Marketing and sales departments are becoming increasingly technology-led. Not only personal technology, such as PCs and e-mail, but company-wide applications have become a feature of everyday life. For many businesses, the goal is increasingly to integrate all the information being used to support management decisions. But as they pursue this goal, issues of budget and skills become more of a barrier.
These are among the findings of the 1997 Softworld Survey of Sales and Marketing Technology, conducted by Interactive Information Services. The survey asked a sample of 146 senior managers in marketing, sales, IT and main board functions about their current and projected use of technology.
Richard Tribe, UK sales and marketing director at Interactive One, backs up one of the survey’s key findings: “We are becoming quite saturated in personal technology” he says. This is most evident in the high levels of use revealed for portable PCs, which over three-quarters of the sample uses. E-mail use has grown by about a third compared with 1996, when 65 per cent of those surveyed were using it, while the Internet has grown by nearly 50 per cent, from 52 per cent using it last year.
Sales forces in particular are now heavily dependent on mobile communications and data transfer to carry out their jobs. This is in line with the current business strategy that keeps sales teams on the road; often they visit the main office once a month or less.
What has lagged behind the adoption of technology, however, has been software applications for sales and marketing. “There is still a way to go. We have been promoting to this market for seven years and for the past three or four we have been saying sales and marketing systems are going mainstream. But the market is still holding back,” says Tribe. Clear evidence of this can be found in the percentage of respondents currently using typical applications. The most fashionable software – a marketing database – is only to be found in two out of five companies, although three out of ten expect to implement a database over the next year. Despite the trend towards carrying out more business by phone, only 14 per cent have implemented a call centre or telemarketing system.
Contact management software has a higher level of use, at just over half of all companies. But salesforce automation, territory management, and fully-integrated, enterprise-wide systems currently only have a small user base. All of these are likely to show the strongest growth, although only from this small base.
The implication is that companies have been busy ensuring their staff are fully contactable. But they have been slower to absorb sales and marketing information into their management culture. Although there is now a vogue for building data warehouses, this is primarily being carried out by large companies with a turnover which exceeds 50m. Tribe estimates that “enterprise-wide systems are probably only a reality for the top five per cent”.
Where sales and marketing systems are being implemented, the benefits companies are looking for are primarily internal. Improving efficiency is the main goal, together with better management information. Some way down the list is delivering higher levels of customer service, which 45 per cent expected to benefit from.
This might come as a surprise to marketers, who are often trying to gain competitive advantage precisely through using technology to ensure customers experience better levels of communication.
However, the survey suggests there is a complex loop at work. Companies are trying to integrate all of their systems in order to benefit from better management information (and possibly higher levels of customer service).
However, in doing so, budget suddenly becomes an issue. “When companies were buying ad-hoc, they could get away with spending 5,000 here and there. With the need to integrate, the natural effect is that projects become more complex. You can’t spend 50,000 on a system without involving the full team,” says Tribe.
This almost inevitably means that executives in the sales and marketing functions are not necessarily the major decision makers. This year, 39 per cent of the sample said the IT department played an important role in buying technology, a significant rise over last year. Even relatively simple applications are now being bought by technical specialists, rather than the end user.
“Most of the big contracts we have are with IT managers,” says Harry Meikle, sales director at QAS, which produces address management systems. Although it is marketers who are most conscious of the need for accurate postcoding, the move towards complete integration has pushed this responsibility into the back room, he believes. “IT managers now have the major responsibility for clean data. They purchase address management as part of that.”
Some applications are still being driven by marketers, and can indeed indicate an individual on the fast track. Simon Perry, sales and marketing manager at Beacon Dods-worth, which is a major supplier of geographical information systems (GIS), certainly believes his customers are getting younger.
“With younger, newer people coming into the department, they are given GIS as a way of bringing them up to speed, because it promotes a broad view of the business. The potential high flyers are starting by taking responsibility for GIS,” he says.
