Peter van Teeseling interviews Michael Moon of GISTICS, an international thought leader and author on customer engagement systems, global brand management, and digital asset management.

Key challenges marketer face today

Peter van Teeseling: Michael, in those firms with whom you consult, what do you consider as today’s greatest challenges in marketing?

MM: Well that constitutes a fairly open-ended question. So let me respond with a kind of a similarly open-ended response and then we can build from there.

Most organizations drive their businesses against a strategic plan with pretty clear objectives and quarterly milestones against those objectives. In one way of looking, that means that most organizations really represent executional systems—where most of the roles and responsibility, and more specifically, the clarity about who does what, relates to activities and tasks directly related to execution of annual objectives and quarterly milestones. And that’s all great so long as the strategy and objectives remain aligned with customer requirements or congruent with the realities of the world; however, increasingly that’s not the case.

In today’s world, customer requirements and preferences continue to change more, if not transform, in ways not easily predicted. Paraphrasing the cyperpunk novelist, William Gibson, “The future arrives unevenly distributed.”

Increasingly, many global organizations find themselves not well-aligned with customer requirements, including a broad range of capabilities and/or offerings, and/or services of the organization. In particular, customers seek deeper, more interactive, and personalized communications, flexible interactions and mash-ups, and collaborations with brands AND the community of brand users.

Next, generally, and this is a distinction I draw between what I’ll call senior marketing executives and junior marketing executives. Junior marketing executives think in terms of programs and campaigns, and what I’ll call easily defined, easily recognized wins in their particular market, and that’s all good, that’s why we have junior marketing executives.

Senior marketing executives don’t think in terms of tactical wins, they think more in terms of a broader front – in the language of generals, you’d call it a theater – and more specifically building operational capabilities by which to monitor the execution many programs and campaigns. Do get me wrong, senior executives want to achieve short-term wins; it’s not their primary focus; it is the primary focus of their subordinates.

Senior marketing executives watch the measurable progress against objectives. Increasingly, the data has become real-time and granular—specific to a market or segment. These granular or detailed data become proxies or suggestive of larger patterns of execution and marketing effectiveness.

If we examine the idea or underlying assumptions of an operations capability and say, “Well, what does the term really mean?” I think that it means that senior executives understand a hard won lesson in their career: You can manage people or you can manage systems, with the one caveat. People are unmanageable! So operational capability really means that senior executives know their sustainable success directly correlates to their building systems, process, and accountabilities by which to execute strategy – by which to marshal available resources for competitive advantage.

And so senior executives, for the most part, grapple with working through which of their existing operational capabilities should be enhanced which ones they build from scratch, which ones to secure through acquisition, and which ones to secure from partners, understanding that the operational aspect of marketing drives major global organizations forward, and more specifically, gives them competitive advantage.

Global marketing strategy

PvT: Okay. What regional considerations must firms accommodate in their global marketing strategy?

MM: Sure. Let’s start by breaking localization into four geographic mental maps.

First, we have what many call pan-regional marketing area. For example, this typically includes Asia Pacific (also called APAC) or in some cases Indo-Pacific where the mental map falls along the lines of English-speaking areas (which would include India, Australia, and New Zealand) And, EMEA—Europe, Middle East, and Africa as well as Latin America (although my Brazilian clients remind me that Brazilians do not consider themselves as Latin Americans!)

In each of those areas, a global marketing organization has to localize the marketing material, both print and online, across dozens of languages and currencies.

There’s a whole new business eco-system that has begun to emerge around facilitating or driving pan-regional localization of marketing content, as well as services related to the pre-sales and post-sales interactions with customers.

Then, the second geographic mental map address cultural markets with a more or less a unified language and currency, emphasizing the challenges how to maintain a global voice and cultural resonance. From an operational perspective, this emphasizes the integration of traditional and newer marketing processes.

So it’s, if you will, a global brand with local flavors. For example, many Americans make the mistake—I should say many North Americans—make the mistake of translating a piece of collateral or web content into German and consider their work done—that it will work well or good enough in Germany, the German-speaking parts of Switzerland, and Austria. In most cases, it does not work.

You don’t need more than 5 minutes in a conversation in the café in any one of those areas to understand that they are incredibly tribal, and they make hyper-acute discernments about haircuts, shoes, facial expressions, so as to establish you’re part of my tribe or you’re not part of my tribe.

What works in the Southern part of Germany doesn’t work in the Northern part of Germany, and it certainly doesn’t work in Switzerland, and it categorically won’t work in Austria; different metaphors, different visuals, different motifs, and different underlying narratives in terms of what it means to be a consumer and in a relationship with the brand and the tribe of brand users.

The third geographic mental map address mini markets within a country—I’ve already tipped my hand by saying micro-localization within a country.

So, for example, my work with clients in the Netherlands led me to discover the hyper-tribal nature of their local markets. I am astounded just in this tiny little country of the Netherlands, the Dutch remain fiercely tribal with respect to the very southern parts of the Netherlands, such a Einhoven, to the greater Amsterdam area, to the northern parts which are more Flemish as opposed to the more French folks in the southern parts. The Dutch make very, very sharp distinctions about, again, haircuts, clothing styles, inflected speech, manners of metaphors, key words and phrases, that all mark out, oh, you’re not one of us; oh, you are one of us.

