Professor John McCann
Fuqua School of Business
Firms have long realized the need for an information strategy that conforms with and supports their business strategy. This note concerns the need for a marketing and sales information strategy. The theme of this note is that this strategy must match the reality of the nature of marketing and sales as they are practiced today, and will be increasingly practiced in the future.
Ten years ago, providing computer support for CPG sales and marketing organizations was a simple process. Product managers were assigned the task of understanding and influencing consumers, and sales managers the task of understanding and influencing customers. The only available computing tools were central processors that contained data about geographical markets. Because these data provided a limited view of consumer and customer behavior, the computers that housed the data were a minor player in the marketing and sales processes. If anyone in the firm wanted to understand a customer, she or he would engage the appropriate sales manager in a live or telephone conversation. Similarly, understanding the mass consumer market or market segments would flow from conversations with the appropriate product manager.
This highly centralized and hierarchical practice of marketing and sales has given way in almost all firms to a much more decentralized and diffused practice. More and more people are getting involved in the practice of marketing and sales, in the practice of understanding and influencing customers and consumers. We have seen the rise of trade marketing departments, consumer promotion departments, and direct marketing departments, as well as the increase in the use of outside consultants in all aspects of the marketing and sales processes.
One of the driving forces behind this diffusion is the advent of scanner data and its relentless march towards store-level, real-time data. Ten years ago, audit and/or warehouse withdrawal data provided a few measures on broad geographies and time periods. This evolved to hundreds of measures on 60 markets on a four-week basis, and then to weekly account-level data on hundreds of retail firms. There was no way that a few centralized marketing and sales managers could make use of these exploding data to understand and influence customers and competitors; there are simply too many markets for a few people to understand and influence. Hence, the diffusion of marketing and sales was inevitable.
Just over the horizon are daily store-level data that are combined with measures about the consumers who shop in those stores. In the not too distant future, the information highway will lead to large databases on the preferences and purchases of hundreds of millions of consumers around the globe. Thus, we have only seen the "tip of the iceberg" of the need to access data about customers and consumers.
This diffusion of marketing and sales throughout the firm is viewed by most leading consultants and academics as a positive development because it is moving firms towards being truly customer focused. In an ideal customer focused firm, everyone has the responsibility of understanding 1) the customers and consumers, and 2) how their own actions will influence these customers and consumers.
Consider an example. Person A accesses data in a central database and draws a tentative conclusion about a customer. Based on this understanding, person A is ready to take an action designed to influence the customer. But first, person A checks his conclusion with person B because that person is known to already have a high level of understanding of the customer. This dialogue results in a new level of understanding about the customer that neither A or B had before the conversation. In this instance, the insights generated from the database were combined with existing insights to produce new insights. If this discussion were private, then considerable extra work would be required to make the logic and conclusions available to others in the firm.
In the "old days," it was not important that these other people have access to this dialogue because it was simply none of their business. At least it was thought to be none of their business. But in a customer focused firm, this dialogue should be available to everyone because it is everyone's job to understand the customers.
In addition, if this dialogue has occurred in a public forum, then it could have been a much richer dialogue because anyone who had knowledge about the topic could join in. Perhaps person C, a person who is an expert on the data that were used by person A, could provide valuable insights on those occasions when there is a question about the meaning and appropriate uses of the data.
This will still be an accurate view, but a limited one. We will still need those numerical databases, and they will continue to explode in size. But we must also recognize that the insights that flow from those numbers are more important than the numbers. The understanding of customers and consumers is more important than the numerical measures on those customers and consumers. The insight that "I can get Vons to move 4 weeks of volume by ..." is more important than "2343 543334 33.33 1132". Or, the insight that "We cannot get more than a 20% retail price cut without getting both a feature and a display" is of much more importance than the underlying numbers that led to this insight.
