5 Marketing Capabilities for Customer-Centric Digital Transformation

A couple of months ago we discussed what marketing capabilities are needed for a digital transformation. Let’s now address the additional capabilities required to transform a traditional marketing organization into a modern revenue marketing machine.

A couple of months ago we discussed what marketing capabilities are needed for a digital transformation. We narrowed the scope of the answer to just technology-related capabilities. Let’s now address the additional capabilities required to transform a traditional marketing organization into a modern revenue marketing machine.

“A capability is a unique bundling of skills, knowledge, and resources that facilitate the execution of business processes, and are what ultimately contribute to sustainable competitive advantage and superior performance.” (Day, 1994).

5 Core Customer-Related Capabilities Marketing Must Acquire:

  1. Buying Journey Management is the capability that maximizes the sales and marketing activity with its buyers at all stages of their buying lifecycle, resulting in stronger customer relationships, increased revenues, profit and competitive advantage. This buying journey repeats itself with every purchasing decision. This capability is not simply about defining the buying journey; it is about aligning your content and marketing activities so they align with where the buyers are in their journey. Have you defined your customer journey? Have you mapped your content to the journey?
  2. Content Operations is a capability that supports the production, collection, management, publishing and measurement of customer or prospect-oriented information in any form or medium. Marketing manages content to support successful execution and optimization of multi-channel programs and campaigns. Content operations is a factory that collects requirements from demand generation, product marketing, and sales. They publish a production calendar. They are experts at content curation and understanding the best media for each message by segment.
  3. Customer Engagement is the capability that maximizes the relationships between sales/marketing and prospects/customers through the stages of the customer lifecycle. Too many firms simply pour out blog posts, newsletters, and promotional emails without actually measuring the level of engagement they are driving with each touch. Achieving a high level of engagement with your content and offers requires deep understanding of what messages and content works with which persona in which part of their buying journey, through what channel, and in what medium. The expectation is good engagement produces good conversion rates in your funnel. How good is your team at engaging prospects? Do you measure it?
  4. Customer Knowledge Management is a cross-functional capability for collecting, organizing, sharing and gaining insight from market and customer information, which drives stronger customer relationships and results in increased revenue, profit and competitive advantage. Back in the day, when direct mail was king and email was a novelty, we said the success of a campaign was 60% predicated on the quality of the data, 20% on the quality of the offer, and 20% on the quality of the packaging. We may have shifted the bulk of our campaign communications to digital channels, but the rule still applies. If your customer data quality is poor, don’t expect campaign miracles. Your customer data is an expensive asset that you have acquired. It depreciates at 2.1% per month (source Marketing Sherpa). Effective management of your customer data is a core capability in digital marketing success.
  5. Persona Management is the capability that develops, manages and optimizes semi-fictional characters to represent the different customer types that might use a company’s products or services. Personas need to go beyond job titles in B2B, because otherwise you are simply describing a segment. Modern marketing technologies enable us to gather, assess and adapt to people’s behaviors. Good personas therefore reflect the person’s goals, needs and decision-making behavior. Persona management means you recognize that personas are not static and need constant updating and refinement.

Delivering on each of these capabilities requires certain skills, knowledge and experience. You can outsource some of these capabilities to agencies or train your internal team to fulfill them.

4 Steps to Digital Transformation by Customer Capability Acquisition

  1. Assign someone to be your data czar, even if it is only part of their role. Have them create data quality dashboards.
  2. Define one or more customer journeys with the help of sales and map your content to the journey stages. What are the gaps? Build a plan to eliminate the content gaps. Create a content calendar. Now start planning your engagement based on the journey stages.
  3. Start measuring customer engagement with your content, events, offers, ads and all digital properties. What content is driving more engagement or minimal engagement?
  4. Finally, define personas, map the content to the personas, and start to collect data on your prospects so you can learn their persona and start to improve how you communicate with them!

Customer experience is the new competitive battleground. Shift to greater customer centricity in 2019 by investing now in the five marketing capabilities described above.

Why Capabilities Trump Skills in Digital Transformation

There are hundreds of skills a marketing department could need. The real question is, “What capabilities do we need in order to do digital marketing effectively?” By considering capabilities instead of unique skills, we turn digital transformation into 10 or 20 capabilities we must acquire instead of 200 skills. For CMOs this is the best approach for building the organization.

