CMOs are witnessing an unmistakable revolution in marketing, driven by the combination of lower demand, hypercompetitive world markets, and the complexities and challenges of buyers engaging across a multitude of channels. Evaluating the effectiveness of marketing by brand awareness and market share alone is being replaced in this new marketing revolution by achieving short-term revenue goals.
This might seem tactical, but, in fact, for the CMO, it is very strategic. The principles behind these goals contain the necessary information, strategy, and framework to open new markets, extend the life cycle of products, and increase the profitability of your company. In short, it’s an opportunity to drive market leadership and competitive advantage.
Right-Time Revenue Optimization
CMOs are feeling the heat. Although evaluating marketing on its contribution to revenue is not new, what is new is the level of complexity in which it is being evaluated to produce that revenue. Gone are the simple days of total leads and conversions to sales. Instead, the evaluation is based on a dynamic process at multiple stages throughout a customer’s life cycle. Making the process even more complex is the need to target the highest-yielding target markets from a revenue and profitability perspective in the shortest time possible. And that requires right-time revenue optimization.
Right-time revenue optimization optimizes value to the buyer at any stage of the customer life cycle, increasing the probability that a customer will make a purchase in a shorter period of time. It focuses on applying customer intelligence to spur meaningful interaction based on buyer context–where they are (e.g., on a mobile device); what they are doing, (e.g., comparison shopping), when they are doing it (e.g., at a mall or online), etc. This database-driven data is used in conjunction with marketing strategies and multichannel marketing campaigns to drive revenue performance throughout the customer life cycle.
For CMOs, using the customer life cycle provides a more holistic view of the buying process that creates alignment with the buyer on their terms, increasing the propensity to purchase. There’s an indirect benefit, too. The customer life cycle maximizes the productivity of the marketing organization while also optimizing marketing spend, producing high ROI. The efficacy of this approach provides a more simplified way to apply customer intelligence, while also being consistent with B2B sales models and the B2C buying process.
Customer Intelligence Is The Driver Of Revenue Optimization
The customer life cycle, while a critical starting point toward revenue optimization, is merely a framework to apply marketing strategies. The driver of those strategies is customer intelligence, which focuses on learning more about your business and your customers in real-time to drive revenue now.
Customer intelligence is multidimensional across a variety of segmentation attributes, buyer characteristics, and customer interactions, and it's married to your business, i.e., penetration rates, revenues, and profitability. It is not static reports or dashboards that merely detail response rates and conversions by campaign type or even high-level segmentation data. Customer intelligence requires a purpose-built marketing data mart that is seamlessly integrated with a marketing automation system and CRM. The combination of the three creates a closed-loop marketing and sales system that uses customer intelligence to feed multichannel marketing campaigns to optimize revenue.
What kind of customer intelligence do you need, and how do you define it? Here are some typical questions that can help optimize revenue at different stages of the customer life cycle:
- How many prospects or customers do I have by segment, and what is their interaction or purchasing behavior?
- What clusters are forming based on segmentation attributes and profile data, and is they sufficient to form a new segment? Can the interaction history tell me how to appeal to the new segment?
- What is the right offer and channel to put in front of prospects that have interacted with my company in different ways within a concentrated time frame?
The information derived from this customer intelligence begins to formulate marketing strategies that are used to drive campaigns, e.g. new market segmentation, market penetration, and brand loyalty strategies.
Marketing strategy and right-time revenue optimization.
Formulating marketing strategies, shaped through customer intelligence, to drive right-time revenue optimization must ultimately tie to your company’s or division’s business objectives. Here, revenue goals based on the saturation of a market’s potential, or an understanding of the most profitable segments or parts of your customer base, become paramount. Marrying the information gleaned from customer intelligence to business objectives enables far more effective strategic decision-making.
There are four important elements that need to be put in place to help create an effective marketing strategy for right-time revenue optimization:
- Interaction model: how you and customers interact
- Organizational design: marketing organization alignment and processes
- Information and technology: marketing automation, CRM, customer intelligence, and a marketing database
- Performance measurement: tying your campaigns to revenue and profitability targets
Creating a streamlined, efficient marketing environment among these four areas ensures the effectiveness of executing on a closed-loop system to drive and fulfill responses from multichannel marketing campaigns.
Right-Time Multichannel Marketing Optimizes Revenue
By now, a level of transformation has occurred within your marketing organization to optimize revenue. There is one more piece--multichannel marketing--that is focused on strategy and campaign execution at the right time.
Right-time multichannel marketing is where customer intelligence, marketing strategy, and superior marketing operations execution come together to drive buying behavior to optimize revenue. It is not a stage where marketing operations clicks on a button to do a campaign send. Rather, right-time, multichannel marketing campaign execution is where the synergies of marketing strategy and customer intelligence come together to define the right elements of the campaign-- from the message, to the offer, to the target--all based on a time dimension that says this prospect is ready for the next level of engagement, or better yet, to buy.
More Revenue, Faster
Right-time revenue optimization is about more revenue, faster. Accomplishing this objective starts with the realization that acceptance of rudimentary or even dirty data means that marketing organizations will underperform relative to their goals and certainly will be at a competitive disadvantage. Achieving a new level of marketing excellence that best positions your organization to take advantage of the new reality of marketing being driven by revenue requires:
- transforming data into customer intelligence
- applying customer intelligence to marketing strategy
- improving and aligning marketing with the strategy
- executing multichannel campaigns based on strategy and customer intelligence that drives engagement at the right time of the customer life cycle
These four steps embody right-time revenue optimization. To attain it, marketing organizations must recognize their own distinctive competencies, as well as the levels of sophistication and maturity they can achieve on their own.