Marketing Intelligence Is Not an Oxymoron

The recently released results of the Corporate Executive Board’s 2005 Benchmarking Survey shows just how involved marketing departments from B2B, high tech, B2C — indirect channels to B2C — and direct channels are in managing a significant part of their company’s total spending on competitor, industry and market intelligence.

When CMOs from B2B firms were asked to rank those areas they have the most scope of control as a result of their marketing budget, the following top five priorities emerged (in order of priority from the recent Corporate Executive Board 2005 Benchmarking Survey). Three of the five are directly related to market intelligence.

The Rankings

  1. Market Research
  2. Informational Web site Creation and Maintenance
  3. Competitive and Market Intelligence
  4. Data Mining
  5. Market Planning

Also included in the study was an assessment of high tech companies’ marketing departments’ scope of control. Here are their top five areas:

  1. Informational Web site Creation and Maintenance
  2. Market Research
  3. Database Analytics
  4. Public Relations
  5. Competitive and Market Intelligence

For B2C companies with direct sales, the top five areas they have the greatest span of control over are:

  1. Market Research
  2. Data Mining
  3. Informational Web site Creation and Maintenance
  4. Competitive and Market Intelligence
  5. Intranet Creation and Maintenance

Those companies who are B2C-focused selling through indirect channels, have the following as the top five areas of marketing’s scope of control:

  1. Market Research
  2. Informational Web site Creation and Maintenance
  3. Competitive and Market Intelligence
  4. New Product Development
  5. Data Mining

Marketing Needs to Find Passion for Intelligence

No pun intended; with so much control over competitive and market intelligence, data mining, and market research, the real value of marketing is in how to synchronize all these forms of intelligence into strategies that deliver dollars.

Here’s what needs to change for Marketing to find passion in intelligence:

  • Marketing must re-define its role to be critical to the demand generation and answering the tough questions when customers aren’t buying. Let’s face it, the best marketers have an innate sense of the customers they sell to. Further, these top marketers have a passion for bringing the voice of the customer into the company and see their role of bringing insights into why products, services and channels are selling or not. It’s no surprise that so many marketing budgets have research as one of their top three spends; it’s that critical voice of the customer and what’s happening outside the company’s four walls that really matters.
  • Pay for 3rd party win/loss analysis using a portion of the market research spend. Keep in mind that once you start down the path of doing win/loss analysis there is an implicit assumption that you are going to change based on the feedback. If that’s not the case then don’t do it. But for companies that do go after win/loss analysis the results are significant — and best of all, it gets everyone in the company away from thinking they are infallible. A good win/loss analysis is like one of your best performance reviews. You leave the room feeling good about yourself but also resolving to make major changes — and you feel passionate about that change. That’s what the best win/loss analysis strategies deliver.
  • Win/loss data needs to be much more than measuring salesmanship on pricing. High tech companies in particular have a tendency to do a knee-jerk win/loss analysis and say “we need better sales people” or “we could have undercut our competitors and won…” Yet all these quick and often wrong analyses have high price tags to fix. Sales forces are known for high turn over in high tech, so recruiting the top talent can get pricey as many of the best are on comp plans that would make even Donald Trump blush, and with pricing, a little goes a long way. McKinsey & Company’s analysis showing just an 8 percent drop in price would have to yield a 20 percent increase in sales for publicly held manufacturers in a recent pricing study they did shows that it’s easy to compete away your own profits by bad analysis.
  • Marketing must define the full set of root causes for sales success or failure. That’s exactly what British Telecom did, initiating Voice of the Customer programs to capture what customers thought of their services. BT was careful to use a 3rd party to do the actual research as not to bias the results. Further, BT’s Marketing Strategy and Insight Group created a cross-functional team comprised of sales, product marketing, product management and pricing departments to review all potential causes for sales wins and losses. Their full set of root causes captures sales attributes, company reputation, product attributes, and service issues. From their root cause analysis, BT was able to strip away all preconceived notions of how good or bad they were and got to the truth.

Bottom line: It’s time for marketing to deliver the truth of everything from market conditions to why deals are won or lost, and that starts with a solid Voice of the Customer program with win/loss analysis layered on. British Telecom’s root cause analysis is best practices in this area.

Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research. He is the author of several books on making the most of analyst relationships, including Best Practices in Analyst Relations, which can be downloaded for free.

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