Segmentation and the Value Proposition

growth team m e m b e r s h i p™

europe

Segmentation and the Value Proposition 2012

marketing priorities survey results

TWEET ABOUT THE SURVEYS

#2012priorities Co-Sponsor

The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.

1


2012 survey results

CONTENTS Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 INTRO

Survey Purpose and Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 What is the Growth Team Membership™ . . . . . . . . . . . . . . . . . . . . . . . . .5 Marketing Overarching Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION

1

SECTION

2

SECTION

3

SECTION

4

Key Marketing Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Marketing Resource Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Special Interest Topic: Demand Generation . . . . . . . . . . . . . . . . . . . . . . . 18

Respondent Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


2


2012 survey results Introduction

3

Marketing Survey Executive Summary SECTION 1:

Key Marketing Challenges

Key Internal Challenge

Key Internal Challenge Root Cause

Developing a value proposition

Insufficient personnel and process

SECTION 2:

Marketing Resource Trends

Budgets

Resources

Resource Allocation

Marketing typically has an annual budget under $1 million

2012 budgets and staffing levels will increase moderately

Marketers continue to allocate a majority of funding toward personnel/staffing

Demand Generation Effectiveness

Demand Generation Activities

Demand Generation Focus for 2012

Most respondents indicate their effectiveness is “Average”

Marketers indicate that their teams are best at leveraging customer segmentation

Marketing’s priority is developing segment‑specific campaigns

SECTION 3:

Demand Generation


Growth Team Membership™ research.



4

Survey Purpose and Respondents

146

survey respondents

Research Objective To understand the most pressing challenges shaping marketing executives’ 2012 planning

Methodology Web-based survey platform


Survey Population

Co-Sponsor

Manager-level and above marketing executives from companies throughout Europe




5

What is the Growth Team Membership™? GTM is a subscription program that supports executives within the functions that report to the CEO CEO’s Growth Team™

GTM: Creating Client Value

GTM’s case-based best practices help executives:

R&D/ Innovation Sales Leadership

Corporate Strategy

Marketing Marketing

CEO

Corporate Development

Market Research

Investors/ Finance

GTM provides best practices, events, and services that enable executives to address challenges within their companies

Competitive Intelligence

Speed the design and implementation of initiatives by not reinventing the wheel

Save money and reduce risk by avoiding mistakes made by other companies

Accelerate problem-solving with a cross‑industry perspective

Improve their functions’ and companies’ performance and productivity

[email protected]

www.gtm.frost.com


twitter.com/Frost_GTM

slideshare.net/FrostandSullivan Growth Team Membership™ research.



6

What’s Keeping Marketing Executives Up at Night in 2012? Marketing Overarching Challenges

Sample Solutions from GTM

Developing a Value Proposition Marketing executives tend to guess why customers buy, instead of collaborating with Sales or assessing the market. Over time, mixed messages become diffused and weaken the value proposition.

Learn how Kronos collaborated with Sales to refine the value proposition based on key differentiators, and embedded it with the sales force via improved messaging techniques.

Prioritizing Markets and Market Segments Marketing executives must increase their familiarity with prospects to prioritize segments based on fit with core capabilities.

Learn how Tandberg made customer segmentation the foundation of its customer-centric business model.

Creating Effective Demand Generation Using Social Media Employees and customers are using social media— whether you harness it or not is up to you. Marketers need to enable practitioners with best practices in social networking to speak with one voice and engage prospects.

Learn how Cisco created a Social Media Center of Excellence aimed at improving employees’ capabilities in listening, planning, engaging, and measuring.

Contact us at [email protected]. The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.



2012 survey results

7

INTRO

SECTION

1

Key Marketing Challenges

SECTION

2

SECTION

3

SECTION

4




2012 survey results Section 1

8

Top Five Key Marketing Challenges

Challenge 1

Developing a compelling value proposition (23%)

Challenge 2

Understanding changing customer preferences and needs/ incorporating voice of the customer (15%)

Challenge 3

Prioritizing markets and market segments (17%)

Challenge 4

Driving sales usage of marketing collateral, tools, and resources (14%)

Challenge 5

Measuring marketing ROI (18%)

Note: The respondents were asked to rank their top five challenges. The percentage values indicate how many respondents listed that particular challenge as their first through fifth challenge.

SURVEY QUESTION:

What are the top five functional challenges shaping your marketing strategy?





9

Marketers in B-to-B companies are occupied with supporting the sales force, while their peers in B-to-C companies are struggling with balancing traditional and social media tactics Top Five Marketing Challenges (By Business Model)

B-to-B

B-to-C

Challenge 1



Challenge 2

Understanding changing customer preferences and needs/incorporating voice of the customer

Improving sales and marketing integration (19%)

(16%)

Challenge 3

Prioritizing markets and market segments (18%)

Challenge 4

Driving sales usage of marketing collateral, tools, and resources (16%)

Challenge 5

Improving sales and marketing integration (16%)

Coordinating social media and traditional marketing activities (20%)

Understanding changing customer preferences and needs/incorporating voice of the customer (13%)

Measuring marketing ROI (29%)

Note: The respondents were asked to rank their top five challenges. The percentage values indicate how many respondents listed that particular challenge as their first through fifth challenge. The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.




