Call For Participation – IDC’s CMO Advisory Service’s 2014 Tech Marketing Benchmark Survey

It is that time of the year – IDC’s CMO Advisory Service is in the field with our Marketing Benchmarks Study. This is our 12th year conducting this study that is used by leading marketing organizations to benchmark their marketing spend and organizational structures. Now it’s your chance to join in this important research; I would like to offer an invitation to participate in this survey. 

Below are the essential “need to knows” around our survey and further down I’ll dive into all the great value of benchmarking your marketing organization:

What are the benefits?

  • Complimentary copy of our 2015 Marketing Investment Planner to benchmark your company’s marketing data against industry data.
  • Receive an invitation to our exclusive client telebriefing held by IDC Analysts.
  • Access to IDC’s industry standard marketing taxonomy.

What is needed? 

  • Email me (smelnick (at) IDC (dot) com) to get our survey instrument and taxonomy.
  • A “lead” marketing executive with access to marketing budget and staffing allocations. 
  • Complete the survey by August 1st.

What is the Quality of Data and Confidentially?  

  • This is the 12th year IDC has fielded the Tech Marketing Benchmark Survey and will include participation from many of the 100 largest tech companies – this depth and expertise is unmatched
  • All responses are 100%, no questions asked, confidential. We take this part very seriously.  

Bonus to all Participants

  • All participants will be eligible for our 2015 Chief Marketing Officer ROI Matrix and will have access to their placement on the Matrix. A great way to easily compare your marketing progress against the rest of the industry’s. 


Need More Information: View this excerpt from Kathleen Schaub’s excellent post, IDC Tech Marketing Benchmark: Behind the Scenes. It explains all the intricacies (and value of benchmarking).

Why do companies benchmark? A benchmark provides context for decision-making. You spend a million dollars a year on social marketing. So what? If your CEO asks you this question, what will you say? Tech marketers tell us that they like to benchmark for the following reasons:

  • Improve the quality of annual planning: Last year’s program budget and gut feelings are no longer sufficient input
  • Gain insight into critical trends: Learn what industry leaders and competitors are doing – and how you stack up
  • Reallocate costs: Identify areas of overspending and opportunities for better value
  • Transform with confidence: Answer questions such as how much to invest in new areas like social marketing or how should I re-organize my department?
  • Drive with data: C-level executives increasingly expect marketing leaders to manage their business with the same level of operational excellence as other corporate functions.
  • Get an independent view: Benchmark data provides IDC analysts with a wealth of information that make guidance to clients personalized and accurate guidance

Feel free to reach out and let’s have a discussion whether it’s the right time for your organization to participate!

Email me at: (smelnick (at) IDC (dot) com) or find me on twitter @SamMelnick

The State of Marketing Operations 2013

Companies simply cannot excel at modern marketing without strong Marketing Operations.  These professionals reinforce high performance by strengthening processes, technology, metrics, and best practices.  A recent study by IDC CMO Advisory Service, in conjunction with MOCCA, found that the Marketing Operations function is flourishing and expanding beyond its original charter.

 

Marketing Operations has been a rising star from its inception. I like to compare Marketing Operations to the structural frame of building. Try to scale without steel girders and you get a weak and wobbly high-rise.  Your marketing will also be weak and wobbly without Marketing Operations.  IDC first recognized Marketing Operations in 2005 in its annual Tech Marketing Benchmarks study.  Then, Marketing Operations represented 2.5% of the total marketing staff. The team became a fast-rising star – driven by the need for marketing accountability and the addition of marketing automation.  In 2012, tech companies averaged 4.4% of their staff in Marketing Operations.  IDC believes that the optimal percentage is between 4% and 6% of total marketing staff. Below 4%, a company will lack the necessary operational capabilities for solid management and transformation. Above 6%, a company should examine whether it’s time to infuse operational capabilities into other functions rather than holding them in a single role.

