Marketing resource management is growing up--and adding muscle to ROI--as companies seek to codify strategies and track marketing budgets.
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"HALF the money I spend on advertising is wasted--trouble is, I don't know which half." John Wanamaker, father of the American department store (and creator of the first copyrighted store advertisement), made this quip more than a century ago. His observation, however, continues to resonate with CMOs and marketing managers.
A great deal of time and money is spent researching which marketing practices work most effectively.
At its base marketing is a suggestion, a method of appeal and proposition that plays to our rationality and delves into our subconscious. With the number of channels that advertisers can now select and deploy, gaining clear insight into best marketing practices has become even more challenging. Questions arise: Was it the emails or the billboard that prompted the sale? Was it the low-end graphics or dull slogan that failed to garner the targeted interest?
Marketing resource management (MRM), sometimes known as marketing operations management, was created in part to help companies get a better gander into how marketing dollars are spent and to what extent they are returned. MRM solutions have enabled companies to see more clearly into their marketing processes and to better hone their practices. A decade ago most marketing was not automated, but as the economy began to climb the call for high-level marketing grew louder.Marketers began to make use of campaign management and database software to process customer analysis, but there was little capability for marketing to execute repeatable business processes, to easily find out what was working, and to continue to do so.
Now MRM product offerings compensate for this inability, and companies are able to plan and budget, track campaigns and projects, and manage performance through an accessible, collaborative framework. MRM streamlines the marketing value chain by automating the tracking of costs and projected budgets, connecting all numbers and information through a common platform. Companies are better able to coordinate their resources, and with the constant increase of channel availability, managing all the coordinates that marketers must deliver can be daunting. MRM provides the capability to bring together these channels--be they email, traditional mail, telephone, social networks, text messaging, television, print, or online ad marketing.
But again, strategic questions crop up as MRM software continues to expand in use and popularity: Will the market expand too quickly for processes to fill? Will MRM be either swallowed or stagnate in the larger sea of management software?
A Good Cover Story
The recent growth of MRM can be understood by taking a closer look at the market in which it is used. "In the last couple of years there's been a return to growth within the economy and the market at large," says Kimberly Collins, a research director at Gartner. "This has placed a huge emphasis on sales and marketing." The greater attention focused on marketing has called for more sophisticated performance and a better response to pressures coming both from within and outside the company.
Elevated marketing expenditure levels created a desire for better financial accountability, a need mapped out by the Sarbanes-Oxley Act (SOX) in 2002, which imposed regulations on corporate activity. Gareth Herschel, a research director at Gartner, defines SOX as a "good cover story for a widespread desire to be accountable in any case." The act's provisions, which include the certifying of financial reports by CEOs and CFOs, the publication of annual audit reports, and severe criminal penalties for misstating financial reports, demand that companies be able to closely monitor all numbers in all business segments. In the absence of automation, the process of accessing these numbers can be nearly impossible. Collins explains that if you ask corporations operating from manual processes about their marketing spending, "they have to pull together 60 spreadsheets to answer that question. It's six months later and they still don't really know anything more than what they did before. Even at that layer--forget what's coming back in--they simply didn't know where that money is going."
Internally, marketing became driven by demand for better cost control within corporations and a higher speed to market. Aprimo, an MRM vendor that has been called the inventor of MRM software, began developing its solution in response to the "inefficiency and waste" company founders saw in corporate marketing divisions, says Michael Emerson, Aprimo CMO. Gartner's Collins says, "If I'm in that organization with 60 spreadsheets and my competitor launches a campaign, I'd love to respond with a countercampaign, but I can't because I can't find the funding."
MRM's expansion has been marked, according to a report from the Aberdeen Group published in 2005, which states that 18 percent of marketers at that time had employed an MRM suite. This percentage is on the rise. "It's still something that's relatively immature," Herschel says. "I'd say the growth of MRM is definitely accelerating. The momentum will come first from organizations with the greatest risk of fragmentation, the ones with lots of decentralized marketing departments, with lots of divisions, and lots of product lines."
Aprimo forged the way, beginning in 1998, for automated MRM solutions that could help marketing departments perform more efficiently. Today, companies can choose from a wide variety of software options delivered by a number of vendors. Aprimo remains a force in the market, having developed a number of applications to cater to delivery management, financial management, lead tracking, and performance management.
Other players include firms like Assetlink, MarketingCentral, and Unica, which have strict MRM- or enterprise market management--focused products. There are also niche or specialty players that cater to more specific demands. Elateral specializes in marketing fulfillment, Marketingisland has developed a four-tier solution, and MarketingPilot targets the midmarket. Additionally, larger vendors have more recently sunk their teeth into the MRM market, with Oracle acquiring Siebel in the past year (along with having developed its own e-business solution), and SAP having introduced an enterprise-marketing platform.