Another major sector which has been driving the adoption of sales and marketing systems, has been the media. Its salesforces are more dependent than ever on delivering the right information, which means immediate access to data. “There has been quite a big increase in the user base for our GIS in regional press,” says Perry.
GIS is the system recommended by the Joint Industry Committee on Regional Press (Jicreg), and many of the new owners of local newspapers closed an information gap by adopting it. “A few years ago, the regionals were run by large media owners who saw them as a bit of a cash cow. There was not a lot of investment. Now they are owned by specialists, such as Trinity, Newsquest or Thomson, they are putting that investment in,” he says. The growth of advertising expenditure in regional press has helped to create the necessary budgets.
Paul Robinson, a director at Strategic Data Management, says national newspapers like The Daily Telegraph are also putting salesforce management systems in place. “Its teams use laptops, where before they would have relied on hard copy reports, so now they have the information to hand,” he says. The automatic updating of sales data has also removed the requirement for employing a data capture bureau, which was both expensive and potentially inaccurate.
However, where companies are introducing such technology, Robinson recognises that there can be budgetary issues. “Sometimes you have to speculate to accumulate. For technology, that can mean parallel operations. When you equip the salesforce with PCs, it may be a year before you can ditch the paper records. So that is one year of extra expenditure with the promise of success, but no guarantee,” he says.
Despite the obvious goals of efficiency and hence cost savings, the survey did reveal one remarkable gap. Where cost-benefit analyses were concerned, there was a notable lack of follow-through. While 52 per cent said they carried out checks before adopting technology, only eight per cent did so during implementation and eight per cent afterwards. That suggests few companies know if their systems are delivering what they expect them to.
Tribe believes there is a “slight avoidance” of the challenging issue of demonstrating a cost benefit after the event. “It is easy to do before buying by justifying on hard benefits, such as more efficient business and shorter lead times. But the benefits that you get out are more difficult to quantify,” he says.
This may be true. Once a sales and marketing system is in place, measurements of customer or user satisfaction become part of the broader measurement of a business. They do no relate specifically to the systems being used. It could be that, while marketers find it easy to put together a case for finding the budget to buy in a system, once they have done so there is no need to look again at what it is doing.
Certainly there are signs that companies are getting happier with what technology does for them. Although this year 72 per cent of those surveyed said there was a gap between what they thought IT should be able to deliver for sales and marketing and what it is actually delivering, this was down from 81 per cent in 1996 and 95 per cent in 1995. Levels of satisfaction have also risen – ten per cent say they are now extremely satisfied, compared with two per cent last year – although 28 per cent are not very satisfied now, compared with 17 per cent previously.
This may reflect the fact that users are becoming more knowledgeable about what they want. With the greater involvement of IT departments, specifications are probably becoming more precise. It has to be hoped that sales and marketing systems are not failing to deliver what they promise. With so much corporate strategy and investment riding on technology, failure is not on the agenda.
The Softworld in Sales, Marketing & Customer Service 97 will take place at the Wembley Exhibition Centre from November 3 – 5.
This year, the show will include a conference, “Marketing to your existing customers to increase business using data warehouse techniques”. The conference is a new feature of the show and will take place on the first day at the Hilton National Hotel, Wembley.
This conference is the first to examine datawarehousing specifically from a marketing angle.
This year, the theme of the two-day exhibition focuses specifically on technology to improve customer relationships and service. There will also be a programme of seminars and management briefings which will focus on state-of-the-art technology.
The event will also have a new technology feature. This will illustrate that disparate technologies may be integrated to delivery ascertainable business benefits through genuine Technology Enabled Relationship Marketing (TERM).
Adam Malik, market manager for Softworld in Sales, Marketing & Customer Service comments: “Increasingly, it is the levels of customer service that differentiates a company from its competitors. There is no doubt that taking advantage of the new technologies available can make a dramatic impact on both customer satisfaction and retention levels, and – ultimately – on the company’s bottom line.”