Companies seeking to accelerate growth by improving their value proposition may be stopping short by solely focusing on identifying the total addressable market (TAM). While identifying attractive market spaces is the right first step, a market-led growth approach alone is insufficient. It can lead to false assumptions that make a business vulnerable. Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.

The Limitations of a Market-Led Growth Approach: Starbucks’ Expansion

To see the limitations of using only a market-led growth approach, recall in 2008 when Starbucks announced the closure of 600 US stores. At the time, Starbucks was confronted with the challenge of continuing to drive same-store sales while rapidly expanding its footprint. The brand created new offers around wi-fi services, music and an expanding menu of food and drinks while opening stores at a rapid pace.

However, Starbucks’ customers were starting to seek out other coffee chains. Companies like McDonald’s and Dunkin Donuts were improving their value propositions around coffee to regain forfeited shares. In the process, Starbucks diverted investments in delivering a great coffee experience in favor of investing in near market adjacencies with little success.

“Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.”

This led Starbucks to deliberately rethink its value proposition and develop a focused set of customer-led growth moves to turn around the business. And where did Howard Schultz start? With the customer. Starbucks launched a series of new moves including the introduction of a Pike Place blend, delivering whole bean coffee to stores and purchasing new machines designed for better coffee brewing. Starbucks later continued with one of the most engaging loyalty programs in retail to continue to drive same-store sales. They have continued to evolve their value proposition in countries against customer needs, with frappuccino beverages ranging from red bean green tea in China to dulce de leche in Argentina. Starbucks has even created uniqueness in its more than 30,000 stores around the world.

Why Value Propositions Should Be Aligned with Customer Needs: An Example From Cigna

Sharpening one’s value proposition against target customer needs and supporting it with market-shaping moves can become an essential motivator on “why buy from us”. But it’s not just retailers who seek out developing strong customer-led, value propositions. We see categories like health insurance and financial services driving massive transformations in their market-facing propositions and investing greatly to understand customer needs.

Take the health insurance challenge of continued cost pressure, rising cost burdens, and trying to create engagement and value beyond the policy. To combat this, global health services company Cigna has made significant investments to truly understand its customers, recently completing a three-year study of 200,000 consumers on health incentives. The company has been on a journey to strengthen its value proposition with a focus on integrated capabilities and connected, personalized solutions that advance whole-person health.

Cigna started this proposition development through a thoughtful augmentation of value-added services for employers and employees built around customer needs. Cigna services support a range of issues employers care about for employees such as life assistance, financial wellness, health advocacy, wellness and travel. The company is taking these services to the next step piloting Cigna Health Today™, an Amazon Alexa voice skill aimed at proactive health engagement.

In 2018, Cigna distributed more than $255 million in cost savings back to customers for completing 2.5 million health goals. Further, in December 2018 Cigna announced a $67 billion acquisition of Express Scripts Holding as a move to strengthen the company’s position as a one-stop-shop for health needs. Core to Cigna’s value proposition is finding a more complete way to engage and support customers beyond just insurance.

A Customer-Informed Value Proposition to Drive Uncommon Growth: JP Morgan Chase

In financial services, a lot of focus has been placed to thwart off emerging FinTech and BigTech (e.g., Alibaba, Apple, Amazon) and winning with the next generation of affluent millennial consumers. JP Morgan Chase shocked audiences during a time of industry-wide increased operational cost pressure by offering 100K point consumer signup bonuses on its new millennial-focused Sapphire Reserve card. The card hit its annual acquisition goal in two weeks and Chase even ran out of the signature metal cards.

JP Morgan estimated quarterly losses at the end of 2016 at over $300 million. This did not come absent of a strategy than invested heavily on deeply understanding millennial consumer financial services and spending needs down to the “plunk” factor of dropping the metal card. JP Morgan Chase was seeking to build one of the strongest value propositions behind Sapphire and extend the offer well beyond credit cards.

