Sunday Jan 12, 2025
Sunday Jan 12, 2025
Wednesday, 3 July 2013 00:00 - - {{hitsCtrl.values.hits}}
Data is also a major issue for marketing now. While the reality is that data is always there, the problem is that the storage costs were so high to keep the data that people storing data thought it was cheap. So that’s created the issue of big data. The other thing about that in the past is that because storage was so expensive, you will keep the record of a customer for a year or two and you will perish that data. Now you can maintain the historical transaction of a customer over a 10 period or a lifetime period. Now you can have lifetime transactional data so there are two benefits.
Big data are also long data, because today one can know what a customer brought five years ago and what has changed his or her taste over time, how the income has changed. This big data notion also means long data, which is a great opportunity for marketers how to analyse that data and how come to the table and say ‘let me give you a pool of customers who we can sell what to and who we can create a differentiated experience and have our profitability from’.
I was speaking to some clients in Sri Lanka this week and you have this offer giving 1,000 minutes for free. If you use analytics you will discover that most customers are using only 300 minutes. So why are you giving them 1,000 minutes for free? Either you didn’t value what you are giving them or maybe they want something else. Maybe you can give them only 300 minutes for free and give them other value added services as data. This is what marketing can do to analyse data and say ‘let’s do something different’.
Then we have the booming social media. In a traditional way which you would think about social media, social also generally mean about a lot of insights, about buyer behaviours. In a recent study that was conducted in 2011, South Asia was the only region in which social media was a more important factor than big data. Everywhere else in the world, data explosion is what has kept CMOs up at night. Here it was social media, because of demographic, which is very different. 
What is happening is that we are having a complete explosion of social media usage. Because of the demographic more people in South Asia are accessing social media and internet through their mobile phones. So I heard a very nice term a few weeks ago which is that this generation has no browser baggage, which means people are using customised mobile apps instead of having to type http://www and so on.
What is happening is that they are accessing social media and services through their mobile so they are able to more instinctively experience your brand, be delighted or complain about your brand. They are not going to go back to their customer complaint desk and say that they are having a bad experience at McDonald’s. Instead they will be standing in line at McDonald’s and go on to social media and say ‘15 minutes I have been waiting for my happy meal’. So the amount of brands that are monitoring social media for feedback and conversations are higher. Customers who are not happy on social media will ruin your brand. So that’s a sudden thing and the analysers will need to engage with social media with real time social sentiment analysis – not just for a reputation perspective but for also a customer service perspective.
The third trend is really around how this role is going to be successful, which is the relationship with the CIOs. What you see is that CMOs are getting more involved in defining the requirements, because big data and social and analytics is what they need IT to do. And the traditional relationships with CIOs have been more back office, systems and architecture terms of work. Now they are seeing a greater role, enabling them in the front office. The digitisation that is happening is not only in marketing but also in customer service. So what does this mean for CMOs and CIOs? To work differently, together.
There are three basic trigger points that are driving the partnership between CMOs and CIOs.
1. CMOs want to get a better understanding of the customer as an individual. You can no longer say ‘I want to market from 18 to 34 male’. That doesn’t mean anything anymore. They want to harness the data from existing transaction systems, from social media and say ‘I want to market to you a personalised message’.
2. They want a whole organisation to create a coherent experience to the customer. Because the customers are coming into the shop, going into the website and calling somebody before they make the decision. Before they make the decision, they are doing everything. So this is the only channel experience. So I if dial someone to make a 15 minute complaint to the shop and you didn’t know that I was unhappy and I go to the website and have some behaviour of looking at different things, if you don’t know my whole journey, how you are engaging with the brand and every channel? I will think you are five different companies. The clients are looking for a systemic engagement with me that knows my behaviour online so I would search online, shop offline and essentially do my customer service on the phone, which should be all one. It requires IT to enable that. Your customer profile is very different to what it used to be. This is about creating a system of engagement that adds value at every touch, in this channel of customer-buyer journey.
