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The coming battle between ABM and marketing automation tools

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For those of us who aren’t salespeople or marketers, account-based marketing (ABM) may seem like something that should have been part of marketing platforms all along.

After all, if you’d like to get Big Company to become a new customer of your products, wouldn’t you choose and pitch the account as well as the individual?

Of course, Gartner Managing VP and analyst Todd Berkowitz told me.

“The notion of ABM has been around for a while,” he said, “starting with very large companies looking at their top 50 accounts” and trying to figure out how to increase their customer base. Last month, he and Senior Director/analyst Noah Elkin released their “Market Guide for Account-Based Platforms.” [Gartner account required.]

Traditionally, he said, B2B sales was oriented toward key accounts to sell them more product, while marketing was focused on new customer acquisition.

Many digital marketers originally found new business with their digital tools by targeting and nurturing profiles of individuals. Although the individuals’ profiles contained firmographic info about their respective companies, the marketing automation platforms were largely set up to handle individual leads.

“Everyone thought about [individual] leads,” Berkowitz said, “because everything was based on people [who] engaged with you, who came to the web site.”

Now, new intelligent tools allow marketers to target prospective new accounts, at scale, while juggling interactions with individuals from that account.

As these ABM tools evolve more capabilities, a battle is brewing among these tool providers and marketing automation platforms. And the results of that battle can impact marketers’ future options in tool selections, customer data management and other areas.

More people involved in buying decisions

A key marketing reason behind the rise of ABM in the last few years, Berkowitz noted, is that “the number of people involved in the buying process keeps going up,” he said. This includes the number of what he called “assassins”: people inside a company who can kill a deal.

Why are there now more people involved in buying decisions?

One obvious reason, he pointed out, is that the more complex the deal — and complexity can correlate with the amount of money involved — the larger the decision team. Since many purchase decisions involve technology or other products/services that are used across an organization, wide-scale buy-in is often required.

“If it’s a $2000 annual subscription,” he said, “one person can decide.” But, if it’s a million dollars, he noted, there is often a committee.

And, since virtually all sales, marketing and other business software are now offered as cloud-based software-as-a-service, technology purchasing decisions have moved away from centralized IT departments and toward other departments, where a departmental buy-in is often needed.

The AI driver

Another reason why ABM tools have recently emerged is the availability of AI. First, AI was used by ABM to propel the automated selection of target accounts via predictive analytics. Increasingly, it is also driving the intelligent orchestration of nurturing and other marketing responses, based on how the targets respond, their needs and profiles, the perceived hierarchy of individuals in that account, and so on.

“One of the things about ABM,” Berkowitz said, is that “it takes a long time to do well and get it right.”

If you’re targeting, say, 200 accounts as potential new corporate customers, some individuals at those accounts will visit different pages at your site, some will download white papers, while others will respond to emails. Additionally, new data will emerge, for instance, on where new branch offices of the targeted companies are opening.

Responding to such a dynamically changing engagement and delivering the next best action requires a coordinated, sophisticated and automatic orchestration that is only now emerging in ABM platforms, he said.

Not a stable scenario

One might think that the tools in the ABM category would have been swallowed up by the large marketing automation platforms. While some ABM additions have been made to platforms like Marketo and Salesforce, Berkowitz said, they don’t offer the capabilities of ABM-specific platforms like Engagio, Demandbase, Terminus, 6th Sense, Radius and RollWorks.

On the other hand, ABM tools in general are not expected to be systems of record the way a Salesforce customer relationship management system is, and no ABM tools have a fully developed, native email capability — a key need for account nurturing.

As a result, ABM platforms all integrate with marketing automation tools, but Berkowitz predicts that this isn’t a stable scenario.

The coming battle

ABM tools are going to develop more of the capabilities of marketing automation platforms — like sophisticated email features — he predicted, because software is always looking for competitive differentiators and because the increased use of AI will enable new levels of dynamic response across channels.

With added capabilities, ABM tools can then coordinate email interactions, orchestrate across channels and determine the next best response, in addition to predicting the most responsive target accounts, tracking web visits and generating reports. In short, they will be able to offer the key interaction capabilities needed to pursue an account, lacking only a system of record for maintaining target and customer profiles.

By adding capabilities, ABM tools can get a bigger share of marketers’ budgets. With these additional functions, it’s unlikely they’ll fall victim to marketers’ desires to reduce their toolset, Berkowitz said, since many marketing departments have shown their willingness to manage “a massive stack.”

