July, 2013

  • July 31, 2013
  • One of the subtexts to the marketing automation explosion is analytics.  Having a CRM system might make you wonder why marketing automation is needed at all but the reasons boil down to analysis and improved data collection.

    Let me share some information with you from a new marketing study I did this summer.  First the data — we asked marketers if they used CRM, marketing automation and business intelligence to process marketing data.  The big dog was CRM with a 54 percent share.  Next came marketing automation with a full third, and last was business intelligence with 22 percent.  So far, so good.

    I also asked what kind of data marketers collected and got some typical responses.  From that data we get measures like cost per lead, cost per program, cost per revenue dollar, total leads and similar things — heavy on controlling costs.  But only single digit responses came in for time stamping marketing events, measuring deal velocity and average lead time in a marketing stage.  To me these are all critical measures that still too few people are using and it’s sad because these things separate monitoring marketing performance from managing it.

    When you put the two things together — whether or not they’re using analytics and what kind of data companies are collecting, and thus analyzing and reporting on, you see there’s some work to do.  I’d say from this data and some other stuff I am tracking, that we are squarely at the monitoring and not the management stage of the marketing revolution.  In other words it’s still early days.  That’s not to say that there are no companies out there doing the right thing the right way, just not enough to move the needle much.

    What would it look like if the needle was moving?  Good question.  I think we’d be moving away from monitoring marketing as a cost and more companies would be managing it as a strategic weapon.  When you can collect the data we’re collecting — which is pretty good, though not perfect, we still need more of a sense of time — and use analytics rather than simple report writers, will be able to cross tabulate seemingly unrelated data to derive new insights.

    For example, suppose you were half way through the reporting period and it was clear you were going to miss your number.  What would you do to rectify the situation?  Obviously, you’d have to put more deals in the pipeline but, and this is critical, do you know how to generate leads with relatively short fuses so that the marketing spend will have an influence on the current quarter?  You can depend on sales to beat the bushes to see what happens and you can always try to find some low hanging fruit in the customer base for upsells or cross sells.  But that’s rather random and it has a 50/50 chance of working.  In the end everyone would look heroic for trying and some heads might roll but that isn’t the same as making the number.

    That’s a tough assignment but one that analytics is suited to providing an answer for.  If you time stamp marketing events, chances are good that you can figure this out without breaking a sweat because you could figure out close time by program.  If you had two marketing programs, one with a close time for leads that’s less than the 45 days or so that you have or one with a 90 day rate it’s a no brainer which one you’d use but so many marketing organizations don’t yet slice and dice their data to provide these results.

    So while it’s good to be able to tell the CFO what you spent and the VP of sales the number of marketing qualified leads you generated and how many of them were accepted by sales, none of that really talks the talk of the boardroom which is much more along the lines of winning and not simply doing your job.

    Some of my other data also shows that sales is still not providing enough feedback to marketing on the leads it develops and that’s too bad.  But I suspect it’s because the two organizations — in too many instances — have not come to agreement on what a lead is or what an opportunity is and why it’s important to give feedback. It also suggests that there isn’t enough agreement on the marketing-sales process and handoff.

    What happens when a sales person rejects an MQL?  It should go back to nurture in many cases, but too often marketing doesn’t have visibility into the sales pipe and rejected MQLs just evaporate rather than going back into the hopper.  So to net it out, we’re making progress, there’s more to do, and these are classic signs, to me, of an early market in marketing.  And the tools you use determine the kind of results you can imagine.  Funny how that works.

     

    Published: 11 years ago


    In a move that surprised me, at least, last week Amazon announced that it was lowering its fees for on-demand infrastructure by as much as eighty percent.  Should we be rejoicing or is this a sign that something is amiss?

    Back around the turn of the century something similar happened in at least two situations.  The first was that telecommunications companies and cable companies buried enough fiber optic cable to satisfy demand for a long time.  It became known as dark cable because there was no light going through it implying there was no demand either.  That was right.  It took years for the marketplace to absorb all that fiber and in the mean time some companies that bet large on fiber anticipating immediate returns, crashed and burned.  Their dark fiber became a shrewd investment at bankruptcy for others with deep pockets and a long time horizon.

    Around the same time there was also the ASP boomlet that fizzled like a wet firecracker.  Much like todays’ infrastructure-as-a-service (IaaS) vendors, these guys tried to sell computing capacity with or without conventional applications delivered over a VPN.  It was a Rube Goldberg-like device, in retrospect a lead balloon, and the idea suffered an ignominious demise.

    Fast forward to more recent times.  Infrastructure providers told us this time would be different.  Advances in server capacity, dirt cheap storage capacity, and applications that no longer ran in the client-server paradigm but instead used HTML and REST computing would make the idea viable.  Then last week happened.

    So the question is which is Amazon’s announcement more like — over abundant dark fiber or a lead balloon?  If the latter, can we expect that this idea of IaaS will ever fly?