3. This is about seeing some internal collaboration. What we are finding is that you have to be a great company and therefore a great brand. You cannot be unauthentic. If your brand promises in the advertising and the CEO speech that you are going to deliver x number of value, but your experience at the sales is different, this creates distance with the given promise. A lot of time what we are realising is that we spend big budgets to create a brand and awareness and at the moment of truth, the customer is having a different experience. So we are seeing the greater need for a brand and culture that is authentically one. You cannot talk about your brand that is different from the customer service or the experience that you will get day-to-day by every employee.
The analogy that I get from that is that you see all these beautiful buildings coming to Colombo, the beautiful advertising. There are lots of apartments coming, but buying a house is an emotional decision and if the agent comes from the developer is sweating, has a greasy hand and is trying to sell you a house as though he is selling you a used car, it doesn’t matter how beautiful the building is, what matters is that experience.
It’s not that the product is bad, it’s beautiful, this notion is that you need to internally enable a culture and that’s where social business comes in. This means that our employees are internally changing. It means that they are more used to social media as engagement. There are a few employees who are using email and fax. However many people actually need new information about a new offering, they will not only be looking at a company manual. We believe we need social for employees. The way to create a coherent 
environment and culture is to create social communities that you can eternally learn and engage internally from the company.
Briefing my points, the first was on data and role of marketing, having the authority and the ability to harness that. The second is about social and what is triggering and how we need to be more prepared for social and mobile. The third is this relationship between the CMO and the CIO. And I think these are the three triggers that are driving the collaboration. It is a very difficult relationship and it’s difficult, since if you look at the way budgets come, the marketing budget usually goes to advertising and above the line, and things that you can see and touch, and the bid outdoor advertising, which coincidentally is on the way home, to the CEO’s home. So the boss can always see the advertising. But technology improves the function and makes it smarter, but in very intrinsic ways.
So some of the challenges with CMOs is that they also have to change their thinking and understand that smarter marketing is not necessarily bigger or more marketing but marketing enabled by technology. It’s more efficient. So they have to change the mindsets that it is not bigger budgets, more people, more advertising, more air cover. It’s about changing the way you think. From the CIO side it is also challenging because the CMOs are coming to the table with budgets that they want to use towards technology and usually these budgets sit in IT. So it’s essentially saying ‘I have my requirements, and my budgets, you go execute what I need from you’. That changes how CIO engage since they have a business person who is quite demanding, who is educated in what they need.
Q: There is a trend that CMOs are using technology to get back into the boardroom. At the same time there is a debate on whether there is enough presence of CMOs in the boardroom in the first place. Even CIOs or CTOs are not in the boardroom either. In that context how can a CMO be told to use technology to make sense in the boardroom and how do you see the trend in Asia with the number of CMOs brought into the boardroom?
A: The way I’m seeing the trend change is that more successful CMOs are now able to take over the commerce channel, the digital channel. So what’s happening is that there are a lot of CMOs in banking, which has successfully shown through pilots that digital or online transactions are more and more prevalent. For industries where there is a business strategy to grow online, CMOs who have been able to evolve their skills and gain more digital skills have been able to takeover P&L responsibility for the online channel.
The first trend is that the online channel is not big in terms of revenue, it’s probably 10 to 15%, but has the attention of the CEO because they see the upside being very high in terms of being able to do the transaction.
The second is discovering that the amount of data they are able to generate online about the consumer is much higher than in the store. So the ability to go back and cross sell and increase the value of the customer, but also the analytics, which is what CMOs are able to demonstrate, analytics and progress and also able to get more per customer. Even when the numbers of customers are less, each customer has higher asset value. Only marketing people can link transactional data and behavioural data. Sales only has transactional data and operating data. So our unique place is when we come to the table with insights. When you become the voice of the customer, the board will listen to you.
CMOs are taking over analytics and will soon take over customer service and they are able to convert customers to speak for the brand. These trends are witnessed in Asia and are growing faster in banking and telecom, with retail and media catching up.
Q: How about the revolution of Customer Relationship Management (CRM). Did it come from the CMO or CIO landscape? Has there been a convergence. What would be your explanation?
A: CRM came around at the same time. These are packaged applications that became more complex and custom-made now and also are more cloud based. The initial focus of CIOs 10-15 years ago was supply chain, ERP and then CRM and marketing was never in the radar on the CIO.