JP Morgan Chase, CEO Jamie Dimon shared that despite acquisition costs expensed over 12 months, the benefits would come over several years. Fast-forward just over 2 years since the launch and the results are impressive. The average Sapphire Reserve cardholder income is ~$180K and the average sales volume of $39K, a true “top of wallet” card. What’s more impressive is that 96% of cardholders actively use their cards and annual renewal rates are >90%. The company does 2X the industry average in merchant processing volume over $1.2 trillion and has raised its credit card Net Promoter Score with customers 18 points since 2012. JP Morgan Chase hasn’t stopped there, the company continues to find meaningful ways to deliver customer value (new “moves”). Evolving its Premier Platinum checking accounts to launch Sapphire Banking, with new perks like no ATM, foreign exchange, or wire transfer fees. Sapphire Banking also includes free online stock and ETF trades along with access to special experiences. Sapphire is giving valued customers an ever-widening list of perks and services to keep people locked into the ecosystem.

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Victim or Victor? 

That’s a choice all CMOs face today in responding to the multitude of changes rocking the marketing landscape. If CMOs let change put them on the defensive, marketing’s role at their companies (and their job tenure) may shrink. But if they get in front of change, the role that marketing plays at the company can become more strategic than ever, with the CMO’s role on the c-suite team more critical.

The average CMO tenure remains short, just 44 months. In many cases careers are brief because CMOs struggle to master a confluence of changes:

• The businesses that marketing supports are changing,
  including key aspects of their go to market / commercialization
• The behavior of customers served by those businesses is changing
• The way marketing gets done is changing
• The role that marketing needs to play in the company is changing
• The talent that marketing must inspire to join and stay with the company is changing

This presents CMO’s with a pivotal question, every Monday morning. Is that marketing leadership hill that I’m climbing a mountain that I’m going to stand atop?  Or is it a volcano that’s going to erupt?

The answer depends in large part on the existence and quality of the CMO’s transformation agenda. It also depends on CMO success in linking their marketing transformation agenda to the company’s overall transformation plan.

“Once developed, refined and socialized, the agenda serves as a guiding light that CMOs use to inspire their workforce and company leadership to invest in new impact.”

Creating a CMO Transformation Agenda

What is a CMO transformation agenda? Very simply, it’s a CMO’s game plan for how a marketing organization undergoing transformation can better serve a company that’s undergoing transformation. Every good agenda includes three elements:

• Clear ambitions for change
• Concrete moves per ambition in a roadmap
• A headline theme that captures the agenda’s overall impact.

Once developed, refined and socialized, the agenda serves as a guiding light that CMOs use to inspire their workforce and company leadership to invest in new impact. Five steps will help CMO’s to effectively develop their agenda.

1. Gather a brain trust who will walk through the agenda development journey together.

The marketing transformation leadership team should be large enough to look at the business and its marketing function from multiple angles, but small enough to keep discussions confidential and minimize politics so that free-thinking ideas can be generated. A team that can be counted on one hand is optimal.

If resources are available, it helps to supplement the effort with an outside advisor in touch with marketing transformation trends across multiple industries to stimulate creative thinking. A good advisor will also provide a helpful sounding board and help synthesize team inputs and outputs into effective communication documents.

2. Prepare the team with common inputs to enable everyone to brainstorm effectively.

The agenda needs to address the underlying forces that are compelling marketing to undergo a transformation. A CMO and team should identify those forces to craft a vision that is on-target for impact.

Start by studying the company’s current corporate strategy and business plans, and compare them to their 3-5-year-old versions. How are the roles of marketing and go-to-market channels changing?  Is there leadership talk today of even more change over the horizon? If so what are the implications? Repeat this thought process BU by BU, region-by-region, customer type by customer type, always looking for major patterns (vs. niche instances) of how marketing needs to show up differently.

Key questions to answer in this exercise include:

• How are customer behaviors, priorities, and segments changing?
• How are business models and offer value propositions changing?
• How are routes to market and post-purchase relationship opportunities changing?

Keep bringing these questions back to the implications for marketing:

• What new market-facing capabilities does the business need?
• Which of those capabilities might marketing provide, including new roles?
• How will marketing need to redefine and shift emphasis from its current capabilities?

Beyond taking inspiration from the company’s business requirements, explore changes occurring in the world of marketing, not only in your industry but in other industries that may prove insightful. This exploration will help identify opportunities for marketing to add value in ways that company strategists and peer executives don’t yet know about.

What are key trends in marketing? Our next blog post is devoted to that topic – we’ll share a handful of marketing trend themes that we’ve observed, each one in its own right a combination of 3 to 4 trends.