    I really dislike it when a discussion comes down to splitting the difference — it’s both!  A floor wax and a dessert topping, as the old SNL skit has it.  Tastes great and less filling!  Please spare me that.  To me splitting the difference is too often the product of fuzzy logic or lack of creative understanding.  That’s why I reluctantly come to this conclusion based on my analysis of the announcement.

    First, the eighty percent reduction was for something called dedicated instances within the same region, which is equivalent to the old ASP model.  One customer, many seats, and dedicated computing power for all of them, I get it.  However, and this is where it gets more interesting, the discount was only thirty-seven percent for dedicated on-demand instances, which I think means shared resources.  Maybe not multi-tenant databases but a big compute-storage farm that serves customers and keeps the data separate like not letting the peas touch the potatoes on the plate.  I get that too.  So what’s going on?

    Perhaps, and I don’t have enough data to say definitively, the demand for old style ASP is just not there.  That would be a good thing because it would indicate that companies realizing that they need to go to the cloud also believe that moving the data center without doing anything else to their computing architecture is a non-starter.  If so, good.

    The dedicated on-demand instance discount tells me a different story.  It says there isn’t even enough demand for moving legacy applications to a shared environment and that included buying net new legacy apps and just putting them in the cloud.  It tells me that if a company seriously contemplates moving to the cloud, it is also re-examining its approach and opting to use more modern technology that is cloud native.  This means scrapping the old premise-based ERP and CRM and taking a fresh look at companies like NetSuite and Salesforce.  Both companies do seem to be adding customers and they have to come from somewhere after all.

    Moreover, companies making these switches are likely being persuaded in part by the ecosystems surrounding successful cloud companies.  Since they have the hood open they’re not content to just change the oil and check the fluids.  They’re doing a tune-up, which requires new parts — social, analytic, and mobile — that come from the ecosystems.  This should all be good news because it says that companies are investing (and lowering their costs at the same time) anticipating further economic expansion.

    Of course, I can be wrong.  There’s only so much you can conclude from a simple announcement, though a price cut, especially a significant one, tends to indicate a vendor is going in a new direction, in part because the old direction may not be working out.  Microsoft has also been cutting prices on some Dynamics products, the Surface tablet, and the Surface operating system for instance.  In that situation, though, I suspect the company is trying to find its level and not having a fire sale because those products are all the latest and greatest from the company and software inventory is a bit of an oxymoron.

    Time’s up for theorizing, we’ll have to wait for the next quarterly reports to understand how these adjustments are working out.

     

    Published: 11 years ago


    I still see far too many examples of content confusing the ideas of data and information.  Sometimes, it seems like a writer is simply trying to not be redundant when he or she uses data and information in the same sentence to mean the same thing.  But of course they are different and the result is unnecessary confusion.

    I just wrote a paper for a European law journal on the topic and I learned more about the topic than is healthy for one person.  The piece will be out in August.  Generally, I admire the effort the Europeans are making to get it right though they are less concerned with data and information per se than they are with privacy and security.  These things all intersect but in sometimes unpredictable ways.  The more I think about things the less I am sure of and the more questions I have.

    The European parliament is trying to figure out laws that protect individual rights to privacy, which necessarily affect what data is kept and what is not.  That makes sense, and it sounds simple, but how do you do that?  Does a person walking on a street have a right to privacy and thus a right to determine how you use a crowd photo?  And what if a corporation like Google or a government takes the photo?  Are we to prevent photos based on the premise that someone someday might do something to a person in one of the photos based on the picture?  From there it gets silly but there are some concrete situations that are nothing to laugh at.

    Take the case of a nurse in Connecticut who was arrested for possessing a small amount of pot.  According to an article in the New York Times, the case was dismissed when she agreed to take some drug education courses.  In the good old days, that would have been the end of it because according to Connecticut law, and the laws in many other states, her record was wiped clean with the dismissal.  Connecticut law says she can even testify under oath that she has never been arrested now that the record has been cleared.

    That all makes good sense to me.  It might not be factually correct but these expungement laws are one of the fictions we create in modern life to keep the world spinning.  But with the Internet there’s no such thing as expungement and a search still comes up with the original news article that, while true when it was published, is now false.  It matters because this nurse can’t find a job any more thanks to the simple expedient of doing a rudimentary searching on every new job applicant.  What to do?  She’s suing the news organizations that wrote the story for slander but the story was true when it was reported.  Yikes!

    The Internet and our modern world are full of examples like this.  Society used to be able to conveniently forget small indiscretions and we all got on with life.  But that’s being taken away without anyone even giving permission or law being made.  The Internet is the defacto repository of all things digital about us, but should it be?  The Europeans take all this very seriously and perhaps we should too.

    It seems to me that the biggest issue we have with data and information today is not data security even though lots of it gets stolen — I’m talking to you People’s Liberation Army unit 61398.  In fact, I think we’ve put too much emphasis on physically securing data and given too little thought to how it is transformed into information.  After all, data by itself is useless.  An MP3 file is garbage without software to render it into a song, which is a kind of information.  Ditto with your bank balance and the video you shot over the holiday or the formula or source code for a new product.

