Bloghound

General Electric values these two marketing competencies over all others, according to CMO Dan Henson, who spoke this week at the CMO 2007 conference:

1. Segmentation, particularly down to very granular level.

2. Ethnography. Helps in finding innovative ideas, fueling GE’s “Imagination at work” focus.

Lauren Flaherty, CMO of Nortel and former IBM marketing executive shared her thoughts on what it takes to be a “21st Century CMO” at this week’s Red Herring CMO 2007 Conference:

1. Lives by fact-based decisions. Measure whatever you can. Benchmark to know who is best in class. Shift from historic to predictive insight.

2. Creates organizational excellence. First the who, then the what. Know where ball is moving and what skills you’ll need for what’s coming. Talent is a top priority. Get organizational hygiene in place.

3. Is a partner to sales. Does sales have the right tools for an engagement and dialog model with customers?

4. Drives business and growth. CMOs must be oriented to revenue. Identifying new sources of revenue. Forging alliances to fuel momentum. Being at the door of business units, pushing and driving ideas forward.

5. Is a chief architect of the business. Create agenda for CEOs internally and externally. Champion the voice of the customer. Help the organization stay centered on the customer and on the future.

At this week’s Red Herring CMO 2007 Conference in Carlsbad, California, chief marketing officers agreed that their role has substantially changed — as has what CMOs are being held accountable for.

All the CMOs who spoke — from companies including GE, Nortel and Google — said that their number one priority is increasing revenue, and that every marketing activity today must be measurable in a way that aligns with business goals, particularly revenue, growth and improving the customer experience. Dashboards tracking marketing’s impact on key business goals is a fundamental, said the CMOs.

They also concurred that the role of CMOs today is more of a strategic partner to the CEO on how to move the business ahead. More of a chief architect, less of a programs manager.

Other highlights:

Kathryn Hanson, CMO of Red Herring, presented a the results of a survey, “What Keeps CMOs Up at Night.” Top strategic priorities: driving revenue, changing brand perception, custom acquisition, aligning sales and marketing, and aligning marketing across geographies.

CMOs Lauren Flaherty of Nortel and Dan Henson of GE stressed the need for more predictive insights and analytics. “It’s about the headlights not the taillights,” said Flaherty. “You’ve got to measure real time, looking at the future not historical data. That’s why Tracking studies don’t provide value.”

Why CEOs replace their CMOs: According to Tom Seclow of search firm SpencerStuart, CEOs almost always say, “The CMO didn’t get anything done. And they didn’t get buy in in the organization.”

Red Herring CMO Conference

Marketing runs on technology today — but what will it take to get the marketing and IT organizations to work together more collaboratively?

A new paper, “The New Marketing - IT Power Partnership,” by David Bond, head of business and IT strategy at Sapient, and Mark Jeffery, associate professor at Northwestern University’s Kellogg School of Management looks at why aligning the two functions is especially critical today, what commonly gets in the way, and ideas on best practices from marketing executives at Hyundai, Celebrity Cruise Line, Nissan, and Vodafone.

I found Steve Wilhite’s comments especially insightful (he’s the new COO of Hyundai America.) He believes that while downstream changes (new channels, consumer generated media, etc) are really changing marketing, “upstream changes may be even more dramatic.” By upstream he means things like product development, time and cost to market,, new ways to hardwire customer insights into the business. Areas , perhaps, that deserve more attention than Web 2.0.

He also cautions marketers not to be seduced by transactional campaign data. “Some of the technology allows for very rapid learning and feedback, but it can take you down a very destructive path. For example, if you see how a campaign can considerably generate a certain kind of lead generation or dealer visits within certain costs, you’re tempted to keep doing that. However, transactional data can lure marketers away from investing in more strategic initiatives like building a foundation for demand creation.”

(Full disclosure: I worked with Dave and Mark in this project.)

Here are our observations on marketing trends to watch — and experiment with — in 2007, as well as a scorecard on how well our 2006 predictions fared. Let us know what we’ve missed!