As you review external marketing trends, ask yourself:

• Which trends obviously apply to our situation? Why?
• What factors underly other trends?  Might those factors apply to our situation?
• Do some trends link to our corporate strategy choices?   What are dependencies?
• Will key trends be easily understood and received by the company’s leadership team?  If not, how much socialization is involved?

3. Over the course of several meetings, brainstorm 3 to 5 transformational ambitions, several moves per ambition, and a unifying vision.  

We find the brainstorming process is best served by starting first with ambitions, then moves, and finally vision. That’s because most teams don’t have a clear vision in mind when the process starts. The vision will be more powerful as a “golden thread” expression of what the ambitions have in common rather than a “beacon” that serves as a guiding light throughout for the ambitions.

What does a CMO transformation/change agenda look like? Here’s a hypothetical example inspired by several CMOs who have gone through this process:

Note that the vision statement addresses the “why”, the ambition statements address the “what” and the move statements address the “how.” It’s at the move level that a management team can sequence investment, focus management attention, and harness organizational energy to bring ambitions and vision to life over time.

4. Socialize the Agenda with senior management, the board, and marketing leadership.

When a strong draft of the transformation agenda exists, socialize it with the CEO and other key executives in private. Once their feedback has been incorporated, it’s time to socialize the agenda with the senior management team together.

If possible, strengthen support by presenting an up-leveled version of the agenda to the company’s board of directors. If the CEO arranges for such a presentation, it’s a good sign that the CEO views the CMO’s agenda as a core part of corporate transformation.

After getting buy-in from company leadership, share the plan with the extended marketing leadership team. More times than not, transformation agendas will involve top-down shifts that can be unsettling – a shift in resourcing, a change in skillsets, a re-organization – so become a relentless source of inspiration and encouragement around the agenda to top marketing talent. With leadership, a transformation agenda can mobilize and unite that talent.

5. Build the Foundation for Successful Implementation.

Execution of the change agenda will take several years (vs. months). The team will go farther faster if the CMO builds a strong foundation for change prior to implementing. Depending on the situation this might include steps such as:

• Re-organize to enable new competencies to emerge
• Shift resourcing levels from legacy capability teams to future-focused teams
• Promote new cultural values for new capabilities
• Request extra investments to make needed transitions
• Nurture peer relationships to expand marketing’s role in the company –
  often in white spaces involving data, digital monetization, and/or digital CX
• Institute agile change processes and pilots to make change happen quickly
• Design enterprise-level programs that change the company, not just marketing
• Find a way to measure and monitor impact with a keen eye on ROI

Common Ambitions in CMO Agendas

Every CMO transformation agenda we’ve seen has a few key elements in common. The most frequent ambitions that we have seen adopted include:

Digital marketing excellence:

Digital marketing is the greatest zone of disruption and innovation in marketing. Unsurprisingly, digital marketing excellence is the most frequently mentioned transformation ambition. Goals might include expanding the number of business use cases that digital marketing empowers (e.g. adding cross-sell and up-sell marketing to new customer acquisition), improving specific capabilities (e.g. real-time personalization) or marketing through new engagement channels (e.g. a conversational commerce platform). Identifying key initiatives on each of these three dimensions is the first step for driving digital marketing transformation.

Data responsibilities:

Thanks to digital touchpoints, customers generate exponentially more data than they ever have before. Data about location, segmentation, digital journey stage, browsing behavior, preference indicators, physical factors, distribution channels, and purchase triggers are all critical for companies to use in their best-move rules. Yet most companies still struggle with capturing, storing, and acting on this data. Will the CMO Transformation Agenda convincingly offer to step up and take responsibility for 360° customer journey data? If not, new executive roles such as chief digital officer or chief customer officer will emerge, narrowing marketing’s role.

New monetization:

Digital enables marketing to create or enhance 1:1 relationships with customers in a way that used to be the sole domain of the sales force or channel partners. Thanks to new digital relationships, marketing can extend its role to help drive growth through monetization techniques never used at scale before. This use of marketing’s competencies for new growth can take several forms:

• Direct sales to fragmented, long-tail end users (e-commerce, AI advisory, etc.)
• Direct management of small channel partners (vs. multi-tiered distribution)
• Next-best-move support to account leaders, sales reps and customer service reps

Varying Ambitions in CMO Agendas

Despite the common patterns above, every CMO’s agenda is unique, reflecting the fact that no two companies and marketing departments are alike. There are dozens of potential ambitions to adopt – here are 20 to help jumpstart your reflection.

