Building a Smarter Planet. A Smarter Planet Blog.

Yuchun Lee, General Manager and Vice President, Enterprise Marketing Management Group, IBM

By Yuchun Lee

If you follow this blog, you know that there’s been a lot of discussion about the evolved consumer and how the need to gain insights from mountains of data is drawing CMOs and CIOs closer together. To be sure, a healthy relationship between marketing and IT can drive real business results.

IBM’s Center for Applied Insights recently released a study titled, “Why Leading Marketers Outperform.” The study examines the success of leading marketers defined as individuals who have a high level of responsibility for engaging customers and a sophisticated approach when it comes to investing limited marketing resources.

According the study, marketing organizations that engage customers effectively and make better technology investments have a three-year revenue compound annual growth rate (CAGR) that is more than 40 percent higher than that of other companies.

They also enjoy gross profit growth at a rate that is double that of their peers. The study also reports that these leading companies grow gross profits faster than revenue, suggesting they are able to maintain high margins and sell more products at full price instead of relying on discounts.

Those numbers are clearly impressive and, of course, are goals all businesses should strive for. But what are these leading companies doing to generate these results and what does it have to do with the CIO?

Behind the numbers is what we like to call a “system of engagement” — an integrated and innovative set of technologies and processes that are born out of marketing and IT collaboration. By working closely with the CIO’s team the CMO can build this system that allows marketers to communicate with a wide array of customers in a personal way, across all channels.

In fact, through this system of engagement, leading marketers are 33 percent more likely to serve personalized or targeted offers in at least four channels in real time. They also are better able to create integrated online/offline marketing programs, a major hurdle IBM identified in its recent State of Marketing survey.

A system of engagement goes beyond tying in new channels, such as mobile and social. It involves pushing the boundaries of each by extending efforts beyond rudimentary tactics. For example, when it comes to mobile, the marketing leaders are working with IT to move beyond traditional web-based efforts, with 36 percent using location-specific mobile messaging campaigns and ads. When it comes to the rest of their peers, the percentage drops to 20 percent. For social, 48 percent of the top performers are using or plan to use, social/local group buying in the next 12 months. As for the rest of the group, that number drops significantly to 31 percent.

For many, embarking on a system of engagement means internal discussions about budgets and how to get senior management to green light the plan. One approach to making it happen is to highlight measurement. Leading marketers place greater emphasis on measurement, tracking results and then linking them to individual efforts. But measurement isn’t just important to selling products or services to customers – it also lets you sell them to your peers who control your budget. According to the IBM CAI study, currently 88 percent of leading companies engage in attribution in some way and of that group, 93 percent have a set process for determining marketing activity results.

By knowing which marketing efforts are delivering desired results and which are not, organizations are able to make better use of budgets. That translates to building credibility and the financial justification needed to construct an enterprise-wide system of engagement. They can use those results to also enlist the support of other teams, including IT, to knit together a common view of the customer across different points of interaction.

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