Diesel in Distress
"One of the good things about MRM," Collins says, "is that when you're in a down economy, it brings you efficiencies. When you're in an up economy it can help you grow your business. No matter which way the economy is heading, you can pretty much justify it." MRM helps enterprises facilitate marketing campaigns more quickly by performing real-time spending and resource reallocations needed to launch a campaign. The reduction in cycle time can lower expenses and the software's capability to unify branding can increase response and revenue. By bringing together all remotely operating avenues of a marketing or advertising campaign, it becomes easier for companies to create and produce a unified image and to continue to communicate that message when executing target marketing. An example is Cummins, a manufacturer of diesel engines and related technologies.
The company integrated an MRM solution in response to a Six Sigma project with which the company prioritized collateral development. Cummins found that as a dealer network with a presence in almost 200 countries and more than 5,000 facilities, it was becoming unbearable to coordinate all processes while launching a product or marketing campaign. Because the company executed its marketing in house through an agency, communication became burdensome and costly. "If I needed to know where a piece of collateral was in the development process I needed to find our project manager internally or someone at the agency involved in our project," says Tracy Kaiser, Six Sigma black belt in sales and marketing communications for Cummins. "Each time we went in with an additional change it was racking up charges."
Cummins knew that its reliance on basic Microsoft desktop solutions and person-to-person contact was making go-to-market time too long, and that its resources were being squandered on unnecessary reviews. Because the company had initially incorporated an Aprimo offering to help facilitate a direct marketing effort, Cummins turned to the vendor for its MRM capabilities. Kaiser admits that there were a few hurdles to complete integration. "Initially we got feedback from people saying, 'Marketing is just trying to have us do their work,'" she says. Despite initial internal setbacks, the company saw an ROI almost immediately. The integration was completed within three and a half months, and in the first quarterly measures the company saw a 61 percent reduction in through-put time after having targeted only a 30 percent reduction. This saved time paid off when Cummins saved 23 percent of money spent in creative development.
"On our customer end, what they've seen is that we can deliver a project much more quickly. What used to be 60 to 70 is now 30 days," Kaiser says. "That gets us high marks from those who rely on this marketing collateral to do their job every day." Cummins attributes continuing success to the Aprimo integration. The MRM software played a key role in a rebranding effort that garnered recognition from the ease with which the company was able to share ideas and information on an international level. "We are now pushing our instance of Aprimo to new levels," Kaiser says. The company recently completed an upgrade with Aprimo and is looking to keep the software as an integral piece of doing business.
HP 'Paqs a Marketing Punch
Some companies incorporate MRM software to facilitate marketing directives, accelerate growth, and enable more rapidly deployed campaigns. Others go back, look more deeply into internal strategies, and fix problems at home. When Hewlett-Packard merged with Compaq in March of 2002, the computer and printer manufacturer was left with misaligned metrics, marketing systems that didn't work together, skewed planning processes, and an undefined marketing language. With a number of separate, siloed groups in each company and separate CRM applications deployed in various parts of the world, the new marketing challenge for HP was to develop its own communication style.
HP integrated an MRM application from Siebel (now part of Oracle) into its marketing practices as part of an initiative called Operation One Voice. Within eight months HP had the solution up and running in every country it operated in--more than 3,500 employees were using the software. Through clear, in-depth information sharing, the company was able to identify $100 million of investment that it was able to reinvest, instead of save, into its most profitable areas. HP chose Siebel's MRM solution as part of a larger suite that incorporated the vendor's CRM, marketing execution, call center, sales, outside sales, and lead management applications. "We needed an application that could go across all ways," says Bill Rainey, MRM business solutions manager. Through investing in a wide-ranging solution, Rainey says, "[Now,] we are able to talk in a common language."
HP's integration technique--slotting MRM as a piece of a larger puzzle--marks an industry trend, with larger, more comprehensive vendors like Siebel already catering to such needs. Aprimo's Emerson says, "We definitely see more movement towards a kind of integrated enterprise market management. The public is going to be looking for a vendor that can put lots of things together in one solution."
MRM solutions offered as part of larger packages may also facilitate the growth and usage of the software. "Consolidation and growth is just taking off," says Leslie Ament, a research director for the Aberdeen Group. While this expansion may increase the number of companies solving their marketing problems through the use of MRM capabilities, some analysts see this as potentially detrimental to innovation in the field. "I think that the main thing that could squash [the MRM market] is if the main vendors launched their own solutions that effectively squashed the startup vendors," Gartner's Herschel says. "Then, they might just kind of sit on their solutions and not develop it much further."
But as marketers face new challenges every day, and consequently seek out new solutions, it is doubtful that the MRM market will disappear anytime soon. "There is a much wider potential use of the application," Collins says, also arguing that there will be continued innovation and that the software can reach the point at which it is "becoming the marketers' desktop where they do their work on a [daily] basis." As MRM technology continues to alleviate some of the marketing intelligence woes vocalized by Mr. Wanamaker on the inception of his first department store, the industry might look to another one of the entrepreneur's adages for inspiration: "Keep up the old standards, and day by day raise them higher."
Contact Editorial Assistant Jessica Sebor at jsebor@destinationCRM.com
A 60 percent failure rate suggests that process change requires behavior change.