CRM came at a time where they discovered that they need to manage the goals and transaction and record this. The motivation was more from the sales side. It was customer service management but it was actually sales transaction tracking tool. If you look at why most companies use CRM, they are not actually managing customer relationship at all. They are managing to show sales and manage to show the boss the day the deal is closed.
CRM is a sales force management tool. It is being realised that CRM cannot be something that you do when you come to the office. So they discovered that CRM has to be much easier for sales people to use while on the road. So mobile CRM is becoming the way to go. There is an increase in the use of converging CRM in social technology.
The second thing about CRM that’s happening is that it is more community based. Who needs to know that information? Does it have to be everybody or does it have to be nobody?
CRM used to be more vertical, now it’s needed across, and technology needs to evolve this way. CRM is also moving on to cloud-based monitoring. It is noted in marketing that it never has access to CRM as in most companies it was built for sales and operational staff and companies didn’t want client information going public. At IBM it is believed that there are five buying stages; learn, solve, compare, purchase and implement your service depending on the industry. Most industries have these five. Most of us want to get to the end. People are in different stages and we have to abide by CRM and we address customers at different buyers’ stage. When we nail all, we will be doing many of the things that I told you, because my sales person will only go in at the solve/compare/purchase stage, as then they can engage at the right level.
Q: Eventually the CIO is also a customer, so where do you find the problem in terms of CMOs asking for more budgets and support from the board? Why isn’t it happening?
A: The most part, there are two big challenges. One is security. For most of the digital initiatives, the CMOs’ first exposure to technology is digital, through websites and the need to go digital in their campaigns. What happens with digital is that you are creating social media communities where you will have your clients as well as employees access social media from the office. So the first clash becomes the access issue in the office – whether employees should be allowed to access social media or not. Social media is seen as an opportunity by marketers whereas CIOs think it is troublesome since it puts a lot of load on the system. There are a lot of security issues when you access Facebook from the office. There is also the issue of wasting time, so there is a little bit on the angle of this not being productive. The costs of maintaining high bandwidth goes up significantly. When everyone is on YouTube, think of how it can slow down the network.
The second is from a security perspective; they will be downloading applications that will create viruses in the system. Thirdly, what they say is that what if we give out confidential information and share what we give out on social media site that should not be on public record. So employees do not know where to draw the line with what is internal and external. Another problem is from a data perspective where we are asking them to create a system that integrates external and internal data. So you are basically putting together a single data customer. It is not east to create a single profile. We have to figure out a way to make the data seamless. Where this starts exploding is that you need to first have a database that is clean and accurate, that doesn’t go out-of-date within minutes. There are basic issues about keeping the in-house data clean. With CIOs having fixed that problem, they will want to integrate further data. CIOs want data that they can trust and CMOs want better analysis of data. So the focus should be on getting good data rather than hunting for long and big data.
The final problem is centred on the agency relationship. What’s wonderful about marketing is that we have a wonderful ecosystem of agency that supports our businesses. We are very used to outsourcing. For the CIO, they have a relationship with IT vendors. So the ecosystem that supports them is very different. The CIO trusts IBM but the CMO trusts agencies. These are not the same, but they are both outsourcing companies and so what s happening is that the way we work with agencies is different when they work with vendors.
Vendors send costs, proposals, then pricing, and then you have the agency people and media people looking young and cool, they look different. The agency looks exciting and creative and you have IBM saying that they will give a unified role of the customer and the CIOs are very happy with the presentation. What happens is that, when the CMOs need help, the agency says we know people who know people, for two weeks the website will be up and running, look the videos come up, and it’s so cool looking. Our CIO is freaking out since it doesn’t connect to any of the systems because it’s a standalone website that is built on an open source. So the challenge is that you need to find the connectivity between creativity and technology. And there are not very many partners in the industry that can be creative and technological. So a solution that works for a marketing person doesn’t work for the IT person and vice versa.
These are three things that I see in my experience that make the relationship difficult. I think both are right and we should open up the company. It’s worse if they give suggestions and you don’t do anything about it.
Q: At IBM, regionally do you see this synergy working? Working in a rapid sense or is the convergence happening? Do you also see more CMOs using technology now?