Neo-tribalism

You know, Marshall McLuhan was right. All this technology of electronic media cools us down, making us very primal and triabal—what he even called Neo-tribalism. Wow, if he could have only seen instant messaging, SMS, and social networking in action, he would smile with great satisfaction of having understood the root sociology of the Networked Age.

As this relates to marketing, it means that marketing has to become much more tribal too–much more specific to the subcultures and niches within an otherwise unified market.

And finally, we come to the fourth geographic mental map of localization.

It has to do with the newer developments of mass customization, shopper marketing, and remix culture.

Shopper marketing drives the idea of segmentation into the floor plans of individual retailers and shopping malls, specifically drawing upon the very rich practice of database marketing and database analytics.

Shopper marketing takes that same analytic principles to the actual physical footprint of each retail store, specifically asking the question, ‘Who are my most profitable customers?’ and ‘How can we stage products micro-theaters, or ‘design moments’ in interior design-speak that engage with very specific shopper demographics.

Say, for example, a married woman with 3 or more children. Single dad with 1 or 2 kids. Divorced or bachelor male, late 40s. And when these individual demographic or psychographic segments walk into a store, they have certain core needs that you could think of as the basic staples. Then around those staples, shopper marketing details higher margin impulse items that we know appeals to that particular shopper demographic. Imagine that these little stages track to particular local high school or college sporting events.

I see this Whole Foods and WalMart—at both ends of the competitive spectrum.

So as a global brand marketer, you must have brand architecture and promotional content that express the basic narratives and core values of the brand while providing enough flexibility, within a robust framework, that will work at the pan-regional, cultural, in-country, and shopper-marketing levels.

So localization now means getting it right down into the individual store.

For marketing organizations, this means that they must specify and source content in ‘liquid’ form. They must have content that various staffers and partners can mix and match into very unique expressions right down to an individual store kiosk, or a trade show booth, or a direct mail piece like a catalog, and so on.

Marketing performance

PvT: You just mentioned analytics. How important is it to integrate marketing and customer data across the organization versus at the local level?

MM: Well, analytics is generally a can of worms that once you open it you never find a can large enough to get all the worms back in.

Analytics has become central and critical to success in the always-on, 24-by-7 integrated, online-offline brand theater.

When we start talking about analytics, we discover that 80-90 percent of the data that a marketer needs does not reside, or exist at all, in their CRM systems.

So many marketing organizations spent the last six to ten years getting organized around what I’ll call tactical CRM – your sales force automation platform. I am astounded how many firms still struggle with CRM as operational capability.

Many firms have separate or loosely connected operational CRM used by the customer service or call center. I am also amazed with the number of these system that contain little more than a transaction record about previous purchases and logged complaints.

A number of firms that have not yet integrated tactical CRM from sales operations with the operational CRM of their call centers and customer interaction centers.

I just chalk that up to the penalties of execution—everyone’s heads down hitting their numbers with little extra time or incentives to innovate something better.

Integration of multiple CRM systems represents a major undertaking for most firms, and it requires developing huge data model by which to specify – in very concrete table-to-table or data-element-to-data-element level—specifically how to transform data into high-level business information that supports specific business decisions.

Most companies that I’ve run across have incomplete or just simply wrong data maintenance procedures in place. So, as a function of that they end up with glorified mailing lists with very little useful analytic data beyond who bought what and why.

One version of the customer truth

Often first major initiative in data integration entails creation of customer master.

While simple in name, the development of a customer master represents a Herculean accomplishing: one-version-of-the-customer-truth.

As this starts by developing a data model of what constitutes a customer relationship—and I stress the relational aspects of the customer and way beyond basic name and address—we often discover that multiple individuals with multiple roles and responsibilities within a single customer object.

In this data-centric view of the world, a household or business entity constitutes the cornerstone of a customer relationship—to which you can associate a number of individual buyers and influencers by context.

Right there, many CRM implementations fall down: they make no meaningful distinction between an account, an contact, and customer object—the business entity or household—that represents the economic context for many buyers, transactions, interactions, and influencers.

So, let’s say we have a customer master—one version of the customer truth expressed in clean, uniform data!

This invokes 90/90 rule which state after you have completed 90 percent of the work (i.e., building your customer master), then you another 90 percent more to complete—the second 90 percent!

That almost always requires the purchase of external enriched data overlays to your customer master.

This will take to you companies such as Acxiom, D&B, Experian, Epsilon, InfoUSA, Merkel, etc.

Enriched data overlays of households might include credit histories and scores, the model and year of cars in the household, names of other members of the household, marital status, plus things like educational levels, current job position, annual income, total credit available and the equivalent of a business profile.

By the way, one of the most interesting developments as it relates to the customer data master, relates to the emergence of an XML standard from business reporting called XBRL (XML Business Reporting Language) that mandates that all public firms must publish their annual reports, 10-Ks, and 10-Qs in explicit 2000-element XML schema. While just a side show for now, XBRL will transform database marketing into true one-to-one engagement. Gosh, we take another hour unpacking that idea. But here’s the seed of a big idea: Every system of record in the next 5 years will adopt XBRL for all its publishing and reporting functions, creating a level of hyper transparency within business operations that will boggle the mind.

