Marketing Disruption1/7: The Digital Transformation of Marketing

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Interaction and data transparency raise speed of innovation and customer orientation of marketing teams if you organize processes, roles and IT in a connected way.

Digital marketing means much more than just using additional communication channels. “We are now on Facebook” doesn’t cover the challenges any longer. Today, everything is about the digital transformation of marketing management.

Starting with the causes of this change, I would like to give an overview of the organizational changes in marketing in terms of processes, roles, data, and IT that my colleagues will pursue in six upcoming blogs.

Bound up in digitization are two phenomena that will significantly change how a marketing department’s work is organized: consumers’ willingness to engage in dialogue, and the availability of customer data. Both can improve the efficiency of marketing and even become a source of innovation in the company – but they require that marketing be organized differently.

Customers’ willingness to engage in dialogue goes back to a very human need to discuss brands and products. In itself, this is nothing new. What is new is the fact that social media are making consumers’ voices audible in the public arena. Marketing professionals need to closely follow online communication, because any storm of protest can instantaneously reach a wide audience. At the same time, there are also brand enthusiasts who improve a brand’s image through positive feedback.

Have a dialogue with the customers in order to understand their needs

Positive or negative, communication through social media is different from traditional advertising and cannot be controlled. Not for nothing has digital communication been compared to pinball: you launch a message, but have no control over how it subsequently develops or, indeed, whether it is distorted in the digital media. At some point, your time is up. The sole aim is to cut a good figure for as long as possible.

Therefore, TV commercials are no longer the focus of today’s marketing professionals. That “campaign” is dead. Instead it’s about permanently communicating the brand on all channels.

Consumers’ willingness to engage in dialogue increases the workload of marketing professionals even further. Consumer enquiries affect sales, marketing and customer service. Rapid responses are expected, so time-consuming consultations between departments are not possible. What is needed are interdisciplinary, fast-working teams with decision-making powers.

“Communication departments must reinvent themselves as today’s silo structures – marketing and advertisement vs. classical product PR and corporate communications – will increasingly overlap,” says Jochen Sengpiehl, CMO at Volkswagen.

Collaboration between departments is also needed because online customers are not simply looking for pretty pictures; they expect relevant added value from their brand. That added value can consist of entertainment or a time or information advantage. One example is the fitness tracker Nike Plus, which provides customers with personal training plans in return for their cardiovascular data. Nike uses that data to offer better, customized products and services.

This example represents my broader understanding of digitization that extends beyond the aspect of communication. I understand digitization as the creation of products or services using IT, and with the aim of increasing a company’s added value – perhaps by even changing the business model.

My interpretation blurs the boundaries between marketing and sales. Marketing managers are increasingly judged on how they support sales:

“The task for tomorrow’s [marketing people] will be more about developing business cases. They must provide their customers with target-specific communication products that support marketing and with which value and profit can be generated in a digital market,” explains Christoph Bornschein, managing director of the digital agency Torben, Lucie und die gelbe Gefahr.

Create offers based on data

Digital advertising is easy to measure and KPIs are available in real time. That data tells us a lot about customer needs. It can form the basis for developing everything from personalized products, to added value services and new business models. Such data gives marketing managers considerable power within their company because data is a currency that the marketing manager can employ in dealings with other departments, such as sales or customer services. The marketing department thus becomes the source of innovation within a business.

“Data plus creativity are the future,” summarizes Ivan Pollard, CMO of Coca-Cola.

Consumers’ openness to dialogue and the availability of customer data in the marketing department can increase the efficiency of marketing activities – provided that the marketing department is organized differently. Indeed, marketing managers are increasingly seeking assistance from management consultants for the reorganization of their departments and the reassessment of marketing roles, as a study by Adobe (2017) shows.

Change the way the marketing department operates

These blog posts look at what changes are needed in terms of working processes, roles, data, and IT. The first three blogs base their approaches on customers’ willingness to engage in dialogue.

Ana Jakić demonstrates in The proper use of language in online brand-customer dialogues why tonality in digital communication has a significant influence on brand trust. For example, even chatbots need to strike the right tone, if they are to reduce the workload for marketing professionals.

Subsequently, Simon Monske argues that Online customer feedback influences the customer journey – how firms can utilize it. His article emphasizes marketing executives’ need to understand how and when electronic word-of-mouth (eWoM) influences customer’s product decision making. He further suggests implications for how companies can utilize feedback data by monitoring and acting on what is said about their brands online.

Whether the full potential of customer data availability – the second digitization phenomenon – can be realized also depends on customer- and company-related factors. According to Simon Monske, companies must put in place organizational and personnel capabilities alongside the technical skills in order to benefit from customer feedback data. In Cross-industry benchmarking model to measure social media intelligence maturity he argues that German companies still need to catch-up.

For customers, data protection concerns are the greatest obstacle to the use of their data by marketing departments. In How should firms deal with data privacy concerns? my colleague Sophia Kühner argues that customers must first be guaranteed data control and transparency. Customers can also be persuaded to release their data through added value services that offer security or time savings.

Daniel Garschagen addresses the situation from the business perspective. In How can firms automate the 360°-degree customer view? he answers the question of the framework needed for the introduction of artificial intelligence and process automation. He makes it clear that the full potential of customers’ openness to dialogue can only be harnessed if a company’s working processes were already genuinely tailored to that dialogue.

In my concluding article, I ask What digital transformation means for the organizational structure of a marketing department? and suggest a new role model based on analogies with startups leading towards greater agility in customer dialogue and in the speed of innovation.

Disrupting old-school marketing is the starting point of great ideas. Be creative!

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