboration between these two groups has never been more critical to their mutual success. There will be profound consequences in failing to form a closer and more strategic partnership between these two functional areas. At risk is no less than the customer, and time has become the greatest stumbling block. Transformation is no longer a far-reaching goal that allows for sweeping five-year plans and rambling roadmaps. Digital engagement and technologies are changing the way customers engage and the way customers react. Real-time engagement has sped the clock, necessitating immediate action and collaboration between the two critical, front line stakeholders in the delivery of customer experience: the CMO and the CIO. Waiting is simply not an option. One marketer surveyed in this research put it best, “The consumer is taking control of all buying decisions so technology has to enable that simple equation.” As the customer takes control of the engagement, the challenge for today’s enterprise lies in understanding how to get to the customer faster and more efficiently. The requirement is the delivery of the utmost relevant content, in the most accessible and meaningful channel that holds value to the customer. Fail to get there effectively, and you may fail to gain and retain that customer. The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance takes an unprecedented and close look at the state of collaboration between marketing and IT in corporations worldwide. In partnership with Accenture Interactive, this study provides a competitive benchmark and a call to action, for senior marketers and IT executives alike, and hopefully a call to action for CEOs looking to support, challenge, mandate and enable change. CMOs must take greater ownership of the customer experience and assume a leadership role in embracing digital marketing practices, data-driven strategies and new marketing process integration platforms across their organizations and companies. But they can only do so in close collaboration and partnership with the CIO and IT function. Technology now underpins and shapes the entire customer experience, from the delivery of campaigns and engagements to the aggregation of analytics and insights. The profound implications of consumer and B2B customer migration to interactive digital media channels globally should galvanize IT and marketing groups to collectively seek and build competitive advantage within this profound market transformation. It would also stand to reason that the advancement of customer data analytics should further solidify the bond between marketing and IT as marketers seek deeper, instantly-accessible and real-time aggregation and analysis from data gathered across the organization and partner networks.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Customer experience and connection has taken on a decidedly digital feel, with few signs that this online and interactive dependence will slow. With Facebook users now topping 500 million worldwide, digital advertising channels dominating consumer engagement and marketing spend, and high-speed 4G wireless network build-outs scaling up mobile connectivity, social media interaction, digital communications and real-time notification must become cornerstones of successful marketing strategies for global brands. And, IT must be the key co-pilot to these launches in order to more accurately and nimbly deploy, measure and advance the digital customer experience. Likewise, there is a critical and widely-recognized need for improved customer data aggregation, segmentation and analytics to support the development and execution of more customer-centric marketing strategies, tactics and campaigns. Extracting customer and market data and translating it into real and actionable insight about new business opportunities, customer preferences and high value market segments lies at the core of marketing’s goal of improving both customer relevance and profitability. With IT’s collaboration, customer data aggregation and analytics can be a far more robust system that embraces cross-functional input and insight to a single, real-time view of the customer. CMOs must have a more prominent role at the table in discussions about what data is aggregated, how it is integrated into customer-facing front-line functions and how it is used. The CIO must have a more active voice in discussions around where and how this valuable insight can be aggregated and what infrastructures can enable global distribution of resulting insights. And, should the IT executives interviewed in this research be the typical view, CMOs will be more than welcome at this strategic table, primarily because marketing has shed its image of unmeasurable, unaccounted and “window-dressing” role. As marketing moves more firmly into the practice of speaking in the language of the business, delivering measured result that tie to business driving activities and functions, the ability for marketing and IT to make a joint case to prioritize alignment will likely fall on more accepting ears. Alternatively, as IT takes strides to be considered a strategic enabler rather than an operational cog, this alliance with marketing will smooth roads to adoption, performance and acceptance.

The Growing Divide Recent CMO Council research and dialogues have demonstrated that customer relevance, digital strategies and related platform, personnel and process improvements are high on the agendas of CMOs: • A recent global conversation with CMO Council members, seeking to define the new “DNA of CMOs,” indicates that being “digitally savvy” and “customer centric” are top characteristics of successful senior marketers. • Our Marketing Outlook 2010 survey found that a digital marketing makeover, across programs, platforms and people, was the number one project priority of our members, cited by 46 percent of survey respondents.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

• Sales and marketing alignment and customer data integration and analytics were number two and three on their list. • Other studies, such as Routes to Revenue and Giving Customer Voice More Volume, have consistently shown that improved and more relevant customer communications, data analytics through better technology implementation and digital channels, are top of mind with marketers. • According to the consumers surveyed through the CMO Council’s Precision Promotion research campaigns, nearly 50 percent of consumers admitted that their reason for disconnection from brand communications was the irrelevance of the message. Indeed, this study uncovers a fairly high degree of consensus among CMOs and CIOs on the central role of technology in defining today’s customer experience and powering effective market engagement. They agree on the critical importance of customer intelligence in creating sustainable business advantage. Both sides, at least in general terms, know what they need to do. And both sides clearly bring a unique set of talents, strategy and ability to the table that cannot simply be merged or combined into what many have proposed as a ‘Chief Marketing Information Officer.” The problem is that neither group believes they are actually doing a very good job of getting it done. While most marketing organizations and IT departments are moving in the right direction, they are simultaneously falling behind. The state of the art in digital marketing practices, customer analytics and relevance is simply changing faster than most companies are responding to the opportunity. It seems that a majority of companies are taking an incremental approach to crossing the Digital Divide. This might seem wise, perhaps even unavoidable, in a period of business uncertainty and sluggish growth. But the risks of losing to more nimble and digitally savvy competitors, many of whom are born-on-web companies like Amazon and Google, are growing. Investment in the talent, technology and processes to bridges the divide will be a necessity, as will be an organizational mandate that prioritizes transformation. An aligned strategy must identify the investments that will be required for businesswide growth and optimized customer experience, counteracting the glutenous spend that has been thrown and technologies that have proven difficult to implement or impossible to measure and extract value from. Marketers, working with or without IT, are investing in tactical areas such as email, web site performance analytics, lead generation and customer relationship management. They’re leveraging outsourcing partners and vendors to improve their outbound digital marketing capabilities. But moving from laggard to leader will require more transformational implementations, such as integrated marketing services platforms, multi-channel campaign management, ROI modeling and performance measurement, content management systems and enterprise marketing management.

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Budget constraints and concerns are often seen as major speed bumps on the road to transformation, and it is certainly critical to operate more efficiently to achieve more profitable growth. Yet, the shift to digital marketing done right will have significant paybacks in terms of efficiency, adaptability, cost effectiveness, and measurability, as well as the capacity to better segment, target and customize the customer experience. Budgetary fears must be sidelined with the realization that an old adage still remains true, even in this digital age: the cost to acquire a customer is greater than the cost to retain a customer, yet the cost of a lost customer and the residual cost to recover the lost customer is the greatest cost to an enterprise. Failure to transform and deliver a relevant engagement will undoubtedly result in customer churn, so the ultimatum becomes spend now or perish later. What does leadership in customer-centric, digitally empowered marketing look like? The CMO Council believes it means: • Delivering personalized and relevant experiences to customers through whatever channels and in whatever formats they most value • Achieving consistency of communications and brand experience across both digital and offline channels. • Having the capacity to track and respond to customer behaviors across every point of interface • Becoming a more data-driven, measurable and transparent function where strategies, campaigns and budgets are based on verifiable insight into markets and customers. •

Having systems and processes with the agility and flexibility to respond to changing customer preferences, business conditions and market opportunities.

The ultimate question facing the savvy CMO and CIO is how to reach this goal. Have they looked beyond the solutions and technologies to implement the most basic of systems to secure alignment: a system that outlines communication and governance? Are solutions and platforms in use today equipped for the customerdefined view of tomorrow? Or, are the lines of communication that can speed and enable innovation so clogged with politics, miscommunication and bureaucracy that real advancement will come too slow and at too high of a cost?

The Mandate For CMO-CIO Alignment Making this transformation will require new levels of synchronization and understanding between digitally savvy CMOs and marketing-oriented, customercentric CIOs. At many companies, the divisions between their two functions are wide, and the search for a common language is ongoing. More than a few marketers and IT executives participating in this study have described their differences as a classic case of right brain vs. left brain thinking. As one marketing executive states: “CMOs and CIOs come from different planets.”

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

It would seem, at least on the surface, that several marketers and IT executives are perfectly comfortable chalking the problems up to a “marketers are right brain creative creatures, whereas IT operates in the pragmatic left brain.” But we believe the situation is more complex, often stemming from budgetary controls, differing objectives as established by senior executive direction, and a lack of shared governance and agreed vision of success. Yet in the end, it must be said that a successful “big brain” does in fact require its two distinct halves. There is opportunity to excel by understanding the key differences between “brains,” and enabling the collaborative organization to bring their best thinking to the table to develop a unified customer experience with a single goal in mind: advancing the success of the enterprise as a whole, versus advancing the individual agenda of marketing or IT. Yet, as mentioned earlier in this introduction, there is also a fairly high degree of agreement between marketing and IT executives on the importance and role of technology and digital marketing practices in delivering greater customer satisfaction, engagement, acquisition and profitability. CMOs and CIOs need to take the lead in overcoming the differences and get down to work in addressing the vast opportunities and challenges of achieving customer relevance in a digital world. The marketing function is undergoing a fundamental change, and IT-based marketing innovation will play a central role in the new world. While the CMO and CIO will remain in the driver’s seat on this journey to digital delivery and experience, this cannot be left to marketing and IT alone. This collaboration and cooperation must also embrace the heads of finance and operations, even HR and sales. Alignment is not just an imperative for the CMO and CIO, but a point of competitive strategy that must be shared across the C-Suite. This report will outline the key challenges faced by both the CMO and CIO. It will highlight the areas of disconnect and the layers of complexity this new digital-powered era has developed. Within these insights, some key themes and actionable insights will emerge that will hopefully lay the foundation to move forward to alignment as we all race into a new digital world. The good news that is overwhelmingly evident in this research is that the opportunity far outweighs the challenges that hamper alignment. The company whose marketing and IT can create this impenetrable alliance through alignment will hold the keys to the digital kingdom, with the payoff being customer loyalty and unparalleled advocacy – the top form of currency in today’s technology-powered economy.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Summary of Key Findings Without a doubt, technology is at the core of today’s customer engagement strategy, regardless of industry or region. The transformation of marketing and customer engagement into this digitally sophisticated, data-driven, highly adaptable and measurable processes require high levels of cooperation between marketing and IT. But that functional integration, along with the adoption of gamechanging digital marketing capabilities and practices, is unfortunately occurring only slowly and incrementally at most companies worldwide. “You can no longer separate business from technology or technology from business,” stated Faisal Hoque, author of the celebrated book, Sustained Innovation. “The management process, or how the CIO and CMO interacts or how business in general interacts with IT is very much converged. And unless we drive our thought process and management approach from that point of view, most organizations won’t become very successful.” Yet, sadly, this struggle over technology and engagement has done exactly that – separated the conversation between business and technology. While executives search to understand who controls what area of the technology landscape, customers have been advancing their digital needs and requirements. While customers have now broadly and deeply embraced new digital and social media channels of engagement, interaction and transaction, most senior marketers and IT executives admit their companies lack a clear understanding of how customers are using their channels and are not highly prepared to leverage those channels. Meanwhile, the relationship between marketing and IT too often remains dysfunctional, with marketers complaining about insufficient support from enterprise IT departments, and IT complaining about marketing departments that forge forward with technology implementations without IT involvement. While marketing believes customer intelligence is critical to competitive advantage, it is struggling to gain IT support and budget for better integration and mining of disparate customer data that is often isolated and under-utilized across organizational silos. Yet, there is also significant common ground on which to build a new era of cooperation and synchronization between marketing and IT. There is mutual agreement on the central role technology now plays in defining the customer experience, delivering strategic customer insight, and in reaching and engaging a digitally driven marketplace. To a significant degree, there is also consensus on key drivers and priorities for taking action. The distance, however, between thought and action remains substantial. And, there is a growing fear that this distance, powered by a communications and cultural gap that shows only surface attempts to remedy, will only slow and impair companies as customers increasingly flock to new, fast moving channels of engagement. For those who can catch up and keep up, the rewards could be great. The challenge is getting up to speed – and getting there together.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

In partnership with Accenture Interactive, The CMO – CIO Alignment Imperative: Driving Revenue Through Customer Relevance is a global study on the state of digital marketing practices and priorities and levels of cooperation between marketing and IT in corporations worldwide. Our findings are based on quantitative surveys of more than 300 senior marketing and 300 IT executives, as well as qualitative discussions with executives at 50 leading companies. The CMO Council believes these findings underscore the critical need for CMOs to do more to build closer and more strategic relationships with enterprise IT. It also highlights the need for CIOs to go further in their engagements with marketing, moving away from being a tactical support team, into a real strategic partner with a common goal of optimized, relevant customer experience delivery. Finally, and possibly most important, these findings serve as a combined wake-up call to savvy CMOs and CIOs who are looking for the next frontier of success, innovation and opportunity through closer alignment, collaboration and strategic partnership. Companies must move beyond tactical implementations and incremental improvement to achieve leadership in customer relevance. Truly innovative use of digital marketing channels, including deeper, real-time analytics, personalization and end-to-end integration of the customer experience, will require new investments in marketing systems and customer engagement processes. Enterprise IT’s experience in data and systems integration, business analytics and process automation should play a critical role in this transformation.

Common Ground for Alignment With truly transformational change toward customer relevance and insight-driven marketing requiring greater integration between senior marketing and IT executives, a much-needed meeting of minds is taking shape within global organizations. There’s a high degree of recognition within both camps of the central role technology must play in shaping twenty-first century customer experiences, the importance of the Internet in powering agile, on-demand marketing, and the critical need for marketing to achieve much higher levels of measurability and operational visibility. CIOs and CMOs agree on the top three drivers for greater alignment between their two organizations. Those include: • Technology now underpins and shapes the entire customer experience (according to 65 percent of CIOs and 50 percent of CMOs) • Access to customer intelligence is critical to competitive advantage (according to 53 percent of CIOs and 55 percent of CMOs) • Reaching and engaging the market has become more digitally driven (according to 40 percent of CIOs and 44 percent of CMOs) Most evident is the requirement for technologies that empower the operational functionality of marketing as well as customer relationship and engagement. “Information and availability is more crucial for marketing, which is now powered by the Internet’s global databases,” stated one marketing respondent. The

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

marketing-IT connection goes well beyond websites and emails, as technology touches everything from database marketing, customer loyalty strategy, real-time measurement of programs to the ability to engage and listen through new usergenerated web 2.0 channels. Technology is everywhere, and marketing and IT both agree that this will not change. In fact, when asked to rate the importance of digital marketing to the organization, both marketing and IT viewed the engagement channels as very important, if not critical, to operations. What is most interesting are those marketing and IT executives who felt digital marketing held only moderate importance to the organization (19 percent of marketing; 26 percent of IT) or of little importance (3 percent of marketing; 6 percent of IT) indicating, unfortunately, that even the digital laggards are in agreement. Regardless of importance, both agree (40 percent marketing; 38 percent IT) that technology now underpins and shapes the entire customer experience. They also agree on the top strategic areas of focus for collaboration and dialogue, including customer data integration, customer experience across digital channels, and improvements in market intelligence and decision support. CMOs say their own top technology agenda items include more effective and efficient market engagement, improved insight and intelligence, getting smarter about social media and digital marketing systems, and integration of siloed customer databases across the enterprise. Yet it seems that marketing, predictably, is more inclined to whole-heartedly embrace digital, while IT is taking a more measured approach. As 35 percent of marketers indicate they are heavily committed and invested in interactive digital marketing strategies, only 20 percent of IT agrees. However, both marketing and IT are in lockstep in their belief that a growing proportion of marketing spend is being directed to these channels and strategies (35 percent marketing; 38 percent IT). There are, however, some areas of disagreement between marketing and IT on what should be on the CIO’s agenda for marketing. Both sides agree the top area of CIO focus should be the delivery of more timely and relevant transactional, behavioral and customer insight data. But on the IT side, there is a stronger focus on automating customer interactions and handling and furthering the use of social media for online listening. Marketing, on the other hand, believes IT should first focus on improving linkages between functional marketing, sales and channel groups and on the deployment of better marketing execution platforms and operational systems. Both sides are focused on important issues, but they need to come together in strategizing and prioritizing projects. There’s also significant disagreement about who’s actually championing and spearheading digital marketing strategies within the enterprise. The vast majority of marketers see the CMO as a primary leader (69 percent) and only rarely consider the CIO and IT department (19 percent) important to defining digital marketing strategy. IT executives, on the other hand, most often point to themselves (58 percent) as the true champions of digital marketing, although they do frequently cite the CMO (51 percent) as well.

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What is interesting is that digital transformation is clearly spearheaded from within the organization as few marketers or IT executives feel outside agencies or consultants (14 percent marketing; 11 percent IT) are driving forces. What is clear is that neither the CMO (46 percent) nor the CIO (49 percent) consider the primary driver or champion of digital transformation to be the CEO or member of the senior management team. In fact, when given the opportunity to write in a response, only 3 of the over 300 marketing executives, and 1 of the 300 IT executives gave credit to the CEO.

Current State of Marketing – IT Cooperation A new era of integration and cooperation between marketing and IT may be slowly taking shape, but there are still significant issues of mistrust and misunderstanding that stand in the way. Marketers are frustrated by what they see as a lack of support from their enterprise IT departments, while their counterparts complain that marketers are often not realistic in their expectation and are not consulting them as they adopt new systems and technologies. Consider a few, sometimes humorous, complaints logged by IT executives as part of our survey: “Certain senior management should not be allowed to use a computer… flapping-in-the-breeze management style.” “Marketers too often view requirements as a ‘confab of exceptions’ leading to overly custom solutions that barely address the most common use cases.” “Marketing looks at digital solutions as answers to specific programs or campaigns and not as systems that will exist and be used again. This makes IT ‘disposable’ and budget for maintenance and constant improvement is never mapped.” Marketers, on the other hand, express their own sometimes jaundiced view of the IT department: “The marketing team is so frustrated by a continued disregard for breakdowns and issues that we have stopped asking for support and have been engaging outside vendors.” “IT is more concerned with securing customer accounts and customer data, yet blames marketing for vulnerabilities created by cloud solutions. But cloud solutions are the only way we can get things implemented that we really need.” “IT solutions are created in a box; quite often that box does not account for the needs of marketing departments… Most large brand’s IT divisions are too process-driven to truly deliver what’s needed to launch a successful social campaign.”

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More often than not, the complaints, comments, and challenges stem from a divide that may be deeper than the Digital Divide that has put such dramatic focus on the CMO-CIO relationship. In fact, there seems to exist a real communication gap that stretches from basic lexicon to final mandate issued to both organizations.

A Growing Communications Gap “I had a two-hour meeting with our top marketing guys and after the meeting, honestly, I didn’t understand half of the meeting…I’m just not sure I understood what they were after,” said the CIO of Disney in Europe. “As a company, we spend a lot of money in marketing. It’s one of our top cost pools. So how could we make sure we optimize that money? This is where creative minds and engineering minds tend to have a very different dialog because we don’t think at the same level.” While this dialog disconnect has long been discussed throughout organizations – from marketing to sales, sales to finance, IT to operations – the fundamental challenge is that no matter the parties involved, a disconnection in communication can impact key strategic decisions that prove critical in the development and execution of the customer experience, which in the end, will drive business forward. Regardless of the source, the colloquialism remains true: It takes two to tango. In the struggle between marketing-lingo and IT-speak, the gap seems to revolve around three key areas: governance, priority and measurement. And while the simple challenge can be boiled to who is at the helm of digital and technological strategy, innovation and transformation, the deeper issue is that both marketing and IT have developed similar (albeit not identical) goals, but outlined very different definitions of success. According to Brian Pagano, Chief IT Architect at Guardian Life, the United States’ fourth largest mutual life insurance company, governance extends beyond a decision-making process, and must be at the core to every corporate process. Guardian Life implemented an enterprise level unit that is charged with evaluating and acquiring new technologies, and has admitted to fielding an increasing number of technology requests from the marketing department. This central team drives technology evaluations based on the needs, strategies and requirements of the business, essentially eliminating the scenario where one department invests in a point-solution that cannot integrate into the corporate infrastructure. “We make sure that people aren’t buying point solutions that either don’t meet the full requirement or don’t really meet the needs of the business – aren’t secure or don’t integrate.” This clearly defined process of technology governance has enabled the IT team to evaluate and understand marketing needs proactively, developing a more flexible and nimble infrastructure that can more quickly adapt to customer needs and marketing requirements. “We’re coming from very different worlds, and we’ve each got a mandate,” Pagano continued. “Marketing is supposed to be very, very cutting edge and very externally focused, and from an IT standpoint, we’re very

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much focused on privacy protection and security. So, conversations tend to start at different poles. We have our occasional challenges, and it can be perceived that the process doesn’t move fast enough or that IT is resistant to change. But, that’s where the advantage of these collaboration groups and the common road maps come in handy.” Resistance to change and a sense that marketing is simply not an IT priority is also a pervasive sentiment across marketing. This struggle has manifested most dramatically in a sense that because of these issues, companies are simply not prepared to exploit the opportunities that digital marketing channels can present. Only four percent of marketers feel their organizations are “very prepared” to exploit opportunities, indicating that a lack of funding (59 percent), lack of understanding from senior management (46 percent) and complex solutions (45 percent) have held them back. Most distressing is the sense that there is insufficient support from IT (46 percent) or that IT is resistant to solution sourcing (24 percent). On the other hand, IT has a different view of the situation as 39 percent of IT executives believe that solution complexity adds to the pain. “There is resistance from marketing – they are not technology knowledgeable,” said one IT respondent. While another commented that a key problem was a general “confusion about goals and focus from the marketing organization” was at fault for the deficiencies. Timing is also a key problem. “Marketing needs change quickly, sometimes too quickly, and platforms become obsolete before any real metrics to measure can be determined,” stated an IT respondent. “We are not prepared to be in a constant state of installation!” One key component to be addressed in the CMO-CIO dynamic is the development of a common lexicon and definition of success that drives strategy and ensures productive collaboration. For Barry Libenson, the CIO of Land O’Lakes, this includes holding line of business CIOs responsible for understanding the needs and requirements of the business, across the board, from customer facing to operational, logistical, or supply chain needs. “It is their job, on a regular basis, to understand all of the projects and requirements across the board.” From the marketing perspective, it boils down to prioritization of need back to the business. “You see, my priorities are not necessarily IT’s priorities, so I always try to tie where my projects or requests to a few things,” said, Mohammed Al-Tajer, Head of Marketing for the Middle East & Africa for Citibank. “One is customer need. Secondly, we tie strategies to revenue or cost savings implications. With these two or three things, you will get the CEO to listen to what you say, and then he will push towards that direction.” In the end, it often boils down to effective communication that can lead both marketing and IT to make sound fact-based decisions. In the end, it often boils down to effective communication that can lead both marketing and IT to make sound fact-based decisions. “Market to the [IT executives]. Pitch to them. Take them out to lunch or out for a drink,” Eileen Zichinno, CMO of JPMorgan Chase says. “Approach them as if they were your client, and explain yourself and how they

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can help. They’ll be flattered you asked for help and they’ve got the expertise that’s useful.”

Steps Toward Customer Relevance Knowing what to do and actually doing it, of course, are two very different things. Most companies are increasing their investments in digital marketing and customer analytics, but their approach is frequently one of small, incremental improvements, rather than significant transformational change. Most marketing executives surveyed in this study contend that they will raise their investments in digital channels over the next 12 months, and IT executives, for the most part, agree. Yet only about a third of marketers and one-fifth of IT executives believe their companies are “heavily committed” to invested in digital marketing. What’s more, both sides of the fence tend to be reticent to take on major transformational implementations, such as integrated marketing services platforms, performance measurement, multi-channel campaign management, content management and enterprise marketing management systems. Instead, their increased spending is mostly directed, according to both marketing and IT, toward areas such as email, website performance monitoring, lead generation and CRM. Such investments are unlikely to deliver huge gains in marketing’s ability to achieve highly personalized customer engagement, deeper strategic insights, integrated brand experiences, or breakthrough improvements in marketing efficiency. And thus far, at least, they have not. • Only 27 percent of marketers, and an equal number of IT executives, agree with the statement “we know what we need to know about customer’s usage of our digital channels.” The message we are receiving from both marketing and IT about their company’s commitment to transforming the customer experience and driving marketing efficiency and effectiveness through digital channel is cause for concern within most companies. Customer expectations and behaviors, as well as the state of the art in digital marketing practices, are changing faster than most companies are responding. Companies that take the lead in this transformation will continue to achieve dramatic competitive advantage over the slow followers.

Alignment Through Analytics? Is this the Common Road to Integration? Only a minute percentage of marketing and IT executives (8 percent and 6 percent, respectively) say their companies have fully integrated their online and offline analytic capabilities. In fact, only 14 percent of marketers and 10 percent of IT executives say analytics are even well-integrated into their online channels. At a time when marketing has clearly indicated that a priority for the CMO is to reach the market more effectively and to gain better customer insight and intelligence, these numbers are disheartening, at best.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

All too often, questions over data ownership cause issues between marketing, who would like to leverage all data from across the enterprise to remain in tight, almost constant contact with customers and prospects, and IT who needs to maintain and manage customer data integrity, privacy and security. Seemingly at odds, the desire to exploit versus the desire to protect, both marketing and IT must strive for a common goal of delivery-relevant communications and data-driven engagements to best accomplish both goals. “If we have analytical data that says that doing the following set of things resulted in direct return and was impactful in the following ways, we can clearly measure it, it’s a lot easier to justify investments and understand what investments are paying off,” said Libenson. “It is opposed to sort of throwing a dart at a board and saying, we think this works.” In fact, through both the qualitative and quantitative engagements, the idea that analytic integration could be a key enabler to a closer relationship between marketing and IT came to light several times. “The marketing world is far from standing still,” said Emmanuel Frenehard, SVP and CIO of Walt Disney International. “It makes it hard to analyze a target that keeps moving. Every day there is a new medium that marketing is powerfully exploiting, and marketing is exploiting them smartly. But that is also the struggle. It is not that IT doesn’t want to help – IT struggles to understand and meet the need of how we measure it.” Disney, especially within the travel group, also provides a unique case study of where analytics and engagement merge to produce a stunning result. Through the utilization of data-driven personalization based on customer analytics, Disney is able to offer its customers a highly relevant, personal and dynamic engagement that extends beyond the website, and across customer service and additional points of engagement. The end goal is to create an experience that takes a user from website to parks to movies (either in theaters or at home) spanning all points of customer experience contact. “From your physical experiences to your virtual experiences, we want to make sure we know it’s you – the same person who visited Walt Disney World or Disney in Paris. You’re the same person who bought a movie on our movie rewards program. That’s what we want to be able to achieve. And yes, marketing is deeply involved and driving that process.” But even Frenehard admits that one boon to the process has been a keen understanding by senior marketers of the analytics at the core of the engagement needs. While the senior marketer may have been comfortable with analytics, he is not always as comfortable with technology. “It’s simple to understand what we’re trying to do in principle – I think marketers more and more understand that it’s hard to execute though.” On the conversation wish list is a clear definition of need, not a cloudy perception of want. The sentiments expressed in these quotes are manifested in the results of survey findings across hundreds of marketing and IT executives.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

• Some 46 percent of marketing executives do not agree that their company’s CIO understands marketing objectives and requirements. • Only one-fourth of marketers say they consult enterprise IT, contact center and back office groups in selecting and deploying marketing solutions. • Nearly two-thirds of marketers report challenges implementing marketing and IT solutions, citing the lack of priority given to marketing by IT as the chief reason for discord. • Meanwhile, some 48 percent of IT executives also report problems implementing marketing solutions and IT projects. One of the top reasons, they say, is that marketing has bypassed IT in implementing the project. To the CMO Council, it is clear that there is a critical need for CMOs and CIOs to take leadership roles in overcoming differences, setting a common agenda and moving forward with a definitive plan for marketing transformation and customer relevance. There is significant agreement on the critical role technology must play in defining a new customer experience and raising the measurability and effectiveness of market engagement. Executives on both sides now need to work together to convince the full management team of the necessity of moving forward with key programs and projects, and the significant negative consequences of failing to take action.

Best Practices and Recommendations for Success While the overall state of the relationship may appear to be overcast by misunderstanding, misaligned goals and strategy and an all-too-common lament over which part of the brain each group favors, the need and requirement for immediate action to realign and reclaim the relationship is clear, if not critical. Thanks to the insights of the executives interviewed and audited for this study, a set of starting points have emerged. While more in-depth outlining of recommendations and insights are provided in the detailed findings and interviews, the top best practices shared can be simply stated. 1) Collaborate to Communicate: Marketing and IT must align on a shared vision of success, and a unified view of outcomes that foster communication and collaboration, rather than highlighting differences in vocabulary or lexicon. When root issues arise over requests, phrases and comments, the communication gap has no choice but to widen and expand, as needs are not met and blame is quickly placed. Exacerbating the problem further, the two functions are not able to jointly share in accolades that are a result of their collaboration. There are shared rewards to be gained, but only if a common vision and mutual goals are mapped from the outset. In an age when channels and technologies change almost daily, starting from a shared language of business, goals and success can eliminate what may seem like wasted time negotiating the relationship.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

2) Start At Minute One, Not Mission Critical Stages: Marketing and IT must involve one another at the moment of creation, not the moment of calamity. All too often, IT is not called into a technology analysis or implementation until a problem arises and a solution is required. For IT’s role, there must be an understanding that the role being played and contributions being made should be strategic and with an eye towards advancing the customer engagement. This will eliminate the perception that no matter how brilliant the marketing strategy, IT will kill the engagement. Executives need to create a roadmap that combines innovation and creativity, drawing from the strengths and intelligence of both marketing and IT. One role doesn’t hold all of the answers – only the collaborative view where marketing and IT bind seamlessly into a cohesive, customer-relevant experience will be viable in the new technology-marketing age. 3) Don’t Test So Long You Fail To Invest: Testing, measurement and a controlled rollout of technology may no longer be viable in the fast moving, customer-dictated world of engagement. Yet, testing and piloting to define measures and return are a necessity. In today’s budget-minded organizations, you must define where and how technology impacts the business and the customer engagement. For those areas where time is a luxury, and where there is the opportunity to dream big, test until a business case that reflects impact, return and engagement is determined. However, there will be scenarios where the old 6-month testing timeline will launch as an obsolete technology before a single customer engagement. If IT is involved from moment one, and if a truly collaborative strategy has been developed, the timeline can shift and change to meet the best business outcome, versus the best testing timetable. In all, the reality is that technology – and the speed at which technology is shifting and evolving – is at the core of business, customer engagement, customer insight and intelligence and business opportunity. The merged goals of both IT and marketing must rely on a unifying rallying cry around relevance. This will extend the importance of technology beyond delivery or relevant communications, but rather position the IT and marketing collaboration as a relevant and critical function to the business – necessitating a key seat at the C-Suite table and a business-driving role across the enterprise. There are riches to be won through this partnership. The challenge will be developing the skills, conversations, strategies and willingness to achieve true alignment and partnership.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Top Line Findings • CMOs and CIOs agree on the key issues that drive the need for tighter CMO-CIO alignment and interaction. Both equally believe in the import of customer insight, but CIOs still view technology as the premier reason for the alignment – 15% more so than CMOs. • 68% of CIOs and 78% of CMOs believe digital channels are important to their organization. • CMOs and CIOs are slow to embrace interactive digital marketing strategies with only 35% of CMOs and 20% of CIOs stating they are “heavily committed and invested.” There is, however, a growing proportion of marketing spend being allocated to digital marketing. • CMOs do not see the CIO as one of the top champions of digital marketing (only 19% selected the CIO as a digital champion – actually ranking them fifth in a list of 11 options) – overwhelmingly seeing it as their own responsibility (69%). CIOs, however, saw the CMO as the second most important champion of digital marketing within the organization (51%) after themselves (58%). This shows quite a disconnect: 58% of CIOs said they were spearheading digital marketing strategies, but only 19% of CMOs agreed/looked to them as leader. • CMOs and CIOs both agree that access to customer insight and intelligence was critical to their competitive advantage – with both acknowledging they currently do not know what they need to know about their customer’s usage of their own digital channels. • CMOs and CIOs do have some resources dedicated to supporting each other’s business area, but the majority of this support is in the form of small teams (2-11 individuals). • There is no majority consensus amongst either CMOs or CIOs on the top strategic area of focus requiring continuous CMO-CIO alignment. CMOs rank customer experience highest (43%) while CIOs say it is market intelligence (45%). • Only 8% of CMOs and 6% of CIOs say their online and offline analytics are completely integrated across all functions. 49% of CIOs and 42% of CMOs say it is getting better with room for improvement, with yet another quarter of both CIOs and CMOs saying that they are either struggling to integrate or have no offline and online integration at all. • CIOs were scattered in terms of their top priorities for improving marketing effectiveness, selecting a range of priorities: timely and relevant customer data (37%); championing social media (30%); piloting new digital technologies (29%); increasing use of CRM systems (27%) and safeguarding data & IP (26%). CMOs believed the CIO’s top priority was to provide timely and relevant customer data (43%).

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

• CMOs appear to have more agreement on their top technology priorities to improve business performance with 52% selecting more efficient customer interaction, followed by 47% for improved customer insight. 46% of CIOs agreed that gaining better customer, competitor and market intelligence was the top CMO technology priority. • Both CMOs and CIOs see growth in demand for timely, relevant, and flexible communications as the key driver for digital marketing – with an increasing importance of social media. However, responses were fairly fragmented across a number of drivers, with no one trend gaining more than 51%. • Little consensus exists amongst CMOs and CIOs as to the focus and need of their company’s digital marketing strategy. 58% of CIOs said personalization of web content was the priority while CMOs agreed, but at a higher level: 64%. • Less than half of CMO and CIO respondents believed their organization was prepared to exploit the opportunities presented by digital marketing channels (38% and 32% respectively). Both groups blamed insufficient funding (59% and 62% respectively) and lack of senior management understanding (46% and 46% respectively) for their unpreparedness. In addition, CMOs hold IT responsible for insufficient support (46%). • Only 13% of CIOs and 19% of CMOs are aggressively adopting new marketing technologies. The technology investments they are making for marketing impact are email marketing (38% and 46% respectively), CRM (39% and 32% respectively) and website performance monitoring (42% and 33% respectively). CMOs did rank search marketing highly at 31%, compared to only 19% of CIOs. • CIOs are more likely to consult with CMOs to determine which marketing solutions should be selected and deployed (56%) versus only 25% of CMOs who consult with CIOs for this. • More CMO and CIO respondents have experienced problems or challenges implementing marketing solutions or IT projects than those who have not (64% and 48% respectively). The reasons differ depending upon which group you ask: 46% of CMOs say marketing is not a priority for IT (only 18% of CIOs agree); while 39% of CIOs cite Marketing’s bypassing IT as the most common reason (only 15% of CMOs agree). • Nearly half of both the CMO and CIO respondents agreed that website issues were the highest IT-related risk that could damage brand reputation for their organization (48% and 53% respectively). • When there have been issues, CMOs and CIOs both claim they work moderately well together to solve the problems.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Respondent data: • 308 IT responses: 257 participants responded saying 60% are CIOs and 33% are at Director/VP levels. • 328 Marketing responses: 259 participants responded saying 35% are CMOs and 53% are at the Director/VP levels. • Respondents are from a range of industry sectors, predominantly organizations valued at <$50M. The most surveyed CIOs were from the financial services industry and the most surveyed CMOs were from the professional services industry. • Nearly three quarters of the CMO and CIO respondents hail from organizations headquartered in North America.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Accenture Perspective Scaling the New Horizon: The Real Alignment Imperative for CMOs and CIOs Tim Breene, Accenture Senior Managing Director of Strategic Initiatives and Chief Executive, Accenture Interactive Brian Whipple, Managing Director of Consulting, Accenture Interactive

When steam engines first gained widespread use in the early 18th century, they were employed for a single purpose: to pump water out of mines. Over time, what first benefitted mining operations would quickly transform the rest of the world, exploding horizons of opportunity. Work was no longer tied to seasons or locales: Factories moved inland, away from water-powered mills. Labor was automated and could be consolidated, creating the first economies of scale. New forms of transportation were realized that shrunk continental divides. The innovations developed thanks to the steam engine lay the foundation for the Industrial Revolution and forever changed the way people live and work. And it all began with a water pump. Now another revolution is upon us. This one catalyzed by the advent of the Digital Age. And, like the first great business upheaval, a new horizon of possibility has opened. The difference between the two movements: Where the groundwork for the Industrial Revolution took a century to unfold, the digital one is developing at breathtaking speed. Today, marketing’s control over branding, messaging and positioning are in an unprecedented decline as peer-to-peer, crowd source and affinity-based interactions gain increased influence. If consumers in the pre-digital paradigm were kings, today they are gods and just as difficult to please. And, like deities, they’re armed with almost limitless power thanks to the breadth of information available digitally. As the challenges have multiplied, so have the opportunities. But in many ways companies are still floundering in the Water Pump stage, failing to realize the full potential of this new paradigm. As they wrestle with issues like those explored in the study, “The CMO-CIO Alignment Imperative: Driving Revenue through Customer Relevance,” the real imperative remains unaddressed: The consumer is much more savvy. The underpinning talent and technology effective in driving marketing to this point are not nearly enough to capitalize on the opportunities of the new, and greatly expanded, digital horizon.

Toward Agile, Intelligent Marketing In the dawn of the Industrial Revolution, businesses were faced with the task of scaling unimaginable complexity: distribution over spotty or non-existent, infrastructure; talent management with a labor pool that had never seen, let alone

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

used, the new tools and procedures that became commonplace by the 19th century. With the new revolution, history is, it seems, repeating itself. Digital has introduced an unparalleled level of complexity into business operations. Winning businesses will be those that possess a marketing capability that is agile and intelligent. Acquiring it demands a level of transformation that transcends both marketing and IT and will require most companies to rethink their structures, strategies and cultures. “Transformation” is a difficult word to contemplate, especially given an increasingly uncertain economic outlook. Yet, given the speed at which new advances, channels and tools are unfolding, falling further behind now will leave an open field for competitors to create the kind of relevance that customers have come to expect. What’s more, the very definition of “competitors” has itself broadened: In the digital sphere, the balance of power has shifted and consumers are more engaged in seeking out the product and purchase information. Therefore, any entity that dominates share of mind will also erode share of wallet. What are the golden rules? The fool-proof steps for keeping up, or catching up with the digital onslaught? The uncomfortable answer to that question is that there are none. Developments are happening too instantaneously to predict with any accuracy. (Could anyone as recently as a few years back have foreseen the rise in social media or micro-media?) Although there are no hard-and-fast rules, we do offer our own lessons learned for smoothing the journey. Develop a tolerance for ambiguity. Because today’s digitally driven market is increasingly complex, dynamic and uncertain, what might once have been considered a strategy is little more than a hypothesis in today’s changing environment. Companies need to create organizational structures that are nimble and responsive to an environment that is predictable only in its wildly unpredictable nature. Since no one knows all the questions surrounding digital, expecting to have all the answers is unrealistic. How can organization prepare for the unknown? So, while the old mantra of business was “predictability,” the new one is “ambiguity.” Move decisions from the conference room to the boardroom. As the CMO Council study shows, CMOs and CIOs are making headway when it comes to aligning their functions. The irony in that finding: They’re still falling short when it comes to capturing the promise of digital. Readying an organization for the change requires a fundamental transformation of the way business is done. That necessitates nothing less than CEO-level endorsement and engagement in both the strategy and execution to back required changes. Anything less will perpetuate a cycle of one-off efforts and will only increase organizational complexity and inefficiency. If too many efforts are initiated in the conference room and not the boardroom, they’ll never get the lift needed to power a true digital transformation. It’s daunting to contemplate, but, like a chemical reaction, business can never go back to its old form. Digital has changed every function irrevocably across every organizational area. Re-think investment approaches. Moving toward agile intelligent marketing requires a delicate balance of risk, innovation and learning. Although digital will likely involve significant technology investment, that doesn’t mean the ROI cycle

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

will follow that of a standard technology implementation. If a “typical” pay-back curve is gauged annually, a digital one could extend to three-to-five years or longer, if that. Although this ambiguous and long-horizon investment approach will doubtless cause considerable organizational pain, especially given the state of the economy, setting the wrong expectations will be even more detrimental to moving forward as the plug is pulled on early “failures.” Given the protracted timeline for return, companies should choose projects that promise to deliver the greatest returns and take them on in “bite-size” pieces. Stop buying best of breed and focus on flexible platforms. Digital promises to deliver the Holy Grail of marketing efforts: true “segment of one” personalization. To make good on the promise, companies need a unified data backbone; one that allows the delivery of highly relevant data which in turn generates customer insight and ultimately leads to tailored content suited to individual customers. Yet most companies don’t have an integrated technical infrastructure, having developed multiple so-called “best-of-breed” systems. Marketing and IT can no longer “go it alone” to implement solutions that only address the needs of their respective functions. For the level of transformation called for by digital, this one-off approach to gaining capabilities will undermine long-term success. Moving boldly forward requires a unified vision of the end game. Don’t mine customer data – engineer it. Mining data doesn’t drive insight. Engineering it does. To move beyond mining, companies need to pull from multiple sources to create the most relevant experience delivered to individual consumers in real time. This capacity to continuously sense, anticipate and respond to consumer attitudes, intentions, needs, preferences and behavioral propensities, across an expanding array of media and digitally-enabled touch points, is a defining characteristic of digital. Achieving it requires beefing up – or building – capabilities in each of the analytic sub-sets of allocation, execution, and verification. The end goal: an end-to-end customer view that is central to achieving segment-of-one marketing. Re-think your talent management models. What are the characteristics of a top performer when it comes to the new realities of digital? Which is the more valuable skill set: deep organizational management capabilities or intense domain expertise? Again, the questions are many, the answers are few. Talent requirements, like infrastructure requirements and just about everything else, are evolving by the day. Truly ideal candidates – organizational whizzes raised in the age of Facebook – are most likely still in school. (High school, not college.) In the not-too-distant future, this new crop of talent will be as comfortable with driving P&L as they are driving customer insight systems. But that’s tomorrow. What is clear today is that the traditional models of talent management aren’t cutting it. Corporations need the fortitude to break molds when it comes to attracting and retaining a new breed of talent geared toward exploring the digital limits.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Building steam One day history books may show that digital transformed the world as profoundly as the first modern catalyst for change, the steam engine. Only time will tell. What is certain: Like the locomotives that powered the Industrial Revolution, digital has left the station and is gaining speed. Outrunning it isn’t an option. Keeping up is. Doing so will require a focus on the real, organization-wide, alignment imperative and a commitment toward laying the tracks to keep it rolling along.