1. Virtual worlds explode and get branded. While Second Life continues to boom, companies will offer more manageable and intimate virtual worlds, like CokeStudios. Private branded virtual worlds not only appeal to people who are overwhelmed by Second Life expanse, but give marketers a new way to connect directly with customers and capture new types of customer data and insights.
2. More “Jon Stewartizing” of marketing and PR: Jon Stewart’s “Daily Show” has changed how people consume TV news, getting more from smart comedians on the Comedy Central than the establishment networks’ news broadcasters. Look for more companies to “Jon Stewartize” their Web content, sales meetings, PR programs, similar to what IBM did when it released its hilarious fake mainframe sales training videos on YouTube.
3. More marketing mash-ups: Look for more companies to create interesting mash-ups, combining content from multiple sources to create new types of experiences and services. See Business Week’s article, “Mix, Match and Mutate,” for a quick overview, and check out the Sun Labs Snapp Radio mash-up of Radio Paradise, last.fm and Flickr.
4. Service innovation trumps product innovation: While innovation has focused on product innovation, more and more companies will begin looking at how to innovate services because service has such an influence on customer preference and loyalty. Service innovation firms, like Peer Insight, will become more influential than product innovation specialists.
5. Business intelligence shakes loose its shackles: Business intelligence, while valuable, has been confined to analyzing structured data. New technologies that can analyze unstructured data – like call center notes, blog postings, email exchanges – opens up valuable new insights, making it easier to pinpoint opinion leaders, categorize emerging issues and assess attitudes and sentiments towards brands and companies. Keep an eye on this new breed of BI companies like ClaraBridge.
6. Blogger fatigue escalates: More people will tire of reading so many blogs, and will narrow down their daily reading and posting. In fact, The Gallup Poll recently signaled the turn, reporting that blog readership slowed down in 2006 after five years of strong growth.
7. Marketing geeks get more respect: The science side marketers get more respect – and become much more in demand, filling the underserved market need for professionals steeped both in business strategy and business modeling, predictive technologies and analytics.
8. Web 2.0 over-hypes: mania over digital marketing and communications goes into over-drive with shades of dot.com hype all over again, including the good, the bad and the ugly. Social networking, blogs, communities become more relevant and valuable, but beware that they’re not for every business.
9. Face-to-face meetings back in style: While more people meet up in virtual words and connect via blogs, even more people will opt for face-to-face conversations, meetings and conferences. According to the National Business Travel Association, 67.7 percent of corporate travel managers expect business travel to be up in 2007.
10. “Interactive” departments go away, folding into mainstream marketing, as marketers now see “e” as core to marketing and not “new media and marketing.”

Grading the ‘hounds’ 2006 predictions

• New market concepts vs. new products: A Just look at the wild successes of YouTube and Second Life.
• Consumer insights vs. market research: B- Even the big global market research associations started focusing more of their research and conferences on consumer insights. This year ESOMAR gave its inaugural award for best conference paper to three Australians who likened the marketing industry’s preoccupation with brands to a worn out, struggling heart, and suggested that a new customer-centric vision for business is the equivalent of a heart transplant.
• Communities as big as blogs: B Social network communities like MySpace boomed, as did the growth of private communities, developed by companies like Communispace. You know it’s a trend when mainstream media write about it, as Business Week and Ad Age did on communities.
• Meaning making vs. promoting, point of views vs. messaging, teach me vs. tell me: B More companies are changing their style – talking more about ideas and less about themselves — and getting thumbs up from customers. Sun CEO Jonathan Schwartz’s blog, with approximately 20,000 readers a day, is a great example, as is HP’s Change Artists executive interview series.
• Salons vs. conferences: C+ Still a lot of talking heads, in giant conference rooms. Two great examples of more salon style events: the Business Innovation Factory’s BIF2 Collaborative Innovation Summit in Providence, hosted by The Wall Street Journal’s Walt Mossberg, and the Innovative Marketing Conference at Columbia University, held by Columbia’s Center on Global Brand Leadership and Corante.
• Podcasts vs. Webinars: A+ Podcasts exploded, providing a better way to download a broadcast or listen to it on your PC when you want vs. when the sponsor wants you to listen. Approximately 55% say they’re more likely to consume thought leadership via a podcast, according to KnowledgeStorm research.
• Behavioral vs. demographic targeting: B Online behavioral targeting strategies and analytic tools went mainstream. According to a Forrester study cited in ClickZNews, 73% of marketers now employ or plan on employing behavioral targeting.
• Voices of the customer vs. voice of the company: C Consumer generated media exploded, and analysis services from companies like Cymfony, and Nielsen/BuzzCompanies grew considerably, indicating that companies are investing more around listening to customer conversations. Yet in talking with many big name companies we found that there’s more monitoring on what’s being said than real “listening.”