10

Understaffing is the predominant cause of Marketing’s challenges Top Five Marketing Challenges

Root Cause of Top Five Marketing Challenges

Challenge 1

Developing a compelling value proposition

Staff: Limited resources and Process: Ineffective process (24%)

Challenge 2

Understanding changing customer preferences and needs/incorporating voice of the customer

Process: Ineffective process (31%)

Challenge 3

Prioritizing markets and market segments

Staff: Limited resources (43%)

Challenge 4

Driving sales usage of marketing collateral, tools, and resources

Staff: Limited resources (27%)

Challenge 5

Measuring marketing ROI

Process: Lack of process (36%)

SURVEY QUESTION:

Please indicate the root cause—staff, process, technology/systems, or strategic alignment—of your top five marketing challenges.




2012 survey results

11

INTRO

SECTION

1

SECTION

2

Marketing Resource Trends

SECTION

3

SECTION

4





12

Marketing departments in B-to-B companies are likely to have larger budgets 2012 Marketing Budgets (By Business Model)

68%

70%

60% 49%

50%

F 41%

40%

30%

26% 19%

20%

18%

F

11%

10%

8% 5%

0%

Below $1 Million

$1 Million to $2.99 Million

F

8% 6%

F $3 Million to $4.99 Million

All Companies

SURVEY QUESTION:

The red percentages are for all respondents.

6%

F

0%


B-to-B Companies

7% 9%

11%

8%

F 0%


$20 Million or more

B-to-C Companies

hich of the above ranges (in $USD) best describes your 2012 total marketing budget (all expenditures on marketing activities and W general & administrative—including staff)?





13

B-to-C companies tend to spend a higher percentage of total revenue on marketing activities Percent of Revenue Dedicated to Marketing Budget (By Business Model)

0.40%

0.23% 0.20% 0.15% 0.10%

0.00%

SURVEY QUESTION:

All Companies

B-to-B Companies

B-to-C Companies

What is your 2012 total marketing budget (from the previous question) as a percentage of your company’s total 2011 revenue?




14


B-to-C companies are more likely to embrace online marketing over traditional media Marketing Resource Allocations (By Business Model) 30%

30%

30%

F 25%

20%

15%

15%

F 10% 10%

10%

10%

10%

10% 10%

9% F

F

5%

5% 5% 2%

4% 2%

1% F 0%

Personnel/ Staffing

Marketing Marketing Channel Partner Communications: Communications: Programs Traditional Media Online/Digital Media

F

SURVEY QUESTION:

2%

Marketing Automation Platform

All Companies

5%

F

5% 3%

0% 0%

Customer Content Relationship Development Management (white papers, (CRM) Software brochures, social and Maintenance media, and trade show support)

B-to-B Companies

F

5% 0%

1%

F

0%

Knowledge Management Systems

Training

F

0%

Other

B-to-C Companies

How have you allocated your 2012 marketing budget across the above activities (allocation must total 100%)?





15

Marketing staffing levels are expected to remain constant in 2012 Marketing Staffing Changes (By Business Model)

All Companies Decrease Substantially 3%

B-to-B Companies Decrease Substantially 2%

Increase Substantially 5%

Decrease Moderately

6%

Decrease Moderately

16% 30%

Increase Substantially

19%

Increase Moderately

28%

46%

Increase Moderately

45%

Stay the Same

Stay the Same

B-to-C Companies Decrease Substantially 5% Decrease Moderately 10%

Increase Moderately 35%

50% Stay the Same

SURVEY QUESTION:

In comparison to 2011, your 2012 marketing staffing will…





16

Marketing foresees stagnant budgets in 2012 Marketing Budget Changes (By Business Model)

All Companies Decrease Substantially

B-to-B Companies 4%

5% 6%

Decrease Moderately

2% Increase Substantially

Decrease Substantially

Increase Substantially

Decrease Moderately

16%

19% 31%

34%

Increase Moderately

42%

Increase Moderately

41% Stay the Same

Stay the Same

B-to-C Companies Decrease Substantially 5%

Decrease Moderately 10%

Increase Substantially 15%

25%

Increase Moderately

45% Stay the Same

SURVEY QUESTION:

In comparison to 2011, your 2012 marketing budget will…





17

Marketers indicate their effectiveness is “Average” in comparison to their peers Marketing Effectiveness (By Business Model)

All Companies Exceptional

B-to-B Companies Exceptional 4%

Below Average

4%

14%

15% Above Average

Below Average

36%

Above Average 45%

37% 45%

Average

Average

B-to-C Companies Exceptional 5%

Below Average 15%

Above Average

35% 45% Average

SURVEY QUESTION:

How would you rate the performance or effectiveness of your function compared to others within your industry?