IDC’s Definition of Marketing Operations:  Internal staff responsible for developing and orchestrating the processes and systems required to enable efficient and effective marketing.  More specifically, marketing operations staff members are responsible for developing and managing the processes to ensure smooth operation of strategic planning, financial management, marketing performance measurement (including dashboard development), marketing infrastructure, marketing and sales alignment, and overall marketing excellence.

In this new study, called Marketing Operations Expands, IDC finds the Marketing Operations function expanding. It has progressed beyond its early charter of planning and resource management to become an important part of lead management and marketing technology among other areas.  More than 70% of survey participants say their role has broadened in the last year and more than 80% say it has become more important. The top six responsibilities for Marketing Automation are: automation, analytics, process improvement, campaign execution, and planning/budgeting. Survey participants, many who are members of MOCCA, the marketing operations professional organization, told IDC that Marketing Operations is also spreading out from its original corporate center to regional teams and beyond its origin in technology companies into new industries.

How should marketing leaders view the expansion of the Marketing Operations role? On the positive side, Marketing Operations can serve as an important and exciting pilot lab for new marketing science initiatives. However, in many organizations, IDC observes that Marketing Operations risks becoming the dumping grounds for not just critical operational tasks, but also for most of the “odd jobs” in the department. Too much expansion, or the wrong kind, results in performance degradation.

For more information on the IDC CMO Advisory Service Marketing Operations Expands research report (which contains important information on organizational structure, skills, job scope, success factors, and much more) check the MOCCA website or contact me at kschaub@idc.com.

#CMOFact: IDC 2013 Marketing Investment Planner

With 2012 coming to an end, for many businesses planning for 2013 will bleed into the New Year. Marketers are no exception; in anticipation of the planning cycle each year, the CMO Advisory Service publishes our annual Marketing Planner in August/September, developing the B2B tech industry’s leading marketing (and sales) benchmarking study. To anyone familiar with the industry, you are probably used to hearing that Marketing is transforming. What is so exciting about our Marketing Planner is we are able to provide specific guidance on changes, challenges, and successes within the industry through incredibly accurate industry data and qualitative information provided by you, the senior marketers. Marketers in turn are able to use this information to successfully plan for the upcoming year.
I’ve taken the liberty of pulling out some key facts below from our report that are particularly interesting or useful. Feel free to share them and remember to follow me on twitteror check out the CMOFact hashtag – we will continue to share some marketing goodness there.

#CMOFact Number 1:  In 2012 the average large B2B Marketing organization is in receipt of a 1.7% budget increase. This is 50% LESS than the 2011 rate.

#CMOFact Number 2:  The Marketing Budget Ratio for B2B tech companies has declined each year from 2009 through 2012. Marketing Investment is not keeping up with revenue growth.

#CMOFact Number 3: B2B Tech CMOs are spending approximately 30% of their budget on digital marketing programs. This is up from 12% in 2009. 

#CMOFact Number 4: For Large Tech Companies, only those in Software (vs Services & Hardware) are receiving increased budgets!

#CMOFact Number 5: The marketing automation train is picking up speed, and fast. Jump on now or prepare to be left behind. This is a new category in our survey and is already at 3.1% of programs budget and 1.6% of staff allocations.

These are just 5 nuggets from the 2013 Marketing Planner. The full version includes a complete overview of the current state of the B2B Tech Marketing it includes; program spend, staffing breakdowns, up and coming technology, and forward looking advice. For your own copy, reach out to Wendy Pemberton at wpemberton@idc.comor find it here

2012 Tech Marketing Budgets, Trends

We are now publishing the results of our major annual Tech Marketing Benchmarks survey. Our tenth year of doing so!

My thoughts today:

1) Most importantly: The Marketing Transformation effort is accelerating. Many vendors have been at this for a few years but as we now do some accounting for  results,  we see as many false-starts as we do successes. And so there are renewed and bigger efforts underway to Transform.  The best evidence of this is in recent, aggressive marketing budget overhauls and  larger, more sweeping re-organizations of the marketing function. 

