Should Your Organization Create a Demand Center?

As the annual planning season begins, we have been conducting an increasing number of conversations on organizational design. Especially in the Europe, Middle East and Africa (EMEA) region, where CMOs have identified growth in a tough economy as the number-one priority for their teams, the question of how to balance regional and local resources remains critical.

Resource balancing often makes people feel a little uncomfortable, as the word “restructuring” immediately comes to mind. Indeed, research shows that on average, organizations restructure every 2.5 years and often achieve little gain for all the pain they go through.

Maybe such restructuring efforts are suboptimal right from the start because organizations are focusing their efforts on the wrong question: centralization vs. decentralization.

Instead, SiriusDecisions suggests that organizations explore the suitability of a demand center approach. A demand center is a central and/or regional hub of shared marketing services, infrastructure and processes. It enables organizations to bring programs to market by leveraging key corporate assets and best practices. Think of the demand center as a hybrid of centralization and decentralization, incorporating a pragmatic center-of-excellence approach.

We recently conducted an EMEA-specific demand creation study, surveying more than 400 organizations across EMEA and collecting 635 individual responses.

Here is what we found when we compared the results of organizations with a demand center to the results of organizations without one:

1. Marketing mix evolution. By 2015, inbound marketing will become the number-one marketing category spend at organizations with a demand center. For organizations without a demand center, outbound will remain the number-one category. SiriusDecisions estimates that by 2015, more than 70 percent of leads will come from inbound marketing. A demand center model will enable organizations to rapidly embrace digital marketing and respond to changing B2B buying behaviors.
2. Content optimization. Organizations without a demand center must locally create 61 percent more content than organizations with a demand center.
3. Field marketing evolution. At organizations without a demand center, field marketing drives 75 percent of the required campaign adaptation, whereas in organizations with a demand center, field marketing drives only 35 percent of adaptation. This change is not about shifting power to the demand center, but about freeing up time for local marketers to become more involved in areas of increasing importance – like pipeline acceleration and local account-based strategies, to name a few.
4. Teleprospecting. Organizations with a demand center almost doubled their use of teleprospecting. When applied correctly, teleprospecting capabilities can improve demand creation efforts.
5. Marketing automation platform (MAP) adoption. Organizations with a demand center reported higher levels of MAP adoption than organizations without a demand center (22 percent adoption vs. 5 percent). In an era when organizations must execute integrated and buyer-centric marketing programs, having a MAP in place is no longer optional.

Although our data suggests that a demand center model can deliver significant benefits, there is not a one-size-fits-all implementation approach. Organizations must address a number of critical implementation decisions, which I will discuss in my next post.