Thus, a marketing and sales information strategy must recognize the need to include textual information. More broadly, we must recognize that most of this textual information will flow from many people, as opposed to the numerical information that flows from only a few people. Thus, the information strategy must accommodate the inputting of information by anyone.
But we should not stop in our definition of information by including text in addition to numbers. It is a simple matter today to input pictures and other images, pictures of customer conditions such as an innovative end-aisle display in a retail store.
Further, the "influencing" part of sales and marketing tends to be a very image oriented practice involving sales presentations, video and audio. Thus the marketing and sales information strategy must include all forms of media; it must recognize the multimedia nature of information.
This sections further develops the theme that a sales and marketing
information strategy should recognize the emergence of information
in multiple formats (i.e., multimedia) and information that gets
placed into the computers by managers, professionals, customers,
Notebook computers are getting increasingly powerful, to the point where professionals and managers are beginning to adopt them as their preferred platform. Developments at IBM and other industry research laboratories are leading to rapid advances in the size and capability of storage media. We see projections of 6 gigabyte CD ROM drives in the near future, and 10 gigabyte, 2.5 inch hard drives by the year 2000. The real impact of these speed and storage advances will be the increasing use of multimedia on portable computers, thus leading to a world where sales and other marketing presentations are made with multimedia computers.
Running parallel with the rise of multimedia is the deployment of a high bandwidth communication infrastructure that will enable the rapid rise of videoconferencing as a means of communication among small groups of people, which is the nature of most sales and marketing presentations. The multimedia notebooks and desktop computers will be equipped with small cameras, thus permitting personal videoconferencing anywhere, anytime. This means that multimedia sales presentations, for instance, can occur without the cost of a sales person traveling to a buying office. And, this sales presentation can include anyone in the company who has something to say about the issues raised in the presentation.
Today's bulletin boards, FAX message, telephone voice messages, and groupware applications will quickly evolve to the point where any issue, problem, opportunity, or question can be addressed with any digital media (text, audio, video, image, animation), anywhere, anytime. Whereas telephone and videoconferencing require people to be connected at the same point in time, discussion forums permit the interactions to take place among people who are separated in time. These forums will be a place where a lot of the firm's knowledge will be made public ... the knowledge that resides in the brain's of the firm's employees, suppliers, partners, and customers. And, forums will be places where new knowledge is generated via the interactions among people.
The telephone and cable companies are investing billions of dollars to bring about interactive television. Although there is a hot debate about whether these services will be delivered via television sets or personal computers, it is inevitable that we will soon see widespread deployment of interactive services. By definition, this means that consumers will be able to input information into the network, and some of this consumer-generated information will find its way into the firm's information infrastructure. In addition, firms will be developing and deploying advanced versions of today's infomercials as a means of interacting with consumers. These infomercials are another incarnation of multimedia and will thus need to be incorporated into the firm's information strategy.
Today's Internet is a precursor of a world in which all computers are connected into a web that permits an individual to get information from any other computer as needed. This access can occur from computers located anywhere: home, office, boat, airplane, or mountain top. And, the information can be in an media. It is a new network model, one that transcends the current client/server model to bring about a server/server model in which each computer can serve information to any other computer connected to the web. Thus millions of the world's computers can be thought of as elements of a firm's information infrastructure. Millions and millions of computers. This is a model that is hard for most people to easily grasp because it is so different from the computer architecture that is in place in most firms. Today, it is common for the firm to tightly control the computers and information that it owns. That will remain true in the future because there is no reason for a firm to share all of its corporate assets. But we can see today that there is information that one wants to share with others, and thus make available on this web ... Information about its products and its services. Firms spend millions of dollars today trying to get that information into the minds of its customers and consumers. Similarly, these customers and consumers will be making information available, information about there needs and wants. In a similar way, consulting firms will make available there services on this web of computers.
"Winners and losers will be determined by the incremental differences in companies' abilitites to acquire, distribute, store, analyze, and invoke action based on information." (Davidow and Malone, The Virtual Corporation, 1992)