The good news is that top marketing  execs and C-Level execs DO understand that “future” Marketing can and should be the game-changer function, and so they are going to keep at the Transformation efforts until they see results. 

Here are three major outcomes to watch for and benchmark, on your own Transformation journey: Shorter purchase cycles; reduced overall cost of (combined) Marketing + Sales; and vastly improved customer analytics as a result of integrated marketing plus sales automation efforts.

2) Budgets remain under pressure: we see the average large Tech Vendor getting a 1.7% budget increase this year. That is 1/2 the increase of last year…and we were even “closer” to the 2008-2009 recession at that point.  The main culprit is the economy: management teams not willing to spend until better signs of demand pick up. The second factor is media shift: going-to-market with digital ve traditional media.

3) Tech vendors still spend 3-5 times as much on selling as they do on marketing. Heavy salesmanship has deep deep roots in IT vending. My belief is that the future holds a more even application of monies and activities between selling and marketing.

Rich Vancil

IDC Tech Marketing Benchmark: Behind the Scenes

This week the IDC CMO Advisory Service will start revealing results from the 2012 Tech Marketing Benchmark. In this 10th annual study we found some surprises – as you might expect in this era of marketing transformation. In anticipation of the results, I thought I would share a bit of what goes on behind the scenes in the benchmark.

First – what is a benchmark? The term was first used by early land surveyors to describe the fixed point against which all others were compared. Today, benchmarking means the systematic practice of comparing your business processes to what others are doing in order to achieve superior performance. Companies benchmark against peers to learn how they compare with similar companies and best-in-class to compare with those that achieve optimal results.

Why do companies benchmark? A benchmark provides context for decision-making. You spend a million dollars a year on social marketing. So what? If your CEO asks you this question, what will you say? Tech marketers tell us that they like to benchmark for the following reasons:

  • Improve the quality of annual planning: Last year’s program budget and gut feelings are no longer sufficient input
  • Gain insight into critical trends: Learn what industry leaders and competitors are doing – and how you stack up
  • Reallocate costs: Identify areas of overspending and opportunities for better value
  • Transform with confidence: Answer questions such as how much to invest in new areas like social marketing or how should I re-organize my department?
  • Drive with data: C-level executives increasingly expect marketing leaders to manage their business with the same level of operational excellence as other corporate functions.
  • Get an independent view: Benchmark data provides IDC analysts with a wealth of information that make guidance to clients personalized and accurate guidance

How does benchmarking work? At IDC, we use a six-step method.

  1. Participants are given a standard taxonomy. This is SUPER important.  IDC requires that participants bucket responses in accordance with rigorous activity-based costing methods and a marketing taxonomy based on 10 years of experience so that we’re truly comparing apples to apples. We start agonizing over the taxonomy early in the year. It must evolve with changing times but maintain enough consistency for trending.  This year, we carved out marketing automation as a new category and adjusted definitions to accommodate new media and practices.
  2. Participants bucket their marketing investments into categories.  We start participant recruitment in the spring. Fortunately, IDC has a large constituency of companies that participate annually, but we always conduct outreach to get new blood. 
  3. IDC collects the data. For IDC’s benchmark, the tech company participants are primarily mid-sized and large companies and we have a 95% B2B focus.
  4. IDC creates a database of normalized data. This is our secret sauce and takes a ton of work.  Every survey gets scrutiny. Anomalies get investigated. We use statistical methods, sophisticated tools, and marketing experience to work the data so that it really means something.
  5. IDC analyzes the database for benchmarks and trends. We conduct analysis of various kinds – comparing years, industry sectors, and program and people data. We also conduct interviews with CMO’s to lend color to what we are seeing (although we are constantly out talking to practitioners and marketing leaders during the year).
  6. IDC reports.  All participants are invited to a webcast and get a free report that includes a large amount of data and IDC insights.  Over 100 tech companies each year contribute to the database and get this free report.  For participants who desire a more personalized view, IDC offers a custom service that compares their data with a “market basket” of appropriate peers. IDC conducts an analysis of this custom benchmark and then works with companies to provide guidance decision-making and for instigating change.

