Bloghound

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.

What to do when a customer starts badmouthing your business? Talk to her, of course. Studies show that listening to disgruntled customers and addressing their concerns can turn the angry into advocates. Here’s an example from Yelp that proves the point.

Katelin H. writes: Customer Service trumps all. My first - and what I’d planned on being my LAST - visit to Cowboys and Angels was a total nightmare. A bad cut and a stylist that wouldn’t listen. Why would I give them second chance? Well, normally I wouldn’t. Instead I spread the bad word across cyberspace here on Yelp.

What I didn’t anticipate was getting a phone call from the owner of the salon. I went back in (somewhat shamefaced) last night to give them another go —- this time it was on the house. Louise cut my hair. Not only is this one of the best cuts I’ve ever gotten in my life… she explained what she was doing as she went. She talked me through the cut - and gave me options. I have never been more pleased with a haircut. It looks AMAZING.

I can’t tell you what worlds apart my two experiences were at Cowboys and Angels. I understand that you’re not going to get a perfect cut every time you go into a salon. However, a business owner that understands the power of not good — but GREAT — customer service has got what it takes for staying power. Louise believes in the quality of her salon and her coworkers… and it translates beautifully into her work. Thank you for letting me give you a second chance. It was so very worth it.

negative word of mouth

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.

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

 If you've ever sat through annual sales  meetings, don't miss IBM's hilarious sales training parody videos at YouTube.  IBM made the videos as a spoof to use at its mainframe sales meeting and then put them up on YouTube.  These three short videos probably due more to change the image of stodgy old IBM than anything else IBM has done. By the way, the guy in the video is the real director of sales for IBM's mainframe busness.

David Carr has a great column in today’s New York Times, “Media Business Tips From U2.” Some of the lessons on how to connect with customers are relevant to all businesses today. Here’s an editorialized summary:

Meet the consumers where they live

Know how to “feed the tribe” so they feel part of you. Five years ago U2 replaced it s fanzine Propaganda with a fan site that’s constantly updated.

It’s called show business for a reason

Engage fans in the experience.

Seize the moment, but don’t steal it

Adopt new ideas, but know when to kill them.

Aim high

Make your fans think they’re part of something bigger.

Apologize, then move on

When there was a ticket problem this year with customers and scalpers,
the band immediately recognized the problem and apologized.

Don’t embarrass your fans

The product needs to be great, not re-hashed product releases – or
product extensions to those in the consumer products business. “Don’t
embarrass your fans,” Bono said to the N.Y. Times last year. “They’ve
given you a good life.”

Embrace technology:

U2 didn’t fight downloading, it produced one of the first downloadable boxed sets of its music. Because that’s what fans want.

Be careful how you sell out

The Apple partnership made sense for U2’s brand. Too many other performers sell out for the money.

Embrace politicians, not politics

That’s how to get things done, regardless of the political party label.

Dove’s new advertising campaign is a great example of how powerful it
can be to stir up the market conversation with a new point of view.

The
campaign features confident, happy women of all sizes and shapes,
dressed only in underwear. They’re not the super-skinny fashion models,
but real women with real curves. In other words, the campaign
challenges the media image that you must be thin to be attractive.

The campaign has generated enormous press around the world, including a People magazine cover article, an editorial in the The New York Times, and appearances on the "Today" show.

In last Sunday’s New York Times Magazine
article, “Social Lubricant: How a Marketing Campaign Became the
Catalyst for a Societal Debate,” Rob Walker hit on just how effective a
debate-stirring marketing campaign can be.

“Maybe it is somehow
inevitable that marketing, which caused much of the underlying anxiety
in the first place, can offer up a point of view that blithely tries to
resolve that anxiety.

“Moreover, as the entertainment side of
the media fragments, marketing becomes the one form of communication
that permeates everywhere – and is just as effective whether you’ve
actually seen the campaign or you simply have an opinion about it based
on what you’ve heard,” he wrote.

How refreshing to not only to see real women and real beauty, but to see a marketer stir up conversations – and brand interest.

For more about the campaign, see http://www.campaignforrealbeauty.com/.

PS –Happiness and kindness are the top attributes that make a woman beautiful, according to a Dove global study.

While technology is becoming the heart of marketing and communications, conversations are the soul.
And some of the most engaging conversations are around talking about
ideas, beliefs, opinions, and points of view. Not products.

This
week I came across two examples of companies whose points of view
instantly engaged me and helped me understand what makes their
companies unique and different.

“What we maybe had
to relearn as a company is that we’re not in the transportation
business, we’re in the arts and entertainment business,” explained GM
vice chairman Bob Lutz to shareholders at a recent meeting.

GM
in the arts and entertainment business? Now, that’s interesting. I
immediately understood that Lutz is trying to take GM to a very
different place. It somewhat reassured me as a shareholder, and I’m
toying with putting my car buying plans on hold to see what GM might
come out with next year.

My favorite point-of-view this week was
from Dietsche & Dietsche Architects. While I often hear
professional services firms talk about how difficult it is to market
themselves, Chuck Dietsche’s positioning is clear and compelling,
expressed through this point-of-view:

“The first house is a dictionary. The second is a poem,” he says.

Chuck
talks about how our primary homes are about accommodation – “Where do I
park, where do I sleep?” While the second home idealizes our lives and
helps us express that to the world.

Wow, that’s interesting and compelling marketing.

I’m
off to my second home, which is more of a haiku, for summer vacation.
Some friends are thinking about building in the area. I’m going to talk
to them about Chuck Dietsche because he’s made it so easy for me to do
so.

What’s your company’s point of view?