Copyright © 2010 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. The views and opinions in this article should not be viewed as professional advice with respect to your business.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Detailed Findings â&#x20AC;&#x201C; CMO Access to customer insights narrowly trumps the criticality of technology to the customer experience as the primary driver to alignment between CMO and CIOâ&#x20AC;Ś but just barely. In fact, marketers clearly agree that insights and experience go hand in hand. Their desire to better leverage customer data for an optimized, digitally enabled customer necessitates a deep partnership between marketing and IT.

Q.1

What do you believe is driving the need for tighter CIO-CMO alignment and interaction? (Select top three) Access to customer insight and intelligence is

55% critical to competitive advantage

Technology now underpins and shapes the entire

50% customer experience

Reaching and engaging the market has become

44% more digitally driven

A need for more accountability, measurement and

26% operational visibility

Sales and marketing functions have to be

21% better connected 16% 12% 12% 12% 12% 11% 9% 8% 1%

Agile, on-demand marketing is now powered by the Internet Centralized global databases are essential to the marketing process Marketing automation is a priority and critical to process improvement Global complexity of marketing programs and channels needs IT innovation Go-to-market processes are ripe for improvement and efficiency gains Senior mandates for revenue growth and performance efficiencies Demand and supply chains require better synchronization and calibration Privacy and security considerations around customer data and brand protection demand it Not able to find adequate solutions from external vendors

3% Other

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

The overwhelming majority of marketers view digital marketing channels as critical to the organization.

Q.2 Rate the importance of digital marketing channels to your organization today: Very Important

171

5 Very Unimportant

According to marketers, they are embracing digital channels, with deep commitments and active investments in tools and solutions.

Q.3 To what degree is your company embracing interactive digital marketing strategies? 1% Heavily committed and invested in this area

Growing proportion of marketing spend

21%

35%

Testing and evaluating different directions Still committed to more traditional approaches Not embracing digital strategies

35%

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

The CMO, at least according to marketing, is at the helm of digital marketing strategy. While management is in the second spot, more revealing of the state of CMO-CIO alignment is how few marketers single out the CIO as leading the charge in digital strategy.

Q.4 Who is championing, spearheading or shaping your digital marketing strategies? (Select all that apply) 69% Chief marketing executive 46% Senior management team 26% Digital marketing director and/or web team 24% Marketing communications or operations director 19% CIO and/or IT department 14% Outside agency or consultant 9% Specific product marketing groups 8% Dedicated interactive marketing task force 7% Customer relationship officer 3% Certain regions or countries 5% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Competitive advantage and customer data and insight are tightly bound as marketers look to develop optimized customer experiences and engagements. However, there is a belief that companies still do not know everything they should about their customers. Marketing is also looking to amplify accountability and measurement to justify continued investments. This will likely be a positive turn as marketing also indicates a continued commitment to investments in digital marketing.

Q.5 Please indicate your agreement with each of the following statements:

Disagree

Neither Agree nor Disagree

Agree

Strongly Agree

157

We will invest more in digital channel usage and development in the next 12 months

156

116

Marketing automation is a priority and critical to process improvement

143

Centralized global databases are essential to the marketing process

129

Marketing organizations need more accountability and operational visibility

128

148

Our CIO understands marketing objectives and requirements

127

Technology now underpins and shapes the entire customer experience

107

121

Data privacy is a barrier to fully exploiting digital channels for our customers

103

102

Access to customer insight and intelligence is critical to our competitive advantage

100

195

We will consider outsourcing more of our digital channel development and infrastructure in the next 12 months

We know what we need to know about our customerâ&#x20AC;&#x2122;s usage of our digital channels

124

Strongly Disagree

Agile, on-demand marketing is now powered by the Internet

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

According to marketing’s estimates, IT typically dedicates between 2-11 team members to address marketing’s IT needs.

Q.6 How many people in the IT function are dedicated to supporting marketing platforms, solutions or digital marketing campaigns? 5%

50+

25-49

12-24

50%

2-11

12%

13%

None

10%

Don’t know

Marketing is typically dedicating between 2-11 team members to manage, support or maintain web or technology channels.

Q.7 How many people in the marketing function are dedicated to running, supporting or managing web-based, technology-based or on-demand platforms or solutions? 5%

50+

25-49

14%

12-24

60% 13% 3%

2-11 1 None

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Customer experience development and execution, customer data mining and analytics access, and the delivery of market intelligence are key areas of focus driving dialog between the CMO and CIO.

Q.8 What do you consider to be the top strategic areas of focus requiring continuous CMO-CIO dialogue, alignment and collaboration? (Select top five) Customer experience and user

43% interface management

14% Sales pipeline visibility

41%

14%

41% 31% 28% 26% 24% 24% 23% 21% 18% 16% 15% 15%

Market intelligence, knowledge transfer and decision support Customer data integration and mining Marketing analytics and predictive modeling Customer relationship management (CRM) Acquisition, reactivation or retention of customers Business continuity, infrastructure reliability and operational uptime Website performance, analytics and scalability Customer behavior, transactional history and lifetime value Campaign execution and performance measurement Segmentation and targeting of high-value customers Customer revenue optimization, up-sell, cross-sell, etc. Digital marketing performance analytics Marketing process improvement and workflow optimization

Personalization of multi-channel communications Social media and online 12% word-of-mouth advocacy

11% Service access and product availability On-line and off-line marketing integration

11% and performance assessment

Brand protection and digital

11% asset management

Review, evaluation and sourcing of

10% marketing solutions

Customer data security, brand

7% protection and privacy

6% Customer listening, handling and care Transactional efficiency and

5% billing accuracy

Reconciliation of customer problems

4% or issues

Marketing supply chain management

4% and partner collaboration

Loyalty and rewards program

3% operation 1% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

While most marketers feel that fully integrated analytics tying online and offline capabilities are getting better, 29 percent of marketers still struggle with integration.

Q.9 How well integrated are your companyâ&#x20AC;&#x2122;s online and offline analytic capabilities? 8% Completely integrated across all functions 14% Well integrated online, not well integrated offline 6% Well integrated offline, not well integrated online 42% Getting better across the board, but still room for improvement

22% Struggling to integrate online with offline 7% Not integrated at any level

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Reaching and engaging with customers is top of the CMO digital agenda. Marketers are also keen to gain deep customer insights and hope to get smarter about social media utilization and engagement.

Q.10 What do you think should be top of the CMO agenda as it relates to technology adoption and use to improve business performance? (Select top three) 52% 47% 34% 29% 29% 24% 19% 17% 15% 11% 8% 8%

Reaching and engaging with the market more efficiently and effectively Gaining better customer insight, competitive intelligence and market knowledge Getting smarter about using social media and digital marketing systems Integrating and extracting more value out of disparate and siloed customer databases Delivering more qualified leads and opportunities to the sales organization Tying website and digital engagement analytics to business outcomes and transactions Improving marketing group productivity, performance and compliance Reducing selling cycles and generating higher value deals Improving the yield and return of marketing campaigns through digital channels Adding more engaging and interactive features to company and brand websites Ensuring brand assets are more accessible and better managed globally Knowing more about website utilization and visitor behavior

3% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Complimenting the CMO agenda, marketers believe that delivering more timely and relevant transactional, behavioral and customer profile data should be at the top of the CIO agenda.

Q.11 What do you think should be top of the CIO agenda as it relates to improving marketing effectiveness? (Select top three) 43% 30% 29% 28% 25% 24% 22% 22% 16% 14% 14% 10% 10% 6%

Delivering more timely and relevant transactional, behavioral and customer profile data Improving the links and interactions between marketing, sales and channel groups Deploying better marketing execution and operational systems and platforms Assuring the integrity and availability of back-end infrastructures and interfaces Increasing the use and value of CRM systems by both marketing and sales Piloting new ways to engage the market using mobile, Internet and P-O-S technologies Safeguarding and protecting customer data, brand assets and trademarks Automating customer interactions and improving customer care and handling Furthering the use of social media and online listening and contact systems Introducing closed-loop campaign measurement and tracking capabilities Advancing platforms to aid in marketing measurement and campaign optimization Scaling and safeguarding business websites and customer data repositories Making key websites more valuable and useful at capturing and converting customers Advancing email deliverability, list quality and recipient response

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Cost efficiency and the ability to quickly communicate have been drivers to digital adoption as marketers looking to increase demand to broad audiences must also watch budgets. However, marketers are moving to digital because of its influence and measurability, as well as the ability to better segment, personalize and customize communications.

Q.12 Whatâ&#x20AC;&#x2122;s driving the move to digital marketing in your organization? (Select top three) 49%

Highly efficient, adaptive and opportunistic ways to communicate

41% Cost-effective delivery of marketing content online 37% 30% 22% 20% 19%

More influential and measurable channels of engagement Better audience segmentation, customization and reach More targeted, behaviorally driven, niche media channels Greater consumer gratification, satisfaction and intimacy Growth of social networking and broadband connectivity

18% Improved response, recall and conversation rates 18% Greater share of audience time spent online 17% Need to reach more digitally savvy consumers Mobile device dependency and audience reach

12% (four billion-plus)

Proliferation of IP-TV programming and rich

2% media experiences 4% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Marketing is focused on customer experience development and delivery as individualized experiences, multi-channel engagements and social media interaction all lead the strategic mission. As one marketer stated, they must be ready to “share with the world.”

Q.13 Where is your focus and need specific to your company’s digital marketing strategy? (Check all that apply) 64% 51% 50% 45% 38% 35%

Richer, more engaging and personalized web content and interactivity Individualized relationship marketing (customer lifetime value) Social media interaction, communication and notification Integrated multi-channel market engagement (email, web, voice, print) Social network conversational monitoring and analytics Database-driven behavioral targeting using digital media and analytics

34% Online advertising (search and display) Forming customer communities and affinity groups online Dedicated micro-sites to further off-line 31% campaign response Mobile messaging campaigns – CRM, behavioral, 27% transactional, informational

32%

25% Online viral word-of-mouth programs 25% Experiential online events and/or webinars 11% Mobile, location-based promotional messaging New IP-based video programming and branded

9% “edutainment”

Interactive merchandising systems at point-of-sale

9% or service

8% Digital signage networks and messaging systems 4% Kiosks and smart display-based vending machines 3% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Despite a clear desire and intent to engage, few marketers feel very prepared to exploit these new digital channels. In fact, the majority of marketers find themselves in the middle of the road, as over half of respondents feel moderately prepared at best.

Q.14 Rate how prepared your organization is to exploit opportunities presented by digital marketing channels: Very Prepared

103

5 Very Unprepared

For those who are not prepared, lack of budget, along with the general complexity of solutions, has been a constraint. However, marketers also indicate that a lack of support from senior management along with insufficient support from IT are also considerable challenges.

Q.15 [If rating is a 1, 2 or 3] What are the reasons you are not prepared? (Check all that apply) 59% Insufficient funding for digital marketing channels 46% Insufficient support from internal IT 46%

Lack of understanding of opportunity from senior management

45% Solution complexity and integration difficulties 28% No management mandate to develop channels 24% IT resistance and opposition to solution sourcing 9%

Insufficient solutions from external marketing agencies

8% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

As marketing becomes more dependent on digital channels, companies are also seeing more revenue tied to e-commerce of digital service delivery. More than one-fourth of marketers surveyed attribute over 60 percent of their revenue to digital channels, depending on IT systems or infrastructures to maintain service.

Q.16 What percentage of your company revenue is directly dependent on network infrastructures, digital service delivery or web-based, e-commerce operations? (Please select one) 14% 80 to 100 percent 12% 60 to 80 percent 13% 40 to 60 percent 15% 20 to 40 percent 31% Less than 20 percent 3% None 13% Donâ&#x20AC;&#x2122;t know

Marketers seem tight lipped about budget as 54 percent of respondents claim to not know the size of their marketing budget.

Q.17 What is the approximate size of your marketing budget?

2% Over $1 Billion 2% $751 Million - $1 Billion 4% $501 Million - $750 Million 8% $251 Million-$500 Million 30% $100 Million-$250 Million 54% Donâ&#x20AC;&#x2122;t know

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Marketers are seeing more spend shift to digital channels. In fact, 15 percent of respondents are allocating over 50 percent of their budgets to digital.

Q.18 What percent of your marketing budget are you currently spending on digital marketing? 15% More than 50% 7% 41%-50% 11% 31%-40% 16% 21%-30% 18% 11%-20% 25% Less than 10% 9% Donâ&#x20AC;&#x2122;t know

Marketers are pushing forward with new SaaS based solutions to power marketing operations and programs. It is the speed at which they are implementing that seems to be differing as almost equal segments of respondents are testing solutions, evaluating options or aggressively adopting new solutions. Regardless of speed, digital is clearly a universal marketing priority.

Q.19 To what degree has your company embraced marketing solutions, software-as-a-service (SaaS) offerings and marketing technology innovations? (Please select one) 20% Taking a measured approach to marketing

transformation and automation 20% Testing and exploring new solutions and hosted services Aggressively adopting and utilizing new marketing 19% technologies Assessing and evaluating different options 18% and platforms

14% Little or no investment in marketing automation 6% Not a priority for us 3% Donâ&#x20AC;&#x2122;t know

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Email, with its measurability, cost effectiveness and capacity to reach broad global audiences, has been a primary focus for marketers looking to further business outcomes. In fact, among the top five key strategies, all are directly tied to enhanced performance of demand-generating activities.

Q.20 Where have you invested the most in applying technology to further marketing impact and outcomes? (Select top five)

33% and analytics

Customer feedback, listening and interaction ROI modeling and performance 11% measurement

32% Customer relationship management

11% Digital asset management

46% Email marketing Website performance monitoring

31% Search marketing Multi-channel campaign

12%

10% Enterprise marketing management

27% management

10% Marketing resource management

23%

10% Media buying or online ad placement

Integrated marketing services platform Lead generation, qualification 22% and scoring

10% Mobile marketing and messaging Channel partner opportunity

22% Marketing performance analytics

9% management

17% Content management systems

9% management

16% Data mining, warehousing

8% Web conferencing and collaboration

15% Social media monitoring and analytics

Brand protection and trademark monitoring Customer community and 6% co-innovation

and analytics

15% Digital content creation and publication

13% Interactive marketing solutions

Contact center/call center

3% Other

12% Advertising campaign management

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

As marketing looks to select solutions, a key stakeholder group is seemingly being left out of strategic discussions. According to respondents, collaboration with customer experience stakeholders along with meetings with sales and head of lines of business are the two top strategies deployed to assess tools and solutions. However, consulting with IT was only selected by 25 percent of marketers surveyed. In fact, marketers seem more open to consulting with the agency and external â&#x20AC;&#x153;expertsâ&#x20AC;? (40 percent) before turning to IT.

Q.21 What process or methodology do you use to determine which marketing solutions should be selected and deployed? (Check all that apply) 66% 52% 42% 40% 34% 27% 25% 25% 24% 23% 22%

Internal meetings and discussions with marketing and customer relationship stakeholders Strategic planning and collaboration with sales, channel and LOB leaders Online research, content sourcing and editorial reviews Recommendations from partner agencies, consultants and experts Audits and assessments of marketing efficiency, effectiveness, proficiency and limitations Review of reports and recommendations from industry research analysts Consultations with enterprise IT, web, contact center and back office groups Pilot deployments followed by measured roll-out based on value and ROI Marketing user feedback, uptake and satisfaction levels Meetings with competitive solution providers and integrators/resellers Peer group interactions, third-party referral and customer validation

19% Formal needs assessment study and sourcing RFP Vendor interactions at marketing automation/ad

18% technology/CRM conferences 3% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

A broad majority of marketers have experienced some issue or challenge while implementing new technology tools or digital marketing solutions. Q.22 Have you had problems or challenges implementing marketing solutions or IT projects to further marketing effectiveness?

Yes

11%

24%

Not sure

64%

The most common issues revolve around a lack of budget and a lack of IT support. However, it stands to reason that if IT is being excluded from the strategic discussions around tool selection and implementation, it would be difficult for IT to then solve issues or challenges that arise post-implementation. Q.23 If so, what were the biggest issues or obstacles? (select up to three) 46% Marketing function not a priority for IT department 44% Insufficient budget and funding for the project 41% Time and technical resources not available to help 36% Solution complexity and integration difficulties 36% Lack of expertise and knowledge in IT organization No management mandate to push the project forward 15% Marketing bypassing IT and working directly with the vendor

19%

15% IT keeping marketing out of the loop 13% IT resistance and opposition to solution sourcing 8% Marketing resources taking control and isolating IT 4% Wrong solution that was not embraced by users 4% Other ÂŠ CMO Council. All rights reserved. 2010

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

When asked to provide additional insights into the issues or challenges that arise when implementing solutions, respondents shared their thoughts: “IT not adequately aligned to sales and acquisition. Very transactionally focused and have not kept pace with what is happening on the consumer interaction side. They are not up to speed to adequately advise the business or marketing on mobility, analytics, web management, content management, etc.” “IT has greatly made our social media marketing easier and created a direct interaction with customers, which has expedited our delivery efficiency.” “IT is being told to manage key internal business functions and believes that Marketing is not a priority. But a key business function IT must manage is the e-commerce enablement of the website, which falls under the marketing mandate. There is no understanding that the web must be owned by multiple constituents and not just IT.” “In marketing, we only want to follow best practices. Since our company is new at marketing automation, we want to bring in an outside consultant to set up a best practice data structure for our CRM. But instead, we’re just relying on various salespeople’s opinions of how we should do it, not all of which are even in the ballpark of best practices. This is a cost and speed issue.” “Dedicated IT resources focused on Marketing initiatives. I’d like to have an IT professional (or a few) reporting into the Marketing department.” “IT solutions are created in a box; quite often that box does not take into account the needs of the marketing departments. IT has to report on stability and uptime, but marketing needs to report on sheer numbers. Most large brands IT divisions are too process driven to truly deliver what’s needed to launch a successful social campaign.” “IT is more concerned with securing customer accounts and customer data, yet blames marketing for vulnerabilities created by cloud solutions. But, cloud solutions are the only way we can get things implemented that we really need. It is not a lack of desire to work together, but legal, operations and the CEO place added pressure on IT and we can not pry away more time or resources.” “CMOs and CIOs come from different planets. Marketing is made up of communicators focused on engaging humans and influencing their attitudes & behaviors by way of relevant messaging presented in a compelling manner. IT is made up of noncommunicators focused on perfecting techno-wizardry that ‘magically’ improves operational efficiency. Assuring technological integrity and functionality is their top priority whereas for Marketing, functionality is a given. Marketers take for granted that the ‘gadgets’ will work properly and focus instead on how they can use the ‘gadgets’ to better captivate the target audience. Marketers NEED IT folks to get their job done. IT folks do not think they need marketers to get their job done.“ “IT talent isn’t the issue. They have the expertise and the desire to help us. But they have a priority list and marketing is at the bottom of it.”

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

A true test of CMO and CIO alignment is often in a time of crisis or network failure. According to marketers, these attacks or complications include website downtime, network or system downtime, and loss of customer data. Each of these vulnerabilities can severely impact the customer experience and damage brand reputation.

Q.24 What IT-related vulnerabilities, risks, complications or failures could compromise marketing or damage the brand reputation? (select up to three) 48% Website performance degradation or downtime 40% Network or system downtime or failure 31% Customer data loss or exposure 27% Transactional failures or incompletes 23% Service outages or interruptions 16% System hacking or identity theft 16% Privacy invasions 14% Billing errors or problems 14% Email overload or spam 12% Call center wait times or responsiveness 9% Delivery of products or services 5% Brand hijacking online 4% Viral infections of customer systems 4% Phishing or Internet scams 4% Supply chain communications disruptions 2% Trademark trespassing 2% Other

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Marketers are split among those who have experienced some level of vulnerability or a negative incident.

Q.25 Has your company experienced any incidents or crises where marketing and IT groups had to rapidly respond to contain issues or damage?

11%

Yes No

43%

Not sure

46%

Marketing feels that their IT and marketing teams worked “moderately well” to recover from any incidents, with few respondents indicating that the recovery or response was poor.

Q.26 If yes, How well did the two groups respond, team and work to defuse or resolve the incident or crisis? 3% Very well

10% 26%

Moderately well Not so well Poorly

61%

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Demographics Q.27 What is your title? 35% CMO 13% General Manager / Head of Marketing 11% EVP/SVP of Marketing, Marketing Communications,

Marketing Operations 16% VP of Marketing, Marketing Communications, Marketing Operations

0% VP of Customer Expereince 0% VP Corporate Communications 0% VP Brand Management 11%

Director of Marketing, Marketing Communications, Marketing Operations

2% Director of Digital/Interactive/Online Marketing 0% Director of Social Media 12% Other

Q.28 How large is your company? (By revenue in USD) 29% Less than $50 million 13% $51 million to $100 million 9% $101 million to $250 million 7% $251 million to $500 million 7% $501 million to $750 million 5% $751 million to $1 billion 16% $1.1 billion to $5 billion 14% Greater than $5 billion

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Q.29 What best describes your companyâ&#x20AC;&#x2122;s industry sector? 9% Information Technology

2% Energy

9% Professional Services

2% Food & Beverage

8% Online/Internet

2% Insurance

7% Financial Services

2% Sports & Entertainment

7% Media & Publishing

2% Transportation & Logistics

6% Retail

1% Chemicals

5% Computer Software

1% Computer Hardware

5% Manufacturing

1% Construction

4% Health & Life Sciences

1% Utilities

4% Telecommunications

1% Wholsale/Distribution

4% Travel & Hospitality

0% Aerospace & Defense

3% Consumer Electronics

0% Automotive

3% Education

0% Government

2% Consumer Health, Beauty & Lifestyle

8% Other

2% Consumer Packaged Goods

Q.30 Where is your company headquartered? 73% North America 12% Europe 3% Middle East 6% Asia Pacific 4% Africa 1% Latin America

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Q.31 In which regions does your company operate? (select all that apply) 89% North America 56% Europe 32% Middle East 42% Asia Pacific 27% Africa 33% Latin America

detailed findings | CMO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Detailed Findings â&#x20AC;&#x201C; CIO According to a majority of IT executives, the technology that drives and shapes the customer experience is a critical driver to closer alignment between the CMO and the CIO. Also amplifying the need for closer collaboration is the call for greater access to customer insights and analytics critical to competitive advantage. Surprisingly, marketing operations, process management and enabling functional agility all rank far below engagement tactics and strategy, indicating that IT may be focused on the customer, but less concerned with operational improvements.

Q.1

What do you believe is driving the need for tighter CMO-CIO alignment and interaction? (Select top three) Technology now underpins and shapes the entire

65% customer experience

Access to customer insight and intelligence is

53% critical to competitive advantage

Reaching and engaging the market has become

40% more digitally driven

Agile, on-demand marketing is now powered by

20% the Internet

Global complexity of marketing programs and

20% channels needs IT innovation

Sales and marketing functions have to be

15% better connected 13% 13% 13% 12% 10% 8% 7% 1%

Senior mandates for revenue growth and performance efficiencies A need for more accountability, measurement and operational visibility Privacy and security considerations around customer data and brand protection demand it Centralized global databases are essential to the marketing process Go-to-market processes are ripe for improvement and efficiency gains Marketing automation is a priority and critical to process improvement Demand and supply chains require better synchronization and calibration Not able to find adequate solutions from external vendors

1% Other

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Without a doubt, digital marketing channels are absolutely critical to todayâ&#x20AC;&#x2122;s business operations, again highlighting the critical need for partnership, collaboration and alignment between the two key functions that facilitate both technology and engagement.

Q.2 Rate the importance of digital marketing channels to your organization today: Very Important

114

5 Very Unimportant

Because of the critical nature of digital marketing channels, companies are looking to increase investments and grow their proficiencies in digital engagement. In fact, only 18 percent of IT executives are either not committing to these new channels or remaining committed to traditional strategies and platforms.

Q.3 To what degree is your company embracing interactive digital marketing strategies? 3% Heavily committed and invested in this area

15%

20%

Growing proportion of marketing spend Testing and evaluating different directions Still committed to more traditional approaches

26% 38%

Not embracing digital strategies

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

In the eyes of IT, the CIO is spearheading the charge forward, developing strategies for digital marketing. Marketing does rank high on the list, albeit in the second spot.

Q.4 Who is championing, spearheading or shaping your digital marketing strategies? (Select all that apply) 58% CIO and/or IT department 51% Chief marketing executive 47% Senior management team 21% Digital marketing director and/or web team 21% Marketing communications or operations director 11% Outside agency or consultant 6% Customer relationship officer 6% Specific product marketing groups 5% Dedicated interactive marketing task force 2% Certain regions or countries 3% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

IT executives, driven by a belief that companies do not know all that they should about their customersâ&#x20AC;&#x2122; usage of digital channels, confirm a desire to access greater levels of customer insights and analytics to create more robust, relevant and meaningful customer experiences.

Q.5 Please indicate your agreement with each of the following statements:

Disagree

Neither Agree nor Disagree

Agree

Strongly Agree

165

Agile, on-demand marketing is now powered by the Internet

154

Marketing automation is a priority and critical to process improvement

150

We will invest more in digital channel usage and development in the next 12 months

139

Our CMO understands marketing objectives and requirements

136

Technology now underpins and shapes the entire customer experience

129

118

Centralized global databases are essential to the marketing process

122

Access to customer insight and intelligence is critical to our competitive advantage

120

153

Data privacy is a barrier to fully exploiting digital channels for our customers

100

We will consider outsourcing more of our digital channel development and infrastructure in the next 12 months

115

We know what we need to know about our customerâ&#x20AC;&#x2122;s usage of our digital channels

119

Strongly Disagree

Marketing organizations need more accountability and operational visibility

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

IT teams are focusing more time and talent resources on managing marketing needs, as 65 percent of respondents allocate up to 11 team members to address technology needs.

Q.6 How many people in the IT function are dedicated to supporting marketing platforms, solutions or digital marketing campaigns? 6%

50+

25-49

12-24

49%

2-11

16%

14%

None

Donâ&#x20AC;&#x2122;t know

According to IT, marketing teams are dedicating an almost equal number of team members to manage technology platforms. Specifically, 69 percent of IT executives believe up to 11 marketing team members are dedicated to running, supporting or managing web-based, technology-based or on-demand platforms or solutions.

Q.7 How many people in the marketing function are dedicated to running, supporting or managing web-based, technology-based or on-demand platforms or solutions?

50+

25-49

12-24

54%

2-11

15%

11%

None

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Market intelligence to aid in decision-making and customer experience interface management are the top two strategic areas of focus that require a closer relationship between the CMO and CIO. Interestingly, IT does not view the integration of online to offline analytics as a driver to alignment (7 percent) even as majority of IT executives believe that marketing organizations need more accountability and operational visibility (see results outlined in Question 5). Integration of analytics is, in fact, a key area ripe for collaboration as marketing looks to automate more operational and process management systems.

Q.8 What do you consider to be the top strategic areas of focus requiring continuous CIO-CMO dialogue, alignment and collaboration? (Select top five) Market intelligence and

45% decision support 38% 32% 29% 29% 26% 25% 24% 20% 19% 18% 17% 16%

Customer experience and user interface management Customer relationship management (CRM) Customer data integration and mining Acquisition, reactivation or retention of customers Customer behavior, transactional history and lifetime value Marketing analytics and predictive modeling Campaign execution and performance measurement Business continuity, reliability and operational uptime Process improvement and workflow optimization Customer revenue optimization (upsell, cross-sell) Social media and online word-of-mouth advocacy Website performance, analytics and scalability

15% Sales pipeline visibility

Segmentation and targeting of high-value customers Evaluation and sourcing of marketing 14% solutions 14% Digital marketing performance analytics

15%

13% Customer listening, handling and care 11% Service access and product availability Customer data security, brand

11% protection and privacy

Brand protection and digital asset management Marketing supply chain management 9% and partner collaboration Personalization of multi-channel 9% communications

10%

On-line and off-line marketing integration and performance assessment

Transactional efficiency and billing

5% accuracy

Loyalty and rewards program

5% operation 4%

Reconciliation of customer problems or issues

1% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Twenty percent of respondents believe their organization struggles to integrate online with offline analytics, while another 49 percent are “getting better” with room for more improvement. This makes the low marks given to integrating online and offline analytics as a driver for alignment even more surprising.

Q.9 How well integrated are your company’s online and offline analytic capabilities? 6% Completely integrated across all functions 10% Well integrated online, not well integrated offline 9% Well integrated offline, not well integrated online 49%

Getting better across the board, but still room for improvement

20% Struggling to integrate online with offline 7% Not integrated at any level

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

At the top of the CIOâ&#x20AC;&#x2122;s agenda for marketing effectiveness is the delivery of more timely and relevant transactional, behavioral and customer profile data. This is very much in line with ITâ&#x20AC;&#x2122;s commitment to enhancing the customer experience and improving access to insights and analytics. And again, IT seems ready to overlook measurement tools and operational platforms that may enable efficiencies. Ten percent of IT executives are looking to advance platforms to aid in marketing measurement and campaign optimization, and seven percent are introducing closed-loop campaign measurement and tracking capabilities.

Q.10 What do you think should be top of the CIO agenda as it relates to improving marketing effectiveness? (Select top three) 37% 30% 29% 27% 27% 26% 25% 22% 21% 14% 10% 10% 7% 6%

Delivering more timely and relevant transactional, behavioral and customer profile data Furthering the use of social media and online listening and contact systems Piloting new ways to engage the market using mobile, Internet and P-O-S technologies Automating customer interactions and improving customer care and handling Increasing the use and value of CRM systems by both marketing and sales Safeguarding and protecting customer data, brand assets and trademarks Improving the links and interactions between marketing, sales and channel groups Deploying better marketing execution and operational systems and platforms Making key websites more valuable and useful at capturing and converting customers Assuring the integrity and availability of back-end infrastructures and interfaces Scaling and safeguarding business websites and customer data repositories Advancing platforms to aid in marketing measurement and campaign optimization Introducing closed-loop campaign measurement and tracking capabilities Advancing email deliverability, list quality and recipient response

1% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

According to IT, the top marketing mandates that should be at the top of the CMO agenda largely revolve around the utilization of customer insight and data. Gaining better customer insight, competitive intelligence and market knowledge (46 percent) and reaching and engaging with the market more efficiently and effectively (40 percent) are the top two business performance drivers to be prioritized by marketing, serving as the ideal partner to the IT top mandates to better mine and deliver customer data.

Q.11

What do you think should be top of the CMO agenda as it relates to technology adoption and use to improve business performance? (Select top three) 46% Gaining better customer insight, competitive 43% 40% 28% 27% 19% 18% 16% 14% 13% 13% 11%

intelligence and market knowledge Getting smarter about using social media and digital marketing systems Reaching and engaging with the market more efficiently and effectively Delivering more qualified leads and opportunities to the sales organization Integrating and extracting more value out of disparate and siloed customer databases Tying website and digital engagement analytics to business outcomes and transactions Improving marketing group productivity, performance and compliance Improving the yield and return of marketing campaigns through digital channels Knowing more about website utilization and visitor behavior Ensuring brand assets are more accessible and better managed globally Adding more engaging and interactive features to company and brand websites Reducing selling cycles and generating higher value deals

3% Other

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

While cost efficiency may be driving the digital marketing transformation, better customer access, segmentation and reach is equally important. The growth of social networking and broadband connectivity, along with an increasing interest and investment in mobile engagement channels, is also shifting attention to digital marketing. According to one IT executive, “With social media, our customers are driving us to use their systems of choice to communicate with them in ways they already prefer to communicate instead of the old fashioned way of us forcing them to use systems that are convenient for us.”

Q.12 What’s driving the move to digital marketing in your organization? (Select top three) 51%

Highly efficient, adaptive and opportunistic ways to communicate

43% Cost-effective delivery of marketing content online Better audience segmentation, customization and reach Growth of social networking and broadband 29% connectivity More influential and measurable channels of 23% engagement More targeted, behaviorally driven, niche 21% media channels

30%

19% Need to reach more digitally savvy consumers Mobile device dependency and audience reach (four billion-plus) Greater consumer gratification, satisfaction 17% and intimacy

18%

16% Greater share of audience time spent online 13% Improved response, recall and conversation rates Proliferation of IP-TV programming and rich

3% media experiences 3% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

While IT has already indicated that customer data and analytics should be at the top of the CIO agenda, execution and individual tactics often become the key area of focus. According the respondents, significant attention is being paid to richer, more engaging and personalized web content and interactivity (58 percent) and social media interaction, communication and notification (45 percent). Social media is commanding a great deal of focus as social media engagement, monitoring and analytics, online, viral, word of mouth tracking, and the development of online customer communities all appear high on the list of IT needs.

Q.13 Where is your focus and need specific to your company’s digital marketing strategy? (Check all that apply) 58% 45% 40% 35% 34% 32% 28%

Richer, more engaging and personalized web content and interactivity Social media interaction, communication and notification Individualized relationship marketing (customer lifetime value) Integrated multi-channel market engagement (email, web, voice, print) Social network conversational monitoring and analytics Database-driven behavioral targeting using digital media and analytics Mobile messaging campaigns – CRM, behavioral, transactional, informational

28% Online advertising (search and display) 27%

Forming customer communities and affinity groups online

23% Online viral word-of-mouth programs 21% Experiential online events and/or webinars 19%

Dedicated micro-sites to further off-line campaign response

17% Mobile, location-based promotional messaging New IP-based video programming and branded

13% “edutainment”

11% Digital signage networks and messaging systems Interactive merchandising systems at point-of-sale

11% or service

10% Kiosks and smart display-based vending machines 3% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

And while IT is firm in its commitment to digital marketing channels, respondents also admit that they are ill prepared to fully exploit these new digital channels.

Q.14 Rate how prepared your organization is to exploit opportunities presented by digital marketing channels: Very Prepared

125

5 Very Unprepared

For those who find themselves unprepared, insufficient budget and lack of senior executive support are the key reasons for the shortcomings. However, some IT executives believe that solution complexity and installation issues are a key problem. One respondent added, â&#x20AC;&#x153;Needs change quickly, sometimes too quickly, and platforms become obsolete before any real metric can be determined. We are not prepared to be in a constant state of installation!â&#x20AC;?

Q.15 [If rating is Prepared, Mostly Unprepared or Very Unprepared] What are the reasons you are not prepared? (Check all that apply) 62% Insufficient funding for digital marketing channels 46% Lack of understanding of opportunity from senior management

39% Solution complexity and integration difficulties 30% No management mandate to develop channels 18% Insufficient support from internal IT 8%

Insufficient solutions from external marketing agencies

5% IT resistance and opposition to solution sourcing 11% Other

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Though IT executives indicate a willingness to advance the digital agenda, the state of preparedness (or lack of preparedness) can have a serious financial impact on companies unable to take advantage of these cost effective engagement channels. More than one-quarter of respondents admit that over 80 percent of their company’s revenue is directly dependent on web, online, or digital channels.

Q.16 What percentage of your company revenue is directly dependent on network infrastructures, digital service delivery or web-based, e-commerce operations? (Please select one) 14% 80 to 100 percent 13% 60 to 80 percent 13% 40 to 60 percent 17% 20 to 40 percent 29% Less than 20 percent 6% None 7% Don’t know

The majority of respondents either did not know or did not care to share the size of their IT budgets. But it is none the less clear that a significant percentage of budget is being allocated to the implementation and management of engagement channels with customers.

Q.17 What is the approximate size of your IT budget?

4% Over $1 Billion 2% $751 Million - $1 Billion 4% $501 Million - $750 Million 6% $251 Million-$500 Million 37% $100 Million-$250 Million 47% Don’t know

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

IT is taking a measured and strategic approach to SaaS-based marketing solutions and implementations, looking to test, measure and explore new solutions prior to heavily investing.

Q.18 To what degree has your company embraced marketing solutions, software-as-a-service (SaaS) offerings and marketing technology innovations? (Please select one) 24% Assessing and evaluating different options and platforms 20% Taking a measured approach to marketing transformation and automation Testing and exploring new solutions and 15% hosted services

15% Little or no investment in marketing automation Aggressively adopting and utilizing new marketing

13% technologies

10% Not a priority for us 3% Donâ&#x20AC;&#x2122;t know

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

While strategy and intentions point to advancements in insights and customer experience improvements, top technology applications to improve marketing effectiveness revolve more around tactical demand generating execution tools. These include web performance, email marketing solutions, and CRM tools. Interestingly, advertising campaign management tools rate low on the investments, even as increasing levels of advertising is being driven online and through highly measurable digital channels. However, it is important to note that this may be more systemic of marketingâ&#x20AC;&#x2122;s reliance on the agency to measure advertising performance than a lack of investment by IT.

Q.19 Where have you invested the most in applying technology to further marketing impact and outcomes? (Select top five) Website performance monitoring

42% and analytics

12% Social media monitoring and analytics

39% Customer relationship management

12% Web conferencing and collaboration

38% Email marketing

11% measurement

Lead generation, qualification

ROI modeling and performance

23% and scoring

10% Enterprise marketing management

23%

Data mining, warehousing and analytics

10% Marketing resource management

22% Content management systems

10% Mobile marketing and messaging

19% Search marketing

8% Media buying or online ad placement

19% Marketing performance analytics

7% Advertising campaign management

19%

Contact center / call center management

18% Multi-channel campaign management Customer feedback, listening and interaction 18% Digital content creation and publication Integrated marketing services 15% platform

18%

Channel partner opportunity management

7% Interactive marketing solutions Brand protection and trademark

5% monitoring

Customer community and

4% co-innovation 1% Other

13% Digital asset management

detailed findings | CIO

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

IT executives are relying on collaboration with key stakeholders, along with online research and reviews about digital marketing solutions, to best determine which marketing solutions should be deployed. While the majority of IT respondents point to collaboration as the top driver, a few outliers do exist, showing that many decisions are made through more “untraditional” means (including the very humorous reply that technology was selected by the CEO “out of thin air”).