As ABM tools grow their resume, the Adobe/Marketos, Salesforces, Oracle Eloquas and B2B toolsets growing around Customer Data Platforms are going to have to decide whether to fully develop their ABM side, or to buy an existing ABM vendor.

It’s not clear yet how the larger marketing automation platforms will respond, Berkowitz said, but it is clear the battle is set.

This story first appeared on MarTech Today. For more on marketing technology, click here.

The post The coming battle between ABM and marketing automation tools appeared first on Marketing Land.

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When it comes to customer analytics, you need to be all-in

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One would be hard-pressed to find anyone in a company that didn’t believe that customers are critical to success. But at the same time, you might find that the same customer-focused people don’t really know much about their own customers in the first place, or that their understanding is limited to their specific domain. In a data-rich world, this lack of holistic insight is not only unforgivable – it’s unprofitable.

Go big or go home

McKinsey published a study a few years ago looking at the value of customer analytics. At the time, they raised concern around the fact that the perceived value of customer analytics was “declining, rather than growing.” Paradoxically, companies that relied heavily on customer analytics were twice as likely to perform better when measured on metrics ranging from profit and sales to ROI.

The catch? It was the heavy users of customer analytics, those that deployed tools extensively through their organization that reaped the benefits. Just dabbling in the analytics or deploying tools to a few departments was akin to not even trying. It seems that there is a minimum threshold, or perhaps critical mass before the effect of customer analytics can be felt. Also, the research discovered that having tools alone was not enough. A data-driven culture that can incorporate these insights is necessary to benefit from analytics in the first place.

What does fully-committed really mean?

Obviously, companies work hard to ensure that their departments have the customer information they need to do their job. For example, a customer service rep is taught to deal with irate customers who have issues with their products. Marketers build up customer models often populated by tracking and monitoring web activity in the hope of uncovering purchase intent. And so on.

There is a subtle problem here. In the same way that companies can’t just dabble in customer analytics, they also can’t afford to create isolated pockets of customer analytics within each department. For starters, each team will be limited by the customer data that it collects. Even the advanced data analytics capabilities of modern marketing tools are effectively limited to web data that they can collect from potential customers interacting with blogs, advertisements and emails.

To truly develop a holistic customer model, companies must integrate many different data sources. A richer model should at a minimum include data the following sources:

  • Sales (CRM)
  • Billing
  • Finance
  • Marketing (social, blogs, campaigns, etc.)
  • Customer support
  • Operations

By separating customers into fully distinct groups that rely on multi-dimensional considerations, a company can define unique strategies to target these customers. For example, it makes sense to go after high-revenue customers. Layering in profitability might split these high-revenue customers into high-profitability and low-profitability groups. Layering in sales funnel data to the high-revenue / high-profitability group might further expose customers that take a long time to close vs. those that close within weeks. And so on… The point here is that the addition of a new data source from each department leads to a much more useful understanding of the customer that can in turn be deployed across all teams. This is the essence of being fully-committed to customer analytics.

What next?

To really benefit from customer analytics, first develop a holistic model of your customer that integrates data from as many sources as possible. But insight alone is not enough. Each department within your company must be willing and capable to act on this insight. This involves leadership in incubating and maintaining a data-driven culture. It also involves efforts to ensure that you have appropriate data infrastructure in place to get insights to your employees when they need it.

It’s not easy – without a full commitment to customer analytics you risk wasted effort. But the rewards are worth it.

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Mind the GDPR Generational Gap!

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DIGITAL NATIVES MOST EMPOWERED BY DATA RIGHTS

A new study by data specialists Wilmington Millennium reveals that Millennials and Generation Z are the most empowered age groups when it comes to protecting their personal information. Sixteen to thirty-four year olds are the most likely to act on the powers afforded to them by GDPR.

Almost half (48 per cent) of Generation Y and Z have taken some action since GDPR was introduced last May, including requesting their personal information is deleted by an organisation, finding out what personal data is held on them by an organisation or contacting the Information Commissioner’s Office (ICO) to make a complaint. By comparison only a quarter of Generation X and a third of Boomers have taken similar steps.

Millennials are most likely to ask for their information to be deleted, with one in three saying that they have already done this. This rises to one in five for the rest of the population. Generation Z are the most likely to both request a data audit (15 per cent compared to an average of nine per cent) and complain to the ICO with 18 per cent saying they had contacted the Information Commissioner to register a data breach or data processing concern. This compares to just 7.5 per cent for the remainder of the population.

