LOS ANGELES -- Speaking at last week's Siebel User Week, Hewlett-Packard Co.'s Mike Winkler uttered the words marketers...
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across the country would love to hear.
"When you get to the point of marketing running strategy, then you're on your way to being a customer-driven enterprise," Winkler, chief marketing officer at Palo Alto, Calif.-based HP, told thousands of CRM professionals.
HP, the biggest user of Siebel CRM and marketing resource management (MRM) tools, underwent a massive marketing transformation in the wake of its merger with Compaq two years ago. When it began, there were 86 different marketing departments, each with its own budget and resources and the company had no idea of the total marketing spend, Winkler said.
So HP set about remaking its marketing operation under a new approach toward results-based, data-driven, customer-centric marketing.
"It's led to a focus on the customer we've never had before," Winkler said.
Winkler cited a Gartner study that suggests that by 2007, companies that have devoted 50% of their time to customer-centric marketing approaches will receive a 30% greater ROI than their peers. In part, customer-centric marketing means looking beyond an organization's market share and at different market segments a company can own, Winkler said.
HP has customers ranging from 1,000 worldwide companies to small and medium-sized businesses to millions of consumers, and the company's consumer side is driving marketing and serving as an example to the SMB and enterprise initiatives, Winkler said. With the Siebel MRM initiative, all segments are speaking the same language when it comes to campaigns, initiatives and programs, he added.
"There was a view that marketing never gets any respect," Winkler said. "The reason marketing never gets any respect is that marketing is not held to the same standards as someone like the product management group."
To bring respect to marketing, Winkler suggests, companies should provide ways to measure marketing success and hold the department accountable to goals. MRM coupled with analytics have helped HP achieve this goal. Analytics increased the accuracy of forecasted expenses and measured a program's effectiveness by showing ROI.
"The other thing MRM does is it makes you friends with the CFO who used to be your arch enemy," Winkler said. "There's nothing the CFO likes more than measurement."
Following the merger with Compaq, HP was faced with multiple platforms, legacy systems and a lack of continuity between marketing departments. The company went through a 100-day "Achieve More with Less" initiative to consolidate systems and redundancy. In one example, HP went from using 106 different ad agencies to two, Winkler said. Similarly, the company underwent "Operation One Voice" taking marketing to all customer touch points of the company, thereby reinforcing the company's brand. And, as Winkler noted in his address, no matter what survey you read, brand is invariably in the top three factors that drive loyalty.
In September 2003, HP elected to use Siebel Marketing 7.5.3 and implementation began in March. IT welcomed the project because it simplified its life with just one system, Winkler said. In fact, spending on the MRM platform is less than 1% of the $3 billion spent on marketing, he said. HP is also on track to completely integrate the CRM and MRM tools by December, which will prove particularly helpful with Sarbanes-Oxley compliance, he added.
The operation has reduced total spending by more than 10% while doubling spending on brand building and demand creation, Winkler said. In the past two years, HP's brand has improved by 21%, according to New York-based Interbrand Corp., a brand measurement firm. The "One Voice" initiative eliminated 600 vendors and saved the company $100 million.
"We're still on a road where we design everything toward customer experiences," Winkler said.
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