Watch this space as well as the press for this year’s findings!

 

Data-Driven Marketing: A Survey of Marketing Automation Maturity in Global High-Tech Companies

Marketing has become technology, process, and data driven. On average, marketing operations teams at the large high-tech companies in this survey manage over a dozen major systems in an ecosystem that is rapidly evolving. The purpose of this survey was to assess the technology load on marketing organizations in terms of number, scope, and scale of systems as well as adoption, effectiveness, resources, and overall satisfaction levels. There are many interesting results from the data:
  • Companies that take an enterprise approach to managing the customer creation process make the most effective use of their marketing infrastructures.
  • Data-driven marketing requires many types of systems working together. They must be managed, matured, and optimized together to be most effective.
  • Business intelligence (BI) competency is critical — it’s one thing to have the data, it’s another to use it.
  • Penetration into the intended user base for each marketing system is the key:
    • Leaders have achieved 90% or higher user adoption for the four pillars of any digital marketing infrastructure: campaign management, Web content management, CRM/SFA, and customer database. By comparison, laggards average only one over 90%.
    • Leaders have achieved 75% or higher user adoption for 9 out of the 13 key digital marketing technologies categories we included in our survey. Laggards average only five systems at or above 75% adoption.
  • Most respondents (even leaders) believe they have not realized much of the potential they see in their marketing systems.
  • Organizational, process, content, and data readiness are seen as the major impediments to reaching the full potential of digital marketing infrastructures.

Clients of IDC’s CMO Advisory can access the full document here

Lead Distribution Scoring – a key differentiator for B2B marketers

Lead scoring is a well established technique for marketers to translate digital responses into levels of qualification for next stage outreach. For companies with no direct sales or sales cycles of 30 days or less lead scoring methodologies can be rapidly optimized around purchase behavior. For long cycle B2B sales processes, the optimization process goes only as fast as opportunity development which for many high tech companies can be 18 months or more. This is a crucial time for B2B marketers and they need to be just as exacting in how they manage the post-lead qualification journey as they are in getting prospects to the starting line.

B2B marketers need to segment, message, time, and target their communications with their direct sales reps just like they do with external prospects and customers. In my previous blog post Six Key Table Stakes for B2B Sales and Marketing Alignment marketers were tasked with three things:

  1. Treat the sales force like a market segment
  2. Market collateral (and leads) like solutions
  3. Take an account-centric approach to lead generation 

Lead distribution scoring touches on all three. Lead distribution scoring is a second stage scoring process for marketing qualified leads that enables marketers to “get the right information to the right sales rep in the right format at the right time to move an opportunity forward.” This is IDC’s definition of Sales Enablement and is a fundamental concept that should govern how marketing markets all of its output to direct sales (leads, campaigns, collateral, etc.) The days of posting to a portal or flowing and forgetting MQLs into the CRM are over. Lead distribution scoring incorporates dimensions such as:

  • What type of rep is this contact going to? 
    • By segment 
    • By tenure
    • By region
    • By product line, etc.
  • Does the rep need many leads or a very limited number of leads? 
  • What account is the lead associated with?
  • Is the sales rep meeting with this account in the next four weeks, next two weeks?
  • How is this contact connected to others in the account? 
  • Is this contact interested in the same solution as other contacts in the account?

Using a lead distribution scoring methodology will bring sales and marketing into much more direct alignment on a one to one basis. It can be applied not only to leads but to collateral, campaign training, and more. Marketing output can be “made to order” for sales reps so that it is not only highly qualified, it is also has high immediacy and relevancy to the reps’ call sheets. If the relationship between marketing and sales so bad that accessing call sheets is a non-starter, then look for friendly reps who might be willing to give a little more to get a little more from marketing.