Q.20 What process or methodology do you use to determine which marketing solutions should be selected and deployed? (Check all that apply) 56% 48% 46% 42% 32% 32% 29% 28% 27% 22% 22% 21%

Internal meetings and discussions with marketing and customer relationship stakeholders Consultations with enterprise IT, web, contact center, and back office groups Online research, content sourcing and editorial reviews Strategic planning and collaboration with sales, channel and LOB leaders Recommendations from partner agencies, consultants and experts Pilot deployments followed by measured roll-out based on value and ROI Review of reports and recommendations from industry research analysts Meetings with competitive solution providers and integrators/resellers Vendor interactions at marketing automation/ad technology/CRM conferences Peer group interactions, third-party referral and customer validation Marketing user feedback, uptake and satisfaction levels Audits and assessments of marketing efficiency, effectiveness, proficiency and limitations

17% Formal needs assessment study and sourcing RFP 2% Other

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Despite a desire to collaborate, 48 percent of IT executives admit to having problems or challenges when implementing marketing solutions. Q.21 Have you had problems or challenges implementing marketing solutions or IT projects to further marketing effectiveness?

Yes

11%

48%

Not sure

41%

While solution complexity is often the top cause of conflict, marketing bypassing IT and working directly with the vendor, or marketing isolating IT from the process are sadly top causes of conflict. Q.22 If so, what were the biggest issues or obstacles? (select up to three) 46% Solution complexity and integration difficulties 39% Marketing bypassing IT and working directly with the vendor

38% Insufficient budget and funding for the project 31% Marketing resources taking control and isolating IT 30% Time and technical resources not available to help 22%

No management mandate to push the project forward

18% Marketing function not a priority for IT department 13% Lack of expertise and knowledge in IT organization 11% Wrong solution that was not embraced by users 9% IT keeping marketing out of the loop 3% IT resistance and opposition to solution sourcing 6% Other ÂŠ CMO Council. All rights reserved. 2010

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When asked to provide additional insights into the issues or challenges that arise when implementing solutions, respondents shared their thoughts: “Marketers too often view requirements gathering as a ‘confab on exceptions’ leading to overly custom solutions that barely address the most common use cases. It has been a multi-year process to educate marketers that their flights of fancy have real costs in terms of development and on-going maintenance.” “Pace of change and bewildering array of possible choices and complexity of choices makes this a job that at present has very few best practices.” “With thousands of users worldwide, marketing can not utilize as much resource as it would like. The IT team is constantly being pulled into marketing issues without really understanding why. Communication doesn’t seem to be connecting, even when we each understand the strategy at the start.” “With limited budgets and personnel, Marketing must be a priority, with a dedicated budget, or the projects will not get done and improvements will not be realized. Marketing personnel need to become more knowledgeable of technology capabilities as well as investment requirements..” “We have a real challenge justifying some of marketing’s investment requests. Some platforms are redundant and will overburden our network, but as we explain this, marketing doesn’t seem to understand the implication and wants the latest tool. Now, we have a mess of random solutions and the CFO wants to know where all the return is on these systems that marketing claimed would save money, improve performance and make everyone efficient.” “Old-school marketing staff want to embrace some steps, but don’t have a whole vision for what to do. They are also resistant until comfortable, which takes a long time to get them current. More progressive marketing staff would be great; we could then focus on the IT-marketing relationship, leading to some good projects.” “Marketing fills the queue with requests and demands, purchases their own solutions and then turns it over to IT to implement and then wonders why it doesn’t work together. Might as well let the blind mice and the three little pigs loose with a credit card.” “There is very little understanding on Marketing departments of how technologies work. Best practice recommendation: Create multidisciplinary teams with members from IT and Marketing and execute some training together to get common understanding of objectives and technology. Sponsorship must be at the highest level, beyond CIO - CMO, or little success will be derived of such initiatives.”

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Downtime, network vulnerabilities and digital performance and accessibility are key issues that, when failures occur, can damage brand reputation or customer experience. And while data protection and security are key vulnerabilities closely monitored by IT, brand hijacking and supply chain disruptions – also key components of an optimized customer experience – are barely on the radar.

Q.23 What IT-related vulnerabilities, risks, complications or failures could compromise marketing or damage the brand reputation? (select up to three) 53% Website performance degradation or downtime 30% Network or system downtime or failure 30% Customer data loss or exposure 27% Service outages or interruptions 22% Privacy invasions 20% Email overload or spam 17% System hacking or identity theft 15% Transactional failures or incompletes 14% Delivery of products or services 13% Call center wait times or responsiveness 9% Billing errors or problems 8% Brand hijacking online 7% Phishing or Internet scams 4% Trademark trespassing 3% Viral infections of customer systems 3% Supply chain communications disruptions 2% Other

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Through this vigilance and monitoring, most IT executives have not experienced any incidents crises that could impact business and brand.

Q.24 Has your company experienced any incidents or crises where marketing and IT groups had to rapidly respond to contain issues or damage?

Yes

31%

No Not sure

60%

Among those IT executives who have faced critical incidents, most believe that the situations were handled moderately well.

Q.25 If yes, how well did the two groups respond, team and work to defuse or resolve the incident or crisis? 4% Very well

9% 36%

Moderately well Not so well Poorly

52%

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Demographics Q.26 What is your title? 60% CIO 3% General Manager/Head, IT 4% EVP/SVP, IT 11% VP, IT 15% Director, IT 7% Other

Q.27 How large is your company? (By revenue in USD) 29% Less than $50 million 16% $51 million to $100 million 10% $101 million to $250 million 10% $251 million to $500 million 4% $501 million to $750 million 6% $751 million to $1 billion 13% $1.1 billion to $5 billion 12% Greater than $5 billion

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Q.28 What best describes your companyâ&#x20AC;&#x2122;s industry sector? 2% Consumer Electronics

10% Financial Services 9% Professional Services

2% Manufacturing

8% Information Technology

2% Transportation & Logistics

7% Media & Publishing

2% Wholesale/Distribution

7% Retail

1% Aerospace & Defense

5% Computer Software

1% Construction

5% Online/Internet

1% Consumer Health, Beauty & Lifestyle

5% Telecommunications

1% Energy

4% Education

1% Insurance

4% Health & Life Sciences

1% Travel & Hospitality

3% Consumer Packaged Goods

1% Utilities

3% Food & Beverage

0% Chemicals

3% Government

0% Sports & Entertainment

2% Automotive

9% Other

2% Computer Hardware

Q.29 Where is your company headquartered? 72% North America 15% Europe 2% Middle East 7% Asia Pacific 1% Africa 3% Latin America

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Q.30 In which regions does your company operate? (select all that apply) 79% North America 46% Europe 23% Middle East 36% Asia Pacific 16% Africa 24% Latin America

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Executive Insights Glen Salow Executive Vice President – Service Delivery and Technology Ameriprise Financial Glen Salow is responsible for creating an integrated state-of-the-art technology and service delivery organization at Ameriprise Financial. Before joining the company, Salow was executive vice president and chief information officer of American Express, a position he assumed in March 2000, after holding the role of senior vice president in the organization since 1997.

Salow sees an inherent convergence of marketing and IT, “especially when you think about marketing less as advertising and more as representing your company in such a way that your net promoters increase in a radical fashion.” But of course, the challenges are mounting. “As I move to work closer to our CMO, it becomes difficult because no one knows where marketing begins and technology ends. The amount of insight each group has into that space, regardless of where the line actually is, becomes pretty extensive,” Salow says. One way to combat this intangible space is to have some things very clear – his role as CIO, for instance. “I have an absolute accountability to ensure that the information of Ameriprise and its customers is accurately processed and appropriately protected,” Salow explains. “I also am responsible for taking information and employing it in such a way that we’re gaining the highest potential value to our clients, advisors and shareholders.” Here’s where marketing comes in. “We have a shared responsibility in terms of understanding where things are likely to go. But again, I have the lead responsibility in terms of what technology is likely to become primetime,” he says. As the CIO and CMO work together, there are multiple roadblocks. “There’s always going to be a turf war. There’s going to be a challenge because IT people want to do it too safely and too securely and marketing people want to do it too fast and too insecurely,” Salow reveals. “And we both have enough knowledge to be dangerous about each other’s domain.” While both Salow and Kim Sharan, the company’s CMO, have set opinions about the other’s work, their mutual respect is enough not to attack each other. This stems from a basic understanding. “I know what Kim’s trying to do,” Salow says. “There’s nothing mysterious about it. I know what her measures are and I know how they tie directly to the success of the firm.” “The number one thing is to have a clear and open dialogue about mutual objectives that may be in conflict and get those resolved. If you don’t start there, nothing else is going to work.”

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Kim Sharan CMO Ameriprise Financial Services With 30 years of executive experience in the financial industry, Kim Sharan worked for Merrill Lynch and Citibank before joining Ameriprise as president of financial planning, retirement and wealth strategies, as well as CMO.

Sharan believes that consumers are driving companies to come together. “Over the past few years, as consumers’ trust in companies has eroded, marketing has had to shift from its typical focus on a campaign to truly listening to the consumers,” she explains. “It’s no longer about us pushing to the consumer. It’s about joining the customer conversation where they already are. This is a huge change and it just won’t happen without the collaboration of the CIO and the CMO.” As a giant in the financial services sector, consumer expectations are being set not just by other financial services companies, but by other great brands. “The bar has been raised in our industry – consumer expectations are higher than ever. We typically have not led the marketing from an ease-of-doing business perspective because we’re not a technology company,” Sharan says. Although she has worked very closely with the CIO of Ameriprise since joining the company eight years ago, the past several years has seen them “linked at the hip.” “We’ve always had a close working relationship, but now we both understand why it needs to be more so,” Sharan explains. “At the heart of what we do, we are a sales company. The blurring of the lines between sales and marketing creates an interesting tension,” she says. “At the same time, the CMO is a relatively new role to Ameriprise, so trying to infuse that into an organization is challenging.” Contrary to many companies that cite communication as the biggest roadblock between CIOs and CMOs, Sharan believes that prioritization is the biggest challenge. “Many of our systems are legacy systems, and some of the things we’re trying to do require a set of infrastructure upgrades that we may not have anticipated,” she says. Mobile marketing is a good example of this, as it requires a significant investment and was not immediately prioritized. The C-suite had to come together to decide which of these new channels is the most important. They then had to begin restructuring their systems to keep them competitive with their marketing initiatives. Due to the time and money invested in these new marketing channels, the effectiveness of the channels had to be determined quickly. Throughout this process, communication has been key. “The IT team cannot make infrastructure or upgrade capabilities without having a deep understanding of what the user needs. We discuss in a great amount of detail the ideal client experience

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that we were seeking to deliver,” Sharan says. The way that this conversation between CIO and CMO begins is crucial. “If you start with saying, ‘I need this capability…,’ it’s going to produce unintended consequences because you’re going to be solving for a technology instead of what will satisfy the consumer needs,” Sharan explains. “We need to change that conversation so that it lets both parties solve for that capability and there will be a much better outcome. We’re not trying to do their job and they’re not trying to do ours. At the end of the day, it’s an important partnership.”

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Adam Gerrard CIO Avis Europe Adam Gerrard is the Chief Information Officer of Avis Europe. He has been the Head of IT, IT Director or CIO of various organizations for the past 15 years. Although his last few years have been with travel and tourism, Gerrard has extensive experience in retail and strategic marketing.

Avis has carefully constructed the relationships between IT and the rest of the company. “IT contributes to the business strategy, but ultimately it’s a servant in the business strategy,” Gerrard sayss. “We try to leverage innovation and technology opportunities, but at the same time, we are a fulfillment center. We then make the technology work in the way the business wants it to work.” This alignment between business and IT eliminates some miscommunications. “IT’s priority list in Avis is actually the business priority list,” Gerrard says. The marketing department must also defer to the overall business plan when it proposes initiatives. “If marketing isn’t bringing strategic things to the table with a viable business case, then it won’t be on my priority list.” However, this arrangement has been problematic. “The marketing guys are struggling to put forward business cases that make sense. Because of this, their work isn’t getting prioritized and then they’re trying to circumnavigate the whole of the corporate governance process, which gets them in a lot of hot water,” Gerrard explains. Everyone is more successful when IT collaborates heavily with the marketing teams to work out a commercial strategy. IT has helped marketing understand technology, in order to develop business cases that will allow them to drive projects forward. Indeed, Gerrard believes that the biggest roadblock is being able to assign a tangible benefits to the emerging forms of digital marketing. “Without that, we’re not able to show the business value and why this is a priority project.” “There’s a bit of disconnect between people getting very excited about testing and pioneering some new opportunity without thinking about the bigger picture,” Gerrard reveals. “This is why they’re not able to build the correct business vision around their projects.” Adding to these frustrations is the lack of set structure. “We’ll do something on Facebook, respond to things on Twitter, but it’s not a coordinated approach,” he says. “We are multiple companies, so if we have someone from the UK working in China and flying to the U.S. that had a bad experience with their car rental in the U.S., and then flies back to China, but they booked it through the UK website -- we don’t have a strategy that tells us how we deal with that. Who responds to that situation?”

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These questions prompt Gerrard to think about a cohesive strategy and question the current one. “What are the behavioral things we need to change in the organization? What are the processes that deserve more thought?” These strategy-building sessions are places where the CIO can bring considerable experience to the CMO because the IT sector has been adapting and shifting focus for years. Another challenge comes from the social spaces and their ability to influence reputation. “We’re not dealing with negative comments quickly enough so that they don’t taint the brand to the rest of the consumer base,” Gerrard explains. He has also taken many steps to deal with all these challenges. “We’ve gone through a major reorganization of IT about 12 months ago. We did change some personnel,” Gerrard admits. At this point, Avis lacks business analysts. “Until recently, we didn’t have analysts that understand the market, the emerging technologies and how they can be applied to create those roadmaps of work and partnership with business areas that drive things forward.” While the new analyst team is established, Gerrard has implemented a forwardthinking strategy that will make Avis more mainstream and allow his IT teams to focus on innovation.

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Scott Chrisbacher

Virginia Benson

CIO Ball Aerospace & Technologies Corp.

Manager, Strategic Planning and Market Intelligence Ball Aerospace & Technologies Corp.

Scott Chrisbacher has served as a CIO for almost a decade, beginning with Honeywell Aerospace and then moving to his current position at Ball Aerospace & Technologies Corp.

According to Chrisbacher, the biggest challenge lies in laying out new processes to enable age-old approaches. This is especially true when two entire departments need to be on the same page. Monumental transformation and radical methods of approach must be implemented slowly. “Our strategy has been to deploy incremental capability. Going in and doing massive change is difficult to do. We’ve taken very small, very deliberate steps to introduce the technology and teach the marketing folks different ways of doing business,” Chrisbacher says. Ms. Benson, from her marketing standpoint, adds that it’s even harder because their marketing department isn’t centralized. “Everything is pretty dispersed and each of our groups handles things little bit differently,” she says. “And they all come to the technology at different states.” Chrisbacher is quick to agree. “We pride ourselves on innovation, but what comes along with that is empowerment. And it’s very difficult to bring innovated, empowered people into a consistent approach,” he says. As for collaboration, Chrisbacher and Benson realize its importance. “My job is to align with her and maintain that alignment as we mature as an organization,” Chrisbacher says. “We want to support what she is trying to achieve from a technology perspective every step of the way.” At the same time, perfect collaboration is mostly elusive. The majority of Ball Aerospace’s marketing is done through salespeople who don’t always understand the value of a working relationship with the CIO. “There are people who are really focused on customer relationships, new program development and signing new contracts. They have very specific things they need to achieve in terms of filling the pipeline,” explains Chrisbacher. Their differences in viewpoint also contributes to this disconnect. “We’re taking more of a strategic, long-term viewpoint while they’re out there fighting for the next day.” Communication is the most effective weapon in battling these discrepancies. “You really have to understand what you’re trying to achieve as a business and spend some time actually talking about it and laying it out. Your IT folks aren’t going to have the expertise that your marketing folks have, and vise-versa, so it’s critical to bridge that communication gap.”

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Blair Shane CMO California Academy of Sciences In preparation for the Academy’s re-opening in September 2008, Shane was tasked with crafting and executing a successful marketing plan. Prior to this, she worked for Charles Schwab.

Today’s marketing, according to Shane, goes beyond the roles of CMO and CIO. “Consumers don’t differentiate between a time when they’re using technology and when they’re not – it’s all fluid. Unfortunately, businesses and the way departments are organized force lines between the consumer experience. These divisional or functional lines shouldn’t be apparent to the consumer,” she says. Consumer expectation has completely changed, an evolution that has forced the CMO and CIO to work more closely than ever before. Specifically for the California Academy of Sciences, this represents a tremendous opportunity. “We can extend that experience beyond our walls and have people connect to us after they’ve visited. Or we can connect with people in Timbuktu who may never be able to come to the Academy,” Shane explains. “The only way to enable the growth is with technology.” As the technology develops, so do the responsibilities of the CIO and CMO. “I’m going to count on my CIO, not only to have the infrastructure available for things like digital marketing, but also for the data basing resources necessary to pull the correct data so that we can drive successful acquisition and retention campaigns.” Consumer strategy is another field in which Shane works with the CIO. “We work with IT to ensure a quality guest experience. Do we rent audio devices or do we have people use their own?” she says. “If people are using their own, do we have download stations, and how do people connect while they’re here? How do they stay connected to us when they leave?” A fruitful relationship between CMO and CIO starts at the top. “The number one thing is resource prioritization for the institution as a whole. IT is tasked with so many things that the CEO has to set clear priorities so the CIO can support the marketing initiatives,” Shane explains. “Otherwise, you have the marketer pounding on the door, the CIO not being able to deliver, and there’s resentment.” “The CMO and CIO can each play a crucial role in bringing forward the newest and best technologies based on a given institutional goal,” Shane says. “It should really be a culture of sharing. What are the latest tools in the marketplace to deliver on goals?” This mindset can begin with the CMO. “The first thing is that every CMO should sit back and really think about how technology could enable their success.”

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“Be committed to building an open and transparent partnership with your CIO,” Shane says. “This requires a willingness to understand what they do and what their challenges are from the very beginning rather than just pushing your own agenda.” A third party can also facilitate this relationship. “Look at vendors who might be able to help you on a specific project basis. That way it can end up being a case study to improve the robustness of that CIO/CMO partnership.”

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Amanda Jobbins VP – Technology & Corporate Marketing Europe Cisco Amanda Jobbins manages the arms of Cisco’s marketing outreach, from product marketing to strategic communication. She has held a number of senior global and European technology marketing and sales management positions with major industry players including IBM, BMC and McAfee. Prior to joining Cisco, she served as vice president, Enterprise & Consumer Marketing in EMEA at Symantec Corp.

Because Cisco is quite mature in the development of its marketing automation tools, Jobbins has a very close relationship with the CIO. “We work together on any marketing infrastructure requirements and a lot of that is day-to-day business,” Jobbins says. “We’ve centralized a lot of those tools out of corporate, so we’re not really developing them. My organization has input to the requirements as we look at extending those platforms.” This collaboration is critical but also takes time. “I was in a meeting today with our CIO for four hours because we want to use our own collaboration and enterprise social networking tools internally to improve our productivity and also to support some of marketing’s goals. We want to be able to communicate effectively across the organization about our priorities and IT helps us do that,” Jobbins explains. Although they represent very different aspects of business, “both departments have equal roles,” according to Jobbins. “The one thing that is interesting about the synergy between CIOs and marketing is that both organizations are charged with coming up with new ways of driving the business,” Jobbins says. “The CIO organization and the marketing organization meet much more in the B-to-B world because it’s all about taking what we have in our own IT infrastructure and learning about the messages we can take to our customers’ CIOs.” To facilitate this, they have created a program called Cisco on Cisco. “It’s an example of how we’re using our own technologies internally. We work together very closely on the CIO relevance program, trying to find out how we can be more relevant to CIOs as they try to help their businesses grow. The area where IT gets involved with consumers is much less strategic.” On the other hand, Cisco’s marketing department is taking an approach that is digitally-based, but separate from the IT sphere. “We are reaching out to consumer audiences using a variety of country Twitter platforms, for example, but using the standard web browser technology to put a Twitter or a blog together,” Jobbins says. “We’re leading more there than IT for sure.” “We’ve had a four-pronged strategy with these new technologies. We’re trying to get presence on these sites like YouTube or Facebook. Secondly, we’re trying to do research and engage with companies online. Thirdly, we’re trying to monitor

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

conversations and get feedback that we wouldn’t have access to otherwise. Finally, we want to measure what we’re doing,” Jobbins explains. Cisco has Twitter sites for individual executives as well as country sites where they can participate in a dialogue with customers. The software giant has also been innovative in the realm of digital marketing. “Social networking and microblogs and discussion boards are now the tools of marketing. The IT organizations are set up to support productivity of employees,” Jobbins says. “But they can also bring in knowledge so that we can develop the infrastructure on a scale to reach new customers at a lower cost.” This becomes increasingly important as IT is the only differentiator of a company these days. With decreasing barriers to entry, the speed at which you can deploy and exploit IT to the benefit of your company is crucial. “So why shouldn’t IT be coming up with new business models?” Jobbins asks.

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Mohammed Al-Tajer SVP and Cluster Marketing Head for the Middle East and Africa Citibank Mohammed Al-Tajer has been working in the marketing sector for the last 16 years. He brings experience from a wide range of industries, having served as Marketing Services Head of Gulf Air and Regional Marketing Manager at Wrigley.

Al-Tajer’s first point is that technology department, traditionally managed by the IT people, rarely understands its relation to the company’s big picture. “I know that there’s a big disconnect between what is required by the organization, what the customer wants, and what the IT folks are doing,” he says. Furthermore, their approach to business is entirely different from the rest of the company’s. “For example, if you ask an engineer to design a car, they will come to you with the best materials and the best systems. But then, a few questions need to be asked: Would the customer want it? Would the customer need that sort of gadgetry? Will they use it?” Al-Tajer attributes these tunnel vision mindsets to the fact that the banking industry is being run by experts within that field, not necessarily people with a vast technological background. This is a problem that he sees in many different industries. “I was in the airline industry for a brief period of time and the main reason for failure of the industry is that they haven’t brought anyone in from other industries,” he explains. “We should be brave enough to bring people from other, successful industries and learn from them.” He singles out technology, but thinks this approach should be used throughout a company. “All services departments should report to the business line – to the people who generate the revenue.” At the simplest level, this would align the goals of the CMO and the CIO. Citibank has had their share of roadblocks between marketing and IT. On a small scale, things have gone smoothly, but the challenges come when big changes are in the works. “In some cases, we think ahead of other countries and we bring our ideas to corporate. They say to us, ‘We’ll have to take it back as a regional or global initiative.’ And then it will go into a black hole because more and more people have to approve it,” Al-Tajer reveals. All large-scale technology projects are implemented by their team in Singapore. The distance between the offices is part of the problem, as well as a slew of cultural and language barriers. The global reach of Citibank has almost hindered a collaborative relationship between the CMO and the CIO. “Several times, I’ve had to take my marketing

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initiative, because it had business sense, past the CIO to our CEO because my priorities are not in line with the CIO’s,” Al-Tajer admits. “I always try to tie my projects to customer needs or revenue. If you are focused on improving those things, the CEO will listen to what you say and hopefully give your project priority.” It is also critical to make sure that everyone has this mindset. “My best advice would be to sit down with the CIO and make sure that you have the same goals. You have to make sure you’re in agreement before you go to present to the CEO,” Al-Tajer says. “There is no substitute for a face-to-face discussion saying, ‘These are my goals. How can we make sure they become a reality?’”

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Emmanuel Frenehard Senior Vice President and Chief Information Officer Walt Disney International In his current position, Emmanuel Frenehard oversees IT and broader technology functions across the international subsidiaries of The Walt Disney Company. He has been with Disney for over 10 years in various technology roles.

As cooperation between marketing and IT executives is improving considerably in some industries, the relationship between the two functions is moving somewhat slower in the entertainment business. While some marketers in entertainment have a new school appreciation for analytics, many others are using their instincts to make investment decisions. “We have marketers who live and die by gut feel and by the event,” Emmanuel Frenehard says. “So we build creative events that can be pretty unbelievable. But when we want to measure the return on investment on these events, we don’t quite have the scientific analytics behind it yet.” The problem, Frenehard says, lies in how respective marketing and IT executives have been trained to think. “Creative minds and engineering minds tend to have very difficult dialogues because we don’t think at the same level,” he says. “Neither side is wrong, but they are just different ways of thinking and achieving the same goals.” For Frenehard, this disconnect creates challenges in determining quantifiable marketing return on sizeable budgets allocated for movie promotional campaigns. According to Frenehard, production companies can spend as much money marketing movies as they do on making them, meaning a $100 million movie could translate into a $100 million promotional campaign. Given the magnitude of the marketing investment, marketers understandably often ask for analysis on which elements of their campaigns are effective. Says Frenehard: “We would love to build KPI dashboards, but we need something tangible to measure. We can measure box office, and we can measure sales. We measure a number of parameters, track them and report on them. But brand impact – we don’t have a scientific way to measure it yet.” The problem measuring brand impact, Frenehard says, is that marketing campaigns involve so many parallel elements that it is complex to isolate any single tool in a vacuum for evaluation. Print ads, TV commercials, internal promotions, theatrical ads, YouTube – these all occur simultaneously in the same ecosystem, creating difficulties measuring the impact of any single dimension on its own. “In the financial world, each dollar invested is measured. When an investment is determined to be bad, it is not repeated.” Frenehard says. “But in the marketing world, how do you measure the return on a specific campaign? Honestly, it’s a struggle. It’s not that IT doesn’t want to help, but we struggle to understand how we can help measuring.”

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However, despite the challenges, the sheer cost of marketing campaigns is mandating measurement of their effectiveness, and Frenehard says marketing and IT executives have no choice but to work together. “Marketers and IT people who did not previously work with each other are now starting to establish solid relationships,” he says. “But the [difficulties] are healthy. Marketers and IT people want to work together. It’s just the early days and we don’t quite know each other very well yet.”

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Phuong Tram Chief Information Officer and VP of IT DuPont Phuong Tram is responsible for the information systems and global information technology for DuPont. Tram leads the DuPont worldwide IT organization, focusing on direct support for business units, functional units and regional operations. He joined DuPont in 1989 as the operations manager in Sydney, Australia.

Tram sees the CMO and the CIO collaborating most effectively in the field of demand creation. “Demand creation is about product, branding, position, collaboration with customers, and about understanding the marketplace and managing the life-cycle of a product,” he says. All these things, coupled with the dominance of digital marketing, create a large number of places for the CMO and CIO to come together. “We all work on a number of things together: customer master maintenance data, global marketing, e-marketing, digital marketing, customer relations and product development,” says Tram. In this collaborative space, the customer is at the fore. “The branding of DuPont is the place where customers feel connected to you, through your IT. Then our customer service steps in, giving the customer all the information.” The relationship between the marketing department and the IT program has gotten progressively more strategic. “We now recognize that you cannot do good marketing if you don’t do e-marketing so that now becomes increasingly critical,” says Tram. “You cannot get accepted by the customer if you just send a brochure and a sample.” While marketing becomes more and more digital, its goals are different. Tram is convinced that connection with the customer should happen even before the product becomes available. But technology can play a key (and cost-effective!) role in this connection. “Up to a year ago, we had Customer Innovation Day, where we spent tons of money flying our customers all over the world. At that point, we could get maybe 30 customers and we’d get to talk to them for three days,” Tram recalls. “But now we have it on the web. We hold it over a full week and tens of thousands of customers will work with us on the net. So, we have people who host them, recognize them, and take note of their feedback.” This approach goes beyond the separate sectors of IT, marketing and branding, bringing them together in a superior customer experience. This, according to Tram, is possible because of the many channels to customers; he mentions Facebook, Google and SAP on-demand.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

But these channels also create a roadblock for marketers. “The challenge isn’t so much between the two departments, but with customer readiness and technology readiness. Everything has changed with e-marketing and it makes the relationship between the CMO and the CIO totally different,” Tram says. An example of this new collaboration is their MySurface iPhone application. Launched very recently, the program allows the marketer to launch a new product and show it a customer, a fabricator or a manufacturer. It allows everyone to look at the product in different colors and shapes. While this is ground-breaking, a lot of new systems need to be put into place to accommodate such a change in strategy. Because DuPont’s iPhone applications are so new, these systems are yet to be constructed. Going forward, Tram and his team will focus on creating teams to monitor and improve the MySurface app experience.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Murli Buluswar Vice President Insight & Innovation Farmers Insurance As VP Insight and Innovation, Murli Buluswar oversees support for every function at Farmers Insurance, including customer service, pricing and product management, marketing and distribution. Previously, he held roles at Answer Financial, Progressive Insurance, Monitor Group and Capital One.

For Murli Buluswar, the biggest challenge driving the increasing need for cooperation between CMOs and CIOs is the inability to determine what kind of information Farmers Insurance needs to justify hundreds of millions of dollars of investment in marketing and distribution expansion. Too often, he says, marketers can only provide basic consumer research showing some type of association to brand awareness and not much else. From a CMO’s perspective, according to Buluswar, the CIO should be a critical partner identifying what data elements are necessary to justify marketing expenditure, and how gather them in a more structured way. This is where he says a big gap has existed historically. For example, when a CMO invests millions in a direct mail campaign, he must understand or quantify what impact that investment is having incrementally. However, to make this leap, a strategy for or measurement of customer behavior must already be in place to determine how many of the customers would have acted anyway. “In order to answer a question like that, you need fairly sophisticated analytics, but also an equally important data infrastructure,” Buluswar says. “This is where the CIO and IT can really help the CMO.” This partnership does not naturally exist, however, because CIOs do not have the incentive to support marketing. Buluswar says that in today’s world, the CIO is rarely evaluated on the effectiveness of the CMO. Therefore he or she has little interest in expending significant intellectual capital to help the CMO make more sophisticated decisions or achieve a better data infrastructure. “The real key is lining up incentives in the C-suite much more consistently,” Buluswar says. “IF there’s more skin in the game for the CIO, then there’s probably a bigger play to get these groups or individuals talking to each other much more.” On the marketing side, Buluswar feels CMOs can improve their end of the relationship as well. Most marketers feel secluded from IT by a technology language barrier, and they are consequently struggling to understand or imagine how the CIO’s team can help their business. “The marketing function needs people with that IT mindset that can be an intelligent conduit between the two organizations,” he says.

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Laurie Tucker

David Zanca

SVP of Marketing FedEx

SVP Customer Access Systems Revenue and IT Management FedEx

FedEx is a world-wide network of companies that provide shipping and printing services to customers and businesses. Laurie Tucker, as the Senior Vice President of Marketing, is responsible for the image and message of their global outreach. David Zanca is focused on IT management and Fedex’s customer access systems.

For FedEx, it is imperative for CMOs and CIOs to collaborate for two reasons. Firstly, speed to market is critical and digital savvy is key in the process of getting products to market. Secondly, the two departments must decide together how to prioritize and build infrastructure. This is even more important for FedEx because almost all of their services are enabled via technology. “To take anything to market, you have to have the technology with it,” Zanca says. “This digitization of content and platform means that we have to closely align our marketing and IT to come up with effective strategies on how to address that.” But FedEx is approaching this alignment in a fresh way. “We don’t want to get stuck in that old legacy mode,” Tucker explains. “Marketing would go to finance and then they would throw the requirements over to IT and they’ll code it and throw it back at us. We’ll say it wasn’t what we wanted and then we’ll go back and forth.” “One of the things that we’re really been practicing with David’s team is using better techniques to co-develop so that we can get to market faster,” Tucker says. “Sometimes we’re constrained by technology; some of our constraints are money.” The two SVPs are obviously on the same page: “We’ve worked very well in embedding our capability wherever our customer wants to engage with us,” Zanca says. “Lately, that’s been mobile and we have to create mobile apps.” Zanca reveals that this shift to mobile goes beyond the system and expands to mindset. “We want FedEx to be a connection point, not just a destination,” he explains. “We’ve worked collectively to understand the strategy and execution and what platforms we’re going to support. The first step is to understand the importance and then get down to specifics and allocate the resources to go after it.” When it comes to specifics, FedEx relies heavily on the use of online analytics, which gives them a very good idea of the customer experience. However, with the help of technology, they’re looking to expand on these insights into the customer’s mind. “We’re trying to get beyond saying things like, ‘Look, they’re shipping an international package. Next time they click on fedex.com I want to send them an international offer,’” Tucker says. “Let’s look at the customer who came in and produced three tracks on the same package and then called customer service. Does that indicate something negative happened? How should we respond to those things?”

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

According to Tucker, the biggest hurdle in marrying digital data with marketing strategy is the lack of IT resources. In the past, the company has struggled to find a happy medium between having too many IT people and too little manpower. “If we had a pie chart and we set up all the resources we have available in IT to work on delivering customer value versus how many we have on operations or architecture, there’s an imbalance. It’s favoring the infrastructure,” Tucker reveals. “It may just be because so much technology advancement has taken place that we’ve got to get caught up.” Zanca adds that this problem is exacerbated by differences in mindset. “The IT people want everything tied down with a nice neat bow and sometimes, the business folks want it to move a little faster and they don’t have the opportunity to look at every single detail,” he explains. To combat this, they’ve employed a third-party tool to create an interface where marketers and IT people can go in-depth and really understand the marketing initiative that is being launched. This is called a visual simulation of the project and it is a required phase in development. This step has proven to be crucial, as it has enabled them to identify issues with programs before they grow into complications. At the same time, it paves the way for collaboration. Tucker is the first to admit that marketers can learn a lot from IT people. “Marketers have no clue what is possible,” she says. “If I don’t have a close relationship with David, there’s no telling what opportunity gets missed. More broadly, marketers need to understand the technology and its challenges.” On the other hand, IT people need to be more informed about customer experience. While there are sometimes IT people present at marketing meetings and vice-versa, they have had to make more time-efficient ways of communicating. “Laurie’s team wanted to understand why the projects we were laying out were important,” says Zanca. “So we ended up combining our roadmaps to synchronize them because there was a dependency between the departments.” They have also employed less subtle ways of promoting communication between the two groups. “We relocated them to sit together. It used to be the marketing folks in one building and the IT folks in another,” Zanca says. “When there’s an important crisis, the conversation is right over the cube wall and that’s been very effective.”

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Brian Pagano Chief Architect Guardian Insurance As the Chief Architect of Guardian Insurance, Brian Pagano oversees several enterprise-level technology departments, including the enterprise architecture, security and monitoring, desktop environment, corporate labs and testing. Prior to joining Guardian, Pagano worked as Senior Enterprise Architect at S&P. Before that, was CTO of an Italian software company.

As Guardian’s Chief Architect, Brian Pagano and his team handle new technology evaluation and acquisition of any new technologies within the company. In that role, he has quite familiar with the natural barriers between IT minds and other business sectors such as marketing. Marketing is supposed to be very cutting edge and externally focused, while IT is very much focused on privacy and security, Pagano says. Additionally, marketers see an advantage of moving quickly to market, while IT prefers to thoroughly analyze and secure the process. “It’s very difficult to talk to non-technical folks about why this product that seems really flashy and great with its nice, sexy interface might not actually be the best tool to get the job done for us,” he says. According to Pagano, empowering his team as the central actor driving technology evaluations across the entire company has helped solve these challenges. Pagano participates in quarterly meetings between technology and each line of business for both sides to learn about the other. Technology explains any new available upgrades and capabilities while each business sector fills in IT on its current projects and objectives. Through these collaboration groups, marketing and IT hash out roadmaps for the biggest goals to accomplish. Pagano’s team then takes the roadmaps and works ahead on the technology elements even before those requests begin rolling in from different business and marketing departments. For example, before his colleagues start asking about iPads and other mobile devices, his team is figuring out how to secure the tools and anticipating how his sales force and customers may use them. In doing so, the technology team can keep up – and even stay ahead – of its marketing counterparts without sacrificing its commitment to standardization and security. Nevertheless, Pagano says his colleagues and customers are accustomed to high speed and high performance technology from their personal consumer experiences. Therefore, the Guardian technology team has an excellent standard of comparison for its corporate IT. In Pagano’s estimation, various divisions and systems within the overall company had decent analytics and agility, but those high-performing areas were siloed in their respective sectors. To overcome this challenge, Pagano says they have divided their technology function into a corporate level, centralized IT group and several local IT teams embedded directly into their specific business application.

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By splintering the technology group into a centrally-funded unit with extensions built into specific sectors, Pagano’s team has met the needs of its partners and gradually earned its mandate from executive leadership. The key, he says, has been emphasizing the value it could create at each step of the way. “We really sold [the marketing and business departments] on the value of the process, and it was only though the successes of that process that we started to get the senior level buy-in and now the senior level mandate.”

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Nellson Burns VP of Information Technology Holly Corp Nellson Burns is the technological authority at Holly Corporation – an independent petroleum refiner that produces gasoline, diesel and jet fuel in addition to lubricants, oil and waxes. Before joining Holly Corporation, he worked as a consultant, specializing in mergers and acquisitions. He has had the opportunity to work with marketing organizations for some of the world’s largest corporations.

Burns is quick to point out the friction within companies. “Marketing’s a really important component of any group. You’ve got to sell your product if you’re going to make any money,” he says. “Sometimes the marketing groups don’t try to understand the other parts of the company, specifically the back office, and that has to occur to be able to process an account for the sales transactions appropriately. I’ve seen this problem in a number of companies.” With this knowledge, he goes out of his way to ensure that inter-department relations at Holly Corp are superior. “We have a couple of mechanisms set up to encourage and foster communication between the groups and I think that’s helped us out quite a bit,” he says. Holly Corp has assembled a Process Council comprised of representatives from the major phases of production. The tax and accounting department is represented, along with master data, marketing, IT and credit. The Process Council meets on a monthly basis to improve the process. Smaller, similar groups have been created to delve into specifics and manage the details. “Marketing’s out there doing new deals and if those aren’t communicated to accounting, IT, tax, credit and everyone else in a timely fashion, you end up having a lot of problems processing invoices and getting cash in the door,” Burns explains. Communication, in his opinion, is paramount to success as a company. While it may not be comfortable, it’s a problem that may even require the president’s efforts. “One thing my boss does: If he hears a lot of sniping going on behind the scenes, he’ll bring everyone together and force the communication,” he reveals. “If people continually have these back-channel conversations, it ends up being counter-productive.” Burns also stresses the importance of relationships between Holly Corp and other companies. “I can think of a few examples where there have been some hiccups, but because we had a good relationship, we were able to work through it and move on.” Finally, Burns knows that inter-office relationships are just as important as those between companies. “View the back office as a very necessary part and function of the company. Don’t view it as a necessary evil or even as a no-value-added part of the process.”

The CMO-CIO Alignment Imperative: Driving Revenue Through Customer Relevance |

Debra Jensen Vice President and Chief Information Officer Jack in the Box As the VIP and CIO for Jack in the Box, Debra Jensen is responsible for technology solutions to support Jack in the Box restaurant systems for both company and franchise restaurants. She is also responsible for technology and customer service call centers. Her key areas of focus include strategic planning, analytics and supply chain.

