My CMO 2.0 Conversation with Craig Dempster, Executive Vice President and Chief Marketing Officer at Merkle, which happened awhile back as part of our DNA of Growth CMO study, was one of great insight into the customer experience, customer centricity and the use of data, technology, and analytics to drive customer experiences that drive the performance of a company.
Craig joined Merkle in 2006, and his responsibilities there are quite diverse. He oversees Merkle’s marketing strategy as well as the business unit devoted to designing, creating and delivering highly personalized customer experiences across established and emerging media.
Craig also leads Merkle’s corporate development ventures, including the evaluation of acquisition opportunities, as well as championing the company’s innovation initiatives, in which new capabilities are incubated and developed.
Craig believes that it is an awesome time to be a data-driven marketer. The only two other times of great opportunity was in the 40s and 50s with the advent of television and the other time being when the Internet came to be.
He believes that there is a great value exchange that is continuing to evolve between the consumer and the marketer in that the consumer is willing to exchange information for a great experience.
The marketer has to understand that they are being given that permission and follow through on that by giving the customer great experiences because of that openness that the customer is now sharing with the brand.
During my conversation with Craig, I learned that over 50% of Merkle’s business is about building and maintaining the customer marketing data for their customers. Craig feels that creating better outcomes for their customers get better outcomes for their company. Metrics that look at the way that consumers view the brand and now that view is either positive or negatively proliferated is a really important indicator of whether you are creating great customer experiences or not.
To get a great customer experience Merkle looks to breakdown silos and build strong teams across the organization. To build those strong teams, they are looking for a specific type of person. They look for people who are not only smart, fun, and pleasant; they are also looking for people who are passionate, committed to the vision, and achievers.
They are really trying to build an organization of people whose types of attributes drive the success of the customers’ organizations.
Merkle under the direction of Craig Dempster is putting the consumer first even in the way that they design, run, and measure their business. Craig feels that is a really important transformational aspect of the business, and it takes the right type of culture and person to enable that.
Other things we discussed include:
- How customer-centricity requires a special type of culture and a good deal of agility, as well as a common set of language around the customer.
- The need for strong learning and adaptive organizations to develop true customer centricity.
- How CMOs are now in a unique position to help drive their company’s revenue and growth.
- How CMOs who embrace customer-centricity and help grow their company’s customer base and revenues have a seat at the executive table more so than those who continue to focus on big brand ideas.
- How enacting the marketing revolution that leads to customer centricity requires more than just the CMO, it also requires the CTO/CIO, the CFO, and ultimately the CEO.
- How metrics that look at the way that consumers view the brand and how that view is either positively or negatively proliferated is a really important indicator of whether you are creating great customer experiences or not.
- How some companies spend millions on the technology without first understanding what the customer experiences are actually going to be and how the organization is going to support them.
- The concept of the platform marketer as the marketer of the future.
- How branding is not dead, but transformed – with marketers now needing to activate the brand at the individual level and create the unique experiences.
- The importance for marketers to understand the window of time of relevance.
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From the beginning of here tenure with Crayola, Vicky focused on making sure that the company was capturing and articulating what the Crayola brand stands for, what business they should consider themselves to be in, and what higher purpose they might have as a company. Her current focus is still on how to make the brand and brand idea come to life as well as how to engage customers in a more personal, hands on, and emotionally relevant fashion than they would otherwise experience simply by buying the product.
It’s not as if Vicky had to go through a re-branding exercise, as the Crayola brand has always been very strong and most loved amongst moms for years. What needed to happen is to redress what happens with many fast growing companies — they lose sight of what they are about, why they exist, and what their higher purpose is, or as Vicky calls it, their true north. Successfully articulating their “true north,” which is well represented in the Crayola Inspire video, led to some fundamental business changes — exiting certain lines of business and redefining the corporate culture. This whole effort also positively correlated with the performance of the company.
In the past, Crayolians (that is how they call themselves) would have described themselves as being in the business of color or safety and trust. But those are simply brand attributes; they are not your higher calling. Crayola is about kids, and their mission and purpose is to help moms and teachers raise creative and inspired kids. It is also about allowing kids to express their ideas and thoughts in very visible and colorful forms.