Segmenting for profit

So let’s get back to customer masters and enriched data overlays. Now you have the ability to really start to slice, and dice, segmenting customers and markets.

However, you can’t slice and dice your customer database using the relational database or the tools of a CRM system. You can start there. But, soon enough you will need more speed and better visualization.

At this point you need to bring in specialized, analytic databases—wicked fast columnar databases—for plowing through 5 or 50 million customer records with a response time of several seconds; as opposed to using a relational database that might take hours or all night to complete one complex query.

So specialized analytic databases with train-of-thought visualization tools use the enriched overlay data to begin understanding things like price sensitivity, unmet needs, and other sorts of buying criteria within dozens or hundreds of micro-markets—what analysts call consumption cohorts.

This fast-cycle analysis enables a practitioner to think in terms of predicting long-term value of individual or small clusters of customers.

With time and practice, a good analyst can profile the ideal or most profitable customer sets, specifically identify them by name, engagement criteria, and media consumption preferences..

Now, everything we have discussed to this point deals with database analytics. Four more analytic disciplines now come into play: Web analytics, messaging or email analytics, social media analytics and content analytics (or semantic analysis of one’s inventory of content and advertising)

Web analytics, site performance, and customer experience management will continue to evolve into an integrated suite—all good but fairly narrow sets of data.

Closing the loop with messaging

Messaging or email analytics really start to validate with quick call-and-response or probe-and-validate procedures of newsletters and emails specifically targeted to those segments that your predictive modeling identified.

In practical terms, this means that you need to have something far more than just the mail list manager or a newsletter system. You need to have really powerful analytics process driving each newsletter.

A creative and analytics team starts by building newsletters with Lego-blocks of content and data that correspond to a specific set of segmentation and targeting criteria.

So as I send out 15,494 emails to those individuals that I know are interested in Mexican cruises with Salsa dancing lessons, I want also want to see the response level to other recreational ideas, venues, and offers.

This will require that each email embeds personal URLs, sometimes called ‘Purls’, so that each click through takes the recipient to an individualized landing page—built just in time, just for them—that validates the messaging effectiveness or lift and associates that event’s data to a preexisting user database record.

This closes the loop in terms of my analytic profile, engagement criteria, and consumption of the media.

Now, most of the time that kind of closed-loop feedback information remains locked up in the newsletter or messaging system, and very rarely, if at all, comes back into the customer master or the creative teams driving other media creation processes.

So, as Website, database, and messaging analytics come together, guess what happens: Gee, given all these really fresh insights that our multi-channel analytics has developed, how then we inform the strategic communications teams in our agencies and our tactical content teams pushing content into the various websites—brand touchpoints that passively activate engagement as visitors land.

I have met hundreds of executives who struggle with breach: how do we get the advertising, web, direct response, and field marketing teams on the same page, using a common set of analytic insights to create effective engagement? How do make creative briefs more interactive and driven by same-day analytic insights.

Part of the underlying problem, we have discovered, lies in the very structure of what most creative and marketing professionals call content—the process of creating content and the operational capabilities of managing multimodal content.

But, I skipped to the end of my argument about the evolving integration of five analytic disciplines: Web, database, messaging, social media, and content analytics.

Getting social with analytics

So let’s pick up with social media analytics.

How do you use technology to quantify three really important dimensions of the Web 2.0 mediaspace (blogs, tweets, forums, and social networks).

How can you track, in near real-time, the mood of the market, the voice of the customer, and their individual patterns of engagement?

Social media analytics takes you further upstream into the buying process—much further up in the buying process where people are still developing awareness and consideration.

For that you need to have a really effective voice-of-the-customer program coupled with social media monitoring.

A good voice-of-the-customer program entails long-form interviews with 50 to 300 customers a month, transcribing exactly what they said about the process on discovering, considering, buying, using, and disposing (where applicable) a featured product or service—what we call the ‘customer journey’.

Of course we now see powerful new systems coming to market that automatically transcribe call-center interactions with customers—requests for information or service—all social content to feed a voice-of-the-customer content analytics process.

With semantic tagging of voice-of-the-customer content and mapping that against segmentation and engagement profile, something quite amazing emerges: each step of the customer journey.

So as a customer transits from no awareness to awareness, consideration, trial, purchase, commitment, repurchase, loyalty, and advocacy—as they transit customer engagement lifecycle—you will have actual dialog of real interviews with people at each of those stages, and, more powerfully, how they transit each stage of the customer engagement life cycle.

With just a few hundred of long-form interviews, a team will use a text mining engine map keywords and phrases of the voice-of-the-customer content and develop a taxonomy of desire: awareness, consideration, trial, preference, as well as things like dissatisfaction and satisfaction, wow, or disgust.

And as you develop this library, this taxonomy of engagement supports all kinds of goodness, including which AdWords to buy, how to optimize content for search engine discovery, and the structure of engagement.

This taxonomy of engagement also supports what practitioners call the basis of conversation—the details of how your customers talk about themselves, their lives, and what makes a contribution, including your products and services.

This all syncs up with social media analytics, usually the work of social agencies or monitoring services with specialized spidering tools that crawl through the 50 to 100 million blogs and forums and hundreds of millions of social network profiles and billions of tweets.