When Debra Jensen joined Jack in the Box nearly five years ago, she was paired with the company’s chief marketing officer in an executive mentoring program. Jensen credits that immediate connection with helping to establish a close relationship between the two functional organizations. She has also, however, continued to work at her relationships with the company’s top executives to ensure her team’s role in business operations. “I’ve worked hard to help senior executives understand technology and the underpinning infrastructures and why it’s important to include us in their specific objectives,” she says. Conversely, Jensen says her CMO does an equally effective job making sure everyone understands her business and the rationale behind marketing decisions. Consequently, her IT team has been able to participate in marketing initiatives, brainstorming, collaborative efforts on future programs and consumer engagement. According to Jensen, this partnership has been crucial to both the marketing and IT teams’ performance because many things the marketing team is working on and doing involves digital media and technology. Websites, social networking, loyalty networks – the large technology component would only be effectively achieved through close collaboration between the teams, she says. “Understanding where each side’s working style comes from is critical, since our disciplines are just different,” Jensen says. “Marketing people tend to be very creative, while technology people are about structure and control, making sure thing are repeatable and work carefully.” Jensen credits the partnership and mutual understanding between her IT team and the marketing organization for their recent point-of-purchase media program. This initiative involved implementing technology to enable local marketers to access and refresh their media during local promotions. Without the tight working relationship between the two sectors, these local marketing pushes would not have been possible. In fact, both teams were recently recognized for such close teamwork in a restaurant business, Jensen says. Ultimately, the relationship between marketing and IT will dictate how well Jack in the Box communicates and interacts with its consumer base. “We’re all in a chase to understand where the customer is going, especially in their digital experiences because it’s all changing so much,” Jensen says. “We have to work closely with the marketing team to stay innovative and one step ahead.” © CMO Council. All rights reserved. 2010

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Eileen Zicchino Chief Marketing Officer J.P. Morgan Treasury Services Eileen Zicchino is the Chief Marketing Officer for J.P. Morgan’s Treasury Services business. In this role, she oversees brand management, strategic product marketing, collateral development, client and employee communications, business intelligence, syndicated and proprietary research, advertising, Internet management and client events on a global scale.

For Eileen Zicchino, the need for greater collaboration between CMOs and CIOs has not suddenly emerged with digital media. It’s always been a need. “When you are executing initiatives like interactive marketing and database management, you need the right expertise in place to make things happen behind the scenes. That means the technology team has to be a partner at the table,” Zicchino says. “Today, marketing is being asked to justify every expense we incur. Our technology partners help us accomplish this mandate. They watch our back and help us achieve our marketing goals seamlessly and efficiently.” While Zicchino acknowledges the natural barriers between marketing and IT executives, she believes the burden is on marketers to take the initiative and bridge the divide. Every day, marketers must speak a language their clients can understand. That makes marketers better equipped to communicate the client’s perspective to the technology organization. Technology is central to a number of different groups across the firm, so it can sometimes be a challenge to carve out time for a specific marketing initiative, Zicchino says. But when given specific objectives and a solid rationale behind a particular marketing effort, “nine times out of ten, we’ll be able to work together to get it done.” Additionally, Zicchino says marketers must empower the IT organization as true partners. She regularly invites her IT counterparts to marketing events, trade shows and celebrations to ensure they are involved in the delivery of the end product and can see the fruits of their labor and its impact on the client. Making the extra effort to show appreciation, she says, encourages IT professionals to want to work and partner with her department. Zicchino credits this extra effort toward building a true partnership with the IT organization with enabling her marketing team to successfully realize several new initiatives. Before they could implement a new sales content management system, for example, the proposed program had to pass through the legal, compliance, technology and finance departments. Her close relationship with the head of technology allowed Zicchino to convey her goals and objectives, and the IT executive helped put plans in motion and make sure that the system was properly configured and launched.

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Marketing for the financial services industry requires that Zicchino’s department be relatively conservative when using social media. However, she still feels marketing and IT executives from other areas of the business world can learn from the partnership she has so carefully fostered between these traditionally foreign departments at J.P. Morgan. “Market to them [IT executives]. Pitch to them. Take them out to lunch or out for a drink,” she says. “Approach them as if they were your client, and explain your needs and how they can help. They’ll be flattered you’ve asked and will welcome the chance to demonstrate that they have expertise that’s valuable to any marketing effort.”

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Ramon Baez CIO and VP of Information Technology Services Kimberly-Clark In February 2007, Ramon Baez joined Kimberly-Clark as Chief Information Officer and VP of Information Technology Services. Previously, he had served as CIO at Thermo Fisher Scientific and, before that, CIO at Honeywell. He started his career at Northrop Grumman, where he worked his way up to chief information officer for its electronic systems sensors sector over his 25 years with the company.

Shortly after joining Kimberly-Clark in February 2007, Ramon Baez met with CMO Tony Palmer, and the two did not envision working together often. “We got along well, but Tony just said, ‘Ramon, you may want to spend your time elsewhere, because I don’t really know how I’m going to use IT here,’” Baez remembers. At the time, Baez had no issue with the marketing and IT disconnect, citing the natural conflict in personality and priority between the sectors. He says marketers are generally extroverted and are motivated by what is possible; meanwhile, more introverted IT people operate within the practical. Financial constraints often amplify this tension as IT supports not just marketing but all other functions across an organization. Yet by the time Baez and Palmer sat down for another one-on-one less than a year later, the situation had dramatically changed. “He just said, ‘Ramon, I need you now. There’s so much going on and I absolutely need your help.’” The evolving web 2.0 world was rewarding companies that could leverage technology to reach consumers directly. Platforms like Facebook and LinkedIn were changing customer interaction, and audiences demanded a more relevant and customized message from brands. Suddenly, Baez says, marketing and IT had a true connection and ability to drive company value together. “The bottom line was that marketing needed the technology partner to deliver the solutions to reach consumers and enable customer data integration analytics,” he says. For Kimberly-Clark, circumventing the natural barriers between IT and marketing required a high-performance culture where individuals could comfortably jump across functional boundaries and understand the perspectives and needs of both sides. To create this environment, Baez helped create the company’s “Digital Center of Excellence” where project teams were built with both marketers and IT professionals. This strategy created a tighter alignment between the business sectors and drastically improved Kimberly-Clark’s digital marketing capabilities. “For the DCOE, we took marketers with an affinity towards digital technology and IT folks with an affinity for marketing and combined them. That’s the secret sauce,” he says.

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The culture shift towards collaboration, however, was not without challenges. The marketing and IT team members had to trust that each side was working for a common goal and not just their job function. “It’s getting people comfortable that I’m not trying to do their job and me understanding that you’re not trying to do my job. It’s that fundamental,” Baez says. Through the bridge between marketing and IT, the Digital Center of Excellence has allowed Kimberly-Clark to improve its customers’ experience and relationship with its brand. Instead of each brand or region pursuing technologies and consumers independently, cross-populated teams work together under the unified goal of creating value for the consumer. Overall, Baez says, demonstrating how each sector improves the customer experience the most important element in successfully integrating the marketing sector with IT. “We don’t want to be a solution looking for a problem. The business has to see and want the value we bring in order for us to participate in the conversation,” he says. “IT needs to work to establish the conversation with marketing teams across the globe and show them we’re working on bringing the next digital campaign to the consumer and customer.”

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Barry Libenson VP and CIO Land O’Lakes Barry Libenson recently joined Land O’Lakes, bringing with him eight years of experience as the Vice President and CIO at Ingersoll Rand. He was hired to spearhead Land O’Lakes’ ERP systems and to help with the company’s transformation to an operating company structure. Contrary to popular belief, the butter and cheese manufacturer goes beyond dairy – it also owns Winfield and Purina.

Technology is king for all three brands. “Whether it’s the web presence, any type of marketing campaigns or the distribution, everything is managed from the technology perspective,” Libenson says. In his opinion, the challenges between marketing and IT stem from a basic difference in what each sector wants to accomplish. “The marketing organization wants the technology platforms to be available but they want to control as much of the content as they can. They want the IT organization to be the enabler but not necessarily involved in the process,” he reveals. “When it comes time to push Internet-based marketing content, they want tools that enable them to do it themselves but they also want it be easy and professional-looking. They don’t necessarily want the IT department in the loop any more than is absolutely necessary.” Libenson knows that a huge part of his job is to educate marketers in IT, especially in the world of digital marketing. “The company’s embrace of social media is a fairly new thing,” he says. “The whole concept of using things like Facebook and YouTube for content delivery is relatively new, but it’s something that’s embraced pretty quickly. Other than that, we provide content management tools that allow the marketing folks to deliver content to the end users.” Not coincidentally, this is an area of passion for the CIO. “I love the technology and know how it can be leveraged and used effectively for business, perhaps considerably more than a lot of businesspeople do,” says Libenson. “I have always relied on the Internet and technology to get information I needed about other products and platforms. I’m pushing the envelope in terms of wanting to leverage the technology to help our business go, where it wants to go.” These changes begin in the finance department. “It’s all very new here, but I have a lot of things in the 2011 budget that will help push us in that direction,” Libenson says. “I’m trying to improve internal and external collaboration platforms, use technology to enable our go-to-market strategy and essentially put more information out into the network that customers can have direct access to.” His proactive attitude isn’t exactly prevalent in his profession. “I’ve seen so many CIOs that are in pure reactionary mode. I’ve got a lot of projects that we’re working

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on that I consider to be basic programs. What’s much more interesting to me is figuring out how to move forward with technology,” he explains. “The marketing side is a big piece of that.” Land O’Lakes’ website is managed and run by a third party who is also responsible for delivering the analytics information. This set-up is more driven by organizational structure than a desire to standardize. “Each business has its own set of unique requirements. I’ve got a CIO that reports to me that manages each one of those lines of business,” Libenson says, referring to the different specialties of Land O’Lakes, Purina and Winfield. “That person is responsible for understanding what that business’ overall requirements are across the board, whether it’s around customer-facing, order-entry systems, distribution platforms, logistics or transportation.” “It’s their job, on a regular basis, to understand all the projects and requirements across the board. Marketing is one of those, where there are things that the business is looking to have delivered to them,” Libenson says. “Because our portfolio is as diverse as it is, the requirements from the marketing standpoint are very different across those different businesses.” More specifically, the dairy division of Land O’Lakes has a very visible presence on the Internet because of its strong brand. Additionally, people rely on the Internet to get recipes and nutritional information. For this reason, Land O’Lakes gets a huge amount of customer insight from their buyers and their systems. This information gets fed to the marketing organization so that they can make go-to-market decisions. This sets up an area where both marketers and IT people can really shine. “The best thing that any good technology leader can do is engage with the sales and marketing organization of the respective organization he’s serving,” Libenson says. “Your job is to serve the business and help it be lucrative.”

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Haden Land Vice President and Chief Technology Officer Lockheed Martin IS&GS Civil As VP and CTO for Lockheed Martin Information Systems and Global Services Civil Product Line, Land is responsible for enterprise consulting for new business technical solutions, technical and engineering program support, strategic enterprise initiatives leadership, internal information technology support, industry and academia partnerships, and sponsorship of research and development projects.

Four years ago, Haden Land had limited communication with his marketing and communications department. Outside of his technology and engineering teams, he predominantly spoke with business development. Today, however, Land works closely with his marketing and communications organization on new market strategies, go-to-market messaging, packaging technological solutions and academia relations. This involvement with the marketing function was necessitated by the market’s increased agility and demand for faster messaging. “As the market moves faster than anticipated, we have had to streamline the time between investments, planning and customer challenges, and getting that to the press,” Land says. Improving his partnership with marketing and communications has helped reduce the time required to get key messages out in the field. Given the attention and scrutiny its global security initiatives receive in major media, Land says the company must be even more vigilant connecting its technical strategies with its go-to-market messages. General language differences, however, can strain the relationship between marketers and engineers. “The terms we use evolve and change quite quickly, and sometimes the marketing and communcations personnel might not be up on the same timeline,” he says. Consequently, any marketing discussions relating to innovation, engineering and IT-centric type capabilities require partnership. The key to avoiding confusion and other messaging setbacks is early engagement in the business case type discussions, he says. Involving marketers in these initial conversations can help them understand why Land’s technical engineers are working on certain innovations and how their challenges are relevant to the overall industry they serve. Particularly after the economic climate reduced operating budgets, marketers’ understanding of the overall mission is of even higher importance. Whereas its reputation may have carried the company new business in the past, Land says they must now more heavily interact with its customers. “We need to spend a lot more time focusing not just on meeting contract requirements but on making our customers both look good and feel good,” he says.

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As a result, marketing and communications play a heavier role conveying how technical innovations fit within the context of the customer’s overall mission. “Today, we have to be crisp on precisely how the mission will be enabled or improved by leverage of technology,” he says. “It’s not technology innovation for the sake of technology. It’s technology for the sake of the mission.” For Land and Lockheed Martin, that early cooperation with his marketing and communications team helps all stakeholders, from customers to the media, understand the greater mission and where the technology fits in.

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Adriaan Bouton SVP & Chief Information Officer, Information and Media McGraw-Hill As CIO, Adriaan Bouten oversees the overall technology leadership for The McGraw-Hill Companies Information & Media Segment, which comprises J.D. Power & Associates, Platts, McGraw-Hill Construction, Aviation Week, and McGraw-Hill Broadcasting.

For Adriaan Bouten, a typical CMO is usually forward-looking and constantly thinking about the possibilities, while technology people are focused on the complications of taking specific actions. He says that the key to overcoming the natural clash between CMOs and CIOs is achieving a balance between market innovation and technology capabilities. While emphasizing that both sides have the responsibility to achieve that balance, Bouten puts the ownership on the IT community first. “Too often technology people are the naysayers,” he says. “We should be here to help the business be successful. We’re not here to tell them what we can’t do.” However, when that communication is broken and technology assumes that role of the constraining “naysayer,” Bouten says it will end up as a back-office function. When this happens, IT gets pushed out of critical planning stages and early conversations, and marketers move forward without understanding technology’s capabilities, limitations or costs. More efficient, he says, is integrating marketing and IT in parallel dialogue as opposed to serial conversations. To fight the inherent disconnect, Bouten set up an innovation group within his Information & Media team that pushes new technology capabilities within the segment’s individual businesses. While the individual technologists on this research and development-type team are not experts on the markets of each specific business, Bouten says their suggestions can be key conversation starters with the actual market specialists. “They can help the marketers understand what can be done and bring things to the table to get the right conversation to happen,” he says. Nevertheless, it is still up to the marketers to stay open to the innovation group’s ideas and work together to adapt and build on them. While Bouten says McGraw-Hill’s marketers have embraced social media marketing and digital capabilities, he says they still lag behind newer, smaller competitors. “There’s a lot of attention in a legacy company to protect and grow the existing revenue line, whereas an upstart can concentrate on something new,” Bouten says. To compete with these nimble competitors moving forward, Bouten says close cooperation between marketing and technology will be critical to and indicative of the company’s long-term success and ability to maintain its currently strong position. To keep the partnership healthy, however, both sides must be open to and willing to disagree occasionally. “CMOs and CIOs are often different personalities

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with different experiences and perspectives,” he says. “Disagreement is good, because we need those perspectives, and being different isn’t necessarily wrong. But at the end of the day, when we make a decision and move forward, we need to stop talking about the differences and get on the same page together.”

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Lapo Paladini Senior Vice President and Chief Marketing Officer PerkinElmer, Inc. Since joining PerkinElmer in February 1982, Lapo Paladini has held several management positions in the organization, including vice president and general manager, sales and service, Europe for PerkinElmer Analytical Instruments, and global sales and marketing leader for PerkinElmer Life and Analytical Sciences. Paladini holds a doctorate in industrial chemistry from the University of Pisa (Italy).

By constantly acknowledging and monitoring possible threats to the partnership between marketing and IT, Lapo Paladini says PerkinElmer has been able to achieve and sustain a close alignment between the organizations. “We keep the potential risks very clear in front of us in order to anticipate them if and when each of our intended functions, practices and daily work may take us down those slippery slopes,” he says. This continual dialogue has helped Paladini and his technology counterparts achieve a solid understanding of their respective individual goals, as well as how they can complement each other to advance overall business objectives. The challenge lies in each organization’s attitude towards innovation. With new digital technology and channels of communication, marketers see new opportunities to reach their customers. Conversely, CIOs recognize new security and standardization challenges and proceed with more caution. While Paladini has observed more progressive IT leadership from the emerging generation of CIOs, companies with legacy IT executives will face more challenges evolving with new technologies. In his experience, Paladini believes that marketers hold the responsibility to establish healthy communication with both the CIO and the rest of the company’s executives. “[Marketers] are the ones expected to be more flexible and openminded, so it’s up to us to engage our counterparts and present our objectives to them clearly,” he says. Too often, marketers present their desired plans and goals without qualifying why the ideas are important. Without an appropriate qualification and quantification of those marketing objectives, Paladini says IT leaders – and especially legacy CIOs – will refuse to fund or support the proposal. Moreover, with this clear and convincing justification, the CMO can earn not only CIO support but his or her company’s entire executive team. “For people that do not have a marketing competency, seeing is believing, and it’s not going to be easy for them to support [marketing objectives] without first understanding,” he says. Without this understanding between CMOs and CIOs, Paladini says companies can end up in “pull mode,” where they are pulled towards innovative solutions

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because the leadership was not progressive enough to stay ahead. Other times, progressive leadership can try to change before the organization is ready. By taking the initiative in his relationship with PerkinElmerâ&#x20AC;&#x2122;s IT leaders and the rest of its executive board, Paladini has helped the company achieve a dynamic position comfortably between these push and pull scenarios.

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Michael Matuszak VP of Information Technology PNC Michael Matuszak is the VP of Information Technology at PNC Financial Services Group.

Matsuszak identifies the shift towards a more digital and instantaneous world as the most challenging thing for marketing right now. “Speed to market is incredibly important. But the need for speed is driven by the end user demand, so that’s going to constantly push the marketing folks,” he says. This condensed timeline puts pressure on all aspects of business. “The challenge is that planning horizons are shrinking down to nothing. It used to be that you could say, ‘I’m going to bring this product to market. Here’s my three to four year plan to do it.’” Matsuszak explains. “Now you have to say, ‘I have to bring this product to market tomorrow and I don’t even know if it’ll be on the market six months from now.’” Matuszak can speak from experience when asked about the necessary communication between the marketing and IT departments. “We had our marketing team rush a new marketing campaign to market. There was a video of our new commercial and you could download the song and it was wonderful. I was engaged from the moment I sat down,” he recalls. “Unfortunately, the marketing team didn’t think about the ramifications in IT. So many people started downloading the song, our web server started crashing. Our internet site filled up and it was horrible.” But everyone learned from this experience, and the next time around, they were prepared. When PNC decided to take away their fees for online bill pay, they were ready to accommodate the four-fold increase in transactions. However, this foresight didn’t come without an attitude adjustment. “Marketing is always going to present their newest ideas and give me 40 days to have them up and running on the web. But I should be able to provision them in hours, not days. Of course they’re going to be throwing new ideas at you. Plan for it.” Matuszak’s mindset is a result of the renegade nature of online marketing nowadays: “There’s no structure in place,” he says. “There’s nothing that says that marketing has to give us this much advance notice. Their team has to get our name out into the public space and my team has to manage it.” He also places an emphasis on communication and timing. When it comes time to launch digital marketing campaigns there needs to be a direct communication between marketing and IT to ensure success. There also needs to be a level of understanding because digital systems can’t be launched immediately. “People were coming up to us and saying, ‘I need everything done. I need the procurement. I need the provisioning. I need to install, to build, to configure, I need the software developed. I need it up and running on the production wire connected

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to the Internet in 40 days,’” He says. “I said to them, ‘Well, that’s going to take some time.’” Matuszak’s crew has adapted to the demand by ordering servers ahead of time – before marketing announces their next big idea. And, more importantly, they will continue to adapt. “If people are constantly coming to you and saying, ‘I need it faster,’ find a way to do it faster. Stop saying no. There is a way, but it’s not easy and it takes a lot of work. It costs money, but it’s worth it.”

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James Cornell CMO Prudential Financial James Cornell, the Chief Marketing Officer of Prudential Financial, has 25 years of experience in the financial sector. Prior to joining Prudential, he worked at Quadra and Fidelity Investments.

Cornell has worked on a variety of projects with Prudential’s IT department. “I’m spending more and more time with our CIO,” he says. “The data infrastructure has a very large technology and systems component to it.” “In addition to that, the marketing supply chain has been a substantial project as we evaluate our end-to-end workflow processes,” he explains. “We’re trying to use technology to increase scale and link some of the systems together.” Cornell has taken it upon himself to educate his CIO in his field of expertise. “Marketing has significantly helped the CIO link data, analytics and marketing campaigns together. We’ve really helped the IT guys understand how the customer experience touch points need to be woven together,” he says. But it’s a two-way street: “It’s been a real education to work with the CIO,” Cornell admits. “I’ve come to understand our capabilities, our strategies and how our software works. Knowing their enterprise architecture roadmap has helped really inform some of my strategies.” While many companies are rushing to take advantage of Facebook and Youtube, Cornell takes a more cautious approach. “Social media and its application in the digital world is a great example where you need to be very clear about the audience you’re trying to reach and what you’re trying to achieve.” The unpredictable field of digital media is certainly an area where CMOs and CIOs can work together to generate exceptional results. But for finance, it’s a little more complicated. “We came out with a social media policy, but then the SEC and FINRA gave us their guidelines and made it very clear what’s permitted and not permitted. This has had a drastic impact on the digital tools we’re able to use with customer interactions because we have to have a record of those interactions,” Cornell reveals. This leads to an incredible amount of data that needs to be managed. “Data in this new world is one of the biggest issues the CIO has to face,” he says. As for relationships between the CMO and the CIO, “there has to be a fluid back and forth dynamic.” This kind of a relationship was exemplified when Prudential wanted to collaborate with the IT department to streamline their supply chain. Unfortunately, there was a timing conflict because the IT workers were in the middle of an architecture review. The marketing team had to rely on a third party to do the analysis. No feelings were hurt and Cornell made the final vendor decision.

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He has one piece of advice: gather as much information as you can. “Really do inventory of your data and analytics infrastructure and take advantage of the insights that are flowing in.” But this influx of information is best utilized when members of both teams have a solid understanding of their role. “You should not expect your CIO to understand the intricacies of marketing,” Cornell says. “So gather your data and then present it to your CIO to make sure he or she understands where you’re going.”

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James Latham CMO Open Text James Latham is the CMO for Open Text, the market leader in enterprise content management. Prior to that, he held many different senior management positions at software companies such as IBM, Lotus Development, View Star and Atlas Telecom.

According to Latham, the necessary alignment between the CMO and CIO is being driven by marketing’s growth on a worldwide scale. “The globalization of marketing is driving higher costs unless you can find efficiencies,” he says. Furthermore, analytics are now at the core of marketing. “Of course, those automations are implemented in most organizations by IT,” Latham adds. For software companies, it is crucial that their products can be easily implemented in IT departments. “My advice for other software companies is to engage their own IT department as their products for better use.” In many cases, progress has been hindered by monetary concerns. “There’s been a lot of pressure for IT departments to make it under budget and that’s kept them focused on a core set of operational systems, as opposed to expanding those systems and creating new efficiencies,” he says. But now that the web has become the primary interacting vehicle for purchases, information and social networking, technology is very much at the forefront of marketing. “Our digital marketing initiatives are first and foremost at Open Text. They have been for the last two years and will be in the future,” Latham says. There are multiple factors that allow Open Text to be so active in digital marketing. “We have an exceptional IT department that has experienced and knowledgeable senior leadership. Those people recognize the value of marketing and the need for the close integration of IT and marketing.” In addition to this, Open Text has its own web content managing system. They employ it internally to deliver superior web capabilities. “This creates a set of systems that are essential to the operations of marketing, just as financial general ledger systems are essential to the operations of finance,” Latham explains. “We’ve built the processes, the prioritization schemes and the communications to be effective in this way.” Effectiveness is critical at every stage. “We don’t want to outsource something and get lower quality. We’re constantly looking at the highest quality marketing that we can do in concert with our agencies, but also internally,” Latham says. This constant search is an example of his overall approach to marketing. “Marketers need to be proactive, take the initiative and reach out to the IT department. You’re not going to get everything you need today from an IT department. But to help them understand your marketing priorities and to be able to articulate those clearly is what’s going to be most effective.” © CMO Council. All rights reserved. 2010

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Chris Hummel Chief Marketing Officer Siemens Enterprise Communications Hummel oversees all marketing activities across Siemens Enterprise Communications and supports the development of the company’s corporate and go-to-market strategies. Previously, Hummel spent 13 years at Oracle Corporation in a number of senior sales and marketing roles, and more recently, as EVP Global Field Marketing at SAP.

According to Chris Hummel, marketing and IT professionals have historically struggled to work together because they were motivated by diametrically opposite interests. Marketing has historically been more of an art, he says, focusing on the intangible and qualitative elements of customer interaction. Conversely, the CIO’s role has been standardizing operations, delivering repeatability and scalability and focusing on information-driven decisions. However, as CMOs look to measure the impact of their campaigns and understand the effectiveness of their tools, marketing is becoming a science driven by data, advanced analytics and modeling. “Where traditionally the CFO was the [CMO’s] primary partner in terms of how much money we could spend, information is becoming much more important even than money, so working with the CIO is becoming critically important,” Hummel says. To achieve a functional relationship between these two historically opposite roles, Hummel says jointly working on tangible projects where both have a significant interest is critical. For example, a company’s website has an enormous IT element in terms of its structure, security and scale. Additionally, CMOs have an interest in the data and business process integration that populates the site. Having both executives jointly sponsor the working group for the website will force collaboration between the two roles. Currently, Siemens Enterprise is undertaking a project called the Information Revolution which is reorganizing the company’s customer data to make it more useful to its business, as opposed to effectively keeping it in storage. Hummel says there is joint CMO and CIO sponsorship on the project workgroup to oversee data management, systems integration and the definition of customer segments. In the process, the two sectors are learning to work together. Another example where close collaboration is necessary, Hummel says, is social media. “It’s clearly the new frontier in terms of reaching customers, but it’s probably the CIO’s biggest nightmare,” he says. “So collaborating on not just external policy on reaching customers, but lerning how to track and manage and secure and scale the channels – CMOs and CIOs need to work together to achieve this.” Beyond social media, Hummel says that an improved relationship between marketing and IT will advance a company’s ability to utilize customer data.

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Currently, marketers spend significant amounts of time educating IT staffs on how and why they want to use certain data or systems. However, by closely working together and understanding each other’s respective motives, marketers and IT can approach real-time access to customer information that allows companies to tailor their message to specific consumers. An improved understanding of how to communicate with customers, Hummel says, is the most important result of evolving marketing and IT cooperation. “Whereas ten or 20 years ago marketing was the keeper of the spin, today, we’re becoming the keeper of the facts,” he says. “The art and creativity will always be there and it’s always necessary, but now I come armed with real facts, trends, figures and analysis. Human beings still have to make the decisions, but [cooperation between CMOs and CIOs] gives supporting evidence to the things that aren’t always intuitive.”

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Don Rowley CIO Sleepy’s LLC Don Rowley served as Chief Information Officer for The Wiz and Cybersmith before joining Sleepy’s. He has been the CIO of Sleepy’s for 12 years – seeing the company through the most exciting and shifting times for technology.

In early 2009, as part of an executive management ‘recession beater’ initiative, Rowley and a small team of IT professionals was tasked with developing the company’s first e-commerce site and taking over digital advertising. The collection and management of information, with the intent of turning it over to the marketing department, has been his priority with these initiatives. ‘”We had to learn fast starting from a zero-based education position. A hard launch date 4 months away forced total immersion in e-commerce technology and digital advertising strategies with collaboration from all areas of the business,” Rowley says. “At the same time, we had to fill critical skill set positions with no room for error. We got lucky in assembling a high performance team under the leadership of a talented technologist who understood the connections needed to backend business systems. That team is still in place today with zero turnover.” The challenges come when technological systems need to be assembled, and quickly. “For example, our marketing team planned a promotion many, many weeks ago. But at the last minute, somebody realized that there was a data point that needed to be captured and the systems need to be updated,” Rowley reveals. “There isn’t a choice here. The systems have to be updated quickly because you’ve already put all the time and money into promoting and scheduling the event.” These sort of situations provide for frustration and a lot of last-minute scrambling. “There’s a view that marketers give little thought to what business systems need to be changed,” Rowley says. “On the other end, marketers think that IT people don’t understand the critical nature of their campaigns and their ability to drive business.” To combat this, Sleepy’s instituted mandatory, weekly meetings to make sure that everyone–site technical people, marketing people, merchandisers, operations, finance, call center, customer support, field sales, and creative people were on the same page. As for their e-commerce initiative, the website has been able to bring educated customers into stores and smooth out the process for the sales people. Their site is also directing a 20% increase in calls to their sales and product support group. Shortly after launching the site, the new additions to Rowley’s team implemented ratings and reviews. This provided Sleepy’s with an incredible amount of information, both regarding their customers and for their vendor’s products.

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This influx of data requires employees with more knowledge of business analytics. “You have to have people who understand, from a business perspective, what data points are important and how to pull those out of all the various business systems,” Rowley says. Sleepy’s works with a boutique agency that is purely digital, so understanding the common ground between technology, data points, and marketing has been easy for Rowley. “Again, we got lucky. A traditional ‘full service’ agency without a deep understanding of instant digital data reporting would not have worked.” This is also due to very open channels of communication within the company. “We were sitting in a meeting with some marketing people and one of them had one of the most unique ideas I’ve ever heard about how to drive business. But it involved people in the operations area – it required them to ship a different type of product to a different type of customer” Rowley reveals. “The product that needed to be shipped was of an odd shape that the operations people had never handled before. One of the IT people who was versed in the company’s systems and key people from all functional areas said, ‘We need to bring this person from operations, this person from finance, this person from merchandising, this person from the sales call center, these people from store sales management, and this person from customer support . They can figure this out.’” Without that connection and knowledge of all systems and people necessary, the promotion may have been successful in terms of driving business, but could have failed everywhere else – adding costs that offset the sales increase. “As a company, we are very good in identifying human resource requirements and filling those needs with talented individuals,” Rowley says. “My purpose is simply connecting the dots. Only when people throughout the organization have the respect for each other’s areas of expertise can you have true collaboration.”

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Academic & Expert Insights Faisal Hoque Chairman and CEO BTM Corporation Faisal Hoque is the founder and CEO of Business Technology Management (BTM) Corporation, a management solutions provider in the convergence of business and technology management. Along the way, Hoque has written five management books, including The Alignment Effect: How to Get Real Business Value Out of Technology, and established an international research think tank - The BTM Institute.

After positions with companies like GE, Dunn & Bradstreet and Pitney Bowes, Faisal Hoque founded his own company, BTM Corporation, which he has been running for ten years. From those experiences, Hoque believes that focusing on the relationship between CMOs and CIOs is a limiting notion that is no longer adequate for the current business environment. Instead, Hoque says that in business today, general outreach to the customer and actual product distribution is entirely driven by technology. Therefore, it is impossible to separate business from technology and vice versa, and the management process between marketing and IT executives is similarly united. “Unless we drive our thought process and management approach from the point of view that marketing and technology management are converged, most organizations will not become successful.” To overcome the siloed backgrounds that traditionally kept marketing and IT organizations apart, Hoque says the first step is to combine the strategic initiatives between the respective executives. In doing so, CMOs and CIOs must replace their individual objectives and benchmarks with an overall company perspective. Instead of measuring new initiatives like social media outreach from a marketing or technology point of view, the joint focus needs to be on the organizational gain as a whole, specifically how the financial performance moves the entire company forward. The challenge in achieving this joint focus on overall performance, Hoque says, is that organizations operate in silos with the different goals, objectives and financial matrixes of its constituent departments. Companies looking to reach that next level of maturity must establish a more integrated “brand management framework” that drives every area with the same financial investment management point of view. Within this holistic business architecture, technology would simply fit within the communal goal of achieving customer gain or brand elevation.

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According to Hoque, the key moving forward will be maintaining each sector’s focus on organizational priorities. “Today’s technology, within one or two years, is going to become yesterday’s technology,” Hoque says. “So it’s critical to bring these CIOs and CMOs together and establish a management process that allows them to collaborate and make the right investment for the enterprise as a whole. That takes greater discipline than just knowing the latest and greatest technology coming out in the market.”

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Richard Hunter Vice President and Chief of Research Gartner Richard Hunter works in Gartner’s CIO research group, where his work for the last eight years has focused on different aspects of how CIOs succeed. He is the author of The Real Business of IT: How CIOs Create and Communicate Value and IT Risks: Turning Threats into Competitive Advantage.

According to Richard Hunter, the need for closer cooperation between IT and marketing organizations is simple. “The reason should be very much apparent to anyone in the world who owns a device more intelligent than a toaster -- the overwhelming amount of digitized information now available comes from an extraordinarily wide range of sources,” he says. Hunter says that this explosion of digital technology and electronic channels of communication caught both marketers and IT organizations unprepared. While marketers may struggle effectively managing and discriminating between huge amounts and sources of information, most IT workers were also equally unprepared for the rapid rise of social media. Technology executives had begun to master the management of data generated within the enterprise and the integration of that information with traditional external sources. “But CIOs are in many cases surprised at the growth of electronic channels not under their direct control, and they are not thoroughly aware of what their role in using these channels might be,” he says. Also making the CMO-CIO partnership difficult has been the CIO’s focus on the care and maintenance of systems and less concern with the outcomes those systems are supposed to generate. For example, Hunter makes the analogy to a treadmill and corresponding exercise program. The traditional IT mindset is that once the treadmill (read: computer system) is purchased and installed, the job is done, even though purchase and installation does not produce the desired outcomes of improved health, strength, and stamina. For this reason, Hunter says the first responsibility in improving this naturally strained relationship is the CIO’s. “The CIO must understand what matters to the CMO, why it matters and how it matters,” he says. “The CIO has to know what constitutes success for the CMO and be able to connect that definition of success to the information sources and automation that will produce those outcomes.” At its most basic level, the IT executive must understand what the marketer’s goals are all about – and they are never about technology per se. Simultaneously, CMOs must make sure technologists are part of the discussion from the outset any time innovation is involved. According to Hunter, there is good information from academic sources to show that innovation is more powerful when informed by the capabilities of currently available technologies.

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“Marketers should do everything they can to make the IT professionals they deal with are more informed about what the marketing officer is trying to achieve and why,” Hunter says. “CIOs and their IT organizations should do everything they can, based on that understanding of desired objectives, to help the CMO choose the best technology options to ensure achievement of those outcomes.”

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Dr. Richard Watson J. Rex Fuqua Distinguished Chair for Internet Strategy Professor at University of Georgia Richard Watson has been studying marketing from an information systems perspective since he earned his Ph.D. in 1987.

The key driver that is mandating alignment between the CMO and the CIO, according to Watson, is the Internet. It simultaneously created a channel for marketers to reach customers as well as a tool for IS people to manage and create that channel. While these two spheres don’t easily merge, neither is insignificant. “If you look at the different disciplines in an organization, finance and accounting can’t change an organization like information systems can. IS provides a transformation of opportunities. It can change the way you do things and lower your costs significantly.” Watson says. “Marketing does the same thing. It can present products to customers in a different way or recognize the need for new products.” But collaboration is obviously necessary for either party to transform an organization. Here’s where the challenges lie. “The problem is that the two parties don’t speak a common language. For example, we had a marketing professor here who went off to Silicon Valley to make his fortune, which he didn’t,” Watson reveals. “But he said the first six months there, he didn’t have a clue what was going on because he couldn’t understand what they were talking about.” While marketers might struggle to understand IS workers, the reverse is just as challenging. “From the systems side, people don’t always have a customer focus. They think about the technology and the solutions it can provide, but they’re not really honed in on what customers want or the customer experience,” Watson says. IS specialists are focused on efficiency while marketers are focused on effectiveness. Beyond this, clashes often occur when marketing campaigns are launched online. “IS people have to build reliable systems, otherwise the whole marketing plan will fail when the system can’t deliver,” Watson says. “IS people can combat this by focusing on building more flexibility into their systems so they can react more rapidly.” Proper collaboration between the marketing and information departments opens up a field of opportunity for people to come in and sort out the massive amount of information flowing from the IS department to the marketers. Analytics has been a place where businesses have invested, yet may not be as cut-and-dry as it seems. “If I buy a book from Amazon, they might try to infer my book-reading habits. But they don’t know if I like the book for whether the book was a gift. So the analytic side is really difficult because of this lack of data completeness,” Watson says.

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According to Watson, the only way to get complete data is if the customer collects it themselves. It’s up to the corporation to set up a system of incentives for the customer to give information to them. But this customer-managed interaction marks a paradigm shift for most businesses which will come with its own set of challenges. As for specifics between the CMO and CIO, Watson believes that a structure change is in order. “Both the CIO and the CMO need to report to the CEO and be a part of the top management team. They can walk away from meetings and know precisely what their group has to do,” Watson says. “At a lower level, the transformation is dependent on the information systems group and the marketing group working together to take advantage of a new market or product,” Watson explains. “It’s purely a top management team strategic issue.” Enterprise and resource planning is also a place where transformation can occur. “Apparently Apple has a single instance of an enterprise and resource planning system and they run the whole company from it,” Watson says. “It’s a major investment to do it, but if you can build a single integrated ERP, you do have a foundation.” On the marketing side, Watson sees many marketing opportunities waiting to be capitalized on, especially in the sphere of mobile marketing. “If I’m standing outside a particular store and you can get me a coupon or entice me into that store, that’s pretty important. All this is possible because we have GPS capabilities built into cell phones.” As for marketing and information technology coming together, “the answer is pretty simple. Digital marketing is the most effective way of acquiring and retaining customers.”

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Ben Berry Executive Advisory Board, Operations and Technology Management University of Portland Ben Berry has years of experience leading information services for large-scale organizations. He is a founder of Public Private Renewable Energy Group and an Advisory Board member at Oregon State University.

Everyone knows that the language of marketers and the dialect of IT are worlds apart. But Berry has the solution “to demystifying technology.” “You have to embed your IS teams within the business. I have 67 IS staff members embedded with the Department of Motor Vehicles,” Berry reveals. “This way, they look like the business, they learn from the business and they can anticipate the changes of the business.” Regular meetings are key for this kind of knowledge exchange. “We talk about IT decisions, strategic decisions and IT standards at our Executive Steering Committee every quarter. I believe that kind of direct, in your face conversation has paid dividends for how we’re funded here in IS,” Berry says. In his six years as Oregon’s Department of Transportation CIO, Berry has made a point to work closely with the ODOT divisions. For both teams, budgetary concerns are always at the forefront. “But our funding for IT, in respect to how our CIOs operate, has been stellar in the face of economic recession,” Berry says. As Oregon’s second-largest state agency, the Department of Transportation has a $3.4 billion budget. Despite these resources, the demand for technology is ever increasing. “We’re never going to have all the money that we need to do technology – there’s always going to be more business online, more applications and data being requested,” Berry explains. “There are never enough resources to deliver on all of the requests. There’s a widening gap between the demand for services and the supply.” The technology department has had to do a lot of adapting, especially as budgets got cut. “If you look at our ERP Initiative, we embarked on replacements for our finance and HR systems. We did a lot of requirements definition building, but then the economic slowdown hit and we had to cut back on that initiative,” Berry reveals. “So now we’re re-examining it and looking to launch smaller initiatives.” In terms of social media, Berry’s department was an early participant. However, they realized that sites like Twitter and YouTube have a lot of malware associated with them. To combat this, they worked with Web Sense to enable those media sites without infecting their network. Now their focus is on creating interactive web portals to leverage those social media sites.

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The Oregon Department of Transportation has also used the Internet to take care of some administrative issues. “We have a fee structure that allows people to pay for their driver’s licenses or to pay their taxes in real-time,” Berry explains. “For the trucking industry in particular, we have a way of automatically weighing their trucks and assessing them fees. It’s really the wave of the future in terms of having less of a labor force associated with this kind of work.” For this reason, Berry believes it’s all about IT governance. “We have communities of interest, COIs,” he says. “They deal with the priorities of the IT projects from the customer perspective.” But he has to ensure that his directors have an understanding of the customer’s business. “I allow my direct report managers to manage a COI along with the customer. So my direct report managers are firstly involved in applications development, but secondly customer relationship managers,” Berry reveals. “Structurally, you have to have these kinds of conversations that enable business but also brings IS to the table and makes them a mutual partner within the business.”

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David Schuff Temple University David Schuff has been a faculty member at Temple University’s Fox School of Business for 10 years.

