A black hole. That’s how most finance chiefs like to describe their marketing departments. Taking up much of a company’s discretionary spend, marketing departments have come under fire for years for being free-wheeling spenders that shirk any attempts to instil the sort of financial rigour and analysis that CFOs demand of other functions.
That may be unfair on the creative types, but to stave off criticism marketing departments have turned to technology to help them adopt a more scientific approach to what they do. A relatively new suite of software, marketing resource management (MRM) serves several purposes to this end. (See “Marketing Accountability” later in this article). First, it automates a host of tedious administrative tasks, from pushing draft proposals through an approval process to monitoring spending, which divert creative resources. Second, and perhaps more important from a CFO’s perspective, MRM aims to bring greater visibility and discipline to marketing by moving a lot of their work into online databases, which can be accessed by other parts of the company. And software vendors say that some of the tools bring CFOs closer to what they’ve long been looking for: a measure of marketing ROI.
Consultants at Giga Information Group say a standard “best of breed” MRM suite costs between €450,000 and €600,000. Individual stand-alone modules—analytics, workflow and campaign management, to name a few—are about €100,000 each. After the roll-out, MRM users should see a return of between 10% and 20% in a year and can see returns of up to 85% if they integrate MRM successfully with other systems, according to Gartner, another IT consultant.
Marketing departments certainly need the help. A survey earlier this year of 350 marketing professionals world-wide by consultancy BrandWizard Technologies found that 70% of respondents say most if not all of their work is done manually. The lack of automation has only made a tough situation tougher as the message being sent these days by corporate bosses to their marketing teams is to do more with less.
Tough times at Atlet, a SKr1.3 billion (€139m) Göteborg, Sweden-based maker of forklift trucks, made the introduction of MRM an imperative. In a difficult market, operating profit fell 25% and revenues 8% in the last financial year. That meant marketing’s budget was among the list of areas that needed to be pruned.
But, says Jerry Stridh, marketing support manager at the company, “despite the budget cut, we were able to do the same amount of marketing as always.” A lot of the credit, he says, goes to the MRM software that it had recently rolled out.
Before MRM, all of Atlet’s marketing materials—advertisements, specification sheets, technical documents and the like—were produced centrally in Sweden and shipped to the company’s retail network covering 30 countries. More often than not, by the time salesmen received marketing materials, they were out of date.
Since last year, Atlet’s marketing information is based online via an MRM tool called MarketStore from Citat, a Swedish software vendor and consultancy. Local retailers can call up specification sheets and sales materials tailored to customer queries and, if necessary, have customised marketing materials printed locally by downloading the requisite documentation from the web. This just-in-time approach to customer service has lifted a great burden from the central marketing team, who used to spend most of their time fielding requests from retailers. Stridh reckons the annual direct cost savings are around SKr1m.