Seeking insights on your behalf, Charles Aris vice president Sarah Becker recently interviewed David Krajicek, a former chief executive officer at GfK Research whom Becker recently placed as a strategic CEO-level partner in a private equity firm.
Krajicek spent 24 years as a member of GfK, where he rose from senior vice president to CEO of GfK Research. During his time with GfK, he managed the firm’s client consulting groups, a diverse set of research industry thought leaders who provide research and consulting services to an array of organizations. He also held leadership roles in the firm’s Business & Technology sector and Brand & Communications practice. Krajicek, who has built and led companies with P&Ls ranging from $18 million to $900 million and from 16 to 5,000 employees across 50 countries, has authored numerous articles related to the operational objectives of global marketing insights and consulting firms.
The transcript of this conversation was edited for clarity.
How have marketing services, specifically in marketing technology, evolved over the past five to 10 years?
As in so many other parts of our economy, technology has transformed modern-day marketing from strategy and tactics. In particular, marketing technology (often referred to as martech) has driven three big trends in marketing and marketing services:
- The first is the emergence of multichannel marketing. The rise of the Internet and e-commerce created entirely new channels which marketers had to manage, from websites providing general information to e-commerce capabilities enabling companies to sell within entirely new retail channels. That presented a fresh set of marketing challenges, as marketers needed to consider how to target and convert prospects in new digital channels. As new channels arose and were used at scale, a multichannel revolution was born.
- Secondly, we’re seeing a democratization of marketing services. Technology made it possible for small and midmarket companies to engage in their own marketing activities. You’ve seen fewer companies leverage classical advertising and marketing enablement providers as they’ve learned to manage their own data through CRM platforms to execute campaigns and create integrated client engagement strategies. Martech has helped this democratization gain momentum, as new products are continually rolling out which allow even the smallest of businesses to create, launch and manage their own marketing campaigns.
- The third big trend has been the need for speed. With more complicated customer journeys and with a dizzying array of channels in which a company can spend its resources, marketing strategies need to adjust in real time. The rise of the digital economy has created this need and new technology has rushed in to help address this need. Businesses are demanding new solutions to help them make adjustments to their marketing strategies on a daily, if not hourly, basis.
How do you see the industry evolving over the next five to 10 years?
As people continue to gain experience with and use different platforms such as mobile devices for more than content consumption, you’ll see marketers increasingly work to capture people in the moment. Already, we’re beginning to see that when consumers are in select stores then those companies might offer a relevant coupon or promotion on devices. It’s an idea that whether you’re in home or out of home, you can get relevant content in a moment’s notice. I believe we’ll see marketers increasingly create content not just focused toward a person’s interests but making sure to serve that content at a more targeted time along the buyer’s journey.
Along similar lines, we’ll begin to see an effort toward greater accuracy in targeting. In recent years, there’s been a big focus on “marketing to the one” – and I don’t believe we’ve fully unlocked that promise yet. Brands are increasingly using their own customer data to better inform their marketing strategies. Moreover, brands will continue to demand additional information sources to enrich their understanding of their customers so that they can generate content and rapidly deliver this to impact customer behavior. It’s a continued effort toward personalization through data mining to truly deliver on the promise of one-to-one marketing.
I think we’re also going to see a return to understanding the “why” behind consumer behavior. With powerful computing capabilities has come the rise of rapid in-market tests of advertising messages, web designs and marketing strategies. While this can tell us which message, design or strategy is “better”, we often lose sight of the “why”. Why does one concept work while another doesn’t? We’ve ended up in a position where we don’t fully engage with marketing data effectively to see a return. We want to get smarter about our marketing activities in this multichannel environment, so it’s important to make a significant commitment to understanding customer motivation. This ensures that our subsequent activities are founded in an understanding of what truly drives behavior.
The final consideration is the rise of data privacy around the world. You see laws like General Data Protection Regulation (GDPR) in the European Union affecting how organizations market, and similar solutions are being crafted in North America as a result. California has introduced a new law that will go live in January of 2020, for example. The trends I mentioned previously will be heavily impacted by how consumer information is acquired and leveraged, and organizations will be forced to create more appropriate marketing solutions while remaining effective in the marketplace.
What are some best practices for organizations addressing data privacy regulations?
- Technical position: Get out in front of laws by defining the technical requirements necessary to achieve compliance with laws such as GDPR and the California Consumer Privacy Act. This requires that organizations connect with their consumers and offer information of value related to what information is being held and why.
- Customer-centric position: This is where many companies fall as they work to define their processes and achieve compliance. These organizations are working to show how they care for consumer privacy as they become more transparent with consumers who fall under active data privacy laws.
- Watch-and-see position: These organizations are shying away from proactivity related to data privacy. That’s not necessarily a bad thing if you’re in very low PII industries. Ultimately, we’ll likely reach a point where all industries are impacted in one way or another, but action isn’t necessarily demanded by organizations across all industries at this time.
We’re also seeing many organizations acknowledge that data privacy is a rising trend and compliance from location to location will be difficult to achieve. So they’re defining a higher common denominator that’s forcing their industries to react. These companies are getting in front of these laws by saying, “Hey, let’s set a strategic data privacy plan and inform all of our consumers about what we’re doing and why.” There’s a forcing function that will take place and many leading companies are setting the standard for data privacy – and gaining a competitive advantage by doing so.
How have marketing services impacted the modern CMO role?
I often characterize these folks as the “Always-On CMO” because they must be able to set incredibly nimble, quick-twitch strategies. You can’t establish one strategy and set it on autopilot for even a quarter. You must be able to pivot and flex almost daily in an omnichannel environment. It’s not about making the product more attractive; it’s about engaging with consumers in the moment about your brand’s story.
Not only must the modern-day CMO always be on, but they also have to function effectively across the C-suite. Historically, you see a situation where the marketing budget is defined and then spent to drive the acquisition through various marketing channels. Now we’re seeing a greater appreciation for the buyer journey – and that this journey does not always include these classical marketing outlets. CMOs must appreciate the multistop buyer’s journey and work cross-functionally and proactively with their fellow C-suite members to ensure a positive, seamless experience across all touchpoints in order to effectively drive engagement.
Historically, you’ve seen CMOs tasked with driving the number of inquiries. Today that challenge requires CMOs to reach across the table to folks such as a chief experience officer if retail locations are involved, or a chief information officer in the cases of websites and mobile applications. At the end of the day, consumers don’t care who reports to whom – they just want a seamless interaction with the brand anytime and anywhere they engage. This reality requires CMOs to be attached at the hip with their C-suite colleagues, in both strategy and resource allocation.
When should senior decision-makers begin vetting marketing services partners? Which key elements of that process should they consider?
A lot of companies have rushed to get their own data management platforms to engage in the marketing technology space. It’s important to take a step back and consider your current customer intelligence landscape and whether you’re effectively mining that info for more effective marketing results. I often hear that clients struggle to process data in a way that generates results – and if you can’t extract key pieces of information from a database, it’s a warning sign that you could benefit from a partner.
If you are engaging in specific marketing activities and campaigns, do you know the kind of ROI you’re generating? It’s critical to have the ability to point to specific campaigns and marketing elements which have demonstrated a return; evaluate their performance and assess how you can improve them. It’s really about demonstrating that improvement over time across your marketing activities. If you don’t have a good answer to the ROI question, it’s another sign you might need a partner.