Here is a brief excerpt from an article written by David Edelman and Jason Heller for the McKinsey Quarterly, published by McKinsey & Company. They have much of substantial value to say to business leaders who are struggling to keep up with rapidly evolving consumer behavior. A truly digital marketing operation can bridge the divide between what customers expect and what they get. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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Marketing operations are certainly not the sexiest part of marketing, but they are becoming the most important one. With businesses unable to keep pace with evolving consumer behavior and the marketing landscape, the pressure is on to put marketing operations—skilled people, efficient processes, and supportive technology—in a position to enable brands to not just connect with customers but also shape their interactions.

When done well, we’ve seen marketing operations provide a 15 to 25 percent improvement in marketing effectiveness, as measured by return on investment and customer-engagement metrics. Yet achieving that level of improvement is elusive for many. While marketers are embarking on a wide array of “digital transformations” to reshape their operations and business models, many of these efforts are stymied by marketing’s difficulty in delivering on its aspirations. For example, one recent survey found an astonishing 84 percent of marketers do not have a formal content strategy or distribution process to feed their growing bevy of marketing channels, and they lack any kind of formally managed content supply chain.1 Despite this, content budgets continue to increase.

This situation played out at one global consumer-products company, which saw year-over-year content spending rise by more than 25 percent as a result of its efforts to become more customer-centric. There was, however, no unifying strategy, governance, or system to create cohesion, reuse assets, or measure effectiveness across the company’s complex supply chain, which consisted of dozens of agencies, production companies, and media partners, producing material for websites, blogs, YouTube, social media, mobile, and customer-relationship management.

Establishing a center-of-excellence function to develop and manage a consistent content operating model across divisions resulted in transparency, new governance, and improved processes. That cut the time to generate content, stopped the growth in costs, and brought new discipline into managing the impact of content. As a result, marketing return on investment has improved by more than 20 percent.

Five steps to bring marketing operations into the digital era

Digital marketing operations involve the application of capabilities, processes, structures, and technologies to cost-effectively exploit and scale the interactivity, targeting, personalization, and optimization of digital channels. As the example of the consumer-products company shows, marketing operations have a critical role in driving bottom-line growth. That capability directly enables the speed, agility, iterative development, experimentation, and responsiveness that successful companies need to react to and shape the marketplace.

Marketers are aware of what needs to be done, and many are taking action. But that often boils down to implementing new technology platforms, adding head count, or increasing digital allocations within the marketing-spending mix. While these are important steps, they won’t solve the challenge. Fundamentally, modern marketing operations call for the thoughtful, deliberate development of new processes, coordination, and governance. We’ve identified five attributes of effective marketing operations (exhibit).

[Here is the first of five steps that David Edelman and Jason Heller recommend.]

1. Truly understanding customers

Like any meaningful relationship, getting to know your customers well is a commitment. Tracking, analyzing, and interpreting customer behavior and attitudes should be an ongoing, often moment-to-moment undertaking that is critical not only to targeting and shaping relevant content and experiences but also to optimizing how they’re delivered—an important capability, given that during the buying process consumers add an average of 1.7 brands to those they are considering.2 This requires a wide range of data and sophisticated tools to analyze specific customer segments and their behavior to spot opportunities and predict future actions. Companies should map detailed customer decision journeys for their most valuable segments, using technologies such as ClickFox, which track customers across channels to not only determine their cross-channel behavior but also isolate those moments where companies can influence the journey.

Feeding these insights into marketing operations requires processes and teams that focus on collecting and making sense of the data, as well as quickly delivering the analysis in a digestible form to the right decision makers—often continuously. Scaling this capability means organizations need to automate processes that don’t require human intervention, for example, personalizing web pages, delivering e-mail, or generating dashboards for managers to track customer behavior.

Most companies are only at the beginning of creating comprehensive customer-insights programs. While establishing “war rooms” to monitor and react to social-media conversations is a good example of how companies are moving in that direction, what’s needed are organizations that integrate and make sense of all sources of customer insights. One global hotel chain, for example, has combined its customer-research group and marketing-analytics group in an effort to better understand its customers—specifically, those who engage with their marketing, stay in their different hotels, and spend their money once there. These two groups have been combined into one insights team that reports directly to the chief marketing officer.

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It’s sad but true: marketing operations have traditionally been overshadowed by sexier elements of the sales process. Yet as consumers become increasingly empowered and sophisticated in the way they make purchasing decisions, it’s never been more important to use data to map customers’ DNA, understand exactly what they want, and then take those insights to develop and deliver a superior (and flawless) customer experience. As outcomes go, we think that’s pretty sexy indeed.

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Here is a direct link to the complete article.

David Edelman is a principal in McKinsey’s Boston office, and Jason Heller is a senior expert in the New York office.