2007 marketing predictions

Kudos to Australians Kristin Hickey and Derek Leddie of The Leading Edge and David Jenkinson of Fosters Group for their ESOMAR award winning paper, “The Heart Transplant — Customers at the Heart of Your Business.” The authors liken marketing’s obsession with brands to a worn-out, struggling heart and suggest that a customer-centric focus offers the equivalent of a heart transplant.

In an interview with Jesse Blackadder, editor of “Research News,” Kristin said managers see consumer-centricity as a source of sustainable comeptitive advantage for three reasons:

1. It allows an organization to get closer to the customer, increasing the relevance of innovation, communications and other marketing.

2. It provides ane lement of consistent objectivity in the business. There are fewer push-and-pull struggeles between departments based on opinions of differing priorities. The Customer insight and advice provides incontestable direction.

3. Customer-centricity can be a source of bargaining power with trade or retailers.

The paper shows Foster’s journey from being brand centric to customer centric, explores the six barriers to adopting a customer centric vision in an organization, and suggests a five step process for leading a customer-centric revolution.

“Business are already increasing their expenditure on consumer insights, which is creating buoyancy in the research industry,” said Kristin. “However, on closer inspection this buoyancy should be a significant cause for concern. Our industry holds itself up as the expert in the field of consumer insights. Yet to date we have failed to provide strong, compelling leaderhip for businesses searching for consumer-centricity.”

An interesting note: to become customer-centric Fosters took customer insights out of market research and created a new organization which is part of the senior leaderships team, working closely with the CEO and senior business strategists.

I was moderating a conference session a few weeks ago and asked marketing executives from Gillette, Dunkin’ Donuts and Circle Lendng what they thought was the most important competency for marketing professionals today.

Their unanimous response: math.

With so much customer data available today analytics is becoming one of the most strategic aspects of marketing, yet there’s a huge talent shortage in this area.

"One of the new marketer’s key skills is the ability to marry fluency in higer mathematics and computer modeling to marketing flair and creativity," wrote Richard Rawlinson in last summer’s issue of Strategy & Business. "Just as mathematics has revolutionized finance, it will now invigorate the marketing field, as new models and algorithms are developed to extract value from consumer and business databases, and to allow more precise targeting of ‘hot’ topics to each consumer."

I know a lot of students read this blog, so if you’re interested in a marketing career think about analytics. And for the rest of us, maybe it’s time to learn more about the scientific and mathematical aspects of marketing to be able to be creative in measurable new ways, and to elevate the value of our profession.

marketing and math

At yesterday’s annual ITSMA Conference in Cambridge, Mass., Barbara LaGuarida, marketing communications director of Lucent Technologies, explained why and how Lucent has turned to a conversational marketing approach to increase sales effectiveness.

Lucent Worldwide Services, a $2 billion business with 10,000 employees, realized that to sell services it needed more of a consultative than transactional sales approach. The new senior sales executive told Barbara that he saw one major obstacle to being able to move to consultative selling: lack of tools.

“I was shocked,” said Barbara. ” I thought he’d say the issue was talent or training. But tools? After all, we had 1,00o different pieces of collateral available to the sales reps.”

After analyzing what existed, Lucent found that its sales tools were not helpful in facilitating conversations with customers, were weak on differentiation, and were too product oriented. The company overhauled its sales tools, going from 1,000 different documents to just three Engagement Marketing tools:

1. A customer discussion document for engaging prospects in meaningful conversations. This document focuses on the problems that Lucent is seeing in the prospect’s industry, which gets the prospect talking about his or her view of the issues and problems. Information about Lucent is at the back end of this selling tool. At least a third of the presentation is about talking about issues. Not selling service solutions.