1. Category Reframing: redefining the company’s value context, proposition and edge
2. Launch Re-invention: from launching single products to holistic product line updates
3. Influence Scaling: developing a systematic influencer cascade
4. Pricing Sophistication: dynamic pricing systems and new value capture approaches
5. Solutions Innovation: customer-focused design and partner ecosystem enablement
6. AI Integration: enriching marketing and CX through AI / machine learning use cases
7. Intelligence Branding: updating Brand Portfolio and Architecture for intelligence
8. Re-segmentation: blending best of online and offline information insight sources
9. Content Re-invention: redesigning content for personalization and digital touchpoints
10. AR/VR Adoption: engaging customers through immersive experiences
11. Digital Customer Experience: improving CX monitoring and analytics
12. Customer Re-connection: building digital buyer relationships after channel sales
13. Social and Experimental Listening: gathering customer insights via digital feedback
14. Account Based Marketing: collaborating closely with sales to grow top accounts
15. E-Commerce: developing a new channel for customer convenience and lower cost
16. Channel-partner Data Sharing: collaborating for win-win business growth
17. In-Use Marketing: messaging inside cloud hosted applications and digital services
18. Global-Local Role Shifts: centralizing and decentralizing tasks for flexibility and cost
19. Silo-spanning: agile funding of integrated marketing initiatives across budget owners
20. Impact analytics: calculating return on marketing spend in new and better ways

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Figuring out how to do enterprise content well is no small undertaking. Often, there’s a lot of experimentation and one-off initiatives that don’t reach their intended audiences and are not conclusively worth the effort and investment.

In 2016, Altimeter analyst Omar Akhtar and digital partner Mat Zucker published the report, “Key Elements of a Unified Content Strategy.” The research aimed to help companies jump-start their content strategy development. Findings recommend prioritizing audiences and selecting one of five content archetypes that can serve them best.

5 Simple Steps to an Effective Content Strategy

Since then, we’ve built on the methodologies based on various needs of clients across industries. We’ve developed a framework and 5 simple steps to help companies tackle the hairiest content challenges and create a modern, effective content strategy.

1. Get Your Brand On 

Content is a powerful way to activate a brand strategy. It can help build awareness, engage audiences, and highlight how various brand levers are being received. We recommend anchoring on the brand’s purpose, promise and principles to connect diverse content needs back to the business. Your company story or mission could act as a proxy.

Establishing 3-5 key messaging themes is important to your strategic communications. A messaging strategy ensures teams are collectively covering key messages and clarifies ownership of messaging areas. They help marketers understand which of their messages resonate with audiences.  Messaging themes may be tailored for execution, may change by year, but are foundational for content.

2. Commit to Business Value

A vision for content—what you need content to do inside and outside the company—helps build cohesion enterprise-wide. One of my favorites is Marriott’s “tell a story” which sparks excitement and passion to make Marriott the world’s favorite travel company. It anchors content on the brand’s mission to lead within the travel category while celebrating its audiences. For some clients, we also build content principles that create guardrails for how best to execute this vision.

“Content is a powerful way to activate a brand strategy.”

3. Tailor to Your Audience

We usually tackle 3-5 audiences at a time, building discrete content personas; identifying what each audience needs and wants as well as where and how they engage with content. For example, a corporate audience like job seekers would have very different needs from a line of business’s consumer audience. Picking a priority archetype like “Content as a Window” for job seekers, or “Content as Support” for consumers, helps teams make choices around what content to create, and keeps audience needs top of mind.

4. Get Organized

Content planning is a detail-oriented and coordinated effort. Often, various departments oversee paid, owned and earned activities, or manage disparate channels (e.g. web, social media, intranet, etc.). When teams align their efforts into shared content programs, their content is more likely to be encountered by their desired audiences and deliver value.

