The best IT for reaching customers and partners
There's an abundance of new technology to help sales and marketing departments improve and track their performance. Andrew Donoghue explains where to look for some e-help.
The last 18 months have no doubt been challenging for sales and marketing pros, with customers reluctant to spend during the economic downturn.
Yet advances in technology mean there are now many new, effective ways to connect with customers and partners.
Here we look at the tech trends taking hold in sales and marketing departments.
All eyes on social networking
The rise of social networking has provided a new channel for innovative companies to reach their customers. Some of the more traditionally minded marketing departments may have struggled to understand how social tools mesh with their existing web plans but others have been happy to experiment.
"Facebook is central to our social media strategy," says Robin Auld, marketing director of Domino's Pizza UK & Ireland.
The latest addition to this strategy is a Superfans application on the company's Facebook profile page. Loyal fans of Domino's on Facebook are rewarded with a promotional code which can be used to get discounts on pizza deliveries. "This application will enable us to leverage the importance of brand advocates in growing our customer base," explains Auld.
According to recent research from analyst Forrester, use of social networking tools by marketing departments is set to increase throughout 2010 and beyond as companies search for ways to reach out to, and extend, their customer base.
"Social technologies allow for accessible innovation where the risks and costs are not as high, but the return is significant," says Forrester Research vice president and research director Christine Overby.
The analyst predicts that spending on social media in the US alone will grow from $716m in 2009 to more than $3.1bn in 2014. This rise in marketing spend on social networking platforms is higher than any other form of interactive marketing - the total market for which is set to grow from $25.5bn in 2009 to nearly $55bn in 2014.
Turning friends into sales
"Marketers don't need to start revolutions in order to innovate, they need to solve problems," says Overby. "For consumer-facing companies, that means tapping into consumers' increasing expectation that they will participate with your brand. For B2B firms, it means leveraging the power of innovative customers who are increasingly engaging with their peers to solve their problems."
While companies may have been happy to experiment up until now, the next 12 months will see an explicit focus on the social platforms that can turn customer connections into actual sales.
According to Ed Thompson, distinguished analyst at Gartner, Facebook will become the number one social network in all but 25 countries.
"Facebook membership hit 300 million in September 2009, and is roughly doubling each year," says Thompson. "It is reasonable to assume that it will attain a membership of 600 million (including inactive accounts and a small number of users with multiple accounts) by the end of 2010 based on the trajectory in 2009."
However, companies will have to look to platforms other than Facebook if they want to engage with customers in countries such as Brazil, China, India, Japan and Russia, Gartner advises.
"Marketers and customer service management will need to switch focus from the large number of social networks to the three or four that will dominate specific languages," the Gartner Executive Programs (EXP) 2010 CIO Agenda survey stated earlier this year.
Social tools will also impact more traditional approaches to electronic marketing, analysts believe. The fact that sites such as Facebook have internal email systems creates another target for email marketing and will contribute to the $2bn in spending on such campaigns by 2014, according to Forrester... (continued on page 2)
"The use of email in social networks will be one of the biggest challenges for direct marketers," said Forrester Research vice president David Daniels. "Over the next five years, marketers must bridge the gap between social and traditional inboxes with social sharing tools."
More inboxes means consumers will receive around 9,000 email marketing messages per year - but many of them will be ignored or won't reach their target, the analyst believes. Forrester recommends that marketing departments focus on improving the relevance of their mail campaigns.
"By 2014 direct marketers will waste $144m on emails that never reach their primary target," says Daniels. "Successful direct marketing pros will alter their tactics to overcome inbox clutter and increase relevancy."
Realising real results
While social networking tools may be the current darling of marketing departments, all interactive technologies have an advantage for marketeers, especially in tight economic times, of being able to provide metrics and feedback on how campaigns are actually delivering.
By the end of 2011, more than 90 per cent of Fortune 100 marketing campaigns will include some online element, well up from the 50 per cent in 2009, according to Gartner.
"Being online gives marketers greater access to response attribution metrics to help determine what is working and what isn't working in a campaign," says Adam Sarner, research director at Gartner.
Spruced-up supply chain and partnerships
Social networking is not the only technology that will shape how sales and marketing departments perform over the next year. A more joined-up approach to business partnerships and the supply chain will also be key.
Recent research from the Chief Marketing Officers (CMO) Council highlighted the importance of sharing customer information with partners and suppliers. Only 26 per cent of respondents to the survey said they were effective when it came to sharing customer data and insights with partners to improve innovation.
"Twenty-first century business models are more dependent than ever on complex, cross-company collaboration for business innovation, product and service delivery and customer satisfaction," says Liz Miller, vice president of the CMO Council.
Same old, same old - CRM and SaaS
While some companies will have the cash and bravery to invest in disruptive technologies, more than half of spending on sales and marketing IT in 2010 will be on proven technologies such as customer relationship management, analysts believe. Around 48 per cent of enterprises and 19 per cent of SMEs plan to upgrade their CRM applications this year, according to research by Forrester.
Software as a service (SaaS) applications will also rise in popularity this year, the analyst believes. The flexibility and time to market offered by hosted sales automation platforms are proving attractive to companies such as financial services specialist Standard Life which recently adopted a platform from Salesforce.com.
"We needed it to go live as quickly as possible and didn't want to be caught up in months of system development, testing and deployment," explains Lawrence Cook, national sales manager with Standard Life.
Standard Life was also interested in the metrics which the system could provide on how well its sales team were dealing with independent financial analysts (IFA).
"In one instance, we were able to see that one team was devoting 60 per cent of their time to seven per cent of the IFAs. They were targeting the right IFAs but it was draining our resources," says Cook.
Accurate performance data appears to be the underlying motivator for most of the technology trends for sales and marketing in 2010. With businesses spending less cash being on sales and marketing, teams have to know what they are doing is actually working.
The hit-and-hope approach at the heart of many traditional strategies are being supplanted by approaches with measurable outcomes as companies become increasingly reluctant to leave success to chance.