Schuff has seen a remarkable shift in the way that business and technology come together. “We used to talk simply about having to integrate business and technology. But now we need to explore opportunities afforded by technology more deeply, because the business layer is going to be occurring anyway,” he says. “So now technology is the information infrastructure and it’s always what drives and enables the marketing function to be able to do what they do,” Schuff explains. “We have to stop thinking about these fields as two different sectors. We’re really trying to teach our students that the technology piece is the enabler of what everyone else is trying to accomplish.” There also needs to be a shift in the way that successes are measured. Usually, a project is deemed a success if it get implemented on time or on budget. But its success should be tied directly to a business outcome. This requires a great deal of communication, not only in a simple exchange of ideas, but the right kind of questions being asked. “Instead of trying to get the marketing people to think more robotically, what you want is for the IT people to ask the marketers to clearly define success,” Schuff says. “Part of the IT professional’s job is to figure out how to turn the fuzzy outcomes into measureable outcomes.” To accommodate this, the faculty at Temple is re-working their MBA concentration in information systems, shifting the focus away from managing databases at a technical level. Instead, they want to focus on interpreting data and making decisions based on that data. In addition, future executives need to understand how to present this flood of information to management in a way that they can understand. Marketing is the most prominent example of this. “The benefits of data analytics are the most realizable and obvious if you do it properly within the marketing department,” Schuff says. At the same time, the incredible amount of consumer-oriented data being generated may trigger a shift of power from the CMO to the CIO. “It might be your IT people saying, ‘Well, according to the numbers, if we do A, then B will happen,’” Schuff says. As an academic, he loves to deconstruct everything. “Is an information system department really necessary?” he wonders. “Shouldn’t there just be information systems people in all the functional areas?” One thing is certain: the data generated by IT needs to be credible. As for marketing, their decision-making needs to be impeccable.

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Most problems occur in the communication between IT and marketing. “Mostly, IT just hears the marketers come in and ask them to solve their problems. They’re not saying what they want to happen and the problems they want to solve,” Schuff says. The marketers need outcomes, and the IT function needs a clear set of requirements. Not only do both parties need to learn how to ask for what they need, but the communication needs to be more than hundreds of emails every day. “All that communication does is add more information to a process that’s already flooded with information,” Schuff says. “You need meaningful collaboration instead of just communication.” This can, to some extent, be fostered structurally. “The tools have to be constructed in a way so that the IT people aren’t the complete gatekeepers to the data.” Schuff explains. “The CMO should be able to use the information without having to go to through the CIO to get to it.” This frame of mind, in a perfect world, would flow throughout the company. “If you’re a regular employee, you should be able to get to the data.” In addition to the useful and transparent management of data, control of this data will be an issue in the future. “IT might claim to own everything that comes in via the website, while customer service claims everything that comes in through the telephone support lines. Everyone needs to understand that it’s actually the company’s data,” Schuff says. These issues, while some can be solved through technical infrastructure, will require seismic shifts in corporate mindset.

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Jehoshua Eliashberg Sebastian S. Kresge Professor of Marketing; Professor of Operations and Information Management The Wharton School of the University of Pennsylvania Jehoshua Eliashberg’s areas of research include marketing, operations and R&D interface; marketing research; customer relationship management; pricing; new product planning and forecasting models; and marketing and strategic issues related to the entertainment and pharmaceutical industries.

Like many of the other experts interviewed in this study, Jehoshua Eliashberg credits the natural predisposition of marketers and IT people for the natural disconnect between CMOs and CIOs. Marketers are more creative and open structure people, he says, while CIOs are more rigid and budget oriented, and they prefer technical issues over strategy. Additionally, Eliashberg says companies’ organizational structure further encourages this marketing and IT detachment. CMOs usually report to the CEO or COO while CIOs and CTOs typically answer to the CFO. As such, the management of each function operates own its on agenda without understanding the objectives of their counterparts. “Marketing people look at IT and ask, ‘What benefits do you offer here? Are you more inclined towards developing new platforms to help us sell our product, or are you more interested in collecting information for internal use?’” Eliashberg says. Despite their differences, external factors are dictating a change in CMO-CIO behavior. Specifically, changes in consumer behavior towards more digital technologies require a more functional partnership between marketing and IT. However, Eliashberg also identifies several strategies companies can employ to catalyze collaboration internally. If put in the same work environment for eight hours a day and made jointly accountable for the same project performance, marketers and IT people will have no choice but to grow comfortable with each other. Eliashberg also endorses the idea of determining compensation based on mutual performance and realization of shared goals. For example, in the case of consumer defection, if IT people install solid technology infrastructure that helps reduce defection rate, Eliashberg believes the IT people should be compensated along with marketers. “IT people should not be held responsible only for traditional IT like metrics of performance,” he says. “They should also be compensated and rewarded for metrics traditionally used in the marketing domain but that now have a lot to do with IT support.” Another strategy to overcome the CMO-CIO divide is through better crossfunctional training. Instead of looking for marketers versed in technology or IT

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people with an understanding of marketing, companies should look for individuals fully trained in each area. Eliashberg emphasizes the value of computer science people who earn MBAs to build their strategy skills or marketers formally versed in technologies and infrastructure installation. While many experts advocate the need for a disrupting change agent to further expose the need for CMO-CIO collaboration, Eliashberg views this trigger as more of an extension than disruption. Fostering an enhanced marketing and IT partnership can open new opportunities and leave companies strongly positioned in digital media. For example, consumers are increasingly following innovations in mobile technology like location-based couponing. Organizations that embrace this change in marketing and IT communication early will be better positioned to take advantage. For IT executives, Eliashberg believes the opportunity to take advantage is in helping marketers achieve a single view of the consumer. Given the various touch points and ability of IT to collect consumer data, companies waste opportunities when CIO’s hold one view of a customer and CMOs have a different view based on different data collected in another platform. “The challenge to IT is to provide these platforms that ultimately lead to a single view,” Eliashberg says. “Marketing today is moving toward one-on-one marketing, so we need to know who the individual customers are. I need to have a single view of who they are based on the multiple touch-points where we can collect data about them.”

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Peter Fader Frances and Pei-Yuan Chia Professor; Professor of Marketing; Co-Director, Wharton Interactive Media Initiative The Wharton School of Business, University of Pennsylvania The Wharton Interactive Media Initiative serves as a matchmaker between companies who are sitting on tons of data and academics who thrive on analyzing those datasets. For the past 24 years, Fader has been looking at big customer behavior datasets in order to make predictions and offer advice. His efforts have also been focused on raising the level of quantitative literacy among data-driven firms.

The reasons for collaboration between CIO and CMO are obvious: “The explosion of data isn’t slowing down. At the same time, the walls that exist within an organization aren’t coming down,” Fader says. More specifically, the differences between the two groups are vast. “Neither one really understands the other – there’s a great deal of skepticism. There’s a lot of stereotyping about what the other does,” he explains. “They have different objectives. It’s not necessarily adversarial, but if they don’t understand each other, they can’t work well together.” “Most of the burden lies on the marketing side, because they see the CIO and information technology as a constraint and an impediment, and that’s often not warranted.” The key to harmony between these two groups is a focus on data. “Making a genuine effort to understand what the data means and to harness its power will be great incentive for the marketing folks to work with the IT people,” Fader says. This attention to data is more complex than it sounds. “Too often when companies decide they want to move ahead and become more customer-centric, they look in the wrong spot. They’re looking at, for example, the customer’s likes and dislikes instead of the particular buying patterns that customers show.” These buying patterns can be analyzed even further. “Companies should be focusing on calculating customer lifetime value. Segmenting the customers. Allocating resources according to their future value.” Fader explains. “If you’re a marketer focused on this kind of research, then you really want the CIO as a partner because they’re going to help you harness the data and extract value from it,” he says. “The CIO will also enjoy that process because they’ll start to see a very meaningful ends for the means that they provide.” But pushing customer patterns to the forefront will create multiple challenges because the traditional structure of product development and product-oriented divisions don’t fit nicely into the truly customer-centric perspective. A shift in mindset is in order.

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Fader has two ideas that, if implemented, would change the marketing game. “There’s a tremendous amount that companies can learn from seemingly unrelated companies and industries,” he says. “Too often people are looking for best practice within their vertical and that’s usually a mistake because you end up with incompetent firms chasing each other around.” This approach will help executives collaborate within their own company. “If you break down the barriers between companies, then it becomes easier to break down the barriers among the silos within a company.” Finally, the marketing community needs a wake-up call. “There needs to be an acknowledgement that the marketing function as it is practiced is broken. It doesn’t need to be tweaked – it needs to be overhauled.”

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About the CMO Council The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide-range of global industries. The CMO Council’s 6,000 members control more than $200 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include over 12,000 global executives across 100 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council’s strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Marketing Supply Chain Institute, Customer Experience Board, LoyaltyLeaders.org, Online Marketing Performance Institute, and the Forum to Advance the Mobile Experience (FAME). www.cmocouncil.org

About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 204,000 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$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.

About Accenture Interactive Accenture Interactive guides companies on the journey toward agile, intelligent marketing. Our services cover all aspects of digital consulting, marketing analytics, and media management. Accenture Interactive’s methodologies and assets enable closer interaction between the marketing and technology functions, driving both organizations toward a common end goal: customer relevance. Its home page is www.accenture.com/accentureinteractive

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Driving Digital Marketing Performance With the Right Platforms, People, and Processes

integrate to accelerate Digital Marketing value

CONTENTS

3 5 6 14 17 43 74 75 76

Introduction Leadership Committee Key Findings Expert Commentary Detailed Findings Expert Insights About the CMO Council About Acceleration About Our Partners

integrate to accelerate Digital Marketing value

INTRODUCTION With more than $1.5 trillion spent on marketing and communications worldwide, there are significant incentives for global enterprises to improve the way they allocate, optimize, and justify spend. Consider consumer adoption rates of digital engagement channels: • 75.6 percent of the US population is online • Two-thirds of web users will use social networks • 70.8 percent of web users will watch online videos • 88.1 percent of web users over age 14 will browse or research products online • 83.9 percent of these researchers will make at least one purchase Without question, marketers are at the apex of digital evolution as organizations are rallying around technology. Functional marketing silos are being imploded and tightly connected for improved collaboration, integration, workflow, and use of critical data using advanced marketing automation platforms. Determining the optimal way to go to market has never been more challenging. A multitude of new media channels and online/mobile avenues of market access are fragmenting media buys. Channels of distribution are multiplying, requiring broader, more diverse, and customized marketing support. Sophisticated customer information gathering and database marketing techniques are seeing big shifts of marketing resources into areas that allow for improved behavioral targeting and personalization to optimize response and revenue potential. Market pace and velocity require more efficient and intimate online customer engagement, quicker product uptake, and viral affirmation through social and shared interest networks, as well as greater prominence and cost-effective prospect acquisition through websites and contextual search optimization, web content delivery, and pervasive mobile connectivity with customers. Today’s marketing planning process requires better data integration and analytics, more accurate forecasting and predictive modeling, higher levels of marketing group participation and accountability, and the deployment of closed-loop campaign performance dashboards. This will be driven by a wider embrace of marketing automation platforms processes, continuous business activity monitoring, and intelligence gathering across all customer touch points, interactions, and transactions. Customer expectation in the digitally driven world demands targeted, relevant, and meaningful engagement at every turn. As more customers consider defection from brands because the information, content, services, promotions, and engagements lack relevance and resonance, marketers must look to data-driven strategies that deliver the right message to the right customer at the right time—and in the right channel. Marketing must forge and reinforce the ties between technology, customer data, and the customer experience. Given the significant shift and reallocation of marketing dollars into interactive digital media channels, the CMO Council has set up a dedicated research center focused on measuring and tracking the effectiveness, relevance, and value of online marketing programs and spend. This new entity, the Digital Marketing Performance Institute (www.onlineperformance.org), will examine and advocate the need for more unified and integrated approaches to managing and optimizing the fragmented interactive marketing discipline.

integrate to accelerate Digital Marketing value

The report and insights that follow are the first salvo into this ongoing dialogue. Digital marketing will continue to evolve at this rapid, frenetic pace. New engagement channels will emerge. Solutions like email and CRM platforms will take on the role of traditional digital marketing tools as new, more glamorous channels—like social media, in all of its forms— continue to captivate customers. The first and perhaps most critical step to establishing a long-lasting digital strategy is to develop an integrated infrastructure that allows for flexibility and meets key goals for the business. Chief marketers are in need of consultation, guidance, and direction when it comes to helping them specify, implement, and adopt digital marketing architectures, strategies, practices, and solutions. They are challenged to staff and resource digital marketing programs, integrate offline and online campaigns, as well as unify disparate marketing functions, data sources, and go-to-market processes. More importantly, they have to be effective at making a business case to management on how digital marketing investment and migration will drive business performance, increase customer lifetime value and retention, and create more adept and adaptive organizations. Big data-driven marketing automation is no panacea. It is filled with pitfalls, problems, and potholes. Understanding the requirements and mapping and modeling the journey takes outside expertise and knowledge from an unaligned resource. This report looks to help marketers take that first step toward leaping over the competition and ramping up the value from digital marketing investments. It is truly about accelerating the process to more efficiently reach a point of success. What this report truly outlines is that everyone in the process—marketers and C-suite management alike—is ready for takeoff. Marketers are armed with a box full of pins. What is missing is the right pincushion that can tie all of the technologies and data together. .

integrate to accelerate Digital Marketing value

Leadership committee Tim Suther

Lynne Brum

Mark Phibbs

Andisa Ntsubane

Senior Vice President, Chief Marketing Officer Acxiom Senior Director, APAC Marketing Adobe

Markus Kramer Global Marketing Director Aston Martin

Michelle Waldgeir Vice President, Marketing Astrum Solar

Drew Panayiotou

Senior Vice President, US Marketing BestBuy

Rich Brayer

Vice President, Marketing Car-X Auto Service

Richard Stamets Strategic Marketing Executive Specialty Solutions Group (a Chartis company)

Steve Carchedi

Chief Marketing Officer GE Healthcareâ&#x20AC;&#x201C;MDX

Nicholas de Kouchkovsky

Chief Marketing Officer Genesys (Alcatel-Lucent)

Charlie Cole

Former Vice President, Online Marketing Lucky Brand

Vice President, Marketing and Corporate Communications Metabolix Director, Marketing and Communicatons Microsoft-South Africa

Robert Solomon

Senior Vice President, Chief Marketing Officer Outrigger Enterprises Group

Lapo Paladini

Senior Vice President, Chief Marketing Officer PerkinElmer

Robin Saitz

Senior Vice President, Solutions Marketing PTC

Suaad Sait

Chief Marketing Officer Rackspace

David Friedman President, Marketing Sears

Isaac J. Turk

Director, Database and Marketing Analytics SiriusXM Radio, Inc.

Roger Menz

Vice President, Global Marketing Sony Music Entertainment

Gina Testa

Vice President, Graphic Communications Xerox Corporation

integrate to accelerate Digital Marketing value

Key Findings By the year 2017, Gartner predicts that the chief marketing officer (CMO) will outspend the chief information officer (CIO) on IT. Gartner points to projected increases in marketing budgets in the neighborhood of 9 percent, while IT budgets are predicted to increase by almost half that rate at 4.7 percent as a key contributor to this shift in technology budget control. The analysts also believe that the real proof is that marketing—from operations through campaign execution—has become increasingly technology dependent, and that the rise of big data will continue the push toward a dominant digital marketing future. What is missing from this story of marketing dollar domination is the rationale driving the organization to rally around digital marketing investments. In reality, digital marketing investments to date have already been sizable, and while that amount is arguably less in total spend compared to the large advertising budgets of the past, new digitally directed marketing investments are being made with an intentional effort to realize the opportunities in efficiency, engagement, and intelligence that digital marketing holds. Many marketers are looking beyond the investments of today and are focused on what will be required to leapfrog the competition and gain a true competitive edge in tomorrow’s age of an even more demanding, mobile, and highly digital consumer. To add some body around this digital marketing dialogue, the CMO Council, in partnership with digital marketing consultancy Acceleration, engaged in a thought leadership initiative to better understand where and how marketing technology budgets were being applied specifically to digital marketing platforms and applications, and where the opportunity lies to accelerate performance and business outcomes through digital marketing. Dubbed “Integrate to Accelerate Digital Marketing Value,” the six-month program includes interviews with digital marketing leaders who are pushing the bar upward in the strategy, measurement, and outcomes of digital marketing investments. The program also surveyed more than 200 senior corporate marketing leaders to gain a better understanding of the platforms, people, and processes that comprise their winning digital outcomes. What we found was a changed environment for marketers—one that has not necessarily been the norm for some time. Like never before, the C-suite is looking to digital marketing as a strategic imperative, allocating budgets and resources to fully exploit and leverage the opportunity. With this heightened expectation and support also come key challenges that marketing must begin to address. Specifically, marketing’s reluctance to fully leverage IT as a partner rather than a handyman simply on site to maintain the older systems must come to an end. Marketing must also take a step outside of the cocoon of point solutions and communicationscentered applications to focus on those data-driven engagement platforms that work to deliver a more personalized, relevant, and intelligent experience for each customer. It will only be through this bond between technology and data that real advancements for the business and marketing can be achieved. And while marketing currently has C-suite support to execute, the window to take that next leap forward will not be open forever. It must be capitalized upon now, before the next evolution of technology takes marketing by storm.

integrate to accelerate Digital Marketing value

key findings

Management Support Boosts Digital Enthusiasm If we look back five years, the support for the CMO—let alone support for spending in digital marketing as a strategic business driver—was more of a wish than a mandate. In the 2007 study, “Define and Align the CMO: Taking a Measure of the Chief Marketing Officer,” the CMO Council asked CEOs, presidents, and board-level executives where and how marketing was impacting, influencing, and driving the business. While marketing officers held high levels of influence and clout in decisions around branding, marketing planning, and operations, digital marketing (or eMarketing, as it had been dubbed then) was viewed as a more tactical or executional decision. And at the time, this seemed perfect for the CMO as marketing had yet to earn a high level of clout within the C-suite, being largely seen as a branding or advertising functionary. Those savvy corporate leaders had started to apply a new measure to the top marketer spot, demanding higher levels of business acumen, financial knowledge, and a digital marketing preparedness that would allow a CMO to recommend, identify, and implement new media and digital marketing solutions. As CEOs and board executives were asked to rank the requirements of tomorrow’s CMO, the top four requirements were: 1. Have strong business acumen. 2. Possess exceptional measurement and analytical abilities. 3. Be the connective tissue of the organization—bringing together far-flung disparate tools, solutions, and resources. 4. Have superior technology and Internet expertise to specify, deploy, and quantify the business impact of new and emerging digital solutions. Today, marketers have gained credibility and influence, having added the measurement, visibility, and operational rigor to marketing that the C-suite had once deemed as lacking. Further, marketing has elevated the digital marketing conversation from one that was largely tactical into a strategic focus that is embraced by C-level executives. When asked to what degree digital marketing had become a topic of conversation and focus for interaction with C-level executives or line-of-business (LOB) owners, 20 percent of marketers state they have a mandate and the budget to execute while 42 percent say they have strong interest and active support at the LOB level. But while 23 percent admit that management is still trying to understand where digital fits into the overall business, it is clear that digital marketing is a hot topic around the C-suite table. This clear support has been largely driven by the belief that digital marketing will play a transformative role over marketing as well as the business at large. Specifically, management is looking for increased marketing performance and clear ROI through more efficient digital media channels; better customer engagement that is more robust thanks to the adoption of personalization campaigns that leverage customer insights and analytics; as well as a call for marketing and engagement to match the current demands of customers who expect live, ondemand, and always-on engagement opportunities with brands and companies. “Consumers want transparency across the channels, and that requires technology and channel management and strategy; that’s something we value highly and monitor carefully,” says Robert Solomon, Senior Vice President and Chief Marketing Officer for Outrigger Enterprises Group. As a busy hotelier and resort destination, marketers like Solomon must implement applications with

integrate to accelerate Digital Marketing value

key findings

the ability to extract actionable and insightful information, especially those that illuminate crosschannel behaviors to deliver the ultimate customer experience. This reinvention of the experience through data in a timely, profitable, measurable, and efficient fashion has only amplified the desire and excitement of senior management. Especially enthused are LOB heads, who are likely seeking ways to amplify the new product launches that were slow to roll out in the depressed economy, but were rolling out with a vengeance over the past 12 to 18 months. When asked which digital marketing processes and functions had the most appeal, management and LOB leaders pointed to: • Customer data integration, analytics, and personalization of market interactions (62 percent) • Website performance improvements and richer online engagements (61 percent) • Lead acquisition, conversion, and upselling/cross-selling of customers (60 percent) • Behavior-based insight gathering for more effective segmentation and messaging (41 percent) • Search marketing and online advertising optimization (39 percent) Accelerated performance across go-to-market activities and increased visibility into demandgenerating campaigns will only strengthen the resolve of LOB owners to throw their support behind digital investments. However, this may also be perpetuating a more fragmented digital infrastructure as different segments of the business gravitate to individual point solutions in the digital portfolio.

Application Fragmentation Threatens Digital Acceleration While a steady stream of senior support is boosting marketing’s resolve in seeing the digital transformation through, the rapid evolution of technologies, disconnects between point solutions and legacy infrastructure, and increasing complexity across technology can threaten the integration of digital marketing across the enterprise. More than one-third of respondents indicated that their current state of digital marketing adoption and integration was a random collection of point solutions and not very integrated across the enterprise. And as 44 percent of marketers see their own digital strategies as still being at an exploration level, with teams continuing to evaluate all options, few are leading the pack in expertise or integration. Interestingly, those same marketers who lament over a largely fragmented digital marketing portfolio are also the same respondents who failed to include a key internal resource that could help establish a more integrated and aligned roadmap—the CIO and IT team. Only 32 percent are teaming with IT to specify needs and requirements, and even fewer (26 percent) are developing multidisciplinary task forces to lead the assessment process. When asked how marketers were teaming with the CIO and IT group to map digital marketing architectures and roadmaps, 48 percent are seeking insights on existing infrastructure, and 37 percent want to better understand how legacy systems can interface with new marketing solutions. Again, joint task forces are seldom utilized, as only 32 percent of marketers have teamed with IT to lead initiatives. Consider the assessment and teaming practices of those marketers who identify themselves as being high-performance, data-driven digital marketers. Of these digital gurus, 26 percent

integrate to accelerate Digital Marketing value

key findings

are developing a combined task force to create roadmaps and evaluate solutions. They are also including the customer in the platform assessment process, as data-driven leaders place equal emphasis on the customer’s own preferences in engagement channels and research about the marketing technology landscape. This is compared to the general respondent group who prefer to turn to internal marketing teams (59 percent) or source best-practice studies and analyst reports (51 percent). Best-practice leaders have indicated that this strategic partnership is critical at numerous stages of the digital development process. “Our current IT infrastructure has allowed us to go to market more efficiently than before,” explains Markus Kramer, Global Marketing Director for Aston Martin. “Because there is no real barrier between the marketing and IT teams, we’ve modeled an architecture that fits our organizational size and makes it easier to deal with the complexities we face.” The connection has proven to be especially valuable through the budgeting and planning processes, especially when marketing must make a business case for the proposed IT investments. Despite only 24 percent of marketers turning to IT to assist in making a business case for investment, bestpractice leaders are often turning to IT and even reaching further across the enterprise to ensure value, ROI, and real benchmarks are in place for every investment. “In determining our digital investments, the business, finance, strategic analytics, and IT teams collaborate on a business case that is based on estimates and benchmarks across cost per acquisition through ROI for a given campaign or program,” explains Isaac Turk, Director of Database Marketing and Analytics for SiriusXM Radio, Inc. “If an area proves to be effective, management is willing to increase spending in that area until the marginal economics dictate otherwise.” Marketing may also be missing an opportunity to access data and insights into disparate customer data resources and to incorporate these insights into existing platform usage. Understanding how organization resources and customers are using and engaging—or more specifically, are not using and engaging—with technologies can provide even deeper insights into where investments can be eliminated or augmented. Regardless of this lack of partnership, marketers are continuing to make a bold path into continued investment into digital platforms. Relative to digital marketing success, point solutions lead the way. A notable 67 percent of respondents have found email marketing the most effective, and they plan on continuing investments over the next 12 to 18 months.

Launching Beyond the Comfort Zone While email solutions, web analytics, and even social media monitoring tools have been in the marketing ecosystem for some time now, respondents indicate that continued investment or reinvestment will continue. New advancements in the speed, efficiency, and functionality of these platforms and applications continue to entice marketers to upgrade or advance to the next great solution that will continue to drive digital effectiveness forward. But quite unintentionally, marketing has landed in a comfort zone of sorts, continuously looking to improve and refine known communication, web, and engagement applications and often overlooking critical drivers to overall business and marketing operations improvement. Take, for example, the three key questions we asked marketers about the individual digital marketing solutions available to them that have shown success, and which of these platforms are integrated and aligned across the organization.

integrate to accelerate Digital Marketing value

key findings

Top Five Responses

Currently Deployed

Expect to Deploy

Integrated and Aligned Applications

Social media monitoring

Web analytics

Marketing analytics

Web analytics

Online advertising

Social media monitoring

Web analytics

Demand generation

Campaign execution

From these three questions, a pattern begins to emerge that may indicate that rather than branching beyond core functions and digital marketing expertise, marketers are sticking with points of tactical execution that have been proven over time. The data also suggest that while platforms outside of this comfort zone are on the marketing radar, they require a new or even more advanced level of talent or expertise than what is currently available to the marketing function. The least utilized, least invested in, and least integrated and aligned applications are also those platforms that are largely dependent on cross-functional collaboration and partnership, that apply additional measures and metrics to harder-to-manage processes, or are representative of advanced (and perhaps too advanced) analytics.

Bottom Five Responses

Currently Deployed

Expect to Deploy

Integrated and Aligned Applications

Marketing supply chain management

Multichannel contact and service center

Viral word-of-mouth marketing

Marketing supply chain management

Agency performance management

Mobile relationship marketing

Social media monitoring

Multichannel contact and service center

Attribution modeling

Agency performance management

integrate to accelerate Digital Marketing value

key findings

Each of these applications also has a key place in the overall marketing operational picture, adding management and rigor to often out-of-control processes that can lack visibility and accountability. For example, integration of a marketing supply chain management tool can reduce operational overhead and manage and measure the impact of individual marketing campaigns and creative executions while also applying keen procurement and finance-based measures to the overall marketing operational process for managing consumables. Yet few marketers really understand what the nature of their marketing supply chain is—and getting a handle on this situation will require involving groups as far reaching as finance, operations, procurement, and customer service. Often, it is easier to focus on the known variables like web analytics. Turning back to those best-practice leaders driving engagements through data, it is interesting to note where investments will be made in the next year. According to this elite group, the next 12 months will see investments in marketing resource management applications (27 percent), campaign and workflow management tools (32 percent), email (38 percent), and social monitoring (46 percent) re-investments, opting to focus more on those technologies that can advance the process and deepen customer engagement. “We learned that it doesn’t make sense to put all of your eggs into one basket; you need to create various programs, and they need to be measureable,” says Drew Panayiotou, Senior Vice President of US Marketing for Best Buy. “We use a number of standard metrics, but we need to get better in how we use them.” According to Rich Brayer, Vice President of Marketing for Car-X Auto Service, a core challenge to developing an advanced digital marketing strategy is the sheer velocity at which both consumer preference and technological advancement are evolving. “What worked two months ago may no longer work, and we don’t always understand why. We’re constantly measuring ourselves against standards that may have changed,” Brayer explains. “Sometimes, it isn’t a matter of having technical knowledge or expertise; it’s a question of whether we understand what people are telling us and why things change.” This makes aggregation of cross-functional customer data and intelligence critical to an optimized digital marketing architecture. Another core component is tapping the right talent to monitor, analyze, measure, and execute on programs across this integrated system. And acquisition of talent in this digital age has become more difficult than the acquisition of customers for some marketers.

Coupling Top Technology With Top Talent Beyond the technology, platforms, or applications, talent often emerges as a key challenge and roadblock to those marketers looking to take the next step into digital marketing performance and excellence. Let’s consider the resources marketing is turning to in the process of assessing and identifying key digital marketing technologies. Internal marketing resources tend to be the primary experts when it comes to developing a digital marketing architecture, but marketing executives also admit they are not wholly satisfied with the outcome and result of this resource. A staggering 77 percent of marketers said their primary source for evaluating and specifying technologies was their own internal team, and an additional 46 percent are turning to vendors and solutions providers to provide platform intelligence. Only 17 percent are turning to expert consultants that specialize in digital marketing—ironically, the same percentage of marketers who are inclined to turn to their CIO for insights.

integrate to accelerate Digital Marketing value

key findings

The most common complaint among marketers who find themselves disillusioned with their current resources is that as technology is speeding forward, talent development is not advancing at the same frenetic pace. Roger Menz, Vice President of Global Marketing for Sony Music Entertainment, notes, “While enthusiasm and excitement over new and shiny platforms is exceedingly high, the level of real understanding and expertise is just not fully developed. And enthusiasm and excitement does little to sway the minds of management who is looking for a dollars-and-cents business case to substantiate the dollar and overhead investments.” As marketing is also reinvesting to spur on continuous improvement in certain key areas, the next step up in talent is hard to develop. “Before, you had big CPG companies with people who were proficient in brand management, but now there’s no training ground for digital; no one is developing savvy digital marketers with any degree of velocity or volume,” concludes Panayiotou. This frustration over talent development is evident, as 23 percent of marketers identify recruiting the right talent to run advanced digital marketing programs as a top concern or challenge already being experienced. Talent can certainly be trained, however, and as digital advancement continues, more highly trained and skilled digital gurus will emerge. But this talent must be empowered to fully leverage data and internal partners to maximize the potential of the technologies in which marketing will continue to invest. While budget is a clear and very real constraint, a lack of integration and alignment around far-flung technology platforms can actually do more to confuse, dissect, and separate the digital marketing architecture.

Conclusion Like never before, marketers have reached an inflection point for digital marketing. The choice will be to continue to hover in the comfort zone of technologies and applications, happily continue to perfect and reinvent core digital applications, or to take the next evolutionary leap to intentionally map and develop an integrated digital marketing program that seamlessly binds technologies with customer data. This architecture must be one that allows for the ebb and flow of talent, can adapt to new advancements in individual solutions or functions, and has specific points of metrics and measurement to allow marketing to monitor and continuously improve the marketing process and the customer experience. Without this roadmap, marketing will continue to make monstrous investments into disconnected point solutions that can only hope to stand alone, being connected by the sheer force of will exerted by marketing leadership. If marketing is to truly fulfill the business mandates set forth by management, the digital marketing outlook must do more with customer data; prime the sales pipeline with qualified leads; provide multi-channel, robust customer experiences that can be tracked across all cross-functional touch points; and adapt quickly. In this current state, marketing has an abundance of pushpins at its command, but it seems to be missing that ideal pincushion to house, organize, and eventually optimize placement. Like any good structure, digital marketing requires the right underpinning that can withstand even the most shocking and dynamic changes. And as advancements in technology promise efficiencies, greater productivity, and improved visibility into the business operations of marketing, management will respond with even greater support—and possibly even greater budgets—to continue digital marketing’s advancement and prominence.

integrate to accelerate Digital Marketing value

key findings

The key issue at hand today is not which email platform to deploy or even how to aggregate social data. The key issue is identifying the right resources and structure to support all of these point solutions in a strategy to integrate and align digital marketing across the organization. Once this architecture is mastered, organizations have the opportunity to advance beyond the competition and assume the role of a segment, industry, or business leader.

The Keys to Data-Driven Excellence Seven percent of respondents indicated that they excelled at leveraging data as a core foundation to their digital marketing programs. These data mavens have similar characteristics that have helped drive them to this position, ranging from the level of partnership with IT in developing strategic roadmaps to the insights and intelligence that are gathered from customers to help support digital marketing investments. Here is a brief overview of the hallmarks of these digital data-driven leaders, derived from the responses provided in this survey. Hallmarks of Data-Driven Digital Marketing Leaders: •

They enjoy a high level of approval, conversation, and strategic support for digital marketing adoption.

•

These leaders have formed a taskforce with IT to lead and develop integration plans and strategies. They are also leveraging IT to provide insight into application use and adoption.

•

Instead of primarily turning to internal voices, data-driven leaders turn to their customers (30 percent) to determine their customers’ preferred methods of engagement and digital communication.

•

In the next 12 months, they will implement marketing resource management applications (27 percent), campaign and workflow management tools (32 percent), email (38 percent), and social monitoring (46 percent) re-investments.

•

They are laser-focused on the delivery of timely, relevant, and targeted communications (72 percent).

•

Their measures of success include metrics around conversion and closure rates (35 percent), upsell and cross-sell opportunities (10 percent), and response rates (55 percent) as compared to the general information gleaned from campaign impact and effectiveness measures (52 percent), and web search and analytics (39 percent).

integrate to accelerate Digital Marketing value

EXPERT COMMENTARY FROM Among winning marketing organizations, the promise of digital marketing has arrived, yet architecting and integrating the underlying foundation is not easy to envision or develop. Nonetheless, embracing the digital dimension of your brand relationship with customers is the imperative. The real issue lies in marketing’s ability to move forward in a real effort to leapfrog the competition and truly build business momentum through digital marketing performance. But where is the best place to start? In the next 18 months, we recommend focusing on three key areas that—when combined—will provide you with the agility and strength to succeed in building your brand with powerful digital marketing technology. 1. Invest. Make key investments today to be ready to execute your competitive strategies. Expand your digital capabilities ahead of the curve with best-practice techniques, extensible tools, and flexible expertise. 2. Enrich. Cultivate your cross-channel metrics and interactions while protecting your highvalue digital customers. 3. Establish. Avoid the appealing but dangerous social-internship pitfall. Moving forward on these building blocks brings marketing organizations mid-term advancement and long-term competitive advantages. The key benefits and outcomes include clear accountability of marketing investments, customer-driven intimacy, and increases in lifetime value of the brand’s digital consumers.

Make Investments in Digital Capabilities to Ensure Readiness

Software as a service (SaaS) offerings and the era of “big data” have presented new options, yet the fundamentals remain. To achieve a successful return from your investments in digital marketing technology, you must have strength in the cornerstones of your infrastructure, which should include: • Technology tools • Data accessibility and protection • Business processes • People (staff and extended experts) New marketing requirements demand even more flexibility and quicker deployment of offensive and defensive marketing strategies. When achieved, this creates the competitive edge in digital brand experiences. New revenue and time to market become the key measures. Without a reinforced and solid infrastructure, areas of vulnerability will become readily and painfully visible. The typical weaknesses in this area are 1) disconnects in point solutions, 2) untamed customer data due to a matrix of ownership with agencies, and 3) inflexible and under-powered technology and lacking expertise within your company. The solution is to plan for your broader, longer-term capabilities, including: 1) implementing technology tools and data integration/management, 2) developing efficient workflows, and 3) committing to talented experts who will connect with and turbocharge your existing team and agencies. At Acceleration, we call this Enterprise Architecture Planning. It requires collaboration between key marketing executives and their C-level counterparts to articulate their digital marketing vision, and then we design the infrastructure plan that will support the execution of the CMO’s vision, with each phase proving a positive return. © Copyright CMO Council. All Rights Reserved. 2012

integrate to accelerate Digital Marketing value

Cultivate Your Cross-Channel Customer Relationships at Higher Levels of Trust

Marketing often looks through one of two strategic lenses—acquisition or retention programs. But the real opportunity is to look at these two situations through the eyes of unified and augmented customer data to drive performance across both strategic situations. The retention situation: Digital customers are created across multiple touch points. Although email is your workhorse and easy to measure, your personalized website internal ads or your Facebook initiative may be contributing to the most valuable new customers. The good news: It’s likely that your current web analytics tool set can be extended to provide an Integrated media measurement environment. The outcome will be the equitable allocation of costs and relationship value to the collection and sequence of interactions, often referred to as attribution modeling. The acquisition situation: Digital marketers are aggressively moving toward buying audiences in real time. This means that data is the new fuel of digital marketing. This has everyone, from ad networks to data providers, scrambling to own that data and use it to their advantage. That means nearly every third party serving an ad or widget on your site is attempting to gather and reuse your customer and visitor data, either secretly or openly. Not only is this data and value leaking from your business, but it also increases the legal risks relating to new legislation (UK Cookie Law and USA Do Not Track Legislation,) which controls the approval, collection, and use of data. More good news: Best practice and legal compliance are now affordable and enabled through a new category of digital marketing technology called customer data management. Acceleration offers expert consultation to establish an environment of procedures and automation to protect your digital customer data assets and—most importantly—your brand. In summary, we recommend that you are equipped with state-of-the-art customer digital data management, privacy management, and cross-channel optimization. While much of this can be done internally, many organizations find that they lack expertise in their resources to be able to ramp up quickly. For many of our own clients, we have filled that void, applying these solutions in practical and tangible ways. The key is really to make the commitment to accelerating customer engagement through customer data and activating the right technologies to make these strategies a reality. The best news is that it can be done.

Establish Your Enterprise Environment for the Business of Social—Fast Moving and Cross-Functional

The most common mistake we have encountered in the social media management era is famous brands hiring interns to handle their social initiatives. This has been disastrous, and we often find that instead of working to optimize social engagements, we must help our clients recover. Honestly, our preference is to help you avoid this mistake all together and identify a far more effective path forward to achieve success with the business of strategic social media. There are critical strategic areas in social media that you must take into consideration for effective campaign development through ROI measurement. In all cases, social media campaigns require the coordination of multiple resources, both internal and external to the organization. Effective social media campaign operationalization is a multidisciplinary, multi-departmental effort inclusive of these components: • Promotion and social advertising platforms, such as Buddy Media, Unified, SocialFlow, Adobe Social, and SocialTwist

integrate to accelerate Digital Marketing value

• Community management platforms, such as Lithium, Sprinklr, ExactTarget SocialEngage, and Salesforce.com/Radian6 • Measurement and analytics, such as Adobe Social/SiteCatalyst, other web analytics platforms, various web services/APIs, data sources, and custom dashboards creation • Monitoring and engagement of communities, such as social/PR communications agencies like Fanscape, Likeable Media, Cake, Emanate PR, and WhisprGroup • Strategic listening via platforms and advanced analysis services • Creative, editorial, and branding • Voice of the customer (VoC) integrations with customer service operations • Data management platforms with social CRM tie-back to enterprise customer data warehouse

To define a framework and begin incorporating the relevant components listed above, we have recommended to leading brands that they start by: 1. Performing strategic market assessment and research for potential social levers 2. Extending the research to influencers with traditional and digital PR 3. Developing an editorial calendar, timeline with content, and distribution strategy 4. Investing in both paid and corporate-owned media support plans, PR, email sponsored stories, social ads, and paid search driving Facebook interactions 5. Designing the tracking method for measurement and analytics 6. Setting up preliminary and ongoing strategic listening to guide and refine the social presence and framework 7. Most importantly, engaging and hiring the right talent to manage and execute your social business These steps are not necessarily revolutionary. In fact, many of our clients express that identifying the technologies or assembling the right components at the right time is often the most daunting part of the process. The simple truth of digital marketing is that it cannot exist and evolve without a solid architecture and strategic framework that can tether technologies together with data to deliver on the promise of a rich, robust experience for both brand and customer. Where so many organizations begin to float adrift is when that digital marketing strategy only takes the execution or function of the technology into account. The experts and consultants at Acceleration work with brands around the world to architect, orchestrate, and implement marketing technologies that enhance the brand and boost the business. Considering the sheer velocity at which digital technology and customer experience are racing toward each other, marketers cannot afford to wait for a framework to grow organically. It must be an intentional, strategic, and mandated decision to move forward. At Acceleration, we believe you can move forward…and move forward fast.

integrate to accelerate Digital Marketing value

Detailed Findings A work in Progress Few marketers feel they have reached a highly evolved and proven digital marketing strategy. While 35 percent of respondents indicate they have a strategy in place and are currently testing and rolling out solutions, 36 percent admit these solutions are really a random web of loosely connected point solutions that are not well integrated. Interestingly, only 3 percent feel they are being held back by a lack of requisite knowledge to drive the digital process forward, despite other indications that talent acquisition and advancement of digital skills rank highly as key challenges in later questions in this survey.