Social media monitoring then mines them these sources for keywords and phrases that correlate to your markets and competition, generating a dashboard with statistics on awareness, consideration, trial, etcetera, by your various customer segments, and more specifically what your customers are saying about your brand, what it means to be in a relationship at various stages of the brand lifecycle.

The voice-of-the-customer basically mines interviews about how customers talk about being in a relationship with you, and then the social media monitoring tells you how to validate which brand stories connect brands and consumers.

Agile methods for content creation

This all brings to the last analytic discipline in my rant: content and how marketers will have to reengineer their processes of creating content and and manage multimodal content.

First, it starts with the principles of digital asset management: systematic reuse, do it once, get it right up front, tag and classify everything for speed discovery and retrieval, optimize media components for database publishing and content transformation processes, build and use templates, etc.

Second, adopt the principles of agile software development. A bit much to go further here…

Innovation and marketing. All else is cost!

PvT: In your opinion, what operational changes can organizations make to get a better picture of that customer? You’ve addressed several big topics. However, many organizations have very siloed systems, making it difficult to access needed data. For example, a retail customer may be quite different from an online customer, and rather than integrating that data they keep that data separate, in separate databases. What are some of the things that you think organizations can do, or should do, to address the issue?

MM: Well, let me go back to what I call the axiomatic assumption of the commercial enterprise, and then from that examine some of the propositions or key premise of commercial activity.

Peter Drucker, God bless him, said, ‘The firm has no other purpose than to find and serve customers. Only 2 things add value: innovation and marketing. All else is cost.’

So there you have a quintessential operating principle. There is no other purpose than to find and serve customers. That’s what I call a customer-making process.

So you can put Band-Aids on cancer but if, fundamentally, you do not have a mindset of customer-making, which is, ‘I am building systems, processes, and accountabilities for managing the process of attracting, serving, and keeping customers life, then everything kinds gets muddled, confusing, and a big hairball of politics and turf.

Customer benefit

First, we like to put it into more simple terms: “How does the customer benefit?

Whatever operational or tactical changes that a firm wants to consider, we recommend that that they ‘solve backward’ from customer-making as an integrated analysis-driven process.

Now, there are many companies that aspire to that, but for lack of leadership and the inertia of their business, they encounter a lot of difficulty. We believe that they simply need a better, more fun way of innovating new operational capabilities—yep, from the bottom up with those folks that actually know first-hand what’s going on.

Second, if you accept that innovation and marketing represent the two primary drivers of wealth creation and value, it then follows that customers 30 years or younger will no longer experience the world as online and offline, it’s just the world.

There’s no first life and second life, it’s just life. And as a function of that they start to interact with customers with what I call a digital third hand.

Digital third hands

Now a digital third hand is quite literally how they have developed the cognitive ability and the muscle-memory reflex of interacting in a purely digital world.

In our digital world, we experience an appetite for interacting with brand and communities of brand users that have fundamentally altered marketing and innovation—new business requirements that marketing and innovation must now satisfy.

One, consumers that are 30 years and younger today, for the most part are no longer represent singular economic actors, rather, they represent a clique, a crew, or a pod of 4 or 8 people – their best friends with whom the text message each other 50 times a day!

These younger adults tend to select their best friends not just on shared values and sense of humor; rather on the basis of cognitive specialties—what John Garner talks about as multiple intelligences and cognitive-skill specialties—that offset and complement others in the crew or pod.

This means that somebody in the group will be really good with data, arithmetic, and logic. Somebody else will have aesthetic or design sense—fashion, design, and color. Another person will be really good with interpersonal dynamics, empathy, and support.

This means that marketers must give up the conceit of marketing to an individual demo-psychographic profile.

Rather, we must learn how to market to a pod or crew with collective IQ many times greater than any one individual consumer.

This means that the collective unit will detect any hint of bullshit, manipulation, coercion, or underhandedness, and heap immediate retribution on offenders: the highest form of which is willful apathy and deliberate dis-engagement. Wow. Try marketing in that!

Some marketer will also suffer a public reprimand in front of millions of consumers on YouTube and the mainstream pick-up of outrageous videos.

So, as a function of digital third-handed customers, who then through instant messaging and SMS, and other kinds of presencing thing, be it Twitter or whatever, not only must you market to the pod, but you must market to the cognitive diversity that defines that pod.

Requirement for multimodal content

So that means that you need multimodal content things like Podcasts, and webinars, and newsletters, and interactive calculators if there’s a return on investment.

You need to do customer interviews so people can associate into the narrative, into the journey of customer-making.

So marketing, on one hand, becomes much more integrated, it becomes much more multi-channel and multi-modal in terms of the cognitive styles it must satisfy.

The third thing that happens is that these pods start to form larger networks – federal networks, and out of this they start to organize themselves in terms of movements or de facto unions.

And oftentimes a c-captain – a community captain – will appoint him or herself as the leader of this loosely gathered federal nation of interested people. So they will start – how can I say – exerting far greater influence than quote-unquote “a single loud-mouth” had in the past.

Process maturities for marketing operations

PvT: And how have you seen organizations change or shift their global marketing efforts based on these changes.

