Several years ago Cummins needed to upgrade its marketing efforts. Cummins, an engine manufacturer, realized the cost of its undisciplined processes for developing marketing campaigns was not justifying the return. Senior management knew it could do much better. But it didn’t envision its outsourcer would, in time, become a strategic marketing partner.
The largest discretionary spend in companies is often in marketing. And it’s often the least well-managed. Marketing has survived as the last great un-automated frontier. But no longer.
Product development cycles and product lifecycles are shortening as the number of marketing channels increases. Simultaneously, the current economic climate in the United States is forcing companies to make sure all their operations, including marketing, are running as efficiently as possible.
Cummins, which manufactures, distributes, and services automotive, construction, agriculture, mining, and marine engines, markets its products world wide. This global reach increased its marketing challenge. So did new technologies like email.
“We wanted a more flexible, responsive marketing system to create better customer relationships,” says Alissa Kanwit, Marketing Manager at Cummins. “We had no email marketing program and felt it would be the best way to efficiently communicate with our customers. This wasn’t process improvement, but of necessity, process enablement.”
“Email is more interactive and personal. It allows marketers to get in front of customers and prospects in a more concrete, forceful way,” says Jonathan Jackson, senior analyst with eMarketer, a New York City-based marketing research firm. “At the very least, email marketers can be assured their advertising messages will be seen by particular prospects, especially if they have a pre-existing relationship.”
Cummins needed an efficient, standardized method because the manufacturer had no experience in such a venture. It needed an outsourcing partner that could bring knowledge and experience to the task. This led Cummins to Aprimo, Inc.
Efficiency, Speed to Market Lead to Success
Aprimo’s outsourced solution helps companies manage the business of marketing, including all financial reporting aspects. The firm has an extensive client list that includes Ernst & Young, Bank of America, and Merrill Lynch.
“We chose Aprimo’s Direct Marketer service because we saw it as the most efficient way to harness a quality email-based program. Price and time to market were key factors in addition to the process makeover. Aprimo’s Direct Marketer Service executes trigger-based campaigns based on customer/prospect activity or non-activity,” says Kanwit.
Trigger-based is a method of email communication that takes into account customers’ expressed preferences, then automates the creation of tailored, personalized marketing content designed for individual customers. It can be easily reused and adjusted through templates. It also involves sequential methods of moving respondents through campaigns. For example, it can point prospects to specific Web pages. The service also tracks and counts respondent click-throughs at various stages of interaction and identifies the best prospects and customers for each individual campaign offering.
Aprimo installed Cummins’ customer data onto its remote ASP database in eight weeks, so it was up and running quickly. “We were pleased with the speed that they got us going,” says Kanwit. “Since we had no experience with this sort of delivery and our new communication needs were immediate, such speed to market was a very attractive aspect of the service.”
“This offered us an opportunity to develop targeted email campaigns and allow customers to easily opt in or opt out,” adds Kanwit “Aprimo also ensured that we were following important legislation for customer privacy rights.”
The ASP housed response data (tracking) information as the email communication process began – and Cummins could easily monitor that data.
Initiated over three years ago, the results for Cummins were immediate and dynamic. Direct Marketer turned prospect and customer knowledge into more effective campaigns and made it easier to design and execute complex e-marketing projects in less time. “Our market re-penetration is better,” says Kanwit. “And we’re just beginning to understand the savings offered, although not as fully as we will soon. I’m looking forward to those first figures because I believe the savings will come not only in better results (sales) but lower costs because this process saves a lot of effort in a lot of marketing areas.”
“Marketers have tended to do things more or less by the seat of their pants. So what happens when I come in with a tool that allows for disciplined workflow?” asks Harry Watkins, research director with the Aberdeen Group. “I’ve gotten a big disconnect. I’ve walked this Jaguar into a company that is using bicycles.”
The Relationship Deepens with More Services
This relationship between outsourcer and buyer initially was tactical: it focused on a single task. But the relationship has grown to a point that Aprimo’s services are now strategic.
Management at Cummins now accepts that the efficiency of Aprimo’s Direct Marketer impacts the bottom line. But the metrics have been hard to quantify, often the case in the world of marketing. Since Cummins needs to know the financial impact of its marketing campaigns, there had been a deepening of the relationship between the two firms resulting in an expansion of scope. Cummins recently implemented Aprimo’s Marketing Resource Management (MRM) tracking suite, which allows Cummins to incorporate strategic marketing goals into the reporting process while simplifying budgeting and cost control.
The biggest service offered by MRM is the whittling out of inefficiencies so marketing can be done better, faster, and easier. Each firm has its own way of handling marketing procedures. And if a company has taken the technology plunge, it most likely has several pieces of software installed to handle different marketing functions that most often aren’t fully compatible.
MRM applications coordinate, execute, and measure the results of marketing efforts. They ensure marketing activities and monitor spending, support organizational goals and allow senior executives to view budget forecasts, actual spending, and savings.
“Imagine if the finance department didn’t have applications, and key people left with the knowledge of how to close the books,” says Richard Vancil, VP of CMO Advisory Research at IDC. “It would be preposterous to run a company like that. But in marketing, that’s been the case.”
Gone are the days when corporate marketing budgets operated in the dark. Today they face external regulations that shed light on previously unclear marketing expenses; executives must now understand how marketing money is spent on a line-item basis. Firms need greater accountability for marketing budgets and more cost containment. They need to know their return on investment.
Monitoring Budgets with a Magnifying Glass
Today the law demands it. The Sarbanes-Oxley Act subjects internal audit and financial reporting processes to more intense levels of scrutiny. Sarbanes-Oxley is drastically raising the bar for monitoring, tracking, and reporting all marketing costs and resources, regardless of where they’re generated. There’s also greater punishment for non-compliance.
Companies with multiple marketing organizations that manage multi-channel campaigns across multiple lines of business find the task of providing the low-level cost detail needed for compliance a thorny challenge.
Though the need for tighter financial control over marketing was known within Cummins prior to Sarbanes-Oxley, the manufacturer chose to move ahead with the Aprimo MRM because, according to Joe Meyer, VP of Marketing & Business Development for Aprimo, it was a natural progression. “They already had limited access to some of these services through our Direct Marketing applications. So when they asked, we extended our contract,” he reports.
He notes that the cost to implement additional BPO services is really low because most of the time the previous work has been leveraged. He says the simplest marketing campaign can involve multiple resources such as internal and agency staff, printing and production costs, outsourcing fees, materials, and media placement costs.
Meyer agrees that the new law has increased opportunities. “Our auditable MRM processes were developed several years before Sarbanes-Oxley, so the market’s basically come to us.”
Lessons From The Outsourcing Journal:
- The greatest advantage of outsourced Marketing Resource Management (MRM) is the whittling out of inefficiencies so marketing can be done better, faster, cheaper, and easier.
- MRM’s enhanced reporting capabilities mitigate the risks of Sarbanes-Oxley because marketing costs are easier to track and monitor, thereby greatly lessening the risk for punishment due to non-compliance with these new federal regulations.
- Companies with multiple marketing organizations that manage multi-channel campaigns across multiple lines of business can now successfully outsource marketing to be able to retrieve low level cost details needed for compliance.