Here Boris Toma from McKinsey Marketing & Sales discusses how successful companies put together the teams and the capabilities to make agile marketing happen on a large scale.
We’ve all heard how digital technology allows marketers to engage in innovative new ways to meet customers’ needs especially through personalized content, messages, and offers far more effectively. But taking advantage of the new possibilities enabled by digital requires marketing organizations to become agile.
Agile, in the personalization context, means using data and analytics to continuously source promising opportunities triggered by customer activities, deploying tests quickly, evaluating the results, and rapidly iterating.
These trigger events – such as a search query or a click on site, tend to be relevant for a limited time, requiring quick reactions. A high-functioning agile marketing organization can run hundreds of campaigns simultaneously and multiple new ideas every week.
Fostering this kind of environment, however, requires rewarding people for trying and failing since personalization is still an inexact science despite all the technologies available.
The truth is, many marketing organizations think they’re working in an agile way because they’ve adopted some agile principles, 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.
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.
Real agility significantly 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.
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 to personalize their offers and communications in the following ways: 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.
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.
The most important element for success 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 business as usual (BAU) day jobs to work together full time and be co-located in a “war room”. The mission of the war room team, as these groups are sometimes called, is to execute a series of quick turn-around 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. Those people need to be identified ahead of time, and service-level agreements put in place that outline how quickly they will respond, wherever they are in the business.
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 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, creativity, UX design, or analytics, as needed. Working at the pace of agile may challenge an agency’s established work flows, but we have found that once they get into a 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.
Once you have brought together your crack team of marketing commandos, here’s a top line view of how they should be working together day to day:
Align with leadership and set 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 kick-off 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 BAU (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.
Analyze data to identify 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.
Design and prioritize tests
For each opportunity or issue identified, 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.
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.
Iterate ideas based on test 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 up 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 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.
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 up 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 on a large 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 operationalizing the findings more broadly. With credibility, it’s easier to add more agile teams.
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. 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.
Marketing executives contemplating change often speak of the challenge associated with overcoming BAU. By aggressively adopting agile practices, marketers can transform their organizations into fast-moving teams that continually drive growth for the business.
* The author would like to thank Mathias Kullmann, Steven Spittaels, and Jason Heller for their contributions to this article.
Boris Toma is an Associate Partner in McKinsey’s Marketing and Sales Practice and is based out of the Berlin office. He is a core leader of McKinsey’s EMEA Personalization @ Scale Service Line and serves global energy, automotive, and retail clients in their digitization and growth.Reblogged 9 months ago from www.clickz.com