2012 survey results

18

INTRO

SECTION

1

SECTION

2

SECTION

3

Special Interest Topic: Demand Generation

SECTION

4





19

Marketers tend to consider their demand generation capabilities as “Average” in comparison to their peers Demand Generation Effectiveness (By Business Model)

All Companies

B-to-B Companies

Exceptional 2%

Below Average

Below Average Above Average

16%

Above Average

15% 30%

27%

55%

55%

Average

Average

B-to-C Companies Exceptional Below Average

6% 17% Above Average

22%

55% Average

SURVEY QUESTION:

How would you rate the effectiveness of your marketing department’s demand generation activities (driving awareness and consideration)?





20

The majority of respondents indicate that mobile marketing is their weakest demand generation capability Demand Generation Activities Effectiveness (All Companies)

100%

2% 23%

28%

5%

18% 22%

42% 50%

5%

50%

2%

2%

5% 17%

31%

23%

42% 44%

20%

25%

42%

55%

47%

52%

52%

27% 27%

25%

22% 22%

23%

19% 0%

36%

1%

8%

3%

11%

4%

Develop lead Clean and qualify Allocate spend Identify and Integrate social Integrate mobile Employ qualiﬁcation leads across demand integrate media tactics marketing tactics campaigns criteria with generation appropriate customized by Sales platforms content for each vertical stage of the buying cycle Do Not Use

SURVEY QUESTION:

Below Average

Average

Above Average

15% 3% Leverage customer segmentation

Generate new customer segments

Best-in-Class

How would you rate the effectiveness of your marketing department’s ability to execute the above demand generation activities?





21

B-to-B marketers are unhappy with the effectiveness of their mobile and social media marketing tactics Demand Generation Activities Effectiveness (B-to-B Companies)

100%

2% 22%

4%

2%

3%

7%

18%

20%

30%

29%

26%

20%

29% 42%

47% 50%

51%

41%

37%

48%

38%

56%

48% 42%

27% 22% 0%

24%

28%

29%

32%

20%

20% 4%

2%

9%

4%


SURVEY QUESTION:

Below Average

Average

Above Average

13% 4% Leverage customer segmentation


Best-in-Class






22

Integrating mobile marketing tactics is B-to-C respondents’ largest area for improvement Demand Generation Activities Effectiveness (B-to-C Companies)

100%

5% 21%

26%

21%

11% 6%

6%

11%

5% 16%

21%

17%

45% 32% 50%

48%

63%

61%

52%

44%

74% 53%

26% 44% 21% 11% 0%

16%

33%

16%

15% 5%

5%

16%

SURVEY QUESTION:

26%

6%


21%

Below Average

Average

Above Average

Leverage customer segmentation


Best-in-Class






23

Marketing is focused on activities involving segmentation and the value proposition Demand Generation Activities for 2012 (By Business Model)

All Companies Developing segment-specific campaigns (64%)

Developing qualification criteria collaboratively with Sales (61%)

B-to-B Companies

Refining the value proposition (64%)

Developing segment-specific campaigns (62%)

B-to-C Companies Developing segment-specific campaigns (72%)


Refining the value proposition (58%)


Identifying new segments (61%)



Enhancing contact database (56%)

Reevaluating target segments (50%)

Enhancing contact database (40%)

Improving lead cleansing (44%)

SURVEY QUESTION:

Reevaluating target segments (61%)

Which of the above demand generation activities does your marketing department intend to focus on in 2012 (check all that apply)?





24

Respondents in B-to-C companies are likely to use more email campaigns, while their peers in B-to-B companies rely on live events Media Mix for Demand Generation Activities (By Business Model)

All Companies

B-to-B Companies

B-to-C Companies

20%

20%

25%

5%

5%

5%

25%

25%

10%

10%

15%

10%

Email

Social Media

Live Events

Internet (search engine optimization)

SURVEY QUESTION:

What is the percentage mix of media tactics (listed above) associated with your demand generation activities (total must equal 100%)?




2012 survey results

25

INTRO

SECTION

1

SECTION

2

SECTION

3

SECTION

4

Respondent Demographics




26


Respondent Demographics Enterprise Type Venture Capital Hybrid 4% 6%

Business Model The majority of the respondents come from Public companies.

The majority of the respondents come from B-to-B companies.

B-to-C Company (Indirect) 23%

Private

B-to-C Company (Direct)

29% 60%

Public

6% 71% B-to-B Company

N = 144

N = 144

Company Revenue 40% 29% 24% 20%

20%

18% 9%

0%

SURVEY QUESTION:

N = 143 Below $100 Million



$1 Billion to $11 Billion

More than $11 Billion

Please indicate the type of enterprise, business model, and revenue that best represents your company.





27

Respondent Demographics: Top Five Participating Industries

Automotive and Transportation

22%

23%

Environmental and Building Technologies

25%

Chemicals, Materials, and Food

29%

Healthcare and Life Sciences

31%

Energy and Power Systems

0%

SURVEY QUESTION:

20%

40%

N = 144

Please indicate which region you are located in and which industry categories best describe your company (check all that apply).