Q1. How would you describe the current state of digital marketing adoption and integration with traditional practices and functions in your company? (Select one.) 36% Random embrace of point solutions, but not well integrated 35% Digital marketing strategy in place, now testing and rolling out programs 13% Gaining momentum with cloud-based platforms and services 9% Highly evolved with proven value and a clear path of evolution 5% Digital uptake meeting resistance from functions and business groups 3% Lack of requisite knowledge to prioritize and drive this process

integrate to accelerate Digital Marketing value

detailed findings

Support From the Top The C-suite has embraced digital marketing, with many seeing digital marketing performance as a top priority and backing that mandate with the required budget to execute. Only 10 percent of marketers see the C-suite questioning the value and ROI from marketing, and only 5 percent of respondents say that digital is not even on managementâ&#x20AC;&#x2122;s radar.

Q2. To what degree is digital marketing a topic of conversation and strategic focus in your interactions with C-level executives and line-of-business (LOB) leaders? (Select one or more.) 42% Strong interest and active support at LOB level 23% Still trying to understand where digital marketing fits 20% Seen as a top priority with a mandate and budget to execute 18% Important CEO, CIO, and CFO agenda item we have to address 10% Questioning value and ROI of digital marketing 5% Not on managementâ&#x20AC;&#x2122;s radar

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detailed findings

Key Driver for Digital Management is eager to see increases in marketing performance, greater productivity, and added visibility into the marketing process as key benefits from the advancement of digital marketing within their organization. The customer is also a strong motivator, as management is keen to drive more personalized relationships and engagements and answer the growth in social and mobile customer engagements.

Q3. What is furthering managementâ&#x20AC;&#x2122;s interest in digital marketing migration in your organization? (Select top three)

Potential to increase marketing performance and ROI through

63% digital media and online engagement

51% Growth of social networks, tablets, and smartphone connectivity Customer preference for digital media consumption and live,

49% on-demand interaction

49% The promise of greater productivity, visibility, and accountability 34% Competitive adoption and use of digital marketing technologies 10% Internal stakeholder pressure or advocacy 9% Studies, reports, and media coverage 8% Pilot success and organizational receptivity 5% Consultant recommendations and specifications 5% Agency advice and input 2% Solution provider or vendor influence with management 3% Other (please specify)

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detailed findings

Top Goals for Digital Among the top interests management is showing in digital are web performance improvements that can drive richer engagements, customer data integration and analytics, improved segmentation and targeting based on behavior-based insights, and lead acquisition, conversion, and upsell/cross-sell optimization. Interestingly, while tools and solutions that drive business growth and bottom-line improvements are top of mind, enterprise marketing platforms to integrate and align applications have less traction, as only 20 percent of marketers see this as having high appeal among management or line-of-business leadership.

Q4. Which digital marketing initiatives have the most appeal to management and LOB leaders? (Select top five)

62% Customer data integration, analytics, and personalization of market interactions 61% Website performance improvement and richer engagement 60% Lead acquisition, conversion, and upselling/cross-selling Behavior-based insight gathering for more effective segmentation and

41% messaging

41% Campaign execution and brand asset management 39% Search marketing and online advertising 32% Marketing process automation and operational efficiency 28% Social media listening, conversation, and targeted contact 27% Improving customer convenience, access, and experience 23% Online customer community formation and continuous interaction 20% Deploying an enterprise marketing platform to run integrated applications 16% Multichannel contact centers to improve customer service and handling 13% Viral word-of-mouth and experiential marketing programs 10% Relationship marketing and loyalty and rewards program management 10% Mobile messaging, location-based services, and application delivery 1% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Collaboration with IT is Key Marketers are turning to IT to identify how digital marketing tools can fit into or work beside existing technology infrastructure by attempting to better understand legacy systems and how these new marketing solutions can potentially interface. However, marketing is not leveraging IT to establish business cases for technology investments or to source and integrate customer data from across the organization.

Q5. In what ways are you teaming with your CIO and IT group to map and model a digital marketing architecture and roadmap for your organization? (Select those that apply.)

48% Leveraging existing IT infrastructure and investments 37% Understanding how legacy systems can interface with new solutions 28% Review of vendor offerings and technology use cases 27% Formation of a combined task force to lead the initiative 27% Auditing and assessment of marketing platform needs 24% Establishing a business case for marketing platform investment 24% Sourcing and integrating customer data across the organization 20% Providing insight and analytics on application usage and value 13% Background checks and validation of vendor capability 3% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Assessing the Best Platforms Marketing is taking on the heavy burden of assessing which digital marketing platforms and solutions are providing the greatest value and business gains for the organization. They are either working with internal marketing groups to identify needs (59 percent), researching best practice studies and analyst reports about top technologies (51 percent), or investing in considerable research to identify the right platform solutions. However, few are looking outside the organization to bring on experts in digital technologies to help architect the optimal solution

Q6. How are you assessing which digital marketing platforms, solutions, and channels will provide the most value and business gain? (Select those that apply.)

59% Working with internal marketing group to determine needs and priorities 51% Sourcing best-practice studies and analyst reports 39% Researching marketing platform landscape 32% Teaming with IT to specify needs and requirements 30% Interacting with customers to determine preferred methods of engagement 30% Conducting pilots and trials of potential platforms and solutions 27% Gaining input and advice from marketing peers and online groups 26% Setting up multidisciplinary task force to lead the process 23% Relying on vendors and solution providers 22% Inviting bids and proposals from solution and service providers 21% Consulting with business groups and internal users 15% Employing consultants and IT integrators 4% Using resource sites and advisory services (e.g. Capterra) 1% Other (please specify)

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detailed findings

Assistance in Technology Evaluation Marketing is self-identifying, and an overwhelming majority of organizations are evaluating marketing technologies by seeking assistance from internal teams (77 percent) or marketing agencies, including advertising, digital and interactive groups, and digital marketing consultants for assistance.

Q7. Who are your primary resources for the evaluation, specification, and deployment of marketing technologies? (Select top three)

77% Internal marketing team 46% Vendors and solution providers 42% IT department 33% Advertising or marketing agency 22% Interactive marketing firm 17% CIO 17% Digital marketing consultant 13% Industry research analyst 7% IT integrator 5% Purchasing or procurement group 2% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Rating Resource Satisfaction Very few respondents—only 14 percent—have a very high level of satisfaction in these evaluation and specification resources. While nearly half have recognized moderate success, 34 percent actually provide a mixed to very low score

Q8. What is your level of satisfaction with this resource?

46% Moderate 29% Mixed 14% Very high 7% Not sure 5% Very low

integrate to accelerate Digital Marketing value

detailed findings

Lacking resource expertise For those marketers giving their evaluation and specification resources moderate to low scores, the majority feel it is because these resources lack the up-to-date or leading-edge know-how they expect from a digital marketing expert.

Q9. If very low, then why? (Continued from Q8) •

“We have worked with some competent vendors, as well as some completely incompetent ones. Unfortunately, the incompetent ones add much more work as you end up having to bring in another group to fix the mess.”

•

“There is no consistency across all integrated marketing strategies and limited budget and resources to manage and maintain these systems. Without this connection, we are struggling to truly measure our performance and effectiveness in any meaningful way.”

•

“We need to assign more resources to manage the process and connect all of the dots.”

•

“Really poor return on what ended up being escalating costs that our evaluation team simply did not know about—or did not know to ask about.”

•

“The original platform became obsolete almost the minute it was installed…so now, we are starting all over again!”

•

“The team that sold us the solution wasn’t the team that implemented it, so all of the knowledge that my team gave in the sales process was lost during implementation.”

•

“Identification and specification were not the problems…installation was impossible. We are not able to pull in all of the data and insights we need to execute in the optimal manner, so now it feels like we are dead in the water.”

•

“We are currently piloting a technology that was built for a different industry and trying to make it work in ours. So it is evolving to meet our needs, but there are a lot of bumps in the road.”

•

“IT is understaffed, so they were not able to assist the marketing team in selection, and we are paying for it now since IT can’t actually install what we purchased.”

•

“We lacked full knowledge of all the solution sets available, so we went with the one that seemed to fit the best and are less than thrilled with the outcome.”

•

“Technologies are just not getting the right attention from the right resources.”

integrate to accelerate Digital Marketing value

detailed findings

dig for deeper insights Marketers have seen success across email marketing, website interfaces, paid and organic search, and in tying together online response to offline campaigns. But in order to reach the mandates set by management to fully leverage digital marketing to access deeper insights and execute campaigns that create rich, deep, and personalized engagements, marketers will need to see success in areas like online customer engagement (23 percent), data-driven personalized marketing (26 percent), and marketing process automation (15 percent).

Q10. What areas of interactive digital marketing have been most successful for you? (Select top five)

67% Email marketing programs 52% Website interface (leads, services, and engagement) 48% Social media engagement and insight gathering 45% Paid and organic search 38% Integration of online response with offline campaigns 33% Online advertising and paid listings 31% Webinars and online demos 26% Data-driven, personalized marketing 23% Online customer engagement 21% Mobile applications 19% eMedia content creation and delivery 18% Microsite proliferation 15% Automating marketing processes and practices 13% Online customer community formation 2% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Difficulties in Digital Interestingly, marketers seem most challenged by a lack of budget to fully exploit digital marketing solutions. A significant portion of respondents are challenged by the need to integrate internal and external customer data (43 percent) and identify which platform or application actually holds the most value and impact (29 percent). On a positive note, gaining adoption and buy in to use and adopt new digital marketing technologies does not seem to be a big concern, as only 13 percent of marketers identified it as such.

Q11. Where have you experienced difficulties or challenges? (Select top three)

50% Lack of budget and internal resources 43% Integrating internal and external customer data 29% Deciding which applications have the most value 23% Aligning the necessary stakeholder support 23% Determining where and how to automate marketing 23% Recruiting the right talent to run digital marketing programs 20% Interacting with IT groups 18% Sifting through the many choices and competing claims 18% Making a business case for spend 17% Integrating new solutions with legacy platforms 13% Gaining internal adoption and use of marketing applications 6% Regulatory concerns or obstacles 4% Confusing and inflated vendor claims 2% Privacy issues 1% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Implementing What Works The platforms being embraced and currently deployed closely mirror those digital marketing solutions from which marketers feel they have seen success post-implementation. Among the top platforms or applications are email marketing (75 percent), web analytics (72 percent), social media monitoring (56 percent), and online advertising (49 percent). Few respondents are deploying mobile relationship marketing tools (8 percent), partner collaboration applications (7 percent), attribution modeling tools (8 percent), or marketing supply chain management solutions (3 percent).

Q12.

What marketing platforms or applications have you embraced or are currently being deployed? (Check all that apply.)

75% Email marketing 72% Website analytics and performance optimization 56% Social media monitoring and analytics 49%

Online advertising Demand generation (lead acquisition, segmentation, scoring,

42% and nurturing)

37% Marketing and customer data analytics 31% Campaign execution and workflow management 30% Customer relationship management 29% Customer listening, feedback, and experience 22% Brand and digital asset management 20% Marketing performance measurement 19% Marketing resource management 15% Localized marketing content development and delivery 12% Loyalty and rewards program management 11% Experiential marketing and viral word-of-mouth 8% Attribution modeling 8% Mobile relationship marketing 7% Partner collaboration and performance management 7% Agency performance evaluation 5% Multichannel contact center services 3% Marketing supply chain management ÂŠ Copyright CMO Council. All Rights Reserved. 2012

integrate to accelerate Digital Marketing value

detailed findings

Challenges with Outside Resources Resources that could help ease any challenges in deploying or enhancing digital marketing technologies include outside vendors, digital marketing experts, and consultants. But it seems that far too many marketers have been left with unmet expectations (48 percent) or solutions that could not fully integrate with existing systems (29 percent). In fact, only 24 percent of marketers indicated they had not had any issues to date with their external resources.

Q13. What issues have you experienced in working with digital marketing vendors, agencies, or consultants? (Select top three) 48% Unmet expectations 29% Inability to fully integrate with internal systems 27% Too much complexity 27% Cost escalation 24% No issues to date 20% Lack of communication and follow-through 18% Failed implementation 17% No direct domain knowledge and/or market expertise 16% Budget overage 15% Missed delivery or deployment dates 9% Platform usability problems 8% Poor responsiveness 8% Other (please specify) 5% Project was aborted

integrate to accelerate Digital Marketing value

detailed findings

More of the Same Oddly, when asked what platforms would be installed or implemented in the coming 12 to 18 months, an almost identical list to the solutions or platforms already deployed were provided, starting with social media monitoring (46 percent), email marketing (38 percent), web analytics (39 percent), campaign execution (32 percent) and demand generation programs (33 percent). Only 7 percent indicated that no new platforms would be deployed.

Q14. What marketing platforms or applications do you expect to deploy within the next 12 to 18 months? (Select top five) 46% Social media monitoring and analytics 42% Marketing and customer data analytics 39% Website analytics and performance optimization 38% Email marketing Demand generation (lead acquisition, segmentation,

33% scoring, and nurturing)

32% Campaign execution and workflow management 27% Marketing resource management 27% Brand and digital asset management 25% Online advertising 19% Localized marketing content development and delivery 19% Mobile relationship marketing 18% Customer listening, feedback, and experience 16% Customer relationship management 14% Marketing performance measurement 10% Loyalty and rewards program management 9% Partner collaboration and performance management 8% Attribution modeling 8% Multichannel contact center services 7% No additional investment planned 6% Not sure 5% Agency performance evaluation 4% Experiential marketing and viral word-of-mouth 3% Marketing supply chain management 2% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Room for Improvement Marketers give themselves a solid B, as 51 percent of respondents feel they perform moderately well at leveraging data as a core foundational digital marketing tactic. While 40 percent feel they are not doing a good job at leveraging data, a very hopeful 7 percent are doing extremely well. (See sidebar on page 13 to see how the hallmarks of these data-driven leaders are performing.)

Q15. How well do you leverage data as a core foundation of your digital marketing programs? 7% Extremely well 51% Moderately well 40% Poorly 2% Not sure

integrate to accelerate Digital Marketing value

detailed findings

Greater Support for Data Marketers have access to a broad range of data, including social media, customer profiles, campaign response, transactional histories, finance and billing data, as well as third-party lists. What may be missing from this comprehensive customer picture is data from the channel or customer service and support. These data resources would provide valuable insights into a customerâ&#x20AC;&#x2122;s interactions directly with the front-line service resources of an organization.

Q16. What sources or types of data are at your disposal? (Check all that apply.)

65% Customer profiles 61% Social media 51% Campaign response and engagement 48% Third-party lists 43% Finance, billing, and accounting 40% Transactional history 34% Online behavior 22% Channel 18% Audience segments from online ad networks 16% Service and support 15% Mobile interaction 12% Loyalty and rewards 1% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Using Data to the Greatest Advantage Insights and intelligence are being leveraged by marketing to deliver more timely, targeted, and relevant messages to the customer. Marketers are also looking to develop richer, more robust segmentation models and profiles of their customers. What seems to be lagging is marketingâ&#x20AC;&#x2122;s ability to leverage data into more predictive models to anticipate issues or even reliably forecast projections.

Q17. How are you leveraging customer insight and intelligence? (Select top five) 72% More timely, targeted, and relevant messaging 58% Richer segmentation and profiling of customers 52% Cross-selling and upselling customers 51% Greater response and conversion rates 48% Better customer satisfaction and user experience 28% Higher-value sales and repeat purchases 28% More effective media planning and buying 27% Better care and handling 25% Longer website dwell times and interactivity levels 21% Improved pricing and product decisions 15% Quicker resolution of problems 10% More reliable forecasting and projections 8% Anticipation and containment of issues 5% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Maximizing Integration and Alignment The usual suspects appear when marketing is asked what platforms and solutions are most integrated and aligned across the organization. Old friends like email, web analytics, social media monitoring, and demand-generation campaigns all top the list. Areas where marketing must focus to more fully harness the opportunity in digital marketing include the integration across marketing and customer data analytics (23 percent), customer relationship management (17 percent), customer listening and experience management (11 percent), and marketing performance measurement (9 percent). Overall, 20 percent of respondents outright state that they do not feel any of their systems are fully integrated or aligned.

Q18.

Which processes and technologies do you feel are integrated and aligned across your organization? (Select all that apply.)

49% Email marketing 37% Website analytics and performance optimization 28% Demand generation (lead acquisition, segmentation, scoring, and nurturing) 28% Social media monitoring and analytics 25% Campaign execution and workflow management 23% Marketing and customer data analytics 20% Online advertising 20% I do not feel any of our systems are adequately aligned or integrated. 18% Marketing resource management 17% Customer relationship management 16% Brand and digital asset management 11% Customer listening, feedback, and experience 9% Localized marketing content development and delivery 9% Marketing performance measurement 8% None of the above 5% Loyalty and rewards program management 4% Partner collaboration and performance management 4% Multichannel contact center services 4% Agency performance evaluation 3% Mobile relationship marketing 2% Experiential marketing and viral word-of-mouth 2% Marketing supply chain management 1% Attribution modeling ÂŠ Copyright CMO Council. All Rights Reserved. 2012

integrate to accelerate Digital Marketing value

detailed findings

Assessing Digital Value Marketing is measuring and quantifying the value of digital marketing applications through a series of largely campaign-related measurements, including response rates (55 percent), self-defined campaign impact and effectiveness measures (52 percent), and website performance (39 percent). Areas that are not high on the measurement monitor include quality of inquiries (16 percent), upsell or cross-sell opportunities (10 percent), time-to-market improvements (3 percent), or transactional measures like e-commerce revenue increases, market share improvements, and sales force or channel feedback.

Q19. How have you quantified the value and impact of digital marketing technologies and programs? (Select top three) 55% Response rates, contacts, and leads 52% Campaign impact, effectiveness, and efficiency 39% Website and search engine performance 35% Conversion and closure rates 23% Online registrations and content downloads 16% Quality of inquiries or prospects 14% Sales force and channel feedback 10% Upsell and cross-sell opportunities 9% Insight and intelligence 9% Awareness and recognition levels 7% Market share improvements 6% eCommerce transactions or revenue gains 6% Word-of-mouth buzz, postings, tweets, etc. 3% Time-to-market improvements 3% Yield and accountability of spend 2% Pass-along and sharing rates

integrate to accelerate Digital Marketing value

detailed findings

Building a Budget for Digital Budgets are largely being determined by assessing the overall need for platforms or applications and then preparing a business case for funding. A little more than a quarter of respondents are allocating a percentage of overall spend directly to digital, while others are actually building costs into their budgets for individual campaigns.

Q20. How are you determining budgets for marketing investments? 39% Assessing overall needs and presenting business case for funding 26% Allocating a percentage of overall marketing spend 11% Integrating costs into marketing campaigns 8% Assigning costs to business lines or product areas 6% Lobbying internally for funds 4% Relying on CMO/CIO interaction 2% Reviewing competitor investments and category innovations 1% Relying on consultant assessments and specifications 1% Inviting vendor proposals and recommendations 1% Seeking allocations from IT organizations 1% Gaining contributions from sales or customer service groups 1% Other (please specify)

integrate to accelerate Digital Marketing value

detailed findings

Creating a Business Case The key attributes that are required to make a business case for a solution primarily rely on a strategic assessment of the potential business impact and contribution that a digital marketing solution will have for the organization. Second to that are the economics associated with the adoption of digital marketing.

Q21. What do you believe is needed to make a business case to management for marketing technology investment? (Select top three) 60% Strategic assessment of potential business impact and contributions 41% Economics associated with digital marketing and media adoption 39% Analyzing cost-savings and performance improvement potential Analytics on how leads, contacts, and referrals can be sourced more 34% cost-effectively Customer data showing media consumption preferences and

33% patterns Pipeline and performance impact relative to internal sales, field, and

32% channel partners

Analysis of how competitors are investing in digital infrastructures

27% and channels

16% Sourcing best-practice use cases and third-party studies 7% Using new media studies and analyst reports 1% Other (please specify)

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Levels of Adoption Marketing is mid-way through the digital marketing journey, as 44 percent of respondents believe they are at a point where they are still exploring and evaluating all options. Only 4 percent see themselves as being highly evolved, whereas 10 percent admit they are among the laggards, struggling with adoption.

Q22. Where do you consider your company in its level of digital marketing maturity?

44% Exploring and evaluating all options 22% Follower, not a leader 20% Disciplined and progressive embrace 10% Laggard and struggler 4% Highly evolved, leading our category 1% Not sure

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DEMOGRAPHICS Q23. What is your title? 32% Chief Marketing Officer 12% Head of Marketing 12% VP of Marketing 11% Director of Marketing 10% SVP/EVP of Marketing 3% VP of Marketing and Sales 3% VP of Corporate/Marketing Communications 2% Director of Corporate/Marketing Communications 1% VP of Marketing Operations 1% VP of Customer Experience 15% Other (please describe)

Q24 To whom do you report?

39% CEO 20% President 12% CMO 9% Division Chief or Business Group Head 5% COO 4% Regional Vice President/GM 2% Chief Sales Executive 11% Other (please specify)

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Q25. How large is your company?

36% Less than $50 million 6% $51 million to $100 million 10% $101 million to $250 million 8% $251 million to $500 million 5% $501 million to $750 million 4% $751 million to $1 billion 15% $1.1 billion to $5 billion 16% Greater than $5 billion

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Q26. What best describes your companyâ&#x20AC;&#x2122;s industry sector?

16% Financial Services 10% Retail 10% Professional Services 9% Information Technology 9% Electronics and Miscellaneous Technology 6% Media and Publishing 5% Packaged Goods 5% Manufacturing 4% Life Sciences 3% Telecommunications 3% Food and Beverages 2% Transportation 2% Insurance 2% Education 2% Travel and Hospitality 1% Wholesale/Distribution 1% Pharmaceuticals 1% Aerospace & Defense 1% Construction 1% Consumer Durables 1% Energy 1% Automotive 1% Government 11% Other

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Q27. In which region is your company headquartered?

68% North America 15% Asia-Pacific 11% Europe 4% Middle East 2% Africa

Q28. In which region does your company operate? 86% North America 52% Asia-Pacific 45% Europe 35% South America 29% Middle East 23% Africa

Q29. How large is your staff/team?

33% Less than 10 33% 10-30 8% 30-50 10% 50-100 4% 100-200 1% 200-300 11% More than 300

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Expert insights Anonymous Anonymous Anonymous

The Senior Director of Marketing for one company within the eye care market believes that their rapid adoption rates reflect their ability to create market awareness through effective utilization of their available resources. Despite a limited budget and slow adoption of data-driven strategies, social media has helped the company grow at a faster rate than its competitors. While this particular company is not the market share leader in its field, it is the leader in market share growth. This is due in part to the company’s use of social media as a promotion tool not only for itself, but also for its customers. “In order to improve sales to optometry offices, we have to enable our clients to improve sales to patients,” he says. “The more patients who come through their doors and get fitted with our product, the more revenue we get.” Currently, he says the greatest limitations surround budgets, and because the budgets they need to operate are low, expansive marketing outreach vehicles are not available. While this situation is not optimal, the company has still managed to gain more traction than the competition by effectively utilizing the tools they do have. “We believe the leverage we can gain from appropriately using social media to get our word out can be more effective than some of the traditional mediums, but they are most effective when used together,” he says. “However, even what we consider traditional is shifting, as email addresses are becoming a more traditional medium.” In terms of mapping out an architecture for its digital strategies, the CIO is more involved in the company’s internal architecture and infrastructure. However, the company does have a department devoted to outbound/Internet marketing. “One can’t operate effectively without the other,” he says. “We have to make sure we have the right framework built so that we can accomplish what we need to from a social media outreach perspective. We can use this framework to track emails and click-through rates, but the ultimate goal is to figure out what the ROI is for every dollar we spend in every channel so we can optimize our spend based on the best outcomes.” While the company doesn’t have the most current analytical tools to measure this information, they do receive tracking information through Google Analytics, media monitoring, and social media tracking. These capabilities will increase as the company integrates a CRM, which is in process. “As a result of this lack of hard data, when we present a case to management about marketing spend for something we haven’t done before, a lot of it is based on assumption,” he says. “Funding for our various projects comes from three main groups: marketing, an Internet group, and IT. We work together to a degree to determine what we need in order to accomplish the goals we set.”

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Because the company has limited funding, the importance of effectively and efficiently using the resources it has cannot be overstressed. “We don’t spend as much as our competitors, but we are very forward-thinking,” he says. “We communicate targeted, important messaging in an ethical way. If we can provide the right information to the right audience to help them make more informed decisions, chances are they will make those decisions in our favor rather than our competitors’.”

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Tim Suther Senior Vice President, Chief Marketing Officer Acxiom

When it comes to marketing, Tim Suther knows that consumers are boss. As Senior Vice President and Chief Marketing Officer for Acxiom, he has watched power shift from the brand to the consumer. Consumers carry the Internet around in their pocket or handbag, assessing countless products and services, with access to virtually unlimited information about price, service, and availability. This, in turn, has had a devastating impact upon traditional brand, promotional, and loyalty marketing programs. What was once tried and true is often no longer true, as trust, esteem, and loyalty measures are in serious decline for all but a few of the most progressive brands. Yet, within this traumatic state of affairs, brands can use deep consumer insights to create highly engaging and relevant experiences. To accomplish that, Suther suggests that the right insights and systems, underpinned by modernized marketing objectives, are key. It isn’t just about finding more efficient ways to reach consumers; rather, it’s about better understanding consumer behavior, interests, and attitudes, and then applying that knowledge at the moment of truth. Success will also look different, now favoring measures that depict the likely impact upon the value of the customer relationship. Share of voice will migrate to share of wallet. “The moment of truth refers to where brand meets consumer, and it’s not likely to happen on the brand’s terms,” he says. “More often, consumers will dictate. Accordingly, yelling louder will give way to listening more intently. Reach and frequency will give way to engagement. Marketers are going to have to do a better job of serving and listening to customers, not just talking at them.” One advantage that digital marketing provides in this transition is its ability to hyper-target, personalize, and measure marketing. That’s not new news. What is new is how this can be accomplished. Traditionally, the data driving digital advertising has been owned by media properties. If you want soccer moms, sports enthusiasts, or fashion-forward consumers, they’re all readily available online. The quality of those audiences, however, pales in comparison to what a brand knows about its target audience. A progressive brand knows consumer history, attitudes, interests, value, and so much more— and might have spent hundreds of millions to know these things. Yet paradoxically, this data goes unused for most advertising. It’s no wonder so much advertising fails to hit the mark, but that’s changing. It is now economically feasible to leverage the brand’s own insights, along with what their partners know, to more directly drive advertising decisions. “Gartner recently released a stunning statistic stating that CMOs will spend more on technology than CIOs by 2017,” Suther says. “These investments will be both offensive and defensive in nature. To go on the offense, marketers will activate and apply multidimensional insight about consumers to better acquire, nurture, and retain their most valuable relationships. The need for multiple dimensions is not to be underestimated; no one signal consistently describes or predicts consumer behavior—not search, not social, not actual purchases, or even what consumers say they will buy from you. Each is valuable but incomplete. Defensively, marketers will create their own proprietary mash-up of consumer insight. As media buying increasingly leverages programmatic buying, it is crucial for brands to retain insights that cannot be purchased by the highest bidder.”

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Suther says he takes an inside-out approach to reap the greatest benefits from his digital marketing efforts. “Inside” begins with a clear view into the customer value mosaic; some customers have more future value than others, and progressive marketers will invest proportionally to that customer value (so, it’s the customer portfolio that gets optimized, not media, channel, or even product). Value-driven messages get applied and personalized by recognizing customers across touchpoints. Advantage comes from “outside”: delivering that same value-driven personalization when your best customers are not directly engaged with you. We call this leveraging the intersection of insights for the moments when your best customers are engaged with your key partners. Another key “outside” strategy is to be more surgical with acquisition efforts and to prioritize those who act, look, or think like your best customers. “This approach is truly best practice, as it allows us to maximize the value of relationships already in place,” he says. “Statistics show that companies with customer-centric, data-driven strategies grow faster, earn a better return on marketing, have higher quality customer portfolios, and a superior ability to defend pricing in the marketplace.”

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Mark Phibbs Senior Director, APAC Marketing Adobe

Adobe is a world leader and best-practice innovator in the realm of digital marketing. As a digital marketing solutions provider, the company spends 74 percent of its marketing budget on digital compared to the Asia-Pacific company average of 10 percent. According to Senior Director of APAC Marketing Mark Phibbs, Adobe seeks to help marketers not only create digital content, but also deliver and measure it for maximum effectiveness. In order to be a successful digital marketer, Phibbs says marketers must follow five key steps. 1.

Monitor and report on all customer behavior across your site to see what kind of traffic you’re getting and how they’re interacting with the site.

2. Take this data and analyze the gaps to determine where you can increase conversion. 3. Optimize your digital spend and sell the ROI and business impact to upper management. 4. Begin to target and personalize merchandise while finding opportunities to cross-sell or upsell to customers. 5. Finally, the last step is about innovation. Once the data has been analyzed, marketers have to look at new ways to innovate as a company to revolutionize the customer experience. It’s important to think through the experience in every channel from the customer’s perspective to ensure a consistent brand and value proposition. These five steps can help ensure marketers get the most ROI for their digital investments while helping to make the business case for them. “Over the next five years, CIOs will lose 30 percent of their IT budgets to CMOs, so CMOs are driving a lot of this change,” he says. “The challenge is to bring the CIO along for the ride because it’s a business imperative; you need a great database, web presence, and analytics in place to measure and analyze your efforts and present the numbers to your executives.” Adobe has enjoyed tremendous success with its digital marketing efforts, but it’s critical to understand how to use the data they gather to gain insights for the organization. “Data needs to be related to clear goals for the organization, which requires good strategic direction from the CMO and head of digital to gather the best insights,” Phibbs says. “A multi-channel experience is key, and a consistent customer experience should extend across those channels. If a customer visits our website but chooses to buy from a channel partner, the experience should be tailored when they go to that particular channel to provide a consistent, individualized experience.”

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Markus Kramer Global Marketing Director Aston Martin

At Aston Martin, digital marketing is a joint effort between the marketing and IT departments. This level of integration makes it easier to understand the value they create while allowing them to execute efforts more quickly. Global Marketing Director Markus Kramer says the company has revamped its software and data tools to further enable this process. Until a year ago, Aston Martin’s technologies were somewhat hindering its digital efforts, but the implementation of new tools has enabled them to more successfully execute digital strategies. Furthermore, since the company is so small, integration has also been easier to accomplish. “Our current IT infrastructure has allowed us to go to market more efficiently than before,” he says. “Because there is no real barrier between the marketing and IT teams, we’ve modeled an architecture that fits our organizational size and makes it easier to deal with the complexities we face.” C-level executives within the company have a degree of conversation surrounding digital efforts, although it tends to be very basic. They still have questions about where digital fits into their strategy, what it does, and what kind of added value it creates for the company. To determine which platforms will provide the greatest gains for the company, Kramer says they perform traditional measuring through CRM, and they qualify anything that comes through in terms of interest and track those conversions into sales. “Social media is on a different level, and we haven’t reached a point where we can properly measure that yet,” he says. “Our most effective areas in digital are generating awareness among more prospects so we can measure traffic and click rates, as well as tactical marketing where we can get the right data, target the right audience, and measure interaction levels.” While Aston Martin uses third parties to build platforms and CMS systems, the actual adoption and roll-out take place in house, and Kramer says this approach has been very effective for them. However, while analytics do help to drive their digital strategies, the company does not yet leverage customer online and e-commerce data to shape their efforts. “If you compare us to Google or other companies who are high in the digital space, we have a long way to go,” Kramer says. “However, in comparison with other small- to medium-size automotive companies, we are doing quite well in this area.” “This approach is truly best practice, as it allows us to maximize the value of relationships already in place,” he says. “Statistics show that companies with customer-centric, data-driven strategies grow faster, earn a better return on marketing, have higher quality customer portfolios, and a superior ability to defend pricing in the marketplace.” our various projects comes from three main groups: marketing, an Internet group, and IT. We work together to a degree to determine what we need in order to accomplish the goals we set.”

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Michelle Waldgeir Vice President, Marketing Astrum Solar

While Astrum Solar is utilizing a number of digital marketing tools and gathering data to supports its efforts, Vice President of Marketing Michelle Waldgeir says they aren’t as advanced as she would like them to be. The volume of data and rapid evolution of both residential solar and digital marketing makes it difficult to stay ahead of the curve. “While digital marketing drives a lot of our business, I feel we’re only scratching the surface of all I’d like to achieve,” she says. “We use a variety of tools and data to help us manage the volume, but there’s so much information and so many new tools now that it can become overwhelming if you’re not very focused about what you’re going to use.” For this reason, she says data and insights are critical, and she makes great efforts to analyze, absorb, and utilize it. However, because the home solar market is less mature than others, data is sometimes outdated or less relevant because of the rapid changes that occur with regard to digital. From a C-level standpoint, Waldgeir says management cares more about the revenue aspect of digital marketing than the strategies themselves. In fact, most are comfortable leaving it as a black box within marketing. “In our weekly executive team meetings, we look at all of the dashboards, metrics, and the drivers of many leads and acquisition costs are related to digital,” she says. “It’s probably the biggest piece of our marketing mix, so everyone is interested in digital on some level, but the level of understanding varies.” Waldgeir says she has a partnership with the CIO to enhance efficiency of digital efforts and improve integration of their tools and systems. Because everything from lead generation and CRM to sales profit links together, she says they are currently architecting for the next generation and improving their current system—and that requires shared responsibility. “I look at our systems—and ROI in particular—from a cost-benefits standpoint because the simpler and more integrated everything is, the better off I am,” she says. “We use SalesForce and view how our efforts can be interconnected because the more they connect, the easier they are to use without requiring a great deal of IT resources or learning curves.” Waldgeir says Astrum Solar uses several external resources to aid in the evaluation, specification, and deployment processes. This creates a virtual team approach utilizing a smaller staff, but she still believes the marketing team carries significant weight in this area. “We don’t have all the resources I’d like to have,” she says. “I have to depend on different vendors and other external resources more than I would like because things are moving so quickly.” In terms of where she believes the company is gaining the most value from digital efforts, she names SEM, SEO and display advertising among the most important tools. However, even direct mail and other traditional marketing efforts link back to digital by nurturing leads first generated by digital or driving prospects to these channels.

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Drew Panayiotou Senior Vice President, US Marketing BestBuy

As a market leader in e-commerce, Best Buy has a history of success in digital marketing capabilities but remains focused on finding better ways to communicate with customers amidst media fragmentation. To remain up to date on the latest and most effective strategies, Senior Vice President of US Marketing Drew Panayiotou says the marketing team has recently begun working in collaboration with the IT department. Best Buy’s multi-billion-dollar e-commerce business reflects the company’s success in utilizing digital efforts to draw consumers. However, Panayiotou says that as more media avenues open up to interact with consumers, they need to generate significantly more content. “Because we communicate with consumers in so many different ways, we’re finding that people are now bouncing around the purchase funnel,” he says. “There’s no longer a linear pattern where a consumer moves from awareness to a purchase. If a consumer hears about a new product, they often go through social media to learn more from their friends, or they will see something online or receive a manufacturer email and then bounce around between awareness and interest in certain features.” When customers are ready to make a purchase, Panayiotou says they then use the plethora of shopping applications featuring price transparency to make a decision about where to buy. The whole Best Buy experience has become richer for the consumer because the company educates consumers about products to help them make purchase decisions. However, while digital platforms are certainly to be credited for this experience, they also present greater challenges for marketers. “Things are changing so rapidly with digital applications that we can’t build them fast enough, so we launched a very aggressive tool called a digital insert,” he says. “If you go to Google and type ‘Best Buy’ in the search box, it will take you to our weekly promotional magazine. Now, we also need to make it available for tablets, smartphones, and as a social version. We didn’t have to think about these things three years ago.” Because such a large portion of the company’s business is online, digital marketing is a big area of conversation among executives. However, because of the speed at which the marketing field has changed, Panayiotou says it can be difficult to find people who are well versed in understanding and leveraging the data they gather. “Before, you had big CPG companies with people who were proficient in brand management, but now there’s no training ground for digital; no one is developing savvy digital marketers with any degree of velocity or volume,” he says. “As a result, we just hired the CIO from Starbucks, and we’ll be working with him very closely because he will be inheriting part of the digital marketing team. As a result, the blur between marketing and the CIO is going to fade away.” To determine budgets for digital marketing, Panayiotou says Best Buy uses data from their existing campaigns to make a business case for digital funding. Digital projects are primarily funded from the marketing, business, and retail budgets.

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“We’re probably halfway there in terms of fully leveraging the data we have, but that is more due to our ability to use the data rather than having limited data,” he says. “Even so, we’re finding that we’re at the top of our game in our space; last holiday season, we drove more people to buy from us online than any of our top competitors, so I think that’s a testament to us constantly innovating around new ways to engage customers online.”

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Rich Brayer Vice President, Marketing Car-X Auto Service

As a franchise business within the automotive repair industry, Car-X has a slightly different setup than most companies because they are relatively small. Vice President of Marketing Rich Brayer says this provides them with a competitive edge because they are able to move more quickly on digital activities than some of their larger competitors, and they also have more flexibility with how they utilize their marketing budget. At Car-X, the point-of-sale systems within the individual stores are not linked back to the company, and as a result their IT needs are simplistic. They do not have a CIO, so they use consultants when IT needs arise. “Our website has become the primary cornerstone of all our digital evolution, and we just launched a new site two years ago that utilizes a proprietary software system,” he says. “Because of the securities built into this system to protect against hackers and to allow us to do e-commerce, we are finding that it negatively impacts our SEO. As a result, we’re looking to move toward an opensource platform that will allow us to make any changes we want and still utilize marketing points through our website.” Brayer says digital marketing plays a huge role in the conversation among C-level executives because it changes so quickly. While he feels they all understand traditional marketing very well, digital is more difficult to grasp. “Google controls so much in digital marketing, and you never know how everything is set up; what worked two months ago may no longer work, and we don’t always understand why,” he says. “We’re constantly measuring ourselves against standards that may have changed. It isn’t a matter of having technical knowledge or expertise; it’s a question of whether we understand what people are telling us and why things change.” He says they measure a number of aspects, including the number of website visitors, click-through rates on emails, redemption of email coupons, and the average ticket sale of customers who use coupons. “In the last two to three years, email coupons have provided the greatest redemption rates across all mediums, and they also yield the highest ticket average,” Brayer says. “We’re finding that it’s important to be proactive in e-commerce because automotive repair is not a high-interest category; people only come to us when they have to, but we can sell coupon books, for example, so customers can benefit from those when they need us.” Because the company is smaller than the majority of its competitors, Brayer says they can get things done very quickly, which helps them stay ahead of the curve. “On a relative basis since we only operate in 11 states, we have a higher percentage of web visitors per month than a competitor with 2,000 locations across all 50 states,” he says. “While they may be debating internally about the best digital strategy to incorporate, we’re already testing and measuring our efforts in terms of effectiveness. It’s a very competitive area for us.”

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Richard Stamets Strategic Marketing Executive Specialty Solutions Group (a Chartis company)

Chartis is experiencing an exciting time with respect to digital marketing. The company is currently in the process of developing innovative tools that will enable it to better interact with its clients. Strategic Marketing Executive Richard Stamets says that insurance remains a person-to-person business, but that technology is being used to open new doors and leverage discussions with clients about their offerings and capabilities. Chartis interacts digitally with clients and prospective clients in a number of ways, with the two most common being its public website and a separate, secure website for its brokers. Chartis’ main website is available to the public to learn information about the company and products offered by its member insurance companies, while the secure site is a password-protected feature for brokers to log in and interact with Chartis on a wide range of topics. “Several important services are available through the broker-facing site to deepen their experience with us,” Stamets says. “They can access tools for renewals, policy forms, loss runs, video content, etc. Many clients interact on that site daily, allowing us to see which brokers prefer digital interface as a way to receive communications and to identify the functionality they are most comfortable using.” In the development and implementation of digital strategies, it’s a collaborative process that unites the underwriting, communications, marketing, and technology teams, so decisions about digital strategies do not fall under one team’s realm of responsibility. This collaborative effort leads to more effective and efficient assessments about key platforms. “We look at this area from both a qualitative and quantitative perspective,” he says. “We’re always measuring our success and want to make sure brokers value the information we are sharing. To that end, we are formalizing an attribution model based on specific metrics we have gathered.” Budgets for digital initiatives are developed on a corporate basis for some of the major strategies; however, division-specific or regional efforts may be funded through local marketing budgets. As Chartis continues to make strides towards more effective digital marketing, Stamets says the information and data they receive become more valuable and robust. “We’re developing our best practices now, and the messages and types of products and services we provide are very diverse,” he says. “My role is to ensure—although we may be delivering a very unique message—that the campaigns and methodologies are consistent and leveraged effectively.”