A content program is essentially a broad theme that meets a specific user-based need. They logically connect back to global messaging themes. A meaty program can inspire dozens of topics and experiences across paid, unpaid and earned; executing two or three programs at once can help meet multiple objectives.

Programs help guide holistic content experiences that drive the next best action. They tend to be more efficient to produce and can be linked to business impact versus a series of one-off content pieces which are less meaningful in the long run.

In early 2018, TurboTax launched “There’s Nothing to Be Afraid Of”—an integrated marketing campaign focused on Latino empowerment. TurboTax wanted to reach Hispanic audiences and help them learn more about filing their own taxes. Besides running paid ads, the effort was supported by numerous content efforts. For example, they collaborated with influential Hispanic lifestyle bloggers and experts to create authentic educational content. They also erected a Hispanic community forum on their website and prepared relevant responses to topics that came up within the community. They developed the “#taxconfessions” sweepstakes encouraging the creation of user-generated YouTube content. And, of course, much of the content was in Spanish.

As with the TurboTax example, a holistic program is comprised of several components. Topics are specific content assets that cover various aspects of a program. They could be campaign-based (e.g., time-sensitive) or evergreen. The formats that are selected will often align with the content archetype that is chosen. If your audience needs “Content as Window”, you may choose case studies or video. “Content as Support” may include more selection guidance and post-purchase onboarding materials.

5. Ready, Test, Go

Coming out of content planning, teams are armed with fleshed-out programs and a set of prioritized activities that usually fall into one of two buckets:

1. Good test and learn opportunities (i.e., what can we execute and measure today)
2. Worthwhile investment opportunities (i.e., >6 months)

According to a recent Content Marketing Institute report, about 90% of B2B marketers in North America were committed to content marketing, yet only 37% had documented it.

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Sources:

*Content Marketing Institute, B2B Content Marketing, 2018 Budgets, Benchmarks and Trends – North America.

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B2B businesses continue to embrace the value of content marketing to position their brands, products, and services in more relevant ways with customers and prospects. In fact, B2B companies are ideally positioned to benefit from content marketing, given the inherent nature that expertise plays and the high degree of consideration and complexity that goes into buying decisions.

However, while many B2B businesses have compelling content, most lack a clear understanding of what should drive their content strategy. Every company needs a clear focus on the kind of content they will create and who it is intended for. We call these content archetypes. These archetypes are important because they bring focus, consistency, and scalability to content in a way that gives B2B brands a distinct voice, purpose, and platform on which to speak.

In our experience, the brands that take an approach like this make stronger connections with the right audience and get significantly better returns on their investment in content marketing.

Identify Your Brand’s Content Archetype

Altimeter, the research arm of Prophet, recently published a report, “Key Elements For Building a Content Strategy” that uncovers five distinct content archetypes that guide the content strategies of the strongest B2B brands. Before diving into each, it is important to note that the best companies pick one, maybe two, archetypes as the primary focus of their strategy. Driven by their core marketing objectives, they commit to this archetype for a period of time (maybe 1-2 years) while evaluating how they are doing and evolving their approach as needed.

The 5 Content Archetypes

Let’s take a closer look at these five content archetypes:

1. Content as Presence

The first is Content as Presence. This type of content is about engaging a broad audience while promoting brand awareness and brand health. It’s typically best used to help reposition a brand in a target’s mind or expand what customers think they know about the business.

For example, IBM has done a great job using Watson content to convey a more progressive and analytical IBM, to expand what customers think IBM can assist them with, and to demonstrate how Watson is already helping a wide array of customers.

2. Content as a Window

A second archetype is Content as a Window. This type of content is about giving customers and other audiences, such as prospective employees, a view inside the company that they otherwise would not have. This content is best used for businesses that want to humanize their brand or those that believe showing how they work is a key part of their brand promise.

The global shipping and logistics business, Maersk, is a great example of this archetype. It has built one of the best B2B content positions with its focus on giving people an inside look at the company, its operations and its people. By taking down the walls around its business, Maersk provides customers, regulators and prospective employees a view into its capabilities, purpose, and global scale.

“The best companies pick one, maybe two, archetypes as the primary focus of their strategy.”