MM: Most, now well. Why? Most of the major organizations, with the exception of those that area really far down the maturity process model of say, Lean, Six Sigma, or something like that – some other management process-control framework – most companies do not have the operational capability for engaging in the customer-making process as an integrated process.

I believe that innovation has undergone a fundamental discontinuity. And in turn, that continues to disrupt marketing as we know it.

You know, when the 1990’s came along, we had saw a number of enterprise software firms emerge: operating systems, office applications, financials, databases, and so on. You could say that the 1990’s brought a fairly uniform wave of innovation to large and small business, with a whole bunch of little micro-specialties in it; but the overall wave of innovation move everyone off of batch data centers, into more online interactive systems with enterprise software, and enterprise databases, and enterprise reporting, and all that kind of stuff.

A whole wave of innovation just washed across large, medium, and small enterprises.

With the Web, and the Internet, we all experience another wave that roll through from say 1996 through 2007.

We now find ourselves in a new era; as a function of advances of web services, service-oriented architecture or SOA and application mash-ups, we’re not just talking about mashing up content or on-demand applications. This calls attention to the wonderful, stupendous, and almost unimaginable implication of the Apple AppStore: the near complete dis-integration and dis-entanglement of hundreds or thousands of single-function capabilities of large, complex, and bloated software suites, including enterprise software applications. I have already seen very sophisticated, enterprise applications built from the mash-up of dozens of software widgets—all within an iGoogle framework.

Functions-as-a-service at 99 cents

While this puts a lot of stress on integration, user requirements, and just-in-time training, it brings us the reality of “function as a service“—sold at the AppStore or the Google equivalent of for $0.99. And, yes, that will transform the iPhone tablet computers and those running Android-Chrome into the next trillion-dollar market. Trillion with a ‘t’!

Right on the heals of that we will have the next wave around the semantic web and semantic applications—where everyone can exploit industry metadata standards and schemas, innovation will not just accelerate; it will hyper-accelerate.

We now live in an era that Michael Schrage– I think he’s with MIT – speaks about; the age of hyper-innovation.

50-plus Innovation Vectors

The age of hyper-innovation means that enterprise planners no longer grapple with two to five major innovations that influence their ability to market and innovate. Enterprise planners must now grapple with 50,100, or potentially hundreds of innovation vectors, any one of which could disrupt their market.

So most marketing organizations are, I would say, suffer a deep myopia as to what drives or will soon drive marketing and innovation in their particular businesses.

It’s as if you’re just out flying down the road, 90 miles an hour, fogbound with, you know, 20 feet of sight. At some point you’re gonna hit somethin’, and at some point there’s gonna be a big splat.

And so the inability for marketing organizations, 1) to prioritize innovation vectors, is a pretty serious challenge. Then the next thing is mastering the operational capability to incorporate those innovations, that is building new or enhanced operational capabilities with the technology.

We’ve found persistent trait in execution systems: change generally and, innovation in particular, become sand in the gears of execution.

Calls for innovation leadership

Most medium to large size companies do not have a structured repeatable process for innovating new processes.

Now I know that sounds circular, almost tautological nonsense, but it is fundamental to the challenge that confronts most global marketing organizations. They do not have an effective change management practices or disciplines as it relates to fundamental changes in marketing and innovation across the customer-making process.

Beyond the lipstick of messaging

PvT: And from your point-of-view, how will marketing’s contribution to the organization evolve?

MM: Marketing is really about what I’ll now call engagement with customers and stakeholders that affect the purchase, consideration, trial, and ultimately loyalty and advocacy of customers.

Marketing remains core, fundamental to the value and purpose of a company. However, marketing must evolve beyond messaging—you know the old saw, lipstick on pigs.

Unfortunately, most senior marketing executives lack fundamental skill sets to innovate new services, especially digitally provisioned services.

Most senior marketing executives lack – are utterly bereft of what I call IT service management chops. And yet, the marketing executives that will have the big wins over this next 5 or 10 years will essentially be senior IT execs and CIOs that understand the concept of customer-making, the primacy of brands as a way of engaging customers in the value proposition, and more specifically, the provisioning of online interactive services as a core innovation to the customer-making process.

That’s why most chief marketing officers of major companies today will simply be out of the game in 3 to 5 years. They will have to retire out or do other sorts of boutique consulting because fundamentally they are suited up for hockey when everyone else is doing ballet.

Not good news, huh?

PvT: No, not at all. Not at all, and I’m sure most marketers would not want to hear that, so.

MM: Well, as I mentioned it before, William Gibson, has this great aphorism: The future arrives unevenly distributed, i.e., some people get it, some people don’t, those that don’t end up feeling a lot of pain and hurt as a function of being laggard on innovation-adoption curve and, more specifically, the future that arrived yesterday. We need to play a little catch.

Customer-making mindset, plus systems

PvT: Okay. So what do you consider as the core elements of a tightly integrated marketing model? And that’s sort of a loaded question…

MM: It sure is. Well, not to belabor the points that I’ve already made. First, you need to have a customer-making mindset; you must integrate the systems and compensation of pre-sales and post-sales to customer-making process benchmarks.

Second, you need to have the analytic discipline and rigor to be able to identify your ideal customers and predict lifetime or long-term value. You must understand your customer.

Third, you need to develop the operational capability of listening: mood of the market, voice of the customer, and patterns of engagement.

