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Interviews/ General Management

The CMO.com Interview: BMC Software's Mark Stouse

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by Anoop Sahgal
Partner Marketing
Adobe Systems

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Article Highlights:

  • "Generally speaking, B2B marketing has been behind B2C marketing in terms of perspective, technique, metrics and analytics, etc."
  • "The half-life of any single marketing artifact or campaign is becoming shorter in the memory of your audience."
  • "In our case, awareness is not about demand generation primarily, but awareness of those things that will build confidence in customers."

CMO.com contributing editor Anoop Sahgal recently sat down for an exclusive interview with Mark Stouse, vice president, Global Connect, at BMC Software. Stouse discusses the use of marketing metrics, the close relationship he has built with the company’s sales staff, as well as some of the important skills he believes marketers need today.

On. . .the role and BMC Global Connect.
I returned to BMC Software from Honeywell Aerospace, where I was leading a global marketing and communications team. My new role was leading both Global Communications--which includes analysts, press, social, and other influencers--and Customer Connect, which helps customers get the most value from their relationship with BMC.

Soon after I arrived, we looked at the current evolution in communications and customer service, particularly against the backdrop of social media--both as channels and as a cultural platform. We felt that the word “Connect” was much more contemporary than “Communications.” Comms has more of a one-way, broadcast connotation, which is, in a word, dated, dated, dated.

BMC Global Connect is about engagement and connecting customers with the brand. Connect is about having a conversation and really look at the behaviors you are trying to prompt and see if they are occurring.

On...B2B, the new age of marketing , and the importance of data.
Generally speaking, B2B marketing has been behind B2C marketing in terms of perspective, technique, metrics and analytics, etc.

Let’s take metrics and analytics, which is nothing more than collecting the right data from the past and present, and then using it to make the right bets going forward. As a marketer, if all you are trying to do is seek what happened in the past, you are already behind the eight ball. Organizations need to use data to govern marketing and sales plays and leverage it to limit opportunity cost. There may be something else you could invest in that yields more return--that’s the idea of opportunity cost--and you don’t want to be a two-time loser with your investments.

On...the “real-time” nature of marketing.
It’s all about cycle time. You can have a great idea, a great campaign, but if you can’t evolve it immediately and fluidly, it won’t matter in a social culture. The days of set-piece marketing being effective--particularly in B2B--are waning fast. The old “plan the work, work the plan” marketing culture simply can’t keep up. A lot of the tools are great and remain viable, but the mindset has to change to something much more dynamic and PR-like. I agree with Richard Edelman on that point.

So the cycle time in marketing is spinning faster and faster, and the half-life of any single marketing artifact or campaign is becoming shorter in the memory of your audience. This makes the idea of “fast failure” even more critical--you have to have the ability to instrument tactics, get real-time data, and interpret that data at the operational and strategic level.

On. . .being more predictive with marketing and communications.
I’ve been using a measurement platform called ISS [Influencer Score System] that delivers integrated tactical, operational, and strategic outputs that my leadership teams can use to calibrate their marketing and communications investments. ISS allows a marketing and communications leader to operate his/her organization like an investment fund, going beyond traditional “look-back only” metrics to being able to accurately predict performance and impact across multiple functions.

To date, ISS has been field-tested and applied operationally for eight to nine years in a B2B marketing context, including paid, earned, shared, and owned (PESO) programming.

There are three levels of metrics and analytics in ISS: tactical, operational, and strategic. All three levels are fully exposed within the company at all times, based on the principles of transparency and enablement. We want all contributors and stakeholders to have full knowledge and understanding of all three perspectives--being able to see the correlations up and down the stack improves performance and impact up and down the stack.

On. . .ISS's metamorphosis.
Originally, ISS applied key principles from both sales management and business metrics to answer the question commonly voiced by CEOs: “If I liquidated my marketing and communications teams, how much of this good stuff would I still get?” Put another way, in the “billards game” of daily operations, business leaders want to understand what results are based on intentional skill versus luck.

ISS later matured into a broader capability, which was to give direct, measurable, data-driven insight into the impact that marketing and communications investment is having on sales productivity--specifically, demand generation, deal expansion, and sales velocity.

ISS objectifies individual and organizational performance, both in absolute terms and also in light of spend. This creates a system in which the idea of doing more with less goes out the window. Spend and impact track up and down together, presenting a calibrated “more with more, and less with less” portrait of marketing and communications reality.

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On. . .how ISS enbles cross-discipline collaboration.
CEOs and CFOs embrace a platform like ISS because it helps them calibrate their investments in--and expectations of--marketing and communications. It gives them a data-driven way to see if they received value, both in functional terms and ultimately in sales productivity. It also allows a marketing or communications leader to run their organization according to a true “investment fund” model, picking their “bets” across the mix of functions based on the predicted synergistic contributions.

The strategic level of ISS drives strong integration with sales and marketing. The premise is that marketing and communications operations should be executed in order to improve and accelerate the three legs of sales productivity, which are directly measurable precursors to revenue, margin, and cash flow, [respectively], at the top of the company. Consequently, marketing and communications campaigns that are designed in tight alignment with these sales objectives will produce outcomes that can be correlated against sales data as tracked in an ERP like Salesforce.com.