Most Important Lead Management Practice: Align on Standards

Of all the lead management best practices a company can invest in, the one that stands out as most important is defining standards.  Recently, IDC interviewed technology marketing executives to learn what’s working and what’s not in 21st Century lead management. When asked for a description of their greatest success, many more companies stated consistent global standards (including a common language) than gave any other answer. 

Why is standardization so important?  Variation is a main culprit in erratic and unreliable processes. No two leads are the same. No two geographies are the same. No two campaign tactics perform the same. Nothing in lead management is really the same. Though companies can’t hope to eliminate all variation in their lead management, the best practice companies get rid of much of as much unnecessary complexity and redundancy as possible. By reducing variation, companies gain better control and achieve more predictable performance.
Important areas of lead management standardization include:
  • Definitions: “All marketing groups and geographies use the same stages, taxonomies, and definitions of what it means to be sourced, what it means to touch a lead.”
  • Data: “We strive for a single version of the truth.” “Instead of a 60-minute meeting on why my data is better than your data, we now talk about results – why is Hong Kong doing better?”
  • Procedures: “We consolidated 40 lead queues into six. We standardized BANT criteria, implemented standard SLA’s, standardized everything.” “Even though we are a decentralized company, we run a single process.”
  • Systems:  “Everyone uses the same common business intelligence system so we pull data from the same source.” “Using the same marketing automation system enforces our processes. It has accelerated best practice sharing.”
How to Increase Standardization

Marketing leaders acknowledge the difficulty in getting alignment on standards and offer tips from their experiences:

  • Cross-functional groups: “Bring together a core cross-functional group (regions, field marketing sales), people who are passionate and have a direct stake in the outcome.”
  • High-level sponsorship: “The sponsor was responsible for both sales and marketing. She publically gave me power.”
  • Appropriate specificity: “At first we standardized at too high a level – defining one stage as an “opportunity” for example, and things were too confusing. By getting more granular, putting in more stages, making routing rules more specific, we’ve gotten better results.”
  • Persistence: “The secret is to keep revisiting the model and the results. We’ve needed to revise it multiple times to accommodate changes in sales and marketing capability.”
  • Transparency: “Collect the data and let everyone see how bad it is. Then pick your battle.”
  • Training: “We conducted initial roll-out training as well as ongoing training to maintain momentum.”

Recognize the Limits of Standards and Allow for Some Flexibility

 Although aligning around standards is the most important best practice, it’s important to recognize that exceptions are occasionally needed. Companies should start with a goal of full standardization but then be alert for where variation is reasonably required.  For example, an emerging region with fast growth, such as China, may have genuinely different requirements than a more developed North America for what percentage of leads gets handed to sales.  However, demand a strong business case for any variation, especially in early days when people aren’t used to standards. Then be sure and treat the variation as an exception.
IDC’s report, IDC CMO Advisory Service Best Practice Series: Realizing the Vision of 21st Century Lead Management, will be available soon. IDC also offers taxonomy to assist companies to standardization. (See IDC’s Worldwide Sales and Marketing Taxonomy 2012 #231252)

Technology Buyers Tell Us How to Speed Up the Buying Cycle

IT leaders making enterprise-level technology purchases report that their buying cycle has increased by more than 20% in the last three years, according to IDC’s 2012 Buyer Experience study. They are not happy about this fact and were not shy about telling IDC about how vendors can speed things up.

IDC’s 2012 Buyer Experience Study reveals that CIO’s making enterprise-level technology purchases report that their buying cycle is now longer than five months when multiple vendors are competing for their business.

I find several things interesting about this fact.

1. The length of the B2B tech buying cycle continues to increase.  In 2009, the buying cycle was about 4.5 months and is now 5.4 months. It has increased more than 20% in three years.