A: I do. I started talking about this topic two years ago. And if you had asked me this question two years ago, I would have said no. I do more and more, mostly because I realise that they have to abide to be credible. CIOs are also realising that they need to move from being a cost function and they are being more challenged to look at ways where they can add more revenue. Marketing is a wonderful partner to add to that aspiration because you work with marketing and you can tangibly see, because of these technology improvements, you can increase the average size of a cart of a transaction. Marketing is a revenue generating function and I can see more relation from both sides to do more with each other. Typically, in my experience, one of those two takes a lead. We had a CMO CIO symposium few months ago, and interestingly they came in pairs. So we are doing more events. We haven’t yet seen if they have a common vision or not. I could say who was on the same page, who is stronger, CIO or CMO. The point is that they came together and that they see value.
Can I quote any successful partnership in any company? Too early to say. And the reason for that is that in the industry, the average tenure for a CMO is really not that high, it’s about 36 months. CIOs are similar, you have X amount of time to make a difference before you move. So you want to do something quickly so you don’t have time to build relationships. So there is motivation to do it faster.
Q: This is fine in an ecosystem where people see relevance, but the other issue is that IT is seen as cost rather than an investment so if the CMO wants to make a case, the board decides that IT is a cost. How is this challenge faced by the CMO, even if there is a willing CIO?
A: Actually it is quite the opposite. Cases brought forward by the CIO are getting shot down. But the cases being brought forward by the CMO are being considered. This is because the CMO is aligning the investment against the revenue-oriented goal. So if they are able to say they if we make this investment, we will be able to get X% increased cross selling opportunities, we will be able to reach five new cities and the reason is that the KPI for marketing is revenue, leads, new customers, which is a lot easier to sell to the board than selling a cost.
Where the cases are not going through is when they are making a decision between online of a business function or another. I have seen cases where the board was very enthusiastic but it is not because the marketing person lost to an IT person and IT was more important. Where I am seeing success is that when marketing people have enough conviction to say, instead of doing advertising, print or TV, I suggest we do digital. And we are seeing a lot of growth and shift of dollars from print to digital. To support the initiative you need some technology support. So they are putting their own marketing money on the table without going to the board. There is a lot of appetite at the board nowadays for these strategies.
Q: From an IBM perspective, are you talking to more CMOs now as opposed to 10 years ago?
A: Definitely. I personally engage with more CMOs in the South Asia region and I have spent my entire career between marketing and technology. What’s being going on with IBM is that that marketing brought UNIKA and two years later IBM brought that company. So there is nothing that we are talking about that we don’t use in-house – whether it is analytics and other tools that we use for our functions. The first question CMOs ask me is, how are you doing it? If you are asking me to use this avenue, how are you doing it? I personally blog, tweet, I use videos, I use social internally, so you have to be thorough. We are talking to our CMOs but we are also practicing what we preach. So we are coming in a peer versus a vendor, which I like since we are learning from each other.
Q: Overall what dynamics are taking place in IBM in terms of landscape in South Asia, especially during difficult times for most brands? Are they reducing emphasis on brand building, cutting costs? What are the trends like?
A: There is a better client experience than ever before. I would say exceptional client experience. The reason is that we have figured out that business performance wherever you are, there is one simple equation. Business performance is a function of client experience which is a function employee engagement. So the strategy that we are on is that if you have engaged employees in South Asia and around the world who are proud to be IMBers, who love the brand and work, they would go an extra mile to deliver a better client experience. And if you do that, we will be on automatic business performance. That is the simple equation that we are operating now.
You can say it is a coincidence between 2013 versus 2001 and that is a simple equation. So I am seeing more and more emphasis in employee engagement that ever before. Since we can focus more on the market and all the reasons that you can be successful in the market and the economy and you can be a great company and we are a 101-year-old company and we have seen everything, so for us this not an extraordinary moment in time. More importantly, how can clients come the other way and be more important and if you look at the IBM performance in the last 10 years, recession or not, clients need to either cut cost or improve revenues and technology is a recession proof area since it is used when you want to cut costs and grow revenue or both. They want to know that IBM was with them during the tough times and top times, and that is what client experience is about. They need to know that when they want, IBM will be there. So the company focus on South Asia is very good though it’s not only a South Asian focus.