Fourth, you to put into place agile methodologies for the development of content and services used promotional reach and engagement.

Now some companies people start with the social media and social networks; they start with a voice with which some customer might connect and begin a dialog.

Social media enables a firm to initiate emotional connection with its customers, and get hints about what’s really going on, and then using those intuitions and soft perceptions drive a broad-spectrum analytic practice and develop true rigor about who is your customer.

So, you know, it can mean a Yin and Yang kind of thing where they feed on each other. It should result in a positive feedback loop: listening begats better content and services that in turn produces “earned media” in the form of praise and recommendations in the Web 2.0 mediaspace, that you inform above the line mass market creative strategies, and so on.

So to unpack your loaded question, the fundament challenge confronting the marketing executive today entails building operational capabilities within the context of an operational marketing platform—a business process-management platform for marketing-related activities.

Unlike marketing automation tools for “doing the marketing process”, the operational marketing platform must also support the rapid, agile development and provisioning new interactive services—essential software applications, service mash-ups, and widgets.

With good listening tools and process, combined with collaboration and scheduling systems, the operational marketing platform becomes an innovation-services platform

That idea nicely summarizes how innovation and marketing have converged in terms of a core competency, vis-a-vie this platform.

SOA Value Chains?

PvT: Who are the prime contributors to the development and support of an operational marketing and service innovation platform? And how did you start researching the technical ecosystem—what you and I now call engagement marketspace?

We started in 1995 with digital asset management and content management because no matter what else came along, you must have a media and content under management.

In 2000, we started investigating another class of vendors in the marketing automation, MRM, and marketing operations management space. Some of the vendors have make great progress.

With rare exception, they all still need to better understand DAM and, more the point, metadata management—a database and DBA for logging and tracking enterprise metadata as instantiated in all enterprise databases, including ERP and CRM, as a strategic asset.

Since 2004, we have tracked vendors that come from the CRM, business intelligence, and process analytics space.

For the last three or so years, we have tried to understand firms in marketing service provider and data enrichment vendors—lots to cover!

Of course there are whole sets of vendors in dynamic messaging and email management content space, and in the customer experience management space too/

As I stated before, there’s many different technology vectors in the marketing and innovation value chain, that ultimately support the idea of an innovation-services platform.

This calls attention to, however, the critical need for leadership within marketing to have a services integration framework and an underlying Service Oriented Architecture (SOA) enabling this integration framework. IBM does some great work there with its component business models—what I call CIO blueprints.

Services integration

However, the senior marketing executive, not the CIO, must commission and own the services integration framework—it basically specifies in one wall-mounted poster all of the services – marketing and innovation-related services – of the business eco-system from which the firm will build, buy, or rent technology or engagement services over the next five years.

Now, the CIO blueprint represent an living, evolving visual depiction of one thing: how firm intends provision services needed attracting, serving, and keeping profitable customers for life.

The CIO blueprint also makes explicit how the firm intends to marshal the resources of a global business eco-system: ‘Here’s what we bring to the customer experience. Here’s what our partners bring, and here’s how it all integrate to an end-to-end process of customer-making.

PvT: I guess that repositions marketing automation a bit player in a larger play?

MM: Well, I don’t think that the rubric of marketing automation delivers useful distinction anymore. I don’t like the term “marketing automation” because many of the research firms and vendors have abused the term, rendering it useless.

Rather, I would like to speak about marketing in terms of process maturities, and levels of process maturity for a marketing operation.

Again, the senior executive doesn’t really care about technology or marketing automation, per se, he or she is most concerned with operational capabilities and building or enhancing capabilities which will related directly to a process maturity model for marketing operation.

However, this all underscores a very strategic point: business rules and metadata enable orchestration of the technologies and processes of how firms attract, serve, and keep customers for life. Very, very few technology vendors deliver solutions for orchestrating the customer engagement life cycle. Typically, the missed or underplay the role of three SOA capabilities: digital asset management, metadata management, and marketing claims management.

Marketing claims management

This last one, marketing claims management, entails a end-to-end workflow for developing and publishing approved copywritten material—product or service claims—to a specialize XML database publishing system. I use the term broadly to include anything written, formatted, and published in printed collateral, business communications, web sites, interactive detailing or presentation systems, catalogs, microsites, newsletters, etc.

In my view of the world, marketing claims management represents a subsystem of DAM and metadata management—that in turn represent subsystems of master data management.

And all of which requires a IT governance scheme—systems, processes, and accountabilities for researching, acquiring or developing, deploying, provisioning, managing, and retiring the technologies used to attract, serve, and keep customers for life!

Key point: tomorrow’s CMOs are mid-level IT executives today getting their masters in Business Administration or Media Psychology.

Origins of DAM

PvT: Okay. Talk a little bit about digital asset management and whether or not that’s a feasible way for global organizations to manage their corporate brand identities, photos, and videos—their brand assets?

MM: Sure. Well, just for a little bit of a history on that. My firm invented the term “media asset management” in 1994 in our work with Aldus and MediaStation.

Later in 1996 or so, we expanded the term when we wrote the white paper for Apple Computer as part of their Masters of Media Program—a brilliant industry-wide marketing framework that included Adobe, Agfa, Kodak, Quark, and Xerox conceived and executed by Jeff Martin, then the Director of Marketing for their Advertising, Design, New Media, and Publishing division.