Boomers were the least likely to take any action with only one per cent saying that post GDPR they had contacted the ICO, three per cent claiming that they had contacted a business to find out what information is held on them and 15 per cent requesting that their information was removed from a marketing database.

Comments Karen Pritchard, Director, Wilmington Millennium:

“It is interesting that it is the younger generations that are actively protecting their personal information, rather than the older age groups who have been campaigning for greater control over their data rights for years. The discrepancy between the ages groups is significant – for instance 18 per cent of Generation X versus one per cent of Boomers making a complaint to the ICO. Despite this, it shows that GDPR is having a positive impact with consumers becoming increasingly data savvy. This is a good thing as our research shows that the majority of people now believe that marketing communications are better than they were prior to the 25thMay 2018.”

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Marketers react to Gartner finding: Martech spending now exceeds staff costs

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Marketers are now spending more on marketing technology than on salaries for internal staff.

That’s a key finding in the recent Gartner CMO Spend Survey 2018-2019, which surveyed UK- and U.S.-based senior marketing executives.

Marketers spent 29 percent of their budgets (not including media spend or agency fees) on martech last year, while allocating 24 percent of their resources to paying staff. In 2017, the percentages stood at 22 and 27 percent, respectively.

‘No surprise’

The main beneficiaries of this spending were digital analytics, content management and email marketing tools, making martech what Gartner called the “single largest area of investment when it comes to marketing resources and programs.” The top three marketing capabilities cited in the survey were marketing/customer analytics, marketing technology acquisition and use, and customer experience.

“Marketing leads are focused on building their analytics and martech capabilities because they’re the muscle groups that need the most development,” HubSpot VP and MarTech Conference program chair Scott Brinker posted about the report. But, he added, the whole purpose of this development is to move toward the objectives of customer acquisition and retention.

“It’s no surprise,” Acquia CMO Lynne Capozzi told me via email. She noted that a study by her company, which serves companies using open source content management software Drupal, found that 62 percent of global marketers plan to spend more on martech over the next 12 months, in part to simplify the current complexity of connecting systems and data to deliver good customer experiences.

‘Tremendous race to understand data’

Phil Ahad, EVP of Strategy and Products at online survey provider Toluna, said that enterprises — such as those favored in the Gartner report — have “a lot more room to reduce costs” of staff salaries through marketing technology than do smaller companies, which are leaner.

“I’m not at all surprised” at the Gartner finding, David Frankel, managing partner of sales and marketing consultancy Slingstone Group, told me. He’s the former CMO of financial data firm Edgar Online and of alternative lending company Tapify.

Both from his personal experience and from observing the marketplace, he said, it’s clear there’s a “tremendous race to understand the data around customer experience.”

In 2011 and 2012, he said, marketers started talking about Big Data, but efforts were mostly focused on harnessing and structuring it.

“People didn’t fully understand what you could do with the data,” he added, noting that we’ve since begun to focus on using data to support customer experience through the targeting of individuals with messages, best offers and streamlined processes.

‘A game of catch up’

Now, there is a greater understanding among marketers that they need analytical and implementation tools to improve experience through a better understanding of customer data, he said.

“It’s a game of catch up” based around data, he added.

Frankel said that he didn’t believe this increased spending on martech will fall off over the next year. “We’re seeing a new status quo,” he said, especially since AI needs a growing infrastructure to capture, clean, manage and feed quality data, and since SaaS services involve ongoing subscriptions.

Bayer VP of Media Strategy and Platforms Josh Palau agreed that this emphasis on martech spending “is probably where the industry is going,” in large part because many marketing services are purchased in the cloud, through software as a service offerings.

In his previous stint at Johnson & Johnson, he recalled, obtaining a social listening service subscription added a substantial capacity that required very little commitment in terms of internal staffing. Palau said “maybe two people” were involved in using the subscription at the brand.

Much of his internal staff these days is focused on strategy and management, he noted, since cloud-based services are used to meet needs that once would have required significant internal personnel. Even though Bayer is working to bring all digital media in house, he said, there will still be an ongoing need for the outside cloud-based services.

“It’s a lot easier to change platforms than to change staff,” he pointed out.

This story first appeared on MarTech Today. For more on marketing technology, click here.

The post Marketers react to Gartner finding: Martech spending now exceeds staff costs appeared first on Marketing Land.

All copyrights for this article are reserved to their respective authors.

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