Making your marketing organization agile: A step-by-step guide
Everyone
wants to be “agile” these days. Here’s how successful companies put together
the teams and the capabilities to actually make it happen at scale.
An international bank recently decided it wanted to see how customers
would respond to a new email offer. They pulled together a mailing list,
cleaned it up, iterated on copy and design, and checked with legal several
times to get the needed approvals. Eight weeks later, they
were ready to go.
In a world where people decide whether to
abandon a web page after three seconds and Quicken Loans gives an answer to
online mortgage applicants in less than ten minutes, eight weeks for an email
test pushes a company to the boundaries of irrelevance. For many large
incumbents, however, such a glacial pace is the norm.
Demystifying agile marketing
We’ve all heard how digital technology
allows marketers to engage in innovative new ways to meet customers’ needs far
more effectively. But taking advantage of the new possibilities enabled by
digital requires incumbents’ marketing organizations to become much nimbler and
have a bias for action. In other words, they have to become agile.
Agile, in the marketing context, means using
data and analytics to continuously source promising opportunities or solutions
to problems in real time, deploying tests quickly, evaluating the results, and
rapidly iterating. At scale, a high-functioning agile marketing organization
can run hundreds of campaigns simultaneously and multiple new ideas every week.
The truth is, many marketing organizations
think they’re working in an agile way because they’ve adopted some agility
principles, such as test and learn or reliance on cross-functional teams. But
when you look below the surface, you quickly find they’re only partly agile,
and they therefore only reap partial benefits. For example, marketing often
doesn’t have the support of the legal department, IT, or finance, so approvals,
back-end dependencies, or spend allocations are slow. Or their agency and
technology partners aren’t aligned on the need for speed and can’t move quickly
enough. Simply put: if you’re not agile all the way, then you’re not agile.
For companies competing in this era of
disruption, this is a problem. In many companies, revenues in the segment
offerings and product lines that use agile techniques have grown by as much as
a factor of four. And even the most digitally savvy marketing organizations,
where one typically sees limited room for improvement, have experienced revenue
uplift of 20 to 40 percent. Agile also increases speed: marketing organizations
that formerly took multiple weeks or even months to get a good idea translated
into an offer fielded to customers find that after they adopt agile marketing
practices, they can do it in less than two weeks.
Making your marketing organization agile
isn’t a simple matter, but we have found a practical and effective way to get
there.
Putting
the team together
There are a number of prerequisites for
agile marketing to work. A marketing organization must have a clear sense of
what it wants to accomplish with its agile initiative (e.g., which customer
segments it wants to acquire or which customer decision journeys it wants to
improve) and have sufficient data, analytics, and the right kind of
marketing-technology infrastructure in place. This technology component helps
marketers capture, aggregate, and manage data from disparate systems; make
decisions based on advanced propensity and next-best-action models; automate
the delivery of campaigns and messages across channels; and feed customer
tracking and message performance back into the system. (It should be noted that
the tech tools don’t have to be perfect. In fact, it can be a trap to focus on
them too much. Most companies actually have a surfeit of tools.)
Another crucial prerequisite is
sponsorship and stewardship of the shift to agile by senior marketing leaders.
They provide key resources and crucial support when the new ways of working
encounter inevitable resistance.
While these elements are crucial for
success, the most important item is the people—bringing together a small team
of talented people who can work together at speed. They should possess skills
across multiple functions (both internal and external), be released from their
“BAU” (business as usual) day jobs to work together full time, and be colocated
in a “war room” (exhibit). The mission of the war-room team, as these groups
are sometimes called (though companies also refer to them by other names, such
as “pod” or “tribe”) is to execute a series of quick-turnaround experiments
designed to create real bottom-line impact.
The exact composition of the war-room team
depends on what tasks it plans to undertake. Tests that involve a lot of
complex personalization will need a team weighted more heavily toward
analytics. By contrast, if the agile initiative expects to run large numbers of
smaller conversion-rate optimization tests, it would make more sense to load up
on user-experience designers and project-management talent.
Whatever the composition of the team, the
war room needs to have clear lines of communication with other groups
throughout the organization and speedy processes to access them. For example,
buying marketing assets often requires procurement review and legal approval.
So the war-room team must have access to key people in legal and procurement to
negotiate any changes. At one bank trying to establish a war room, there was
significant resistance to providing representatives from legal and the
controller’s office because of competing priorities. But marketing leadership
knew their agile approach wouldn’t work without them, so it pushed with all
relevant leaders to make it happen. Those people need to be identified ahead of
time, and “service-level agreements” put in place that outline how quickly they
will respond. Similar models of interaction may be needed with IT,
compliance/risk and finance groups.
The team itself needs to be small enough
for everyone to remain clearly accountable to one another—8 to 12 is the
maximum size. Jeff Bezos famously referred to “two-pizza teams,” i.e., teams no
bigger than can be fed by two pizzas.
A “scrum master,” ideally with experience
in agile and often working with an assistant, leads the team. The scrum master
sets priorities, defines the hypotheses, manages the backlog, identifies
necessary resources, and manages “sprints” (one-to-two-week cycles of work).
Building out an agile war room will
require working in new ways with external agencies, adding depth in key
resource areas such as media buying, creative, and UX design, or analytics as
needed. Working at the pace of agile may challenge an agency’s established
workflows, but we have found that once they get into the rhythm, the
performance boost justifies the change in procedures.
The marketing organization’s senior
leaders will understandably need to oversee the activities of the war-room
team. But they ought to interact with the team in a lightweight manner—once
every three or four weeks, for example. Automated dashboards with key metrics
can help provide leadership with transparency.