    Wouldn’t we be better off focusing on data transformation?  A new photo sharing service SnapChat takes this approach by delivering photos that disintegrate after ten seconds.  That’s far from ideal for most applications but it’s on the right track.  Generally, I think data ought to be handled like milk in a supermarket; it ought to have an outdate after which it automatically becomes archival.  You might be able to access archival data but transforming it back into its original information content would have to be restricted in some way.

    Look, we can still access information about various flat earth theories but we all know this is archival and historic but no longer scientific.  Some of us can still take it seriously if we want too but we can’t take it to the bank or whatever, you know what I mean.  We don’t have anything like that for data yet — something that says this does not yield not the information it once did.  On another parallel path, if we were better able to control the conversion of data to information so that only the data’s owners could de-encrypt it, might we have less data theft and the loss of intellectual property that goes with it?

    If any of this makes sense then it’s not data security we should be focused on as much as secure data conversion or transformation into information — those are different issues with different approaches.  When you think of it this way the differences between data and information are starkly clear.  It gives us all good reason to consciously choose the right words to convey our meaning.

    Published: 11 years ago


    It’s my extreme pleasure to remind you that it’s CRM Idol time again.  The team, led by uber CRMer Paul Greenberg, has come up with a strong list of contestants who will try to convince the world that they can rock the CRM world like no other.  For a full listing or to learn more, go here.  Keep an eye on this and that space for news as it happens.

    Published: 11 years ago


    I think I have used this title before but this is in a whole different context.  Also, this is a short piece because I know you are likely out contributing to the leisure economy, as you should be.  This will be here when you get back.  But I couldn’t help but make one more comment on The Oracle-Salesforce announcements of last week because I see them as an important watershed.

    First, let’s dispel some notions that may or may not be true based on these announcements.  Marc Benioff is not going to be CEO of Oracle in the future and Oracle is not buying Salesforce.  Both those things could happen, but to read either into the announcements is a bit of a stretch.  Those ideas would have been very important strategic directions and, they could happen, but my read of the situation is that the announcement is far more tactical.  Of course Marc has reminded me many times that tactics dictate strategy.  Think about that one.

    To get an idea of my thinking, refer to the infographic.  As you can see it projects there will be fifty billion devices on the Internet by 2020, just a few years out.  It’s easy to see fifty billion as just another number in the stream that we all swim in daily but this is more.  By 2020 I doubt there will be ten billion people on the planet — and I hope that’s right because we don’t have infrastructure, natural resources, and some basics like housing for all of them.  So, clearly we’re talking about a population boom in devices more than in people and the real interesting question, to put it another way, is: what kind of devices are these customers going to be?

    Answering the device question answers the original question, who is the customer?  And it goes a long way toward explaining the Oracle-Salesforce announcements.  Clearly getting to fifty billion devices will involve many, many non-human Internet users.  We’re already watching as Salesforce, Oracle, and others ramp up the Internet of things or as the people at Cisco have co-opted the generic phrase, the Internet of everything.

    It’s real too.  Salesforce is already talking about its interface with the new Coke machine, with Toyota cars, and with GE aircraft engines and that’s just scratching the surface.  Just yesterday the New York Times ran an article about Apple  trademarking the word iWatch in various markets around the world.  And Google is hard at work perfecting Glass.  Wearable technology will depend on its connection to the wireless web to prove its utility.  As more devices become smart enough to transmit performance and other data to computers at headquarters, the population of devices on the Internet will swell to the fifty billion projection.

    So who is the customer?  It’s your device(s) more than it is you, though you’ll pay the bill.  Getting to the fifty billion mark will require significant commoditization and price erosion.  Don’t worry they really will make it up on volume.  Companies that use thousands of devices will go nuts if they have to pay a seat price even approaching that of your iPhone.  And given that both Salesforce and Oracle have dogs in this hunt AND that one dominates the front office (that would be Salesforce, see the Gartner CRM Magic Quadrant Reports for 2013) while the other is a major player in ERP and you can deduce a few things.  Also keep in mind that each vendor has an emerging suite of development tools that will drive the front and back office apps of the future.

    Larry Ellison said the other day in a conference call that I participated in that he wanted to be able to provide integration between his back office and Salesforce’s front office systems that could be downloaded and installed with the press of a button.  Here I think he’s aiming at Apple AppStore-like convenience and likely AppExchange and he’s right too.  Business has the same expectation of easy download and operation that individuals have for their personal devices.  That’s especially critical if by 2020 you have an expectation of plugging in a new machine, letting it find the wireless Internet, and then downloading the software it needs to call home.  The whole process has to be inexpensive and dead solid easy.

    So the competition for the hearts and minds of the two to three billion humans who can afford computing devices and software today, (rising to maybe five billion by 2020), is very small indeed compared to the fifty billion or so devices whose silicon hearts these vendors covet.  All the more reason to bury the hatchet, make a gentlemen’s agreement on dividing up the market and pursuing the biggest prize we’ve yet seen in computing.

    Oracle back office, Salesforce front office; what happens to SAP and Microsoft?  This is not over.

    Published: 11 years ago