3. Content as Currency

The third content archetype is Content as Currency. This is for brands that want to be seen as subject matter experts. This type of content helps consumers make better decisions for their business. It is particularly beneficial when used to augment the expertise of a sales team, who can educate customers on the right questions to ask, provide insight into how other companies are dealing with similar challenges, and help them move forward with a complex buying process.

GE, with its Industrial Internet platform, is an excellent example of how to deliver content that helps customers move forward. With self-assessments, relevant case studies, and points of view, GE is helping businesses understand the Internet of Things and what it means for their company.

4. Content as Support

The fourth archetype is Content as Support. This one is all about helping customers extract greater value and utility from the solutions you provide. It is best used in highly technical categories when product usage is complex, and ongoing loyalty and share of wallet of existing customers is marketing’s top priority. B2B companies following this strategy should focus on educating customers and partners about how to get the most out of their products by sharing tips on installation, product usage, troubleshooting and integration.

Schneider Electric, a global provider of energy management and automation solutions, is one of the leaders with this content archetype. It publishes content about design, installation and how to lower the total cost of ownership that is helpful to both its contract partners and end-customers. This strategy enables Schneider’s sales and service teams to stay as productive as possible by giving its customers an alternative way of accessing their expertise.

5. Content as Community

And finally, we have Content as Community. This content focuses on fostering a community of customers or other stakeholders with similar needs. This approach is best suited for B2B brands in highly collaborative categories such as healthcare and technology, or those with extremely engaged and loyal customers who can serve as brand advocates.

American Express, with their OPEN platform, used content to build a community of small and medium-sized businesses. For more than 10 years, it has served as a destination for entrepreneurs to learn from American Express, and each other, about what it takes to grow and run a healthy business. OPEN is a great example a content community that creates value, without explicitly selling.

Questions to Ask When Determining the Best Type of Content for Your Brand

As you think through what archetype is best suited for your business, consider the following:

1. What are your top marketing priorities? What part of the purchase funnel is most important to you right now – increasing awareness, winning more business or driving greater loyalty?
2. What content will your customers find most relevant? What information do they need to help them better run their businesses?
3. What type of content platform could you build that reinforces your brand’s promise? How can your content strategy work in concert with your sales and operations departments to drive more efficiencies and value for your customers?

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According to Wikipedia, “marketing is the process of communicating the value of a product to customers, for the purpose of selling that product (goods or services.)” But that is what marketing used to be. Today, marketing is about relationship management.

The widespread adoption of social and mobile technologies has empowered consumers. They expect relationships with brands rather than the push-messaging campaigns of yore— and now have a voice to praise or complain. Eric Schmidt said succinctly “bad product reviews trump clever marketing” in a recent presentation:

“The four P’s—Product, Price, Place and Promotion—are no longer sufficient as a way to think about marketing. They are about the content and placement of messaging, rather than an ongoing conversation and relationship with a customer. When customer loyalty can begin well before a purchase is ever made (think Hard Rock or Harley Davidson), marketers have to think beyond communicating value to building customer relationship.”

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How Genuine Communication and Engagement in Social Media Helps Businesses Grow Relationships With Employees and  Customers While Improving the Bottom Line

Social technologies have always been about people and relationships, yet in recent years we seem to have lost our way, blurring the lines between social media and CRM as we treat these engagement platforms like mass marketing automation tools. The answer to unlocking the potential of business connections has been right under our noses all along: authentically engage with customers, prospects, and employees on social channels to cultivate long-lasting relationships that result in true business ROI.

For our latest report, Altimeter Group partnered with LinkedIn to study the importance of relationship-building among the most socially engaged companies on LinkedIn. By using social technologies to improve relationships, businesses witness incredible results. Download the full report here.

Why we studied relationship economics

In late 2013, Gallup released its latest survey that measures international employee satisfaction and found that only 13% of workers feel engaged by their jobs. 63%, are not engaged, and 24% are actively disengaged.

What is relationship economics?

Relationship economics dictates that when businesses value people, experiences, and aspirations, they reap benefits measured in profitability, loyalty, and advocacy. Without relationship economics, companies will lose a significant edge to those that do actively invest in employee and customer communication and engagement on social platforms such as LinkedIn.

Companies that invest in relationship economics on social platforms find that employees are more engaged, more likely to stay and refer great talent, are more competitive and optimistic, and more likely to increase business and sales opportunities.