2. IT executives have consistently told IDC that they would like their buying cycle to be shorter. Three months seems to feel about right to them – which is 40% less than what they currently experience. The CIO’s readily admit that their own companies are to blame for most of the delays – 60.8% of the delay they attribute to their own buying process complexity.  More people are now involved in each decision, for example. However, 35.6% of the delay, IT leaders say is caused by poor marketing and sales processes on the part of the vendors.

Clare Gillan, IDC Senior Vice President of Executive and Go-to-Market Programs, told the audience at the recent IDC CMO Advisory client meeting that survey participants were very clear on how vendors could help them speed up the buying cycle. Here is advice from the IT leaders along with just a few quotes:

  • Listen: “Listen to what we are asking and what we want before presenting a cookie-cutter one-size-fits-all solution.”
  • Justify: “Help us write the business case.”
  • Honesty: “Put everything about your product on the table, including the short-comings.”
  • Pricing: “Provide all available options with associated pricing up-front.”

 Respect, service, and transparency – these are the communication attributes I perceive when I read the survey results. Are these attributes in your persona descriptions?

3. One more thing I find interesting about the reported length of the buying cycle:  Does five-plus months seem short to you? In contrast, marketing and sales leaders reported that 19 months is their average sales cycle for enterprise-type deals according to IDC’s 2011 Tech Marketing and Sales Productivity Benchmark studies.  I don’t think I have ever heard a B2B tech marketer or sales leader report a sales cycle of just a couple months – except for small ticket items, repeat purchases (which would not be included in this survey question’s category) or the occasional purveyor of some super-hot-can’t-wait solution.

My guess is that buyers have a different definition of when the buying cycle starts than do marketers and sales people.  What does this mean to marketers who are engaged with buyers in very early stage conversations? Something to think about.

 

Big Data Comes to Marketing?

What’s the most commonly heard word in marketing organizations today? It is “Transformation.”

Dramatic transformational change is sweeping through marketing functions in most industries. And the main “change agent” is the customer. Or what we at the IDC Executive Advisory like to call the “New Buyer” . Our customers and prospects today are crafting their own routes to learning about products and services. They are motivated and skilled at educating themselves and learning from peers. They travel through numerous digital pathways in their exploration process. And by the time they come to a meeting with the vendor sales person, they are smart and savvy. They are empowered.

Marketers need to ask and answer these questions: Where did our Buyers come from? What do they know already? And above all: How do we  add new value to where they are in the process of discovery about our product or service? The New Buyer dynamic creates volumes of new data and customer intelligence analysis opportunities for vendors.

In turn, Those in the marketing job function must be able to bring better data into any planning meeting, including discussions on budgets and investments; programs and campaigns; or performance measurement. Hard data needs to complement the “softer side,” or the “art,” of marketing.

The tools for accessing and mining data, and turning data into insights, are now plentiful for today’s marketers. And, The marketing job function might be the last of all an organization’s major functions to become automated.

The marketing winners of tomorrow will be masters of rapid data management — able to turn data into intelligence, intelligence into analysis, and analysis into decision support and execution. Achieving this will be the first step in the rudiments of sales-to-marketing cost control.

For the CMO, there are three critical, inter-departmental, data-driven intersections that need to be created and nurtured. Marketing is now too important to run in isolation, so here are the three key intersections:

1. The Marketing and CIO intersection. New IDC research shows that the investment in marketing automation technologies in 2012 will be at three to four times the rate of 2011 levels. Automation technology development is going to sweep through sales and marketing over the next 10 years.

2. The Marketing and Sales (CSO, or Chief Sales Officer)  intersection. Today, the CMO needs to be able to connect sales technologies, such as CRM, with new marketing automation technologies.

3. The Marketing and CFO intersection. The CMO needs to deliver a return on investment in measurable terms in order to have meaningful budgeting and planning discussions with the CFO. Measuring impact of push programs in terms of conversion to leads, opportunities, and revenue is the game today.

I like to say that there will be more change in Marketing in the next five years, than we have seen in the past 25 years combined. These Marketing data and IT automation issues will be at the forefront for the next generation of successful CMOs.