Reading about what war-room teams do, one
might think agile practices apply only to direct-response marketing activities.
But agile methods can improve the performance of product development, marketing
mix, and brand marketing as well, by providing more frequent feedback, allowing
for testing and iterating of ideas and communications in market, and
accelerating the process for delivering impact from brand efforts.
Step-by-step
overview of what an agile team does
Here is how an agile team works:
Aligns
with leadership and sets team expectations
Once the war-room team is assembled, it
works with the leaders of the marketing organization and other key stakeholders
to align everyone on the initiative’s goals. After that, the war-room team has
a kickoff meeting to establish clearly that former ground rules and norms no
longer apply and to articulate the agile culture and expectations: deep and
continuous collaboration; speed; avoidance of “business as usual”; embracing
the unexpected; striving for simplicity; data-trumping opinions;
accountability—and above all, putting the customer at the center of all
decisions.
Analyzes
the data to identify the opportunities
By its second day, the team ought to be up
and running and doing real work. That begins with developing insights based on
targeted analytics. The insights should aim to identify anomalies, pain points,
issues, or opportunities in the decision journeys of key customer or prospect
segments. Each morning there is a daily stand-up in which each team member
gives a quick report on what they accomplished the day before and what they
plan to do today. This is a powerful practice for imposing accountability,
since everyone makes a daily promise to their peers and must report on it the
very next day.
Designs
and prioritizes tests
For each identified opportunity or issue,
the team develops both ideas about how to improve the experience and ways to
test those ideas. For each hypothesis, the team designs a testing method and
defines key performance indicators (KPIs). Once a list of potential tests has
been generated, it is prioritized based on two criteria: potential business
impact and ease of implementation. Prioritized ideas are bumped to the top of
the queue to be tested immediately.
Runs tests
The team runs tests in one- to two-week
“sprints” to validate whether the proposed approaches work—for example, does
changing a call to action or an offer for a particular segment result in more
customers completing a bank’s online loan application process? The team needs
to operate efficiently—few meetings, and those are short and to the point—to
manage an effective level of throughput, with a streamlined production and
approval process. One team at a European bank ran a series of systematic weekly
media tests across all categories and reallocated spending based on the
findings on an ongoing basis. This effort helped lead to more than a tenfold
increase in conversion rates.
Iterates
the idea based on results
The team must have effective and flawless
tracking mechanisms in place to quickly report on the performance of each test.
The scrum master leads review sessions to go over test findings and decide how
to scale the tests that yield promising results, adapt to feedback, and kill
off those that aren’t working—all within a compressed timeframe.
At the end of the each sprint, the
war-room team debriefs to incorporate lessons learned and communicate results
to key stakeholders. The scrum master resets priorities based on the results
from the tests in the prior sprint and continues to work down the backlog of
opportunities for the next sprint.
Scale
across the organization
Getting a single war-room team up and
running is good, but the ultimate goal is to have the entire marketing
organization operate in an agile way. Doing this requires a willingness to
invest the time and resources to make agile stick.
The first step in scaling is building
credibility. As the war-room team works its way through tests, the results of
agile practices will begin to propagate across the marketing organization. For
each test that generates promising results, for example, the team can forecast
the impact at scale and provide a brief to the marketing organization, with
guidelines for establishing a series of business rules to use for activities
and initiatives based on operationalize the finding more broadly. With
credibility, it’s easier to add more agile teams; one global retail company we
know has scaled up its operations to include thirteen war rooms operating in
parallel.
As companies add new war rooms, it’s
important that each one be tightly focused on a specific goal, product, or
service, based on the business goals of the company. Some companies, for
example, have one team focused on customer acquisition and another on
cross-/upselling to existing customers. Others have teams dedicated to
different products, customers segments, or junctures in the customer journey.
We recommend adding agile teams one at a
time and not adding new ones until the latest is operating effectively. As the
number of teams grows and their capabilities increase, they can begin to expand
their focus to assume responsibility for establishing business rules and
executing against them. That systematic approach not only gives each new team
intensive support as it comes online; it also allows business leaders to
develop the kind of metrics dashboard it can use to track and manage
performance for each team. This “control tower” helps to align resources as
well, share best practices, and help break through bureaucratic issues. By
scaling up in this way, the control-tower team has the opportunity to bring
along all the supporting capabilities for marketing, everything from customer
management to analytics to procurement, so that they operate at higher speeds
as well.
A North American retailer established an
agile marketing control tower and several war rooms to scale personalization
across all key categories. The control tower ensured that the hundreds of tests
run each year did not conflict and that the right technology was in place to
collect appropriate data from the addressable audiences and to deliver a
personalized experience across categories and channels. The war rooms each focused
on systematically testing different media attributes and optimizing conversion
on the company website across categories. After eighteen months, the retailer’s
marketing-campaign throughput had grown four-fold, its customer satisfaction
had increased by 30 percent, and digital sales had doubled.
As promising test findings become business
rules, and as the number of war rooms grows, insights generated by agile
practices will shape an ever-larger percentage of the organization’s marketing
activities.
Marketing executives contemplating change often speak of
the challenge associated with overcoming business as usual. By aggressively
adopting agile practices, marketers can transform their organizations into
fast-moving teams that continually drive growth for the business.
By David Edelman, Jason Heller, and Steven Spittaels
http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/making-your-marketing-organization-agile-a-step-by-step-guide?cid=other-eml-alt-mip-mck-oth-1611
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