By replacing spreadsheets and integrating data from sales, operations, and supply chain, EPM gives marketers the needed insight to manage price, product, promotion and place.
A good reason to adopt EPM is to do a better job of revenue planning. An even better reason is to do a better job of marketing. Important as revenue is to enterprise performance, it is in fact just one outcome or key performance indicator (KPI) of marketing. Furthermore, it is only one of marketing’s KPIs and sometimes not even the most important. Other marketing KPIs include revenue growth, margins, profitability, and market share. In fact, some companies intentionally underperform for years on revenue and margins so they can outperform on market share. Amazon and Uber are prime examples.
By definition, marketing is what drives marketing outcomes. And what drives marketing — as taught in any first semester marketing class — are the four Ps of price, product, promotion, and place. Based on the targeted marketing outcomes, it is marketing’s job to figure out the right:
- Price at which to sell the product
- Mix of product features (and sometimes products) offered at each price
- Mix of promotional activities with which to support each offering
- Places (i.e., channels) where to sell each offering
For most marketers there are potentially an unlimited number of variables and possible combinations to consider when looking for the optimum strategy. For example, a retail company may decide that overall profitability will be higher if it sacrifices margin on individual products by packaging complementary products together as a bundle rather than sell them separately at higher prices. That may work, for example, if some of the products are not selling well by themselves and there is an oversupply of them in inventory.
To make decisions like this, marketers want to know a number of key data points. For example, they might want to know how many of what items were in inventory, how many were on order or had already been shipped by suppliers, how the various items were selling in the different channels, what customers or channel partners were saying about the various products, the status of substitute products in development, and so on. If the business is not a retailer, but rather a manufacturer, the problem may be much more complex — say, if rather than just data on finished products these decisions also call for data on product parts, production schedules, manufacturing materials, and so on.
A Daunting Marketing Challenge
Making those decisions can be a daunting challenge for reasons that include:
- The speed with which decisions must be made as market windows continue to close faster
- The vast amount of data required to be extracted from multiple disparate sources (e.g., CRM, ERP, financial accounting)
- That disparate data must be repurposed — as in reformatted, integrated, correlated, factored, and synthesized
- That data can’t just be presented, but must be made actionable such as through dashboards, scorecards, and storyboards that are meaningful to the marketer
How then without EPM are marketers supposed to do this? With spreadsheets? Spreadsheets are often adequate for ad hoc analysis of small amounts of data. Marketers, like almost everyone else in business, have been using spreadsheets for years and so are familiar with them. That said, it is very difficult to gain insight just by looking at rows and columns of numbers — especially for very large datasets. Furthermore, spreadsheets require a tremendous amount of error-prone manual work to become actionable — connecting to disparate data, repurposing data, and visualizing data. Formulas are prone to break; numbers are easy to duplicate, transpose, or be omitted. Thus, decision-making is significantly slowed, which makes it hard to exploit fleeting windows of opportunity in time when they appear — and some opportunities may never appear at all given how hard it is to get insight from spreadsheets in the first place.
More Power for Everyone
EPM, on the other hand, was purpose-built to streamline and enhance marketers’ decision-making power. It automates the arduous tasks of connecting, repurposing, and presenting data for analysis. It also facilitates collaboration among stakeholders with whom marketers must interact, first to decide what to do and then to do it. If marketing’s decisions will impact other stakeholders, such as in sales, operations, or finance, then those stakeholders will want to be consulted. To confer buy-in they’ll want to see the same analysis that marketing sees and be able to work on this data for themselves. Accordingly, EPM includes self-service tools that make collaboration fast and easy across domains that speak different languages and have different perspectives.
Ultimately, that is what makes EPM such a great marketing tool — it is not just a marketing tool. It exists to boost enterprise performance. So, it naturally serves marketers looking to bring the whole organization to market, not just products.