Apple commissioned an executive white paper to make the business case for their line of Apple servers. IBM picked up from there and commissioned another white paper and international roadshow—also to make the case for the IBM Content Manager.

In 1998, my partners and I wrote the first full market report on DAM and continued with the reports until 2002.

In 2001, we began our long-standing partnership with Henry Stewart Events and their DAM Symposium.

In 2003, as the Editor in Chief, I started the Journal of Digital Asset Management—with which I continue today.

Strategic Capability

I say this all as preamble, do I consider digital asset management strategic capability? The short answer is, emphatically, yes. You can’t manage a global brand and a pan-regional marketing operations without some form of DAM. In fact, we have published a series of executive white papers on the subject.

Now DAM has a lot of misinterpretations, or misunderstandings in terms of what it constitutes.

DAM, first and foremost, constitutes business strategy for accelerating operational processes within media, entertainment, and publishing, and marketing content processes within global brands. So it’s reducing cycle time, reducing cost, and having a process that’s far more agile or flexible in adapting to change.

I contrast digital asset management with content management. I used to say somewhat tongue in cheek that content management is really ‘crap management’.

Content management deals with more or less self-descriptive files—documents or Web pages for which you do not need a lot metadata to describe its contents, meanings, semantics associations with other content and, more specifically, who owns the content or images—from where did the editorial or copywritten material come, when does it expire, all that.

Digital asset management, in contrast, deal with non-descriptive files, hence the emphasis on metadata and the systematic reuse and transformation of preexisting digital media files. This entails the creation and management of metadata associated with findability, reuse standards, and permissions or digital rights management.

Now a reusable digital file may represent an image, photograph, or publishing template. Digital assets may include text or product claims used in marketing communications, or video clips, MP3 podcasts, and type fonts, or Flash animation. Or elements that contribute to immersive virtual world experiences 3D and 2D models or primitives.

A digital asset might also include software code assets—scripts and programming—and things like IT service management policies and business rules or software libraries and software objects. Or learning objects or reusable pieces curricula that flow into books, instructional DVDs, or online courseware.

So, digital asset management is really about reuse and creating metadata that give you competitive advantage: Cost reduction, time to market, higher quality, greater process agility, and the ability to maintain transparency or governance across an entire marketing supply chain.

As a business strategy, digital asset management starts with a DAM repository—where you put all those bits—and begins to really payoff with an operational group—a DAM service group—that maintains the integrity of metadata, digital asset files, and user productivity.

This brings us to the current state of the art in DAM:  Managing a supply chain for continuous improvement and reduction of cost, cycle time, defects, and opacity of key business processes.

So, I do not consider digital asset management an option, nor a luxury. Just like you have an email system, you must have a DAM. It’s just not an option.

DAM as a Business Strategy

PvT: What type of competitive gains can companies expect from digital asset management?

MM: Well, first of all, digital asset management’s not a thing, it’s a strategy—that evolves through various what I call “process maturity stages.” For most enterprises, DAM entails operational digital asset repository. So that means you’ve got workflows by which to ingest digital assets and content, and tag these them correctly.

That means that you have content specialist, “cybrarian“, or asset services group who maintain overall quality of the both the metadata and source files—content, digital media, publishing templates, fonts, color profiles, and user accounts.

It also means that you have well-maintained metadata, descriptive taxonomy, and perhaps faceted taxonomy, by which to support very specific users in finding and retrieving what they want; and when they retrieve things, it means they’re getting the right file in the right format, including the correct permissions to use or alter the retrieved item.

Second a DAM-as-a-business-strategy entails automating activities, tasks, and workflows of digital asset creation. Automation both accelerates core business processes and lowers operational costs.

A more detailed examination of workflow reveals sub-systems for scheduling, collaboration, project management, (job jackets), review and approvals (online proofing systems—such a ProofHQ—that enable all approvers to use at one centralized commenting system, so everyone else can see everyone else’s comments), and dynamic rendering of images or database publishing of content to Websites or printed collateral. In more advanced DAM systems, firms use specialized XML databases containing product claims and pre-approved copy of marketing communications and packaging to further reduce time to market of products and promotional campaigns.

Third, DAM-as-a-business-strategy may include large file distribution, and more specifically large smart content distribution—automated packaging and publishing of finalized content into websites or microsites. Or it means that a firm can send a PDF file containing an ad to optimized for a particular magazine or newspaper—that’s been cleansed and scrubbed of all the bad PostScript data, funky TrueType fonts, and all of the pixel discontinuities or artifacts of vector and raster artwork files.

So, DAM-as-a-business-strategy become essential in orchestrating multichannel and multimodal marketing processes. Multimodal? The ability to pour content and services into engagement frameworks, engaging the particular criteria, means of consumption, and preferences of individual consumers.

Realignment of Sourcing Process in Marketing Supply Chains

When senior marketing executives really get DAM-as-a-business-strategy, they recognized smarter ways of buying creative services and marketing content as well as a whole new class of creative partners—small, nimble, and very innovative creative or customer engagement agencies—with whom to outsource or partner.