A CMO embarking on the digital transformation of their marketing department recently asked me to prioritize what skills they needed for their fast-growing company. The question reminded me of the time I asked my friend Dan Wolff, some 35 years ago, where exactly on a mogul (front, back, sides or top) I should be skiing in order to master the skill of mogul skiing. His answer was simple. “You are asking the wrong question.”

There are hundreds of skills a marketing department could need, from copy-writing for blogs, video editing, podcasting, data analysis, budget management and public relations all the way to campaign design. The answer would not have been apposite. The real question is, “What marketing capabilities do we need to acquire in order to do digital marketing effectively?”

“A capability is a unique bundling of skills, knowledge, and resources that facilitate the execution of business processes, and are what ultimately contribute to sustainable competitive advantage and superior performance.” (Day, 1994, link downloads the pdf). By considering capabilities instead of unique skills we can think about the problem in terms of 10 or 20 capabilities we must acquire instead of 200 skills. For CMOs this is the best approach for building the organization.

The Technology Capabilities You Need for Digital Transformation

For the sake of brevity let’s narrow the list of capabilities down to those related to technology, and ignore strategy, reporting and analytics, customer, content, people and process related capabilities. We will tackle more of the capabilities for building an effective marketing organization in future posts. Here are five core technology capabilities marketing will benefit from acquiring:

  1. Technology awareness is a marketing capability that identifies current and emerging technology that will help marketing achieve its objectives. It involves defining clear organizational needs, matching potential technology, educating team members as to potential benefits and formalizing a role to own this process.
  2. Revenue Marketing Architecture is the capability that defines the collection of software components that are combined into a service-oriented reference architecture that support marketing in achieving its objectives. It includes the proper integration and optimization of the components, enterprise process and workflow, and overall system governance.
  3. Planning, Selection and Implementation is the capability that defines the process for planning, selecting and implementing a Revenue Marketing Architecture. It includes conducting a proper evaluation and needs analysis, developing use cases and measuring performance.
  4. Vendor Management is the capability that maximizes vendor relationships and enables organizations to control costs, optimize technology, increase performance, drive service excellence and mitigate risks.
  5. Technology Adoption is the capability that ensures the adoption or acceptance of a Revenue Marketing Architecture that drives business results.   It includes communication, strategic planning, senior leadership commitment, project management, training and education and business process re-engineering.

Some might debate if these particular capabilities should live in marketing operations or in IT. There is no simple answer to this. For large organizations, where IT is focused on large initiatives, security, governance, data architecture at a corporate level, then it behooves marketing and sales to acquire their own technology capabilities. Keeping it close to marketing will enable the team to fully understand the business requirements and move with the agility that marketing requires. It does not obviate the need to work with IT on the integrations into other corporate systems and in adherence to defined standards for data, security, vendor selection, licensing terms etc.

Delivering on each of these capabilities requires certain skills, knowledge and experience. It may require multiple people just to deliver on a single capability and in other cases a single individual may bring two or more capabilities. The key is to focus on capability acquisition, and not simply hire people because they have desired skills. Contemplating digital transformation at the capability level also facilitates discussions around what to in-source versus what to out-source.

5 Steps to Acquire the Technical Capabilities

Steps to digital transformation by technology capability acquisition:

  1. Examine what you want to accomplish in becoming more proficient at digital marketing.
  2. Document the capabilities that this will take in technology, content creation, demand generation and reporting at a minimum.
  3. Consider if you can educate existing staff to help them provide these capabilities.
  4. If time or focus is of the essence, determine which capabilities can be outsourced temporarily or even permanently.
  5. Write the job descriptions and goals for the individuals in terms of the outcomes that will be delivered once the capability is in place. Look for people who have delivered these capabilities and outcomes before.

On a final note, I did learn to mogul ski. Dan’s advice that day stuck with me. He shared that the secret was to be able to ski anywhere and everywhere on a mogul. That skill enabled you to make each turn when it was due, regardless of where you were on a mogul. And isn’t that what agile marketing is all about, making rapid turns when they are due, because you have an effective capability to execute regardless of the environment?