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Steve Carchedi Chief Marketing Officer GE Healthcare - MDX

Within the healthcare sector, marketers are restricted in numerous ways regarding their efforts to reach physicians, patients, and payers—as well as the information they communicate. According to Steve Carchedi, Chief Marketing Officer of GE Healthcare’s Medical Diagnostics Division (MDX), this means they have to be very careful in how they promote their technologies. Carchedi says that face-to-face interactions about the company’s products are dwindling, which makes it difficult to market their products in traditional ways. “People are becoming busier, and physicians don’t always have the time or want to take time for promotional efforts and salespeople,” he says. “As a result, we have to find creative ways to reach our consumer base that are unlike anything we’ve done in the past.” Carchedi describes the pharmaceutical industry’s history of sending sales representatives to physicians’ offices to inform them about various products, but they are now having to incorporate digital technology in the form of email campaigns, online continuing education for physicians, and virtual symposia to communicate this information as physicians are less interested in seeing sales representatives. Furthermore, the lack of understanding of the impact of marketing among senior leaders of the company—combined with the fact that the company’s investment levels have been dramatically reduced because of profit margins— presents additional challenges. “Not a day goes by when my CEO comes to me to discuss things we should be doing or things he’s noticed others doing,” Carchedi says. “There is a delusion of grandeur and a lack of education among senior management in most organizations as it relates to what can be done through digital marketing, and the thinking is three-fold. First, they think it’s easy to do and something that can be done quickly. Second, it’s inexpensive. Third, it’s going to increase your reach dramatically. While some of this may be true, it’s not as easy as one, two, three.” As a result, Carchedi says he spends a tremendous amount of time trying to explain the complexities of digital marketing efforts, as well as the limitations that are introduced due to regulations they must abide by. To build platforms for the company’s digital efforts, Carchedi works closely with the CIO, and she is involved in the marketing staff meetings to maintain an ongoing dialogue. He firmly believes that having a close relationship between marketing and the CIO is critical to successful digital efforts. “I recently presented at a CIO summit about the partnership between IT and marketing, and it is definitely evolving,” he says. “A year ago, we probably didn’t speak much at all, but now we have to be connected at the hip; only working together will we be able to deliver commercial impact in the marketplace. I think companies that maintain this relationship are going to do very, very well.” For Carchedi, one of the greatest challenges is determining which digital efforts are most successful for the company. Never is one digital tool or promotional tool responsible for creating great impact for the brand; rather, a multitude of factors is involved. A dedicated business analytics group helps GE Healthcare–MDX build measurements for marketing programs, and they often work with outside companies to determine the best way to measure the effectiveness of specific programs.

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“We try to measure the utilization of a given tool, whether it’s a website, online continuing medical education forum, or a virtual symposium,” he says. “We try to find concrete metrics that are somewhat unrelated to measure the effectiveness. It’s a difficult thing to do, and it’s tough to incorporate into ROI calculations.” Digital marketing spend comes directly from the marketing budget, and budgeting within marketing is done through a benchmark approach. They strive to spend less each year while achieving the same level of exposure and promotional effort. “We try to spend less every year and measure the effectiveness of every program, and then we correlate the two,” he says. “When we get some kind of correlation, we double down. And when we don’t, that’s when we reduce and shift spend to other things.” While the aforementioned email campaigns and online communications have been the most effective digital efforts so far, Carchedi says they also have some patient education and virtual advisory boards. “We have begun to explore social media as well, but it has been difficult due to the number of regulations we must follow in the healthcare industry,” he says. Moving forward, Carchedi says data and analytics are cornerstones of how they will map out their digital efforts in the future. “Data allows us to refine our message and marketing mix in a way that supports our customers’ needs, so we try to capture it everywhere we can,” he says. “If you look at companies like Amazon. com, they really anticipate what people are thinking before they think it. We aren’t quite there yet, but we have the kind of data that will support it.”

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Nicholas de Kouchkovsky Chief Marketing Officerr Genesys (Alcatel-Lucent)

Genesys is a half-billion-dollar software company spun off from Alcatel-Lucent that operated autonomously in relationship to its parent company for a number of years. However, approximately three years ago, Genesys began to merge with other parts of Alcatel-Lucent. Included in this merge were the company’s processes and back-end systems, so when the company began functioning independently as of February 1, 2012, Chief Marketing Officer Nicholas de Kouchkovsky says they had to begin rebuilding everything. Through this process, de Kouchkovsky says the company is working to minimize the number of systems they have in place. They use Salesforce.com as a data repository and are in complete alignment as they navigate the rebuilding process. “We also use a marketing automation platform and are in the process of rolling out a new platform for the web,” he says. “These three systems are tightly integrated and essentially serve as our marketing infrastructure.” While they are making great efforts to remain integrated, de Kouchkovsky says the company lacks a strong IT department, as the CIO role is currently filled by their chief technology officer, who validates the company’s technology selections. The company works with a SAS provider to help them remain fully integrated. “We are also working hard on our web presence, striving to drive engagement by positioning the company in the right properties and utilizing email campaigns,” he says. “I feel good about our marketing automation platform, and we are looking to augment it with tools to manage localization and drive engagement, in addition to a tool for merging social.” De Kouchkovsky is directly responsible for budgeting decisions, and since the company hasn’t yet reached a point where they can evaluate ROI, he says business cases are based on benchmarking and adjustments to refine the strategy. “I strongly believe that the application platforms are going to make a difference, so we typically agree on what needs to be done, and I create room in the budget to finance whatever that may be,” he says. “We have a lot of room in terms of what we contract to agencies, and we find that there are significant savings in the services we get from them, so I analyze the situation to understand how we can repurpose budgetary funds.”

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Charlie Cole Former Vice President, Online Marketing Lucky Brand

As a retail brand, Lucky Brand is taking advantage of exciting new opportunities thanks to the capabilities available through digital channels. Charlie Cole, Former Vice President of Online Marketing, says data and analytics gathered about consumers allow the brand to target customers in the most appropriate way for them, enabling them to maximize ROI for digital investments. As with most retailers, one of the most important mediums through which Lucky Brand reaches consumers is email. According to Cole, it is considered the building block of creating an omnichannel strategy and drives the most money for the least investment. “At the most basic level, we can make sure that customers receive the retail-focused email, but we can use that as a microcosm for larger-scale ideas,” Cole says. “If we know you’re an avid retail buyer, we’re going to do everything we can to make you an online buyer as well because we want to give you the opportunity to shop through whatever channel is most convenient at any given time.” Cole says that online marketing falls into two buckets: large-scale brand advertising and algorithmic marketing. Large-scale advertising—particularly in the world of fashion—has historically been about creating a beautiful depiction of a brand through magazines and billboards, but the results are difficult to measure. Algorithmic marketing, however, isn’t based on beauty or location—it’s all about the numbers. “Large-scale advertising is more complicated because you have to decide between paying a premium for being in traditional fashion destinations versus paying less for the same canvas and arguably better targeting for larger ad networks,” he says. “The reality is that I can have an equally beautiful spot on a takeover for Yahoo! while behaviorally targeting someone who has shopped online in the last 60 days. It’s still going to have a billboard effect, but I can actually measure it.” To map the digital marketing architecture for the brand, Cole says it’s important to incorporate analytical suites that allow you to view the full funnel and validate your online marketing mix. Online provides the ability to quantify branding effects not only from a click-attribution perspective, but also from a view-attribution perspective. Views can then be traced back to the cookie for an IP address. “That’s really the holy grail for marketers, in addition to being able to justify your investment from a branding perspective,” Cole says. “If I have a billboard on Sunset Boulevard, I can’t quantify the amount of traffic that results from it, but I can answer that question online. It doesn’t stop there, though. Your data suite will give you the numbers to analyze, but you also have to factor in realworld causality on top of the data. For example, your sales might double from one day to the next, which the data will show. But the data won’t show that the reason for it was that you marked down a large percentage of your inventory that day.” When making a business case to management for budgeting spend, Cole says three considerations are made: conversion rate, traffic, and average order value. Before making any investment, they ask which of these three factors will be influenced and to what extent. For example, he says if you’re testing a media buy, you know it will drive traffic, but will the traffic convert or have a branding effect? © Copyright CMO Council. All Rights Reserved. 2012

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“We make a scientific case and a hypothesis of what the ROI will be, and then we run tests,” he says. “More than half of them are going to fail, but the ones that succeed will more than pay for the ones that don’t. As a marketer, you have to be willing to test, and that involves having a budget dedicated to testing every month.” With regard to the growth Lucky Brand has enjoyed over the last few years, Cole credits the company’s understanding of the importance of brand cohesion regardless of where consumers are in the conversion process, as well as the use of data to meet consumers where they are. “If you are an email customer who signed up, we are going to communicate differently than we would if we have no idea who you are,” he says. “We leverage the data we have to tailor a personal experience, but it doesn’t stop at the marketing buy. It should involve personalizing your homepage and product page to extend beyond the textbook definition of marketing.”

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Lynne Brum Vice President, Marketing and Corporate Communication Metabolix

Metabolix has only just begun incorporating digital strategies into its marketing mix. Because of the B2B nature of the business, they take a different approach to reaching their target audience and are including IT every step of the way as digital strategies are added. As a company in its infancy of digital marketing adoption, Metabolix has largely focused on its corporate website, in addition to another site to promote the products it sells. However, Vice President of Marketing and Communications Lynne Brum says social media has also been introduced to the mix, and plans are in the works to begin a corporate blog as well. “Our Facebook page provides information and regular updates about our products, but we plan to roll out our blog this year,” she says. “Our management team doesn’t regularly engage to a great extent in discussions regarding our digital efforts, but they are very interested in the blog conceptually are looking forward to unveiling it.” As the company’s span of digital efforts grows, Brum says the marketing team is relying heavily on the IT team and web designer for recommendations regarding the technology. Along with external consultants, these teams work to create the infrastructure to support digital investments. “These teams work seamlessly together, and I rely on them to make recommendations and map out the underlying technology we will be using,” she says. “For example, with respect to the blog, they will help us determine where it will live in the blogosphere, how it will connect back to our corporate site, etc.” Because digital efforts for Metabolix are still in the early stages, funding comes from the marketing and communications budget. That could eventually change as these capabilities grow and more groups become involved, but for now Brum is not ready to create a separate budget dedicated to digital. “The interesting thing about social media channels like Facebook and Twitter is that they aren’t resource-intensive with respect to a dollar value,” she says. “They can become resourceintensive because of the content that must be created to distribute through these channels. I have a reasonable budget to cover that content creation, but I’m agnostic about where that content will go.” Measurement efforts are likewise in the early stages. Brum says the company uses Google Analytics to provide data about the website and a similar function in Facebook, although sophistication in this area may grow as new digital efforts are implemented. “Because we’re a B2B business, many of the customer insights are captured and acted upon through one-on-one interactions in networking, customer service, and advocacy,” she says. “Because our capabilities in this area are currently limited, we look forward to a time when we can gather and act upon customer data and feedback in a meaningful, consistent way.”

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Andisa Ntsubane Director, Marketing and Communications Microsoft–South Africa

While many may believe that tech companies are ahead of the curve when it comes to digital marketing adoption, Andisa Ntsubane explains that other industries are certainly a lot more effective at the moment. He attributes this to other industries being more experienced in marketing to the consumer whereas tech companies have traditionally placed greater emphasis on the B2B side of communicating. As the company’s Director of Marketing and Communications, he says the company’s marketing efforts are certainly taking steps in the right direction in order to also become more relevant to the consumer. In the South African market, 55 percent of Microsoft’s marketing budget is still spent on events. Although high, this number is reflective of the company’s focus on the enterprise and business segments. Ntsubane says that the company executes a great deal of targeted programmatic campaigns toward their existing customers, and that is where they have seen the greatest ROI from digital thus far. “We send targeted communications toward our customer segments that are in line with their online behavioral engagements, and we ensure that we send the right messages to the right audiences with the right content,” he says. Because Microsoft is taking some of its products, services, and solutions into the cloud, the business model is changing, and digital marketing efforts are going to be essential, especially with regard to mobile strategies, driven by the unique growth of mobile in South Africa and the African continent in general. Microsoft has started to build a business case around what they need to do based on the growth of mobile. While C-level marketing executives are having big conversations around digital, the CIO and IT teams are not necessarily involved in conversations around digital architecture and marketing. “We currently have a centralized marketing model, where there is a regional digital hub that is responsible for developing digital campaigns for the Middle East and Africa,” he says. “All countries within the region contribute to the operations of the digital hub, as it has benefits in terms of economies of scale on production but also can facilitate consistency across the region. We then have our own local budgets to augment the regional campaigns and drive more localized digital marketing activities.” To measure ROI, the company has many advanced tools and processes that track campaigns and link them to marketing qualified leads, but these are more advanced in the B2B space. The company has also invested quite significantly within the social media space and has social listening tools in order to monitor the company’s online reputation. “I think we do a great job from a B2B point of view in terms of how we map the online customer journey, but more work needs to be done in the consumer space,” Ntsubane says. “We really need the key insights and data around what triggers behavior in order to optimize our campaigns during execution.”

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Overall, Ntsubane says they are making some inroads around benchmarking methodologies in order to get a better idea of how to constantly innovate and stay ahead of the curve. “In general, some of the mistakes that companies make are in developing separate digital marketing strategies independently of the company overriding marketing strategy,” he says. “This is where the greatest pitfall is. Companies that succeed are those that build a digital marketing strategy based on the marketing strategy and ensure that everything that they do remains in line and true to the vision and values of the company.”

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Robert Solomon Senior Vice President, Chief Marketing Officer Outrigger Enterprises Group

Digital marketing adoption has spread more quickly in some industries than others, especially as it relates to the travel and hospitality sector. With the majority of consumers looking to the web for information, Senior Vice President and CMO Robert Solomon of Outrigger says they work constantly grow these efforts. Solomon describes the adoption and integration of digital marketing with the company’s traditional marketing efforts as an evolving journey. While he says Outrigger is making progress, they still face a number of challenges. “There are challenges involving objectives, people, systems, and external factors that we have to deal with as we’re trying to adapt,” he says. “It’s a dynamic process, especially when you consider the amount of data we try to interpret and apply to our efforts and the fact that it’s constantly changing.” To aid in this process, Solomon says the company uses a number of platforms, but many of them need to be updated as the company has outgrown them over time and newer versions have emerged. “There’s never enough training on the technology, and the amount of training we need and switching costs are always underestimated—otherwise, you wouldn’t adopt the new deals,” he says. “Data and analytics are always improving, but it’s hard to stay caught up.” When speaking with C-level executives about digital marketing technologies and trends, he says a degree of confusion exists regarding incremental, infrastructure, and operating costs. “The business units have a much better understanding of budgetary implications for programs to move the needle,” he says. “A big concern is that for most domestic business, costs threaten to grow faster than throughput, especially if you don’t have international growth on a steeper part of the growth curve.” Over the last few years, Solomon says the company has moved more of the development side in house, and they incorporate both proprietary and off-the-shelf technologies. This is due to supplier costs, delivery, and responsiveness, among other factors. Since most of this is done in house, they work within a box to determine budgets for these initiatives. “We have some parameters with a certain percentage of revenue spend, and we address that for strategic efforts,” he says. “We’ve been doing this long enough to build a comfort level, so we consider growth and strategic objectives, and then come to an agreement for the budget.” He says the company’s IT department also gets involved as they maintain an ongoing dialogue about operating budget and capital. For any extraordinary needs or opportunities, they look beyond the operating budget and add to their wish list. The company quantifies the value of various digital efforts and has found search engine marketing to provide the most tangible value. However, Solomon points out that they want to maintain a multidimensional program.

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“Because SEM is so measurable and tangible, it threatens to make our efforts become onedimensional, and we don’t want that,” he says. “We are constantly trying to test other areas so that we can justify them on the grounds of development or other parameters.” The company has also incorporated cross-channel metrics, which have proven highly beneficial. Their voice channel is extremely productive, and testing shows that it has actually benefitted from their digital marketing activities. “Consumers want transparency across the channels, and that requires technology and channel management and strategy; that’s something we value highly and monitor carefully,” he says. “We truly excel in this hybrid model because there’s no real cost involved, but we extract a lot of actionable and insightful information from our cross-channel behaviors.”

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Lapo Paladini Senior Vice President, Chief Marketing Officer PerkinElmer

PerkinElmer is a global technology leader in human and environmental health focused on improving the health and safety of people and the environment. PerkinElmer is primarily a B2B organization within the developmental stages of creating a digital marketing strategy. As such, Senior Vice President and CMO Lapo Paladini says they are developing their strategy internally by driving several pilot projects as well as hiring talent to help further educate them on digital marketing, and externally by learning from best practices of both B2B and B2C companies. The marketing department has worked with the IT team on a short-medium term development plan of the infrastructure necessary to meet their strategic goals and marketing plans. Dashboard and KPIs are created to monitor ROI. “We are in the phase of leveraging our past experiences to develop our future plans,” Paladini says. “It is now time to accelerate the shift of our marketing activities to digital, and we believe this shift will be key to drive cost efficiency and operational effectiveness.” The company has a hybrid marketing organization that consists of central and divisional levels. As a corporate marketing organization, Paladini says they are responsible for the digital infrastructure and the company’s global marketing plan design, coordinating in a way that keeps all efforts in line with the brand strategy. The business divisions are them responsible for the programs’ execution. Although PerkinElmer is still in the early stages, Paladini says they hope to learn as much as possible, develop as quickly as possible, and sharpen their focus on the most important elements to achieve their goals in the hopes that they will emerge as a best-in-class contender. “We are typically careful to distinguish between what is good to do and what is relevant and important to do,” he says. “We want to build the best experience for clients and the best practices that are going to support them and us as we move forward together.”

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Robin Saitz Senior Vice President, Solutions Marketing PTC

PTC has been making impressive advances in the area of digital marketing. Robin Saitz, Senior Vice President of Solutions Marketing, says the company has moved beyond using digital methods to share content and is now utilizing digital to develop relationships with customers and prospects. Over the last few years as social media and content marketing have become more prominent approaches in B2B marketing, Saitz began investigating how it could be applied to PTC and whether or not an online customer community would succeed. PTC engaged with Forrester to create a social technographics profile of their customer base to better understand how actively they are using social technologies in the workplace and in pursuit of the types of products PTC develops. “On average, we found that our customer base is much more social than the general population, and we used that information to create a community for them where they can share their ideas and learn from each other,” she says. “We have well over 50,000 members in our community, which launched in June 2011, and have done a great deal of social media outreach to appeal to our audience.”* Saitz emphasizes the importance of listening through social media, as well as participating in the conversation. Her team locates where customers are spending time online and engages in conversations in those places. The company’s website is based on a homegrown CMS, which is currently being replaced with a more flexible offering that will provide a more engaging website experience. Combining the new website with Eloqua, PTC will learn about the habits and interests of its customers so the marketing team can create and present more engaging content specifically targeted to those individuals. “We continue to strive for the right balance of digital and traditional outreach,” she says. “We also team with our IT department, which is very engaged in our relationship with Eloqua and the deployment of our new website.” Saitz says the marketing department delivers presentations to an internal operations council to help them understand the value and benefits of digital efforts and how it can improve marketing effectiveness. They use analytics and insights to demonstrate the value of these efforts, and these proof points will become even more critical as they deploy the new website. Another digital initiative PTC has undertaken is content marketing. Saitz and the PTC marketing team believe in this approach so much that last year, PTC launched a new product line that was done completely online and without the use of email. “We applied content marketing practices to a microsite for the product launch, and we’ve seen tremendous amount of inbound traffic as a result,” she says. “It was the first marketing campaign we have done that was entirely online, and we credit this approach for the strong product brand awareness that has resulted. When we share stories like this with other marketers, they are very impressed with the advanced thinking we’ve adopted at PTC and the progress we’ve made on several digital marketing fronts, including content marketing and community.” * You can learn more about PTC and Saitz’s journey to build an online customer community here in an excerpt from Empowered by Josh Bernoff and Ted Schadler. © Copyright CMO Council. All Rights Reserved. 2012

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Suaad Sait Chief Marketing Officer Rackspace

Rackspace, a leader in the cloud industry, seeks to be best in class for its customers and has proven to be a viable contender in the digital marketing space. By utilizing highly targeted efforts based on consumer metrics, CMO Suaad Sait says the company provides solutions that give its customers everything they need to run their businesses. Sait says the company is relatively advanced in its digital marketing efforts, as a significant portion of their business is run on digital. However, one area they find challenging is integration. “We aren’t doing as well in the integration of digital marketing with the rest of the business ecosystem,” he says. “There are islands of data problems where some of our online interactions that turn into business opportunities are now tied into some of our CRM systems. It is difficult to tie that back into a better view of how we should use other marketing mediums and how to interact with those businesses.” Rather than outsourcing work for the evaluation and deployment processes, Rackspace performs these efforts in house. “We have talked to a few agencies and system integration equivalents in the marketing automation sector, but we haven’t found an organization that can give us a holistic, unbiased view,” Sait says. “We’re doing most of the heavy lifting ourselves.” Rackspace uses customer core metrics and other measurement tools to obtain extensive details about online user behavior. While Sait says the technology Rackspace uses does help them reach their goals, it also poses some hindrances. “Our tools are actually causing us more nightmares than we’d like,” he says. “We’ve woven together a fabric of technologies that are not fully integrated. If we had six sets of data problems before, we probably have 50 now because the industry has not evolved to deliver a single-platform approach, and the outcomes aren’t creating a leverage effect that we’d like to see from an ROI perspective. We’re having to build a complicated data warehouse internally to mix and match all the outcomes and fragments of information in order to make good decisions based on it.” Digital marketing efforts are segmented globally into an online market, small- to mid-size businesses, and enterprise businesses. Sait says he and his team spend a great deal of time educating management about digital marketing because they lack knowledge about its complexity. However, he says marketing is working with the CIO to improve understanding and integration. “Our CIO and Vice President of IT are working with the global marketing organization on our data challenges,” he says. “We have full alignment with them and commitment from our CEO to take all the digital spend and data and unify them into what we’ll be calling ‘golden data’ for the business.” In terms of the digital platforms that will provide the most business value, Sait says the company is constantly experimenting and assessing data on a granular level to determine the level of impact of digital marketing efforts. However, they still struggle to make a business case for digital spend to management.

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“From an infrastructure perspective, we are very revenue oriented, so we’re having to create an outside-the-norm way of thinking,” he says. “At the moment, we’re working more on trust than ROI. We don’t look at the marketing mix in a generic sense; we target segments based on the configurations of the products we sell. There’s not one thing that has worked best because we don’t view it that way.”

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David Friedman President, Marketing Sears

As President of Marketing for Sears, David Friedman is finding that implementing digital tools and processes within the scope of digital marketing is relatively easy. The challenge, however, lies in the company’s capacity to seamlessly integrate those digital efforts into the company’s offline marketing strategies. According to Friedman, although Sears’ loyalty program and IT efforts yield a great deal of data, the infrastructure of the company lacks connectedness to how management makes decisions about online marketing programs. “The infrastructure may be linked well to how we execute email programs, but that isn’t necessarily linked well to our display advertising or search efforts,” he says. “Each area of our digital marketing continues to function in a silo. We have infrastructure supporting the individual digital components, but not digital marketing as a whole.” Another challenge lies in the level of digital expertise of business unit leaders. While many senior executives have been involved in marketing for several years, their understanding of digital marketing integration is often limited to an observational level—they have intellectual knowledge of it but lack an understanding of how it works. As a result, the role of data becomes even more important to map the organization’s digital strategies. To aid in this process, the company’s CIO hired a senior vice president to work with the entire marketing organization on both marketing automation and digital marketing efforts. “We actually have a team member who attends the marketing team meetings to help build data findings into the infrastructure of our efforts,” he says. “On an annual basis, we select projects for the upcoming year through a formal process that spans across the entire company’s IT investments.” Once the company’s conceptual architecture is outlined, several pilots are run to test their effectiveness and gather numbers about the benefits, cost, and ROI. On a broader level, an evaluation process is conducted internally by a group called Targeted Interactions, which measures the effectiveness of all targeted initiatives—including direct mail, digital, and television. This data can then be used to set marketing priorities. “Digital marketing technology projects are funded by the marketing budget, and we set our priorities within marketing to determine how those efforts are funded,” Friedman says. “In terms of what we find to be most successful in digital, search is most important because it helps to drive retail transactions, but email and display advertising also yield positive results.” While some level of disconnect exists in the integration of digital marketing, Friedman feels the company is moving in the right direction and will continue to do so with data and analytics helping to determine the best strategies. “The only way to make display and email efforts work well is by incorporating analytics,” he says. “ROI on these programs doesn’t work unless you target them effectively.”

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Isaac J. Turk Director, Database and Marketing Analytics SiriusXM Radio, Inc.

Isaac Turk, Director of Database and Marketing Analytics for SiriusXM, believes that the opportunity for the company is very robust. CEO Mel Karmazin recently projected that by 2015 more than 70 million vehicles will have SiriusXM installed. This figure in perpetuity could grow considerably larger, with nearly 250 million current vehicles in operation (VIO) coupled with the current-day SiriusXM penetration rate (it is installed in roughly two of three new cars). Given the increasing market size opportunity, SiriusXM is well under way with strategic initiatives and tactical execution of a digital marketing roadmap that will enable the business to capitalize on new ways to reach prospects via online direct marketing and couple traditional proven offline channels. While SiriusXM presents a unique business model with world-class, commercial-free music, exclusive talk, and entertainment, there is a plethora of consumer choice in the online streaming space, including competitors such as Pandora, Spotify, Slacker, Last.fm, and Rhapsody, not to mention players like Amazon, Apple, and Google, who have strong presences in the music industry with emerging cloud-based music services. The digital marketing program at SiriusXM, has been constantly evolving and adapting to the needs of the business, and although Turk says some efforts are further along than others, they have a clearly defined strategy in place to move forward. “While the attribution and return on marketing investment (ROMI) methods are being finetuned, we have outlined a strategy to make an integrated offline-to-online marketing campaign very relevant,” he says. “And we’re really looking to get a more holistic view of the lifecycle of the customer that will reveal when they transition from a trial to a self-pay subscription status— whether it is on a new or used SiriusXM-equipped car.” Turk says the company is looking to begin delving into targeted online marketing tactics in a way that will link them with the same prospects and customers via traditional offline channels. “There are numerous marketplace services and solutions that will enable Sirius XM to execute an multi-channel, integrated campaign and dialogue to take place across both offline and online mediums,” he says. “It’s slightly different than an online targeted media buy of look-alike prospects— which may or may not significantly overlap with an existing direct-mail target audience—but by leveraging cookie databases, campaigns can become more targeted and relevant.” In order to assess which digital platforms will provide the best value, Turk says the company runs tests on the offer, promotion, message, and channel level to determine the ROMI. A core strategic analytics group conducts various champion-versus-challenger designs of experiments and build, develop, and put into production dozens of predictive and segmentation models to optimize the business’s performance. “In determining our budgets around digital investments, the business, finance, strategic analytics, and IT teams collaborate on a business case based on estimates and benchmarks on cost per acquisition and ROI for a given campaign or program,” he says. “If an area proves to be effective in a production test, management is willing to increase spending in that area until the marginal economics dictate otherwise toward the next most efficient acquisition source.” © Copyright CMO Council. All Rights Reserved. 2012

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While the company’s actual media spend is sourced from the marketing budget, IT partners step in any time automation is needed to streamline how internal CRM systems and the marketing database can be restructured to translate business requirements into functional requirements to support the business with a scalable, repeatable, and proven IT process. “IT plays an active role in assessing the business case for identifying initiatives that will lead to cost efficiencies for the business,” he says. “For a new issue, it has to go before a committee to determine the business case, and that prioritization process can take time when assessing multiple competing initiatives and opportunities across the entire company.” Turk says targeted display advertising has been an effective digital technique the company has employed so far, although they are incorporating cross-channel metrics to gain a more holistic view. “We know the associated vehicles that are equipped with SiriusXM and can determine whether or not that target or prospect has become an active, inactive, or paying customer after the trial,” Turk says. “One area of opportunity to evolve is a media mix optimization or econometric modeling approach to understand the synergies across all acquisition channels. It is generally believed that if you, for example, spend in radio or TV, it will lift and make your direct mail more efficient, so there is an opportunity for possible improved marketing spend optimization.” .“The only way to make display and email efforts work well is by incorporating analytics,” he says. “ROI on these programs doesn’t work unless you target them effectively.”

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Roger Menz Vice President, Global Marketing Sony Music Entertainment

The entertainment industry has seen a widespread adoption of digital marketing, although marketing budgets have been gradually reduced throughout the past several years—requiring marketers to be much smarter and more efficient in their efforts. Sony Music Entertainment’s Roger Menz, Vice President of Global Marketing, says that while they have a good degree of digital adoption, these efforts aren’t necessarily integrated across all business operations. Sony Music Entertainment (SME) operates in 43 markets around the world, with an autonomous international operating structure. Since the offices in various countries have relatively small staff sizes, many of the strategies and campaigns are created within the company’s headquarters and then rolled out internationally. “Not every activity rolls out at the same time on a global level,” Menz says. “The different countries add to what we create and adjust them locally to be relevant for the individual markets.” Menz says digital marketing is a top priority for the company, and they fortunately have a number of engaging brands with whom they work in the music industry. Since their audience is quite young for most campaigns, it is important for management and individual product managers to provide an engaging experience with artists that the company can control to an extent. Even with digital efforts, this is primarily the responsibility of marketing. “The CIO and IT aren’t necessarily in charge of marketing technology; in our world, we have digital marketing teams that take over this process,” he says. “We do work with the IT team, but not necessarily when it comes to digital marketing.” Menz explains that the entertainment industry is always expected to be on the cutting edge, and this requires a bit of trial and error to stay on top of trends and create something new. The company works with media agencies in deploying campaigns, and they strive to keep a certain degree of variety in their marketing mix. “We learned that it doesn’t make sense to put all of your eggs into one basket; you need to create various programs, and they need to be measureable,” he says. “We use a number of standard metrics, but we need to get better in how we use them.” One challenge that the data presents is in timeliness; the company often must deploy campaigns very quickly, and there often isn’t much time between campaigns. As a result, the data may be incomplete, and they may have already moved on to the next initiative by the time they receive a report on a campaign. However, they have found some measures to be particularly effective. “We do a lot of search and look at the audience demographics—particularly on Facebook—and once we gather information about the consumer, we can send messages that are specifically targeted to them,” he says. “We also use typical analytics and another system that is designed specifically for the entertainment industry providing a great overview of our activity and results.” Menz says approximately 30 to 50 percent of the marketing budget is allocated to digital depending on the project, and the company is more concerned with ensuring that every dollar they spend takes the company further in reaching consumers than with justifying spend. © Copyright CMO Council. All Rights Reserved. 2012

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“In the entertainment sector, we are expected to be more proactive in our efforts to motivate consumers, but the end goal may not always be to make a sale,” he says. “When you think about digital marketing, it needs to motivate a visitor of a site to take a specific action that creates the conversion; that could be a purchase, but it could also be to turn them into advocates, which are very important in our industry.” we gather information about the consumer, we can send messages that are specifically targeted to them,” he says. “We also use typical analytics and another system that is designed specifically for the entertainment industry providing a great overview of our activity and results.” Menz says approximately 30 to 50 percent of the marketing budget is allocated to digital depending on the project, and the company is more concerned with ensuring that every dollar they spend takes the company further in reaching consumers than with justifying spend. “In the entertainment sector, we are expected to be more proactive in our efforts to motivate consumers, but the end goal may not always be to make a sale,” he says. “When you think about digital marketing, it needs to motivate a visitor of a site to take a specific action that creates the conversion; that could be a purchase, but it could also be to turn them into advocates, which are very important in our industry.”

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Gina Testa Vice President, Graphic Communications Xerox Corporation

As a B2B company that educates other companies about the implementation of cross-media digital campaigns, Xerox knows it is important to use these services in order to sell them to others. Vice President of Graphic Communications Gina Testa explains that their transpromotional nature is part of the reason for their expertise in this area. While Xerox provides document services, they also provide IT and e-services, hardware and software for the graphic communications space, and education to help clients provide these services to their own customers. Not long ago, they acquired a software company called XMPie, a Xerox company which offers solutions for creating cross-media marketing campaigns and has grown Xerox’s expertise in this area. “We utilize a combination of print, e-media, PURLs, email blasts, etc., in our own marketing efforts and are able to help our clients do the same,” she says. “While there is always room to grow, the bottom line is we are working to enable engaging, personalized marketing campaigns that are crossmedia. Everyone is talking about how to integrate multiple channels—especially combining print with digital—so there isn’t a conversation where digital isn’t part of the mix.” Testa says Xerox works with an outsourced company to manage the customer database and build the infrastructure. This is one of the most critical steps to the campaign process, and having that expertise is essential. They conduct testing and primary research, in addition to purchasing secondary research to ensure they are utilizing the appropriate channels for the customer base they are targeting. “We do comprehensive A/B testing with some of our clients and their end users to prove the viability and ROI that you would get by using a true cross-media campaign with digital components versus a control group that utilizes the methods they traditionally use,” Testa says. “We are then able to show clients the difference, which causes them to change their approach and engage in some of these newer methods.” Sales and marketing functions go hand-in-hand, as Xerox leverages revenue and response metrics, as well as online customer and e-commerce data in partnership with telemarketing centers. These data help the company determine the best way to target offers to particular sectors. “We have a product spectrum that ranges from $200 to $2 million, so we have to vary our techniques based on where we are within that spectrum,” she says. “The fact that we’re able to use these modern multichannel techniques and then sell them to our customers puts us in a unique position. We’re probably more advanced in our adoption and knowledge of these solutions than the average Fortune 500 or 1,000 company.”

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About the CMO Council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership, and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council's 6,000 members control more than $300 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 20,000 global executives in 110 countries covering multiple industries, segments, and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia-Pacific, Middle East, and Africa. The CMO Council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), LoyaltyLeaders. org, Marketing Supply Chain Institute, Customer Experience Board, Digital Marketing Performance Institute, GeoBranding Center, and the Forum to Advance the Mobile Experience (FAME). More information about the CMO Council is available at www.cmocouncil.org.

integrate to accelerate Digital Marketing value

About aCCELERATION

Acceleration has 12 years of technical expertise in designing and delivering digital marketing solutions that provide quick improvements plus long-term ROI. The company architects digital marketing and publisher ad solutions, implements and integrates optimal technologies, and orchestrates efficient operational delivery to keep companies up to speed with multi-channel consumer engagement and ahead of the competition. Acceleration has a breadth of prominent technology vendor partnerships across analytics, mobile, social, email, and advertising systems, as well as an extensive client base featuring many of the world's largest digital marketers and publishers. Acceleration has experts located on four continents with local and global capabilities to deliver proactive digital solutions. Learn more at www.acceleration.biz.

integrate to accelerate Digital Marketing value

OUR PARTNERS

The only fully integrated North America-based global newswire, Marketwire Inc. is a fullservice partner to IR, PR, and MarCom professionals seeking premier distribution, media management, multimedia, and monitoring solutions. Marketwire's customer-centric corporate philosophy focuses on being the best by infusing every aspect of its business with the following core attributes: precision, adaptability, innovation, and simplicity. Marketwire delivers its clients' news to the world's media and financial communities. With a reputation for technological leadership, Marketwire offers innovative products and services—including social media, search engine optimization, dashboard mobile financial, news dashboard coverage reports, exclusive access to networks such as the Canadian Press Wire Network, Easy IR, and Easy PR workflow solutions, and more—that help communication professionals maximize their effectiveness while ensuring accuracy and best practices. Having merged companies (Market Wire and CCNMatthews) in April 2006 and enjoying a combined history of 25 years of service, Marketwire is now majority-owned by OMERS Capital Partners, the private equity arm of one of Canada's largest pension funds.

Anyone on your team can build, send, and analyze surveys. Our goal is to make difficult things simple so you can focus on research rather than software. Qualtrics Research Suite has become a standard for organizations of all kinds to engage in any type of data collection, including market research, voice of the customer, employee feedback, customer engagement, website feedback and point-of-sale surveys. Organizations use this data to make better business decisions that increase brand recognition, customer loyalty, employee satisfaction, and overall revenue.

Exploring the Business Impact of Marketing Technology Integration Full Report | October 2014

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CONTENTS

Introduction

Key Findings

Detailed Findings

Expert Perspectives

Sponsor Contribution

Affiliate Partners

About the CMO Council

About Tealium

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INTRODUCTION With an increasing number of technologies being added to the marketing toolkit, marketers are beginning to view technology as a key component of their overall strategy. Without question, marketers are at the apex of digital evolution. Functional marketing silos are going away, and data and applications are now being tightly connected for improved customer lifecycle management, omni-channel marketing and advanced marketing automation. And while these platforms are providing deeper insights into customer behaviors and engagements, marketers often lack connectivity across all platforms to gain a single, cohesive view of the customer. Marketers are challenged to improve the economics and value of random and disparate marketing technology investments across multiple platforms and solution areas. Proliferating marketing technology applications, digital engagement channels and customer-driven interfaces are spawning vast volumes of data and insight, which need to be integrated and unified across diverse silos and ever-growing digital data stacks without investing heavily in back-office data warehousing projects.

“Once new technology is chosen, it may be difficult to integrate new data or cross-functional data into the company’s pre-existing legacy systems. You’re often dealing with manual data input, and you may be lacking processes with respect to how data is entered and structured. It’s been extremely challenging to integrate data into our new systems as we get them.” —Julie Derry, Senior Director of Digital Commerce, See’s Candies

The first and perhaps most critical step to establishing a longlasting digital strategy is to develop a fully integrated, cloud-based infrastructure that allows for flexibility and meets key goals for the business. Chief marketers are in need of consultation, guidance and direction when it comes to helping them specify, implement and adopt digital marketing technologies, strategies, practices and solutions. In addition, marketers are challenged to staff and resource digital marketing programs, integrate offline and online campaigns, as well as unify disparate marketing functions, data sources and goto-market processes. Now more than ever, marketing must be able to present an effective business case to senior management on how digital marketing technology investment and migration will drive business performance, increase customer lifetime value and retention, and create more adept and adaptive organizations. However, their technologies may be part of what is holding them back.

Only 9 percent of more than 200 global marketers surveyed by the CMO Council in its “Integrate to Accelerate Digital Marketing Effectiveness” study say they have a highly evolved digital marketing model with a proven and clear path of evolution. This compares to 36 percent who report a random embrace of marketing point solutions (many cloud-based) that are not well integrated or unified. And according to 63 percent of respondents, management’s interest in digital marketing migration has much to do with its potential to increase marketing performance and ROI through more efficient digital media channels and better customer engagement. In addition, 49 percent of marketers believe management is also responding to the preference of customers for digital media consumption and live, on-demand interaction with brands and companies.

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DRIVING DEPLOYMENT ACROSS A SHIFTING LANDSCAPE Determining the optimal way to go to market has never been more challenging. A multitude of new media channels and online/mobile avenues of market access are fragmenting media buys. Channels of distribution are multiplying, requiring broader, more diverse and customized marketing support. Sophisticated customer information gathering and database marketing techniques are seeing big shifts of marketing resources into areas that allow for improved behavioral targeting and personalization to optimize response and revenue potential.   Market pace and velocity require more efficient and intimate online customer engagement, quicker product uptake and viral affirmation through social and shared interest networks, as well as greater prominence and cost-effective prospect acquisition through websites and contextual search optimization, web content delivery and pervasive mobile connectivity with customers.   Digital customers now demand targeted, relevant and meaningful engagement at every turn. As more customers consider defection from brands because the information, content, services, promotions and engagements lack relevance and resonance, marketers must look to data-driven strategies that deliver the right message to the right customer at the right time—and in the right channel. Marketing must forge and reinforce the ties between technology, customer data and the customer experience.