This oftentimes means renegotiating long-term contracts with advertising agencies and marketing service firms. This includes specifying the technical parameters by which creative partners will submit finished artwork, upload mastered digital assets into the DAM repository, affix the right metadata as a condition of payment.

So creative realignment—how a procures digital masters of marketing materials, ads, or online content—becomes the next phase of the process maturity model. We recently published a comprehensive white paper on collateral factories and how progressive levels of automation pay what what call productivity dividends.

At this point, many global firms punch into pan-regional localization factories such as Adnovate in The Netherlands or Arizona in Brazil. So that instead of having to manually localize or translate files in country, firms can centralize localization with highly automated systems.

This means instead of taking 7 to 11 weeks to localize print collateral for a reseller or retail channel across EMEA, I can now get that done in five to seven working days. Fabulous!

Gorilla Market Leaders

PvT: Which marketing solution providers are top-of-mind for you? And why? Again, that’s a broad question, but considering some of the challenges that you’ve just mentioned, can you think of solution providers that address customer engagement?

MM: Well, I have the delectable challenge that many of the vendors—technology OEMs, ISVs, marketing service providers, and solution integrators in the DAM, MOM, and related publishing technology markets, are my clients. So I am little biased towards my clients!

Now, that all said, I’m also a category champion: My job is to cheer, lead, and create energy around the next big opportunity; energize and bring new companies into the larger category of DAM, marketing operations, engagement platforms, and open-innovation processes.

That all said, I’m a little bit like a mother with a whole bunch of children. You know, mom loves all of her children. Now she might love one more than the other, but she never says. It’s really important that all of her children feel loved.

PvT: Yep.

MM: Now, so I’m not gonna be namin’ names; however, I can outline some general attributes of the leading vendor or ‘gorilla’. Probably first and foremost is that they have an integration strategy that links explicitly or implicitly to the customer-making process. So they’ve got technologies and capabilities related to pre-sales and post-sales across the customer-making lifecycle. Boom, one.

Two, that they understand that fundamentally the Web does not constitute a channel but a business eco-system. And an eco-system requires a business strategy that anticipates and rewards contributions to the ultimate end-user customer from third and fourth parties. So a business eco-system strategy really comes down to how well you understand the needs of business partners; not just strategic business partners, but perhaps most critically independent consultants and small niche boutique solution providers – 3, 4, or 5 person firms.

The third thing that really distinguishes the real gorilla or market leader is the company that really understands that purchase of its technology represents barely 10 percent of the overall commitment and value that you bring to the customer; that really is about a structured service fulfillment methodology in the spirit of satisfaction assurance. That really is an agreement by and between the vendor and the customer to build or to facilitate the customer developing or building new operational capabilities within the firm.

So that you bought my stuff and make it shelfware is unacceptable. I’m not gonna let myself off the hook until you’ve bought my stuff, you’ve deployed it, you’ve undergone all of the change management and disruption-mitigation processes, and that fundamentally you’ve created new accountabilities around the care and feeding of my technology, and that you’re now using my technology to drive strategic growth. Top line growth, be it with existing customers, or incremental business in new markets with new customers, and that I’m generating sufficient profit to offset the investment that you made in not just my technology but in my service fulfillment methodology.

Those are the 3 hallmarks, if you will, of the vendor who will succeed in this marketplace.

PvT: Fantastic. A very comprehensive answer!

How does the customer benefit?

MM: Cool! Love doing it. You know, I’d like to expand on what we just discussed, emphasizing the levels of good, better, and best—or the simple, moderate and, you know, the Mercedes version—of DAM as business strategy in global marketing operations.

PvT: Okay.

MM: Let me start by saying that enterprise DAM supports a marketing supply-chain strategy for sourcing marketing content as well as an expanding array of services for engaging customers throughout a life cycle.

PvT: Okay.

MM: Next, let’s address how firm innovate new processes within the marketing operations. I put that under the rubric of bottom-up innovation in global marketing operations. This perspective reflects some of our most current work: how companies innovate new processes using small executive peer-workgroups to create 15-day project plans that single person or small group can execute with existing resources and constraints. Specifically, this emphasizes the creation of a master project roadmap for driving innovation into operational capability.

Third, and the one that directly relates to our new white paper on operational capabilities for managing engaging customers for across an entire lifecycle.

So it would be kind of a über roadmap for how all these technologies integrate to a customer-making process model, the various integration points of these various technologies and disciplines, what are the things that you should do now, next, or later, and specifically answering one question over, and over again: How does the customer benefit?

You know, hey, this is a really cool social media technology…uh, how does the customer benefit? Oh, this new analytic tool…oy, how does the customer benefit? Oh, this new web content managr…yes, but how does the customer benefit? Oh, this new email system…how does the customer benefit?

So that’s my mantra, that’s the organizing principle, how does the customer benefit with very specific proposals from the vendor community?

And, of course, that requires that you have an integration mindset, a customer-making process model, and an innovation-services platform by which to accommodate and integrate these new technologies to new or enhanced operational capabilities.

Finally, DAM becomes integral with that innovation-services platform. In fact, digital asset management with its extreme emphasis on process and procedure for ensuring the integrity of metadata, media, and user experience (findability, usability of what you found, and permissions to do what you need to do with what your found) enables a firm to reengineer its processes of creating content and interactive services.