Socially engaged companies are more likely to drive greater lead generation, cultivate innovation, and yield top talent.

Companies must become digitally savvy to compete for customers and top talent. Companies that are social engaged realize the following business-level benefits:

• 40% more likely to be perceived as more competitive
• 57% more likely to get increased sales leads
• 58% more likely to attract top talent

Investing in relationship economics can represent the difference between engaged and disengaged employees.

Socially engaged employees are more optimistic, inspired, connected, and tenured:

• 27% more likely to feel optimistic about their companies’ future
• 20% more likely to feel inspired
• 20% more likely to stay at their companies
• 15% more likely to connect to co-workers beyond their core teams

“Without relationship economics, companies will lose a significant edge to those that do actively invest in employee and customer communication.”

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As companies become advanced in social and digital business, they require consolidated technology instead of point solutions

Adobe Marketing Summit and Oracle OpenWorld both took place recently. It’s another month until Dreamforce, but I expect similar announcements to be made there. These giants are all building “suites” for cross-channel customer engagement through a series of acquisitions and integration with their existing offerings (see Figure 1). Among the pieces, each has bought social media monitoring and management tools, as well as marketing automation players. Having a complete social offering is a big part of this, but it’s also about integrating social with other customer engagement channels for the best data, targeting, and contextualization. The result: a technology suite that goes beyond just social, designed to entice CMOs with one-stop shopping convenience. Figure 1: How Three Companies Are Creating Digital Marketing Suites

Component	Salesforce	Adobe	Oracle
Social media monitoring	Salesforce Marketing Cloud (Radian6)	Adobe Social (Adobe SocialAnalytics)	Oracle SRM (Collective Intellect)
Social media management	Salesforce Marketing Cloud (Buddy Media)	Adobe Social (Efficient Frontier / Context Optional)	Oracle SRM (Vitrue & Involver)
Social media advertising	Salesforce Marketing Cloud (social.com)	Adobe Media Optimizer (Efficient Frontier)	N/A for now; on product roadmap
Marketing automation & multi-channel targeting	Salesforce ExactTarget	Adobe Campaign (Neolane)	Oracle Eloqua
Analytics & insights	Salesforce Marketing Cloud (Radian6)	Adobe Analytics (Omniture)	Oracle SRM and OBIEE (Oracle Business Intelligence Enterprise Edition)
Content marketing	No internal component, but integration (e.g. Kapost)	Experience Manager & Creative Cloud	Compendium
Enterprise social network	Chatter	N/A, although has built collaboration into Marketing Cloud	Oracle Social Network
Data & CRM	Salesforce	No CRM, but has Omniture DataWarehouse and data connectors into partner solutions	Oracle Database (plus Siebel), Oracle Sales Cloud, Oracle Service Cloud, Oracle Commerce

It should go without saying that this chart is not an exact comparison and that line item “components” vary in complexity. The degree of integration also varies.

Advanced companies need integrated tools to succeed in digital business

These suites are finding an audience ready for a better option. Focused on social business for a moment, brands are getting increasingly advanced, yet they continue to use point solutions in different departments and channels for monitoring, management, optimization, and analytics. In a typical example, one of our clients uses Radian6 for monitoring, Vitrue for social content publishing, Cotweet for customer care, and Adobe Analytics (formerly Omniture) for web analytics.

Plus enterprise social networks and customer communities are disconnected. The result is disparate sets of data being compared in Excel, mixed levels of communication and collaboration, and lost insights. The emerging need for more integrated solutions has been anticipated by Salesforce, Oracle, and Adobe, who are now assembling Digital Marketing Suites.

Best-in-class point solutions dominate today, but change is coming

Although point solutions can’t fully address the needs of an advanced social business, they are often best-in-class—because the promise of the Digital Marketing Suite has yet to be fulfilled. When advising clients on monitoring tools or SMMS today, we often end up recommending point solutions. This is based on specific client requirements, which vary, but it’s not often that one of the “giants” makes it to the very top of a shortlist. With SMMS for example, the offerings are good but not typically best for the client. And overall, the benefits of a suite aren’t compelling enough today—but over the coming 12-18 months, they will be.

“The promise of the Digital Marketing Suite has yet to be fulfilled.”

