Marketing Operations: The Strategic Benefits and Impressive ROI
- Marketing Operations integrates processes, metrics, data and technology to connect the dots between marketing strategy and business outcomes. And that directly improves the business outcomes.
- Research findings show clear and measurable benefits and payback. McKinsey reports that marketing operations deliver 15 to 25 percent ROI improvement.
- Larger companies operate Managed Ops about twice as frequently as midsize companies and over three times more frequently than smaller companies. However, the benefits are equally available and no less important to small and midsize businesses.
Marketing Ops is a broad term.
While marketing operations management (MOM) is widely adopted, at least among larger companies, a shared definition remains elusive.
I did some googling and the most popular definition is the assembly of people, processes and technology. That description makes me want to throw up. It's vague and ridiculously broad.
Is there any part of the marketing organization, or any group within any company that isn't composed of people, processes and technology? Not that I know of.
So, in the absence of a consensus description, I'll share our definition of Marketing Operations, which is a group of specialists that optimize business processes, marketing technology and business development reporting for the rest of the organization. That allows other groups to focus on their core missions.
There's no fixed scope of services so this group may selectively bring specialization to functions such as marketing strategy, demand generation or campaign management. However, I've been implementing these groups with clients for about two decades, and I find that processes, technology and reporting are by far the most universally adopted services.
Marketing Ops Versus Center of Excellence
I'm a believer in starting with clear context. If you can't define something you are unlikely to implement or benefit from it. So, I think one more comparison point is needed to ground an operational description.
The Marketing Ops term was originally coined by IDC in 2005. In started gaining mainstream adoption in about 2009. Since then, the Marketing Center of Excellence has entered the operational lexicon.
Kind of like Marketing Ops, the Marketing Center of Excellence lacks consensus definition. But based on real-world application, the two are distinct. Below are some of the differences.
- The intent is centralize to standardize.
- More of a shared services operation.
- Despite the rhetoric, there is more focus on efficiency (cost savings) than effectiveness (performance improvements).
- Despite the opportunity for integration with other business units, it tends to be marketing centric and operate almost entirely within the marketing organization.
Marketing Center of Excellence (CoE):
- The intent is to centralize to scale; to achieve a force multiplier performance effect by providing services and insights throughout the company.
- It's more focused on effectiveness (more leads, more revenue contribution, higher marketing ROI) than efficiency.
- It's benchmark driven to achieve slated and measurable performance improvements; quite often to achieve Best-in-Class performance levels.
- It tends to integrate more with Sales, Finance and other lines of business. It has more cross-functional collaboration, coordination, communication, and reporting.
- This group tends operate advanced assets, such as a marketing engine.
Many companies take a steppingstone approach and begin with Marketing Ops and later advance to a Marketing Center of Excellence.
Process optimization, technology automation and information reporting impact every part of the organization. Assigning these functions to centralized specialists creates a foundation for excellence that increases performance, speed and scale.
But those are not the only benefits.
According to Gartner, “The Marketing Operations internal benefits are obvious, and include:
- Enabling management to run marketing like a business and deliver the right programs on-time and on-quality
- Achieving financial objectives and increasing ROI by using resources more efficiently, and
- Marketing earning a seat at the c-suite table by delivering customer intelligence and strategic insights to the executive team and enabling sales to be more productive sellers.
Our experience with clients corroborates the above benefits, but there are more.
These groups also improve collaboration, within and outside the marketing department. These groups tear down departmental siloes, increase performance transparency and convert data from an unused by-product to the company's most valuable asset.
And possibly most importantly, they integrate processes, metrics, data and technology to connect the dots between strategy and business outcomes. And that directly improves the business outcomes.
It's Not Just for Big Companies
So, who are the best candidates for marketing ops?
This specialist group is common in big companies and more common in B2B industries. They are pervasive in certain industries such as technology, professional services and financial services.
They are less popular in small companies. Our experience is that when companies reach $15-20M in annual revenues they have the staff and the infrastructure to form a Marketing Ops team and achieve a double digit increase to marketing ROI.
Even small companies incur problems such as leaky funnels, manual processes, underutilization of technology, disparate data siloes and a lack of data-driven decision making. These are typical problems remedied with Marketing Ops.
Smaller companies that want to get ahead of the growth curve have some unique considerations. Instead of a marketing ops team, they may start with a Marketing Ops Manager. Instead of optimizing multiple functions, they may focus on one or two. Over time, the Manger can grow the team by hiring a business analyst, a marketing technologist or other specialist.
Factors beyond company size also apply. For example, growth companies adopt Marketing Ops early irrespective of their size. Perhaps that's why they are growth companies.
While company size is an easy indicator to understand, the best indicators are companies that seek the benefits shared in the above section.
If the benefits look right for you, or you would like to learn how to implement a Marketing Ops organization, consider our 3-step Marketing Operations implementation framework.