Marketing Strategy

Death of the Demand Center?

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It’s been at least eight years since the term ‘Demand Center’ was popularized by SiriusDecisions.

The arguments in favour of this new operating model were – and still are – compelling. Gather together scarce technology skills and telequalification functions, centralize the management of data, standardize methodologies and governance, provide rolled-up reporting, and more.

So have the benefits been realized? Some companies are still in the early stages of planning their migration. If this were a hype cycle, they’d be approaching the ‘peak of inflated expectations’. Meanwhile, some early adopters are now wallowing in the ‘trough of disillusionment’ – asking themselves: “where did it all go wrong?”

Two reasons.

First, it’s not as easy as it might appear on paper to centralize functions and organize them to efficiently and effectively support the needs of the business. To illustrate this, we’ll look at three of the areas we’re most commonly involved in: marketing automation support; teleprospecting and qualification; and reporting and analytics.

Second, decoupling delivery from the strategic planning and analysis has actually set companies back. An emphasis on system governance and rigid standardization has stifled the innovation that delivers on the promise of the technology. And those tasked with planning campaigns don’t have the necessary understanding of the data and tools at their disposal.

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Why centralizing Marketing Automation management is tough

It makes sense to centralize the ownership and rollout of a marketing automation platform (MAP). To be fair, most companies adopting the technology accept they need the help of an agency or the vendor’s professional services team to help them get it ‘right first time’.

Beyond implementation, many companies are seduced by the promise of self-sufficiency, but the team given responsibility for producing campaigns using the automation platform are not always best equipped. We frequently see hastily retrained developers who would actually rather be coding, data admins who don’t understand the nuances of marketing, or field marketers who have zero desire to be working in a software application.

Over time, skills and responsibility become concentrated in the hands of just one or two power users. The moment those power users feel they’re not developing and growing, they get itchy feet. And when they’re poached, take maternity leave, or just have the temerity to go on holiday – the invaluable knowledge they carry is lost.

Centralizing teleservices can also be a challenge

Teleprospecting and qualification is no less a specialist skill than marketing automation. It’s easy to underestimate the time (and cost) it takes to identify, recruit and train a good business development rep. It can be weeks, if not months before they are productive and contributing valued leads.

Operating a multi-lingual demand center supporting several markets is even harder. Load balancing languages is a challenge when there are only a few hours of calling activity within the week for one language but high demand for another. Persuading a stranger to engage in a conversation becomes even harder when you’re not a native speaker of their language.

Let’s face it, picking up the phone and prospecting is hard. If it’s unfamiliar, people will do anything they can to avoid it. It’s not long before that precious business development resource is sucked into prepping name badges for the next event, or taking on sales admin tasks, because everyone wants Sales to be happy, right?

The skills gap undermining reporting and analytics

As ownership of technology platforms has been centralized, so has the management of the reporting and analysis of the data they produce. Most companies are trying to combine data sources to provide the business with a view of how prospects are behaving across multiple channels and the relative influence of those channels on sales outcomes.

Several of our clients are seeking to use a combination of vast data lakes – frequently using Cloudera’s Hadoop framework – and BI and Analytic tools like Domo, GoodData and Birst to find the answers. But the success of these initiatives is being undermined by the scarcity of critical skills.

There’s a dearth of people with the skills to engineer the data generated by multiple sales and marketing applications to support unified reporting and automate the creation of segments that can be fed back into automation platforms or web content management systems. Jeff Wright covered some of the struggles companies face around managing B2B data structures in more detail in this recent article. It’s not just the data engineers that are rarer than hen’s teeth. It’s also a challenge finding people with the blend of analytic and marketing skills to make sense of disparate sources of data: events, advertising, website, social, email, ERP, CRM etc. and provide real insight and direction to the business.

But it’s more than just a centralization problem

Centralizing demand center services is a challenge, but with the judicious use of partners – like MarketOne – to provide complementary skills and burst capacity, they can be overcome. Greater challenges arise where companies expected more than efficient delivery from their demand centers: improved response rates, better campaign integration, or even marketing transformation.

The centralized provision of shared services through a demand center was never going to lead to the organizational change necessary to cope with the rapidly changing dynamics between vendors and customers, and between marketing and sales. In the worst cases, companies end up deploying the exact same campaigns and tactics using new tools, but expect a different (better) outcome.

Campaign managers need clear guidance on how to plan and produce high-performing, always-on, customer-centric experiences. But in order to cope with overwhelming demand from the business, the operations team will often impose rigid rules to deter customization and experimentation. The result can be a cookie-cutter approach, churning out highly templatized 3-touch campaigns that make no allowance for customer needs or buying cycles.

The emergence of the Nerve Center

The answer is not to abandon the demand center concept, but to press on and go even further with the development of a marketing ‘nerve center’ that brings together strategy and analytics. If the real (but maybe not fully realized) benefits of the first generation of demand center were process efficiency and improved platform governance, the next generation will be about increased insight and effective integration.

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Forward-thinking organizations will seek to create an Analytics Center of Excellence (ACE) to align analytics strategy more closely with business strategy and apply advanced techniques such as attribution modelling and predictive analytics. Not only will this team mine structured first, second and third party data for insight, but also the unstructured data that comes from social, telephone and chat conversations.

Critically, the ACE team will need to work hand-in-hand with a strategy team focused on designing the optimal ‘pre-customer’ experience across multiple channels, extracting full value from the technology and data at their disposal. The strategy team will define the communications ‘architecture’ – a framework to align and integrate all communications channels. Then together, the strategy and analytics teams will help campaign managers to populate that framework with the most compelling content and persuasive messaging.

A secondary role for this nerve center will be to identify the capabilities they require to optimize the pre-customer experience and maximize conversion further. They will work with the marketing technologists to define the business requirements for new technologies and data integrations to support those capabilities. They will design pilot projects and proof of concepts to test new capabilities. And they will then be required to adjust the marketing operating model and provide training to ensure that campaign managers continue to take full advantage of the tools at their disposal.

The disconnect at this point will be between the pre-customer experience and the actual customer experience. How long before we see a single strategy and analytics team planning end-to-end customer experiences using a single data and technology platform, with one delivery team responsible for both prospect and customer communications? Perhaps that’s what the third generation of demand center will look like.