A NEED FOR CONSOLIDATION According to a review of customer data-centric software listed on Capterra, more than 3,000 marketing technology products, platforms and point solutions are being deployed across some 30 application areas. These include email marketing, website monitoring and analytics, CRM, social media monitoring, social networking, web data extraction, customer experience/loyalty/satisfaction, search marketing, social media marketing, campaign execution, lead management, mobile marketing, contact centers, customer feedback, display advertising, affiliate marketing, personalization, shopping, instant chat, etc. Even while a major consolidation of this fragmented market is underway, many new innovative products are still coming to market. Acquisition-hungry software vendors— such as Adobe, Salesforce, IBM, SAP, Microsoft and Teradata—are stitching together many different point solution providers to create suites of offerings. But the challenge of easily unifying multiple data streams collected by these diverse applications (and third-party data services) remains challenging without the use of powerful marketing middleware to collectivize and create a richer, 360-degree view of the customer.

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To address this need for more consolidated technology platforms to help unify the view of customer data across touchpoints, the CMO Council partnered with Tealium on this study, entitled “Quantify How Well You Unify,” to gain a better view of the challenges and best practices emerging as marketing leaders strive to be more strategic in their acquisition and utilization of marketing technologies. The findings are based on a quantitative survey (fielded during the third quarter of 2014) of more than 150 marketers, as well as qualitative interviews with marketing leaders at Wells Fargo, Charles Schwab, Disney ABC Television and more. Participants hail from B2B, B2C and hybrid companies, with more than half of respondents holding CMO, VP, SVP and Head of Marketing titles. The study highlights the challenges and benefits of unifying marketing technologies and data, in addition to underscoring the performance gains made by early adopters and best-practice leaders.

ADDITIONAL OBSERVATIONS FROM THE STUDY INCLUDE: • Technology is now an essential part of the modern marketing strategy, but the rapid increase in technology options is causing problems—applications and customer data are more fragmented than ever. • Most CMOs do not have a marketing technology strategy; those who do are likely to contribute more to overall revenue, ROI, customer engagement, etc. • CMOs who own the marketing technology strategy have greater business impact than CMOs who delegate the responsibility. • CMOs who successfully manage and integrate technology are achieving measurable business and operational gains on their investments (greater returns, smarter spend, fewer resources, process efficiency, speed to market, reduced costs, greater revenue, etc.). • CMOs who are good at integrating marketing technologies are seeing better business upside (more visitors, customer acquisitions, conversions, transactions, retention, upsell/cross-sell, repeat purchase, affinity, etc.). • CMOS who have successfully integrated their technologies are achieving measurable improvements in personalizing customer interactions and delivering better customer experiences across all digital channels. • The most successful companies have a comprehensive marketing technology strategy and are taking steps to better deploy, manage and integrate their technologies. • The most successful companies extend their marketing technology beyond marketing to include sales, product development, etc., and they generate a significantly higher business impact.

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KEY FINDINGS Marketing has reached a bit of a crossroads with respect to technology integration. There is no doubt that marketers recognize the value of various technologies to their companies in order to derive deeper insights about customer preferences and behaviors, and many have experienced great successes due to the implementation of these technologies. The concept of big data has grown to become more than just a marketing buzzword as more and more marketers are making technology investments to access data that will improve their view of the customer. However, gaps still exist in how marketers can actually turn this data from numbers into actual insights that help the business. In fact, a recent Gartner study found that through 2015, 85 percent of Fortune 500 organizations will be unable to exploit big data for competitive advantage. Still, the recognition of the importance of these technologies is undeniable. In fact, 78 percent of respondents to the “Quantify How Well You Unify” survey indicated that they have technology strategies either in place or in development, and 67 percent say that these technologies are either essential or very important to their businesses. Part of the problem, however, lies in the lack of alignment between the technology strategy and overall business goals and strategies. This lack of alignment may prove to be problematic on a number of levels, particularly as marketers continue to add more technologies to the mix as new platforms become available. Eighty-one percent of respondents indicated that they have as many as 10 different marketing-related technologies or cloud solutions implemented, but only 16 percent feel that their technology strategies and business strategies are tightly aligned. And while marketers are gaining better data and information about their customers across different technology platforms, it is becoming more and more difficult to create a single, cohesive view of the customer without having these technologies connected—the information is there, but piecing it all together to paint one clear picture remains a challenge. However, those who have a formal roadmap for digital marketing technology integration and data unification are showing real promise in the form of improved business and marketing performance. When we looked more closely at those who have this strategy in place, we found that half report they are achieving more targeted, relevant and efficient customer engagements compared to 22 percent who do not have this strategy in place. In addition, 39 percent of this group is achieving greater return and accountability for their marketing and advertising spend compared to only 19 percent of those without a formal strategy. The unfortunate reality, however, is that only 44 percent of respondents say they have this strategy in place. Julie Derry, Senior Director of Digital Commerce from See’s Candies, advises against implementing more technologies than a company really needs due to the overwhelming nature of integrating these platforms and then making them work together. “There’s a bit of risk involved in getting way more technology than you need

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given the size of your organization,” she says. “Once new technology is chosen, it may be difficult to integrate new data or cross-functional data into the company’s pre-existing legacy systems. You’re often dealing with manual data input, and you may be lacking processes with respect to how data is entered and structured. It’s been extremely challenging to integrate data into our new systems as we get them.” When asked to name the top struggles they are facing relative to the use of new marketing technologies, respondents indicated that integrating and centralizing increasingly fragmented data is their top challenge (54 percent), followed by figuring out which technologies to select (48 percent) and having sufficient talent and resources to manage them (48 percent). Also high on the list were prioritizing and selecting the right solutions (46 percent) and making a business case for marketing technology spend (39 percent). However, this difficulty in making a business case is likely caused by the fragmentation of data, which leads to an incomplete view of the customer and difficulty proving ROI to senior management. This is evident in the fact that only 19 percent of respondents have an underlying data framework that integrates and unifies their marketing technologies. Still, the importance of integrating the marketing technology strategy within the overall business goals and strategy cannot be overstated. This study found that 30 percent of CMOs who say they are both managing and integrating this strategy pretty well or extremely well are achieving measurable business and operational gains. Of this group, 51 percent are seeing gains in the form of greater revenue contributions, 40 percent are seeing greater campaign process, outcome and impact, 38 percent are seeing greater website performance, and another 36 percent are seeing more leads and opportunities provisioned. Those with integrated technology strategies are also able to achieve more personalized engagements with customers across channels. In fact, 59 percent report being able to achieve more relevant, efficient and targeted customer engagements, and 20 percent are seeing more profitable and enduring customer relationships.

BUILDING A CASE FOR TECHNOLOGY INVESTMENTS Thirty-seven percent of respondents have a separate budget dedicated to marketing technologies, and 20 percent are working toward this. Sixty-two percent of marketers are planning to spend less than $500,000 on these technologies this year, with 24 percent planning to spend in excess of $1 million. And while nearly 40 percent of respondents indicate they are struggling to make a business case for marketing technology investments, these investments are nevertheless on the rise, with 73 percent anticipating increases, 4 percent expecting decreases and 22 percent expecting no change. The struggle to make a business case for these technologies may lie in marketing’s ability to prove tangible ROI. While 46 percent say these technologies are producing ROI, 54 percent say that they either are not producing ROI, they aren’t sure, or they are still working to determine the ROI from marketing technologies.

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Looking specifically at CMOs, we found that 60 percent of respondents report that the CMO holds responsibility for marketing technology specification, adoption and use, which appears to bode well for business impact. Of the CMOs who own this strategy, 42 percent indicate that their marketing technology investments are producing tangible business value compared to 4 percent of CMOs who do not own the strategy. The remaining marketers are unsure or say these investments are not producing tangible business value. Those who are seeing tangible value from these investments are primarily gauging success through revenue contributions (74 percent), campaign process, outcome and impact (58 percent), website performance (55 percent), leads and opportunities provisioned (52 percent), and customer conversion and revenue optimization (49 percent). When asked where marketing technologies are being deployed, 53 percent of respondents said that they are being used to further data analytics, insight and intelligence, which reveals a gap between intent and execution. Less than one-third (29 percent) of respondents are actually measuring the value of these investments based on customer insight and personalization. Other key areas where technologies are being deployed include email marketing and mobile (67 percent), website optimization and personalization (63 percent), and search and have not only social (60 percent).

“You need to technologies and people who are data-savvy, but also people who can actually understand the business and make that connection.” —Karly Wang, SVP of SMB Database Marketing, Wells Fargo

With regard to how marketing technologies are impacting the economics of the business and ROI of marketing spend, 66 percent indicated that technologies are enabling more targeted, efficient and relevant experiences, and more than half (54 percent) said they are achieving greater return and accountability of marketing spend. However, another important gap is identified in that while marketing is looking to revenue increases as a key performance indicator for technology, only 32 percent are looking at how these technologies are enabling them to reduce operational costs.

CREATING FUNCTIONAL ALIGNMENT While 60 percent of respondents report that the CMO owns the marketing technology strategy, IT is the owner within 29 percent of respondents’ companies. And while relationships between marketing and other key functions within the business are critical to the successful implementation and execution of these technologies, it is somewhat alarming to find that only 3 percent of respondents feel they are doing extremely well at extending their marketing technologies to embrace other departments and functional areas of the business. Fifty-four percent of respondents indicate that they are working on these relationships, but this lack of alignment is likely to blame—in part—for the less-than-optimal ability to justify the business case

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for these investments, as well as the lack of alignment between the technology strategy and overall strategic business goals. Karly Wang, Senior Vice President of SMB Database Marketing for Wells Fargo, highlights how important it is to have functional relationships with people who are able to extract insights that allow the company to enhance the customer experience. “You need to have not only technologies and people who are data-savvy, but also people who can actually understand the business and make that connection,” she says. “These employees have to be devoted to figuring out how these solutions will help our customers.” Greater functional relationships in support of these technologies should incorporate groups like IT, sales, customer support, operations, etc. These cross-functional relationships are critical to getting a fuller picture of the value and ROI of these investments, as well as gaining a better understanding of customers.

CONCLUSION Today’s marketers bring disciplined development and cross-functional harmonization to what is an ever more crowded, data-producing landscape. In order to accomplish this, the marketing planning process requires better data integration and analytics, more accurate forecasting and predictive modeling, higher levels of marketing group participation and accountability, and the deployment of closed-loop campaign performance dashboards. This will be driven by a wider embrace of marketing automation platforms, processes, continuous business activity monitoring and intelligence gathering want to be able to across all customer touchpoints, interactions and transactions.

“We accumulate information and data that will allow us to make better business decisions and continue along a path of continuous improvement.” —Steven Bushong, SVP of Marketing Operations, Disney ABC Television

As marketing technologies continue to proliferate, it will be the responsibility of marketing to adopt and integrate technologies in a way that demonstrates tangible business value in order to continue making a strong case for these often hefty investments. It is certainly beneficial to have new technologies in place that provide better customer data and allow for greater business value creation, but the key is to turn this data into insights that can truly make a difference for customers and—ultimately—the business.

This will require having the right talent, platforms and processes in place to not only integrate technologies effectively, but also to connect and unify them in order to gain a more cohesive view of the customer and drive more meaningful engagements that translate into increased revenue and customer loyalty. It will also necessitate the ability to build and implement a marketing technology strategy that is linked and aligned with the overall goals of the business. For many marketers, this will be the challenge moving forward, but the good news is that marketers are already making progress in this journey. Steven Bushong, Senior Vice President of Marketing Operations at Disney ABC Television, perhaps said it best: “This process is really about tying everything together in a way that is seamless and frictionless for the user…We want to be able to accumulate information and data that will allow us to make better business decisions and continue along a path of continuous improvement. We want to industrialize our tools, and that’s going to be really © Copyright CMO Council. All Rights Reserved. 2014

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DETAILED FINDINGS Q1. Do you have a formal marketing technology strategy and build-out program to further business goals? 1% 44% Yes 22% No

34% 44%

34% In development 1% Not sure

22%

Q2. How tightly aligned is your marketing technology strategy to your business strategy?

11%

16%

28% 44%

16%

Tightly aligned

28%

Well aligned

44%

Working to better align

11%

Not well aligned

Not sure

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Q3. How many marketing-related technologies, cloud-based services and applications have you embraced or started to implement?

33% Less than five 48% Five to 10 10% 11–15 2% 16–20 1% 20–30 2% More than 30 4% Not sure

Q4. In what areas are you mostly deploying digital marketing technologies? (Please select top five)

67%

Email marketing and mobile messaging

63%

Website optimization and personalization

60%

Search and social marketing

53%

Data analytics, insight and intelligence

41%

Lead acquisition, scoring, nurturing and qualification

34%

Content creation and syndication

31%

Online and mobile advertising

30%

E-commerce channel growth and development

25%

Campaign execution and go-to-market

24%

Customer feedback, listening and experience

23%

Customer engagement, service and support

14%

Mobile application development

14%

Public relations and media analytics

11%

Brand asset management

Channel empowerment and localization

Other

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Q5. How important are new marketing technologies to your marketing groupâ&#x20AC;&#x2122;s overall effectiveness and performance? 1%

29% Essential

10% 29%

38% Very important 22% Growing in importance

22%

10% Mixed experiences 1% Not very important 1% No value to us 38%

Q6. In what ways are marketing technology investments impacting the economics of your business and the ROI of your marketing spend?

66% More targeted, efficient and relevant customer Greater return and accountability of marketing/ 54% advertising spend 29% Increased productivity and output of marketing teams 26% Improved rate of conversion, closure and deal value Measurable improvements in time-to-market and cost 24% reduction 23% More profitable and enduring customer relationships 21% Higher quality and incidence of business opportunities Stronger brand affinity and attachment; more third20% party validation and referral 14% Not much impact to date New sources of revenue and lead flow from online and 14% mobile channels 7%

Greater value for LOB leaders, sales teams and channel partners

3% Other

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Q7. Who has primary ownership and responsibility for marketing technology specification, adoption and use in your organization? (Select all that apply.)

60%

CMO or lead marketing executive

29%

CIO and IT group

18%

Direct reports managing digital marketing functions

17%

Digital marketing group/task force

16%

Head of marketing operations

14%

Head of interactive marketing

Head of e-commerce

Chief digital officer

Other

Q8. What complexities or challenges are you facing relative to the use of new marketing technologies? (Please select top three)

54%

Integrating and centralizing increasingly fragmented data

48%

Figuring out what to select and how to integrate

48%

Having sufficient talent and resources to run applications

46%

Prioritizing and selecting the right solutions

39%

Making a business case for marketing technology spend

34%

Dealing with the diversity of new choices and channels

26%

Getting marketers trained and using new technologies

Other

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Q9. How well have you extended your marketing technologies to embrace other departments and functional areas, including sales, channels, customer support, telemarketing, product development, store operations, merchandising, etc.?

3% 3% Extremely well 25% Pretty well

15% 25%

54% Working on this 15% Not very much 2% Not sure 1% Not at all

54%

Q10. Do you have an underlying data framework that integrates and unifies marketing technology deployments?

19%

50%

30%

19%

Yes

30%

50%

Working on this

Not sure

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Q11. Do you have a separate budget for your marketing technology spend? 1%

20%

37% Yes 37%

42% No 20% Lobbying for this 1% Not sure

42%

Q12. How much do you expect to invest in marketing technology this calendar year?

3% 5% 16% 62% 15%

62%

Under $500,000

15%

$501,000 to $1 million

16%

$1 million to $5 million

$5 million to $10 million

More than $10 million

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Q13. How much do you see it increasing or decreasing next year?

22% No change 12% Increase by less than 5 percent 27% Increase by 5–10 percent 18% Increase by 10–20 percent 10% Increase by 20–30 percent 6% Increase by more than 30 percent 1% Decrease by less than 5 percent 1% Decrease by 5–10 percent 1% Decrease by 10–20 percent 1% Decrease by 20–30 percent 0% Decrease by more than 30 percent

Q14. Are your marketing technology investments producing tangible business value?

10%

46%

39%

46%

Yes

39%

Working on this

10%

Not sure

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Q15. If yes, what measures, metrics or KPIs do you use? (Select top five)

74% Revenue contributions 58% Campaign process, outcome and impact 55% Website performance 52% Leads or opportunities provisioned 49% Customer conversion and revenue 38% Incidence of inquiries and site visits 36% Quality and value of data and knowledge 32% Operational cost reductions 29% Level of customer insight and personalization 28% Search prominence 25% Customer retention 13% Quality and incidence of customer engagement 7% Social brand ranking 4% Other

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Q16. What is your title? 21% Chief Marketing Officer 15% Director of Marketing 11% VP of Marketing 6% Head of Marketing 5% General Manager, Marketing 4% Director of Digital 3% SVP/EVP of Marketing 2% Director of Insights 2% VP of Marketing and Sales 1% VP of Marketing Operations 1% VP of Customer Experience 1% VP of Corporate/Marketing Communications 1% VP of Digital Marketing 1% Corporate/Marketing Communications 24% Other

Q17. To whom do you report? 36% CEO 10% President 10% VP of Marketing 9% CMO 8% Head of Marketing/GM 4% SVP of Marketing 3% COO 20% Other

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Q18. How large is your company by revenue (USD)?

38% $50 million or less 7% $51 million to $100 million 9% $101 million to $250 million 7% $251 million to $500 million 3% $501 million to $750 million 4% $751 million to $1 billion 17% $1.1 billion to $5 billion 15% Greater than $5 billion

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Q19. What best describes your companyâ&#x20AC;&#x2122;s industry sector?

ANSWER

Information technology

17%

Professional services

12%

Retail

Travel and hospitality

Banking

Telecommunications

Energy

Electronics and miscellaneous technology

Media and publishing

Media agency

Manufacturing

Automotive

Education

Healthcare

Insurance

Pharmaceuticals

Consumer durables

Wholesale/distribution

Aerospace and defense

Entertainment

Government

Transportation

Capital markets

Packaged goods

Other

12%

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Q20. What is your company type?

20% 47% B2B 47%

32%

32% Hybrid 20% B2C

Q21. In which region is your company headquartered?

63% United States 18% Europe 7% Canada 3% India 2% Africa 1% Latin America/Caribbean 1% Middle East 1% Japan 5% Other Asia-Pacific Country

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Q22. In which regions does your company operate?

81% United States 60% Europe 50% Canada 41% Latin America/Caribbean 34% China 33% Japan 33% Middle East 31% India 22% Africa 20% Other Asia-Pacific Country

Q23. How large is your staff/team?

41% Less than 10 20% 10–30 11% 31–50 11% 51–100 7% 101–200 4% 201–300 5% More than 300

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EXECUTIVE PERSPECTIVES Anthony Bowen Director of Digital Media and Search Marketing Cablevision Steven Bushong Senior Vice President, Marketing Operations Disney ABC Television Group Julie Derry Senior Director, Digital Commerce See’s Candies Larry Hanback Vice President of Marketing Operations, Charles Schwab Karly Wang Senior Vice President, SMB Database Marketing Wells Fargo Anonymous Global Vice President of Web and Digital Marketing Anonymous Investment Firm

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EXECUTIVE PERSPECTIVE FROM ANTHONY BOWEN Based in New York, Cablevision is a leading telecommunications

Anthony Bowen Director of Digital Media and Search Marketing Cablevision

operator that offers its customers Internet, phone and television services. Cablevision currently has five different websites and has built-in support initiatives that include instant chat and interactions with live sales agents. As Director of Digital Media and Search Marketing, Anthony Bowen strives to have one tactical strategy that will help all marketing teams meet their goals.

Cablevision serves customers via a multicultural site, a small-business site, a customer-driven site for the general market, a corporate site and a site for existing customers to log in and use bill pay and support tools. Bowen and his marketing teams have created a symbolic digital umbrella that strives to encompass all of the data coming from these sites to better serve their clients and customers. The company utilizes at least five different vendors who provide in-house CRM systems that focus on audience targeting and local geo-cloud marketing, with daily reports being delivered. As Cablevision’s customer base increases, Bowen also sees their vendor base expanding. “By doing analytics with one vendor and campaign management with another, we’re really creating a cloud technology that can integrate all of these different digital tactics into one unified platform,” he says. Marketing technology has allowed Cablevision to differentiate its brand and customer subscriber experience from other telecommunications companies. “We’re able to utilize the technology to speak to specific audiences,” Bowen says. “When you’re actually able to speak to a specific audience or send them specific content, it sets you apart from other businesses that only focus on acquisition-based messaging.” Cablevision’s IT teams focus on all of the company’s websites and analytics. This type of IT integration is critical for reporting and optimization because Bowen wants customers to have a unified user experience whether the customer is on desktop computer or migrates from desktop to tablet to smartphone. “As mobile starts to shift in the direction of analytics and how people are utilizing devices for search, it sets the roadmap for having a responsive site,” he says. “We are working to ensure that our sites are as responsive

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as possible. When customers visit one of our retention-driven sites, for example, we can identify who they are and target those customers with retention messaging, cross-sell messaging, upsell messaging, video learning tools and self-help channels.” Cablevision’s IT and marketing teams have collaborated on a call center tool that can be used to pull customer information by telephone number or by household. Support teams can see exactly who the customer is and what type of product they have. They can also see what type of service they have and how long they’ve been customers. However, on the analytics end, Bowen notes that one main challenge involves having access to unified reporting. Most of the service providers used by Cablevision run on different platforms and don’t provide easy and fast reports that can be reviewed across the board. “We need a platform that can integrate all of the reporting into one place, allowing us to have a much more cohesive picture of how everything is working,” he says. Adometry by Google is one technology that gives Cablevision a look at the digital attribution model. These insights help the company know what efforts create lift and enable them to zero-in on touchpoints, identify frequent conversions and note how often to send customers messages within a page search, social landscape or email. “Once that framework is set and you have an understanding of that attribution, the next step is having a technology platform that can actually take the learnings you’ve gained from the study and implement them across the board to help drive the digital strategy moving forward,” he says. “Our tactical strategy is all about re-targeting and re-marketing. You have to work alongside your CRM partner to pass along your data and define the segments of the audience.”

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EXECUTIVE PERSPECTIVE FROM STEVEN BUSHONG Disney ABC Television Group (DABC) broadcasts television shows to tens

Steven Bushong Senior Vice President, Marketing Operations Disney ABC Television Group

of millions of people every day across the U.S. and is a part of The Walt Disney Company’s global entertainment and news television properties. As Senior Vice President of Marketing Operations, Steven Bushong and his team engage with fans and audiences across a wide mix of owned, earned and bought media, often targeting specific Nielsen demographics. The company also pulls info from social networking to gauge programming monitoring sentiment and buzz around the shows and characters. Disney ABC consistently measures how campaigns perform and how they’re produced with an overall focus on high-quality content and improved ROI.

Disney ABC allocates about 2 percent of its marketing budget on marketing technology-related spend, and Bushong says he is able to justify that amount through productivity, increases in effectiveness and the efficiencies that they have been able to deliver. “We try to tie our modeling back to the Nielsen ratings to see the effectiveness in marketing ROI,” Bushong says. “We then leverage our model to help us make decisions around allocation.” Bushong’s marketing operations team works with both IT and content creation teams within other networks of The Walt Disney Company to innovate and create best practices for communicating with the company’s audience. They have also created a state-of-the-art content creation platform that allows them to respond quickly to changes in storylines and messages while flexing capacity throughout the year. “We also have technologists on our team who are really passionate about the quality of marketing content we create,” he says. “This is one of the things that allows us to remain at the forefront of our industry in this area because they understand marketing, our business and our cadence.” The goal of the company’s marketing efforts is to drive viewership of its shows and audience engagement. The company’s television shows are marketed through either owned or paid media or earned platforms to create awareness and drive intent to view. “My role is a relatively new one in the industry—managing the people, processes, technologies and finances that go into our content creation,” he says. “I manage our ‘content factory.’” Disney ABC has a very detailed and longstanding marketing technology strategy that encompasses content, acquisition, creation, transformation

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and delivery. They also have a very tactical approach to social platform measurement to determine how they are engaging the audience on social platforms. The broadcasting company is in the process of striving to improve communication with its audiences. Most real-time interactions take place within a small team that initiates conversations, monitors social media and responds to comments, and they are able to communicate with the audience as they watch shows. To enable more contextually relevant advertising and messaging for their marketing communications, the company conducts A/B testing and focus group testing to gather insights around how they can improve the relevance of their content. “We have a very robust approach to data management and analysis that helps us understand the effectiveness of different media types at different moments in time during the life of a television show,” he says. “We use that to manage our marketing ROI more than anything else.” Because the company’s marketing teams create so much content, a thirdparty application is used to manage production workloads. They company was also one of the first adopters of MRM technology for campaign planning and management. One rising challenge is the ability to bring these disparate tools together and develop a common platform that allows all of their systems to work well together. “When it comes to the volume that we have in marketing for content production, our teams have had a hard time keeping up,” he says. “We’re currently reviewing all of our technology components and will be upgrading over the next year. The process is really about tying everything together in a way that is seamless and frictionless for the user.” Disney is constantly looking for new tools that will allow them to do things that aren’t already being done. “Since the time of Walt Disney all of our business segments have been innovation leaders in their respective industries,” Bushong says. “We are continuing that legacy.” He adds, “As we go through the actions of doing our work, we want to be able to accumulate information and data that will allow us to make better business decisions and continue along a path of continuous improvement. We want to industrialize our tools, and that’s going to be really hard to do. But as long as we continue to tell a good story and quickly spin up the content in the format that’s required, then we can be successful.”

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EXECUTIVE PERSPECTIVE FROM JULIE DERRY Headquartered in California, See’s Candies has more than 200 retail shops and a thriving online presence. To better cater to tasters who love their

Julie Derry Senior Director, Digital Commerce See’s Candies

candies but don’t live in California, See’s has been able to successfully develop a presence beyond the West Coast. This sizable potential US marketplace leaves room for further expansion and investment as the retailer’s main goal is to drive traffic into its stores and have people taste their candies. As Senior Director of Digital Commerce, Julie Derry manages the e-commerce and contact center channels, which are the fastestgrowing areas of the business.

See’s Candies’ customer experience journey starts with understanding the company’s target customers. Once this understanding is achieved, marketing teams then work with third parties to decide which segments they are going to target in their marketing efforts. “We’re in the process of implementing point-of-sale for retail,” she says. “Once we have that information, our next step will be to centralize our customer data and gain holistic view of who our customers are.” At the customer record level, See’s Candies knows whether a customer fits a specific persona and can tailor email campaigns based on each particular segment. As See’s Candies has limited technical capabilities, the company is currently re-platforming its processes. Despite this limitation, however, See’s has a very prominent social media presence. With well over a million Facebook fans and a significant following on Pinterest, the brand has managed to create a very loyal customer base. “While we have seen some great successes with social, we’ve not yet gone down the Twitter path because we know there’s a significant customer component to that, and we’re just not ready to address it yet,” she says. See’s Candies plans to launch the Demandware platform and integrate a new POS. These initiatives will help the company streamline both online and pick-up orders. “This new POS will solve a lot of usability challenges that we currently have,” Derry says. “Digitally, we’re going to be able to map out all of the capabilities we want available to our customers to create the best experience. This new technology will further establish us as a differentiator in the market.”

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See’s uses different technologies for clickstream analysis and to get direct customer feedback from various pages on the website. While Derry describes the company as data-rich, she says the company is informationpoor in that they are still learning how to access and centralize all of the data they have. See’s uses specific metrics to justify investments in marketing technologies. Their main metrics look at ROI and the time frame in which they receive net returns. While areas like social media have proven difficult to monetize and quantify in terms of revenue, Derry has found a solution to this problem. “There are industry benchmarks from other companies who’ve seen the benefit of new platforms and technologies, and you can apply that benchmarking in creating your own investment plan,” she says. “It provides a good guide to know how you are stacking up against other companies.” For others who are implementing and deploying new marketing technologies, Derry recommends developing a true understanding of what their needs are and investigating the right-size solution for a company’s needs. Otherwise, this process can be overwhelming as there are so many options available. Furthermore, it’s important to understand how to integrate these systems once they are acquired so that you benefit the most from them. “There’s a bit of risk involved in getting way more technology than you need given the size of your organization,” she says. “Once new technology is chosen, it may be difficult to integrate new data or crossfunctional data into the company’s pre-existing legacy systems. You’re often dealing with manual data input, and you may be lacking processes with respect to how data is entered and structured. It’s been extremely challenging to integrate data into our new systems as we get them.” Despite these challenges, Derry is determined to master the integration of marketing technology in order to better support the customer journey. “You really need to understand your culture, your organization and what it’s going to take to deliver the experience that the customer wants from a technology standpoint,” she says. “You also need to know what assets will be needed to promote it so that you can get the buy-in and support that you need to follow through.”

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EXECUTIVE PERSPECTIVE FROM LARRY HANBACK Charles Schwab is a global investment services firm that has more than 300 branches and approximately 1,200 financial consultants. The firm’s formal

Larry Hanback Vice President, Marketing Operations Charles Schwab

marketing technology strategy has been in place for many years and is based primarily on varying degrees of specificity. As marketing continues to change at an accelerated rate, Vice President of Marketing Operations Larry Hanback is looking at a more holistic approach to integrating technology into their marketing plans.

Charles Schwab mixes homegrown and third-party solutions to create a unique hybrid of technologies that serve both the needs of internal organizations and those of their clients. Hanback leads the Marketing Operations team within Charles Schwab’s central marketing organization and focuses on three main areas: strategy integration, planning and budget support. However, when it comes to the actual deployment of marketing efforts, several teams are involved. “The marketing technology and operations teams are focused on leveraging and deploying a mix of process and technology to support the marketing efforts we have in place,” Hanback says. “We also have a services team and technology partners that we work with.” Many of the firm’s technology solutions, such as its CRM system, are internally developed and customized to fit the organization’s needs, but an array of different service providers are used as well. Some of their technology solutions are localized deployments and only provide selective support. For this reason, the company has worked to align its internal and external solutions to make the data they gather more interconnected. “We get into some content management solutions, both internally and externally, and some technologies go further out into the actual distribution of marketing materials to clients,” he says. “This can be anything from behavioral targeting systems to re-targeting efforts.” The company already works with dozens of different marketing technologies, and as the number of these applications increases, the amount of data that the company needs to capture increases as well. The firm consistently checks its data silos and determines how to crossconnect them or consolidate them into more centralized data warehouses. This also involves asking themselves which technologies they need to be directly involved in, how the current technologies they have in place either facilitate what they want or can be expanded to support their objectives moving forward, and where changes need to be made.

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“We are getting increasingly better about creating alignment across all of the different technologies we use,” he says. “Our technology partners have been working over the past couple of years to break down some of the silos and make the data a little more interconnected. Although we have made some strides in this area, I think we are pretty early in the integration of the different activities and channels in terms of how cross-connected the data is within the various systems.” Charles Schwab is currently exploring the use of cloud-based solutions, but data sensitivity and protecting proprietary customer information are critical concerns. “Safeguarding customer information is hugely important in this business, and there’s a high degree of sensitivity around the information we have,” he says. “There are multiple Salesforce deployments inside the firm, and we continue to look at other examples like that.” On a broad behavioral level, the company’s goal is to capture insights to understand the needs of its customers. Over the last several years, Charles Schwab has made investments in its lead management infrastructure, which have greatly impacted their ability to capture information and respond to customers and prospects in a much shorter time frame. “We’re trying to leverage this information to customize the content that comes back to the client,” Hanback says. “We see a certain set of behaviors over a core block of people that we serve, and that indicates what subjects they’re interested in. As a result, we can work to ensure that we provide the information that meets their needs.” With respect to challenges that the company has faced, Hanback says that collecting data, synthesizing it and extracting insights from it has posed one issue for the firm. In addition, the investments required to make the changes they want have been sizable. “It’s one thing to have all of the information, but it’s quite another thing to be able to convert it into something that you can use to make a difference for customers,” Hanback says. “There’s also a bit of a legacy infrastructure in place at Schwab, and we have to be mindful about how we upgrade that, but that’s an ongoing challenge.” Hanback notes that getting these insights has been critical for enabling teams to help clients, make them happier and open up more business opportunities. “Our sense is that marketing technology—and the appropriate deployment of that technology—have definitely helped us achieve various business goals and objectives that we have set,” he says. “As a result, we’ve been able to increase client satisfaction, drive incremental assets to the firm and

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EXECUTIVE PERSPECTIVE FROM KARLY WANG

Karly Wang

Wells Fargo is a leader in international banking, investment, mortgage,

Senior Vice President, SMB Database Marketing Wells Fargo

insurance, and consumer and commercial financial services. Ranked fourth in assets and first in market value in the United States, Wells Fargo supports almost 35 million business households. Knowing that today’s corporate environment is recognizing the value of customer insights, Karly Wang, Senior Vice President of SMB Database Marketing, and her team pride themselves on knowing their customers and increasing their understanding of how to create effective digital marketing interactions.

The SMB Database Marketing team resides within the small business credit community of Wells Fargo. Mostly familiar with small business owners, Wang and her team decide what types of marketing campaigns to offer and whom the campaigns should target, in addition to managing the overall approach. Wells Fargo defines small businesses as companies with up to $20 million in revenue. But within that market exists an area of massive fragmentation. “Our main goal is to acquire new customers in a fast and cost-effective manner,” Wang says. “It’s about understanding the customer’s needs in order to provide effective communications that enable us to cross-sell and upsell more effectively.” Because of legacy requirements and how Wells Fargo operates as a business, there’s never a situation in which only one team is responsible for marketing efforts. And because of the importance of data, their efforts to gain customer insights are managed by a centralized team. “When it comes to data analysis, we leverage the data framework in the company but maintain our own technical environment, which is managed by our centralized team,” she says. “This system allows our teams to answer questions on how to address specific problems and decide which strategies are best to use in individual segments.” When making technology decisions, Wang and her small business team most often go with an enterprise approach. To this end, there are more than 90 different lines of business with teams who specialize in all kinds of technology to enable their marketing programs. Wells Fargo has made large investments into its customer experience strategy and plans to continue these investments in the future. As a result, they have built a repository of data from customer interactions, which sets them apart from other banks.

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“That’s not to say there isn’t room for improvement; there is a huge amount of room for improvement, and it’s an ongoing process,” Wang says. “If you talk to our technologists, they would tell you that they’re extremely busy, and there’s still a long list of things they could do to improve the customer experience.” To enhance the customer experience, Wells Fargo uses many big data applications and analytics tools to manage mobile and online experiences. As a financial institution, one major aspect of the customer experience is data security, and it consumes a substantial part of the bank’s technology focus. “It’s not about how cutting-edge our technology is but about how to keep our customers’ information safe and make our tools safe for our customers to use,” Wang says. “We have to protect our customers but also hold ourselves to the value that we promise them.” Before the bank had consumer data and insights, marketers had to work hard to identify insights from the data, make sure computer algorithms were running sensibly, and learn how to integrate insights from the data into the business. For this reason, she says it is important to have people on staff who can understand the data and extract actionable insights to enhance the customer experience moving forward. “You need to have not only technologies and people who are data-savvy, but also people who can actually understand the business and make that connection,” she says. “These employees have to be devoted to figuring out how these solutions will help our customers.”

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ANONYMOUS EXECUTIVE PERSPECTIVE One global investment management firm with whom we spoke for this report has more than 100 online and mobile sites and provides financial

Anonymous Global Vice President of Web and Digital Marketing Anonymous Investment Firm

content in more than 40 different countries. The firm’s primary area of expertise involves supplying advisors and financial professionals with B2B product data and financial information. The company’s websites are not created for lead generation but are instead intended to be self-service tools for its advisors. The company has been able to align marketing and technology teams to enable marketing to better understand how to leverage technology to create the greatest impact from their efforts.

The firm has a centralized view of technology versus marketing spend, which makes its marketing technology foundation different from other companies in this space. “We don’t really get a formal budget,” says the firm’s Vice President of Web and Digital Marketing. “I take my plan to the centralized PMO and talk about what I’d like to do and what the investment would be, but that doesn’t mean it’ll get approved. Everything is aggregated in a different way that doesn’t silo the business.” Marketing holds accountably for its own projects, but there is some degree of dialogue with IT. However, the company doesn’t have a holistic view of the marketing and technology aspects of the business. As a result, business cases for marketing efforts are built based on efficiency. While all of the countries seem to have different wish lists for capabilities that they would like to see, if a technology solution can be built that will work for 20 countries rather than just one, they can achieve a greater level of global efficiency. As a historically B2B company, the firm’s institutional funding is based on building personal relationship with customers and making sure that business needs are met on a 24/7 basis, and web analytics certainly play a role in that. “We have web analytics, and we look at that level of engagement, but it’s more about providing information that the financial advisors need before meeting with the client,” he says. “We work with a lot of different companies to provide the capabilities we need.”

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SPONSOR CONTRIBUTION For marketing executives, technology has turned into the classic double-edged sword: so helpful, yet—increasingly—so problematic. Now more than ever, marketing technology is seen as a key component of any effective marketing strategy, ushering in new ways to acquire, convert and retain more customers. Albeit a key enabler of differentiation, competitive advantage and customer centricity, technology has also become a big problem: It involves too many siloed applications, too much fragmented customer data and the inability to effectively integrate it all together. One of the most startling data points from this new study is that a surprising 54 percent of marketers are not sure whether their marketing technology investments are producing tangible business value. Considering the billions spent on technology each year, there’s an imperative for marketing leaders to not only drive the strategy for investment, but also to ensure that their spend delivers results against their key business drivers. At Tealium, we have long believed in the power of marketing technology and have embraced the mission of making it easier for marketers and their IT counterparts to leverage any technology necessary to accomplish their business goals. It is also our belief that when marketers own their marketing technology strategies, amazing things happen. This belief was the impetus behind commissioning an economics survey with the CMO Council. Our goal was to better understand the attitudes of senior marketers toward technology and to be able to draw clear economic distinctions between those who embrace technology and those who continue to keep it at arm’s length. The differences are stark: • Forty-two percent of CMOs who own their marketing technology strategy have greater business impact than those delegate. • Fifty percent of those with a formal strategy are able to achieve more targeted, efficient and relevant customer engagements. • Nearly one-third of CMOs who manage and integrate technology extremely well or pretty well are seeing tangible business value, with 51 percent of those achieving greater revenue contributions. Given this insight, it’s clear that marketing executives must be more proactive in thinking about how to better manage and connect their disparate technologies to maximize their investments. If they want to achieve a unified approach to marketing (i.e., the ability to drive real-time customer interactions across channels), it’s an absolute must. As you begin to understand the power and impact of marketing technology, let me offer one tip: Start with the right foundation.

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Enterprise tag management is widely recognized as that unifying technology and data management platform. Tealium’s tag management solution is being used by hundreds of major brands, such Cathay Pacific Airways, Domino’s Pizza, Hanesbrands, Kimberly-Clark Corp., Lamps Plus, Lincoln Financial Group and many more to harness the power of technology and data to take strategic, impactful action. Thank you for reading this report. We hope you find it useful in unlocking your marketing potential.

Tracy Hansen CMO Tealium

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ABOUT THE CHIEF MARKETING OFFICER COUNCIL The Chief Marketing Officer (CMO) Council is the only global network of executives specifically dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council’s 7,500-plus members control more than $400 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 35,000 global executives in more than 110 countries covering multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia-Pacific, Middle East, India and Africa. The council’s strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Mobile Relationship Marketing (MRM) Strategies, LoyaltyLeaders.org, CMOCIOAlign.org, Marketing Supply Chain Institute, Customer Experience Board, Digital Marketing Performance Institute, GeoBranding Center and the Forum to Advance the Mobile Experience (FAME). For more information, visit the CMO Council at www.cmocouncil.org.

ABOUT TEALIUM Tealium is the leader in real-time unified marketing solutions, helping brands seamlessly integrate their siloed applications and data and drive more profitable interactions across all digital touchpoints. Tealium’s open platform for tag management and data enrichment enables marketers to bring order to chaos and build better customer experiences. Founded in 2008, Tealium was recently named to the Inc. 500, which recognizes the fastest-growing private companies in America. The company’s award-winning solutions are used by hundreds of global enterprises, including Cathay Pacific Airways, Domino’s Pizza, Hanesbrands, Kimberly-Clark Corp., Lamps Plus, Lincoln Financial Group, Party City, Univision and Wet Seal. For more information, visit www.tealium.com.