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Multimedia, Multichannel, Multimoney

I was sitting in a board meeting of The Database Group the other day. We were discussing the kind of services that our marketing clients most needed. One of our conclusions was that although clients who uses a database bureau should have their data on customers and on marketing activities in order, they often do not get the information they need to manage their channels. An example was passed around. It showed in a simple graph that contact channels with the highest lead generation (measured in both response rates and absolute numbers of responses) provided virtually no sales. This is not a new story, of course, but what was startling was that the chart was based on real data, for a company that prides itself on its marketing standards.


What this taught me was that while management thinking, marketing technology and perhaps even marketing planning has moved pretty quickly in the areas of media and channel productivity in the last few years, practice has moved ahead only in a few companies. I am sure that this has a lot to do with the reasons identified in the research into media neutral marketing taking place at the Centre for Integrated Marketing at Luton University where The Chartered Institute of Marketing and IBM are the leading sponsors (see www.integratedmarketing.org.uk). You might want to read the You talkin' to me? paper on this subject on www.shapetheagenda.com. The main reason for this poor practice (and at least 25% too great a spend on marketing communications in most large companies) is the organisational silos that exist on both client and agency sides, with rigid positions being developed about the role of particular media and the kind of budget that should be spent on them.


This in turn is a consequence of failure to do the multichannel planning work. Another research project this time at Cranfield (see www.som.cranfield.ac.uk/som/ccarm/multichannel/index.asp - again, IBM is a leading sponsor) is focusing on how companies should optimise the management of their communication and distribution channels. Here, similar conclusions have been reached, from a slightly longer-term perspective. Companies who need to use many media and channels need to manage the decisions strategically, including changing channel focus to meet customers' changing channel preferences (including their attitude to permissioning and here legal or regulatory aspects may need to be taken into account), and where appropriate, using particular channels competitively, perhaps branding them, trying to dominate them, so as to make it harder for competitors.


What makes all this difficult (though it is always possible to make big improvements, so this is not an excuse for inaction) is the transformation in the technologies of media and channel management that is taking place. Most major CRM software suppliers now include (or are about to announce) modules which enable you to fine-tune channel use in real time or near real time, to optimise outbound and inbound contacts with customers, to take into account permissions, and to change media spend plans according to the latest results (marketing resource management). However, just as with CRM, it takes quite a long time for practice to catch up with technological capability.


This brings us to the third research area my own i.e. marketing transformation. Our main conclusion here is that getting the kind of savings in costs and improvements in effectiveness described in the above research projects is a transformational, change management issue. IBM is about to publish a piece of research which shows that on many CRM projects, change management is the central issue and that when change management disciplines are not used, CRM projects tend to fail. We also have evidence that while consultants/clients are well aware of this (it's not a new finding), they still knowingly make/accept recommendations that either pay lip-service to change management or do not cover it at all. That's why my main conclusion about marketing transformation is that it needs to be driven by marketing directors who distance themselves from marketing detail and expertise and instead function as true general managers of the function that is responsible for marshalling resources (people, technology, money, suppliers etc.) to ensure that the company and customers both get what they need in the short and long term.

About the Author
Merlin Stone is IBM's Business Research Leader and Director of QCi Ltd and The Database Group Ltd. He is currently moving his professorship back to Bristol Business School.

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