2. An executive proposal that highlights the customer’s key business challenges and Lucent’s proposed solution The purpose of this brief document is to make it easy for the prospect to shop it around internally to get feedback and build support.

3. A statement of work — a short, clear document linking Lucent’s proposed solution to the prospect’s objectives and problems.

While Lucent has only been using this conversational marketing approach for a year, the results are impressive.

• 56% of the sales reps say that the find the customer discussion document a valuable and effective tool.
• 51% of the sales reps say they can customize the customer discussion document without a sales engineer, which is a big deal in technical sales situations.

Other results:

• Lucent has reduced sales cycles by 20%
• Sales and marketing productivity is up 20 - 30%
• The expense to revenue ratio for services marketing communications has improved 20%

Prospects don’t want to have to sit through a PowerPoint all about a company and its solutions. They do want to talk about their issues and needs, and see if you’re the type of company that they would feel confident in working with to address those needs. Follow Lucent’s lead and create conversational marketing sales tools that make it easy to get people talking. You, like Lucent, will shorten your sales cycles and reduce the cost of sales support.

Lucent marketing measurement

The tenure for Chief Marketing Officers is shorter than ever, a brief 23.2 months according to Spencer’s Stuart’s new study.

Marketing is one of the most important corporate functions as it’s responsible for attracting and satisfying the customer. So what’s the fix to the revolving door? Some thoughts…

Give marketing authority over all those activities that affect a customer’s experience with the company/brand — including sales, product development, customer service, front line employee hiring and training, channel partners. If marketing is primarily foucsed on marketing communications — advertising, promotions, pr, etc. — it’s bound to fail. Branding is about what we do, not what we say. At last week’s Innovative Marketing Conference, Gwen Ishmael of Decision Analyst said she’s seen this model work at two successful companies and wonders why more companies don’t use this model.

Restructure the marketing organization: for those who aren’t ready to make the dramatic organizational changes in #1, think about this: eliminate all the different siloed departments and focus on three essential functions — customer and market insights, strategy, and communications.

Think of the CMO as more of a COO of the marketing organization, and less of a manager of the advertising agency or the “brand steward.” Leadership and innovation skills are more critical than traditional marketing experience. In fact, someone who has 20 years of marketing experience may be a liability because they may be too wed to old marketing pricnicples, like TV advertisiing and oversimplified brand promises.

Create new metrics for measurement. Reducing costs to get a better ROI may be the absolute wrong thing to do because it may affect the value you provide to customers. Similarly, increased sales or market share may be the goal, but what are the components needed to achieve those goals? What is the purpose of those components in helping to achieve sales or market share? Are those purposes realistic? How do we assess the performance of those components in ways that not only measures but provides insights for what to do differently?

Rotate the other C level positions into running marketing for 23.2 months so they understand the challenges and can help create innovative ways to run marketing — or set more realistic expectations for success.

CMO turnover

If James Lipton, host of “Inside the Actor’s Studio” BRAVO television program, were to interview a marketing person, here’s how he’d probably adapt his famous 10 questions that he asks at the end of the show. How would you answer them? At next week’s Corante/Columbia Marketing Innovation conference I plan to pose this questions to a number of outspoken people and share what they have to say.

In the meantime, here are my responses.

What’s your favorite marketing word?

Love. (Passion and emotion drive all decisions)

What is your least favorite marketing word?

Transformational.

What turns you on creatively, spiritually or emotionally about marketing?

Finding point-of-views that spark conversations – especially when a company or its products are kind of boring.

What turns you off about marketing?

Alpha fraidy cats. Aggressive, persuasive, and scared to try new approaches.

What’s your favorite curse word when you see really bad marketing?

F…k. What are they thinking?

What sound or noise do marketers make that you love?

Absolute silence as they really listen to customers.

What sound or noise do marketers make that you hate?

Sucking up to the CEO even though they think he/she is diluting good ideas.

What profession other than marketing should marketers attempt to become better at marketing?

Teaching middle school kids or running a customer service department.

What profession should marketers never try?

Neurosurgery. Because most of us have ADD and don’t focus enough on details.

If marketing heaven exists, what would God say when a marketer arrives at the Pearly Gates?

Relax. We don’t measure anything up here.