The future is suites—or irrelevance

Not only will there be consolidation in terms of technology coalescing into larger suites, but the marketplace will also go through the natural evolution and consolidation as the landscape matures. For social marketing vendors determined to stay independent, there is only one option: to raise money to scale into suites themselves by buying or quickly building missing components like monitoring, optimization, and analytics. Several SMMS vendors like Hootsuite, Sprinklr, Spredfast, and HearSay Social have raised significant rounds of financing to build scale.

They are embedded and tough to replace, and integration-enabling APIs may extend the timeline, but over time that will not be enough to support so many players. Consolidation or exits are an inevitable outcome, as it has been in previous technology spaces. A few of the other SMMS vendors have already folded, like Awareness Inc. and Syncapse. This left their customers high and dry and needing to start the search for vital tools all over again. That has been another reason why some companies are looking to the big players—simple staying power.

What does the future look like with Digital Marketing Suites?

Beyond the obvious benefits of integration, like fewer tools and logins, and platform security that come from an integrated suite, there are four impending changes that marketers should watch closely:

1. Internal and external social networking on a single platform

In SMMS, collaboration features are mostly limited to basic workflow (tag, flag, annotate, route). Yet as social permeates an organization, the need for internal communication through Enterprise Social Networks (ESNs) becomes necessary to plan and react to external engagement. Adobe has already made a push to bring greater collaboration into its new Marketing Cloud offering, although it does not have an ESN product of its own. Salesforce will undoubtedly integrate Chatter into future offerings of its own Marketing Cloud, while Oracle is embedding Oracle Social Network into the social publishing workflow for collaboration. Companies with installed ESNs are also eager to tap and evolve internal employee engagement and direct it toward external conversations for purposes like providing customer support and employee advocacy.

2. Company-wide utility—this is not just for one department

Most SMMS address one or two departments’ needs well, yet we found that companies today are likely to have up to 13 departments involved in social. Social customer support may require the features familiar to a call center, whereas marketing may require a content repository and an editorial calendar that includes earned media. Because each department has different use cases and metrics, these suites are looking to address the needs of many departments rather than just the one or few primarily addressed today. Marketing is central, but other stakeholders are increasingly being involved.

3. Customer relevance and targeting (Social CRM)

Speaking of sharing nicely across departments, the growing need for a common view of customers’ social profiles and social behavior data is also driving a move to suites. Several SMMS vendors have focused on customer identification and targeting from the outset—but few integrate well with marketing automation and enterprise CRM systems in order to know and target customers based not only on social data, but all available customer data.

To take an example, Walmart allows Facebook fans to Like local stores, then shows them items specific to that store, based on comparative local prices and even the local weather. By integrating (in this case, location) data, the relevance of its content is increased. For now, customers remain mostly anonymous, so only certain layers of relevance may be applied at any given time (geography, demographics, psychographics, socialgraphics, mobilegraphics, brand affinity, loyalty program, etc.). So far, the local Walmart pages have little engagement, since they still feel impersonal compared with other local businesses.

Eventually, though, companies will have a single customer view, connecting these layers of relevance for contextual, personalized messaging for individual customers and prospects. This has been a long-term promise and the customer journey keeps getting more complex, but Adobe, Salesforce and Oracle have all been especially focused on this of late.

4. Bigger sticker price and IT involvement

The average enterprise deal size for SMMS has steadily increased over the past few years, rising from $76k last year to deal sizes of what we typically see today in the $100-150k range. This reflects a growing ability to spend on social software where there is perceived value.

These larger Digital Marketing Suites will naturally be even more expensive, but as social is integrated, an independent social business technology budget will be a challenge for most marketing organizations that are still just beginning to build out their social business capabilities. Also, because these suites are larger in scale and require greater care to be “plugged in” correctly, marketers will need IT to be more involved than it has been in decisions like SMMS, which marketing departments have in some cases been able to buy and install on their own.

P.S. Digital Marketing Suite seems like a good name for now, but this goes not only beyond social but even beyond marketing. While Adobe and Salesforce each have their “Marketing Cloud,” Oracle has its “Social Relationship Management,” which is department-agnostic, but of course, focuses on Social (Oracle Eloqua is referred to separately for now). So what is this called, really, and does it change over time?

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