For example, portfolio companies often focus on campaigns with a “better together” message, designed to make customers aware of the benefits of buying multiple, integrated solutions from the company. Let’s say that Company A has a sales cycle that is typically nine months. When we see a consistent pattern of deal expansion by promoted SKU six to nine months after our campaign in that area of the business, there is a strong observable correlation.

<!--I began to build ISS back in 2004, with a lot of individual and agency collaborators helping out along the way. ISS 1.0 was completely Excel-based and very primitive. ISS began to mature substantially in 2006, increasing the interface with an array of platforms and data sources. The platform was stable and flexible enough that by 2008 the focus was more on adding new data sets, quants, and analytics--a process that continues to this day. In 2012, the static dashboard underwent a conversion to a live cloud-based experience, using Tableau and other tools.-->

On. . .ISS scoring and metrics.
In ISS, all three main strata of metrics and analytics reflect a simple points-based system that gives any piece of earned or owned media a score. Based on roughly eight years of accumulated data, a leader could “look back” to gain insight into future performance across a widening range of events and situations, ranging from routine product launches to special events to crises to any other scenario that is likely to present itself.

At the beginning of the fiscal year, my organization goes on the hook with company leadership regarding our points and cost-per-point metrics for all four quarters--just as you would see in classic sales management. Among other things, my guys are judged by the accuracy of their predictions--falling short is bad, but consistently overachieving would denote some “sandbagging” behavior.

Tactical metrics in my organization would include fairly recognizable examples, such as volume of coverage, impressions, tonality, key message reflection, share of voice and reach, as well as more unusual ones such as missed opportunity, competitive displacement, assists (tactical flips by one function to another), and individual coverage quotas.

Examples of operational analytics would include total points by country, region, line of business, key message, and outlet, as well as efficiency metrics, such as cost-per-point (similar in concept to miles-per-gallon in a car). Regarding the latter, the data currently suggests that in a large B2B portfolio-based company, a mature, effective communications team operating in a relatively positive market environment should be able to generate strong results at a cost of 45 cents per point.

Beginning in 2013, ISS began to include an Environmental Difficulty Index (EDI), which leverages published macroeconomic data with company performance data to create a 1-5 index. That index represents the relative difficulty of selling a company’s messages into the marketplace. These numbers are applied to the cost-per-point as environmental multipliers. Using the car analogy again, your miles per gallon will be much worse while driving through six inches of mud that on smooth, dry tarmac.

To sum, here’s the car analogy expanded as a high-level roll-up of ISS and EDI:

  • Points = how miles we have to drive
  • Spend = vehicle selection, how much gas we can afford and how fast we can drive
  • Cost per point = miles per gallon (MPG)
  • EDI = impact of weather and road conditions

On. . .the key metrics that the C-suite, and Global Connect, care about.
Let’s look at my current role. In B2B, communications--or Global Connect--operates mainly in the back half of the sales funnel.

In our case, awareness is not about demand generation primarily, but awareness of those things that will build confidence in customers--confidence to buy, to buy more, and to sign the contract more quickly.  If a customer hesitates when buying and delays the deal by a quarter, that lack of confidence has had a linear impact company cash flow.

Likewise, if a prospective customer is feeling a lot of decision risk, he will not respond favorably to the salesperson’s desire to expand the deal. Assuming that your pricing is in good shape, this reticence reduces the opportunity for margin expansion and better operating income. If you are running campaigns to reassure the customer, what you will be able to see deal expansion and deal velocity being reflected in the CRM.

On. . .the IT and marketing relationship.
Technology is a core asset that both organizations can now leverage to deliver the best product and services based on customer needs. But SaaS and cloud computing have disenfranchised the idea of “monolithic IT” in many ways. IT has had to shift from being monolithic to more democratic--all while maintaining security. We still have to balance freedom and security.

On. . .the impact of social.
Social has changed the expectations of other channels. The radical authenticity and transparency requires companies to become democratic and real. You are saying to the market, “You--the consumer--really do own our brand. Companies are finding out in real time what the market wants. Change is being driven from the outside. A transparent, open, outside-in perspective is a non-negotiable fact of doing business in the social world--which is the world we’re all going to be living in for many years.

On...privacy and the responsibility marketers have.
Experiencing the power of the new marketing technologies and tools is like having a bit of magic on your hands. We are living in an era where the ability to understand customer behavior--and take action on it--is unbelievable. However, there are profound ethical and moral consequences that go with that newfound power. Marketers will need to agree on ethical, moral, and legal standards for the use of this power and adhere tightly to them. If we don’t hold up these standards, we will be regulated--the lessons of history are there for us to inspect.

About Anoop Sahgal

Anoop Sahgal leads global marketing programs for Adobe's key agency and system integrator alliances. Sahgal has global experience in leadership roles that span marketing, product management, and business development in high technology, and has spent time time working in both the SI and agency worlds. Follow Sahgal on Twitter: @anoop_sahgal.

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