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Published: January 13, 2012

 
 

A Collaborative Approach to Marketing

Expertise-based services require business knowledge and are usually kept in-house or in close proximity to the business units. Typical activities include social media marketing, customer insights, and campaign management. Harrah’s, now part of the Caesars Entertainment Corporation, for example, decided to centralize its expert services (Web 2.0 marketing and predictive analytics, among other operations) because they were at varying levels of maturity and had been inconsistently adopted at its casinos and other properties. Now, although the individual units still set their own business objectives, the center of expertise, called Studio One, is the gatekeeper for those services. To impose consistency, Studio One has developed and distributed common tools and templates for the units’ use.

Step 3: Lay the groundwork and design the future model. The different roles for corporate headquarters, the business units, and the marketing shared-services group need to be clearly defined. At Royal Philips Electronics, for example, a bold transformation a decade ago included migrating from a business unit–centric marketing model to a centralized operating model in which activities with the highest economies of scale and the longest time horizon, such as branding and customer or market research, reside at the corporate level; activities with high scale and a medium time horizon, such as direct marketing and trade shows, are assigned to the business sector or segment level; and activities with low scale and short-term results, such as campaign execution, are handled locally.

Automation across the marketing life cycle is essential to successfully implementing and sustaining many of the structural and process changes. Because many companies are playing catch-up on the technical front, leading companies are implementing a core customer relationship management system as the foundational tool and then adding bolt-on applications to support specific processes such as marketing ROI analysis and campaign management.

Companies should establish a governance body consisting of senior executives and key marketing stakeholders early on, to ensure executive buy-in and create a model that senior marketers are both invested in and accountable for. The group should be charged with setting the vision and strategy for marketing, and defining the modus operandi and decision rights for various stakeholders. It should review major investments and work with business units and regions to resolve conflicts. The governance body should also instill a pay-for-performance culture with service-level agreements and chargebacks — internal cost transfers to pay for marketing services. High quality and timely delivery are critical in building confidence in shared services among the business units, and a clearly defined service-level agreement between marketing shared services and the business units will help to ensure compliance. Separately, an effective chargeback mechanism provides cost transparency, enables business units to manage demand for shared-services involvement, and encourages spending efficiencies and accountability.

Developing a sound economic case for the model is essential. There are two ways to go about it. One is to obtain buy-in for the concept of developing a marketing shared-services group, set up the organization, and then go after the benefits over time. The other is to be very clear about the economics from the get-go and then manage the marketing shared-services group in a manner that keeps it on track. A solid business case should include an assessment of whether a service should be kept in-house or purchased externally.

Step 4: Devise a transition plan. A holistic but practical road map should start with an end state, and spell out intermediate steps to reach it. The transition can take several forms: Company leaders can begin with a few processes that are rolled out to business units globally, they can choose a region or market to pilot the concept, or they can select marketing services to be offered to a particular business unit. Executives can decide which approach to use on the basis of their business’s structure and past experience setting up shared services in other functions, such as human resources or finance.

 
 
 
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