Allison Watson, corporate VP-U.S. marketing and operations at Microsoft Corp., leads marketing and strategic development for the company's U.S. business, which generates about 40% of its worldwide revenue. In the following interview with CMO Close-Up, Watson talks about the challenges facing marketing organizations today and how marketing and IT can work more closely together to improve marketing effectiveness. CMO Close-Up: What are your top marketing priorities at Microsoft? Watson: Our priorities are really around the voice of the customer and hearing how the customer's voice comes forward in the use and the value that they get out of our software. That is a key marketing and selling priority that we have—the customer is at the center. The second priority is thinking about how the marketing division takes on direct revenue responsibility. More and more of our b-to-b revenue will come directly through our marketing efforts. So our priority is getting really good at marketing—not only at the top end of funnel, but marketing all the way to the bottom end of funnel and all the customer touch points along the journey. The third major area is about analytics and driving a new path to value. For us, we've made a major investment over the last four years in ensuring that we have data for all of the marketing and sales activities that we drive in the market; and now we have the ability to quickly deploy analytics as needs arise for decision-making. So we make better marketing investments, and faster marketing changes and times-to-market, so that we get to results. The final priority is what I call driving the social enterprise. With the advent of social media as an important lever in marketing, the concept of focusing on the social enterprise is one of how we use social media internally with our employees and externally in understanding how our customers act and react to our offering in the market. CMO Close-Up: What are the biggest challenges facing marketing organizations today? Watson: The business environment is such that every dollar of marketing investment is one that we're looking at carefully as a path to revenue, or satisfaction or other company goals. With the advent of two pillars—one being data and analytics, and the other being social—and the impact of customers making decisions in new ways and in a social environment, those two dimensions have radically changed how we market. So I think the challenge is, how do we harness analytics so that we drive dollars and value of marketing investment and how do we harness the power of the social world we are all living in today and target that against our marketing objectives. CMO Close-Up: How are you harnessing the power of social? Watson: One of the things we're using social for is—and we just did this with Volkswagen of America—we reached out as they were going through their deployment (of Microsoft Lync videoconferencing software), and we let their employees talk about the issues they were having in an open, and social and externally viewable environment. The employees enjoyed telling the story of their realizations of being able to work differently using this new technology, and it worked as a marketing vehicle for us, because other divisions of Volkswagen and other car manufacturers got involved in understanding what was going on in this one company and perhaps how they could work better as well with this new technology. So it's really about pulling the voice of the customer operating in a business environment [under] a social media lens, and letting people talk about what they are doing. CMO Close-Up: What is the relationship between marketing and IT at Microsoft? Watson: What I call the CMO-CIO bridge is one of the most important foundational items for today's CMO and today's CIO; and it's one of the top conversations I have when talking to peer CMOs in the marketplace. I had the fortunate opportunity for the last eight years, prior to taking on this role, in running the worldwide partner group for Microsoft, and that was a group that marketed and branded to 700,000 external global companies as part of Microsoft's channel. The way we connected with that organization was through IT-enabled assets. So we built tools, and systems and analytics to run that. I developed a strong relationship with our CIO through that process because we not only run marketing through that group, but we also run all the revenues that come through our channels and all of the incentives that go to those channels. It's a fairly significant supply chain IT project. So I developed a strong relationship with the CIO there and I have carried it over to this organization; and I think that is paramount for other CMOs in the industry. CMO Close-Up: How do you build a strong relationship between the CMO and the CIO? Watson: One of the things we've done is that we have a dedicated IT business unit that sits inside my organization but works for the central IT organization. By sitting inside my organization, they are able to develop goals and be close to the customer—the marketing department in this case—relative to the business and the activities we're trying to drive. So I think that is pretty critical and a big commitment from the CIO. The second major thing is, marketing had a scorecard that had business goals on it and the IT department had a scorecard that had IT goals on it. An example might be, I would want to reach a certain number of customers in a campaign and they would want to make sure that my tools were running 99.9% of the time. Well, those are both important goals, but you can have 99.9% uptime and never reach the right number of customers. So one of the things we had to do was establish a joint scorecard, and it ended up with fewer (goals) on each, but blended goals between the two groups and joint accountability; and that was a huge payoff. When we changed the executive review dialogue to one of joint business and IT goals, we really started to see transformation between how the teams were working together.