Defining their “true north” was, of course, a cross-functional effort that was moderated by an outside firm. The whole process took three to four months, not including the internal and external launches.
Launching the new “true north” internally required them to look at how their new manifesto and brand needed to come to life across all parts of their business. Culture was a big part of that. First they re-articulated their shared cultural system of beliefs — making them all compatible with the new branding language. So instead of saying that they were “be risk-oriented,” they changed that to “last one in is the rotten egg,” or instead of being consumer-focused, they now say “best friends forever.” It’s all inspired by kids — how would a kid say it?
Extensive cultural and branding training and orientation programs for existing and new employees also become part of the mix to make sure the whole organization’s culture became aligned with the external brand. Office spaces were redesigned to look more like playgrounds, and employees were given the choice to have their phone greetings recorded by their own kids and their email signature pictures be pictures of themselves when they were kids. It’s not as if they want people to act like kids, they want the whole culture to be inspired by kids.
With so many different beliefs systems floating around as it relates to raising kids, it’s no wonder that understanding consumer cultures is very important at Crayola. It also drives how they communicate with their consumers — e.g., they never define success, nor do they ever tell parents or teachers what’s right and wrong. They help parents and teachers achieve their goals. The only strong point-of-view that they take in their communications is that creativity is really an important part of a child’s development — it helps with critical thinking, it helps with communications, and it helps with problem solving. Creativity is a skill that can be learned and is needed later in life to be successful.
Social media has affected Crayola in positive ways. There is now much more user-generated content available to help moms and teachers make critical decisions about educational methods and tools, and that only benefits a company like Crayola.
Trust is another important brand ingredient at Crayola. It reflects itself in the physical product — no matter where you put it, it will not have any toxic effects — as well as in the brand as a whole and in the internal culture — where there is a decision-making culture that engenders employee trust.
Other things we discussed include:
- How to actually launch with a re-articulated “true north.”
- The marketing challenges associated with the buyer and the end-user not being the same.
- How to measure how well employees keep living the cultural values.
Tags: branding, crayola, culture, true north, trust, victoria lozano
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I truly enjoyed my CMO 2.0 Conversation with Aaron Davis, the CMO at Schneider Electric — a 170-year-old company with 24B Euros in revenue. Aaron grew up as an engineer in a family of engineers — with even his grandmothers being engineers. When he got out of school, however, he was attracted to advertising — leading to his life-long perspective that good marketing operates at the intersection of science and art. He was a co-founder at APC, which was acquired by Schneider Electric a few years ago, and subsequently named Aaron the CMO for the company.
The CMO role at Schneider Electric was created as part of an interesting transition — one in which the company transitioned from a corporate holding company with multiple sub-brands to more of a large well-recognized brand that can drive the economies of scale that allows for cross-organizational innovation needed to capitalize on fast-changing markets and opportunities. During this transition they went from 130 different brands to 10 associated brands — brands that can keep using their name in association with the Schneider Electric brand — and a few that can keep operating on their own for competitive or market amplification reasons. Those brands that survived as associated brands had to be the number one or number two brand in their space.
At Schneider Electric they truly live their brand values as part of their organizational culture. With sustainability being a cornerstone of their brand they also happen to be one of the top 20 sustainable companies in the world. They gamefied their internal process of sustainability — resulting not only in a better bottom line, but also in a more collaborative culture, one in which people work more closely together across functional boundaries.
For Aaron, one of the most exiting changes in marketing was caused by collaborative technology — Facebook, LinkedIn, etc. Those technologies allowed for widespread intimacy — a contradiction of terms, but clearly a reality. What he is even more excited about is bringing those technologies in-house allowing his organization to compete not just on price but on agility.
Aaron has an interesting approach to making sure that new marketing channels, processes, or technologies do not lead to silos in marketing. First off, whenever something new comes on the horizon, he rarely forms a dedicated team Instead he tasks a trusted person from one of his competence centers to go and become an expert on the topic, and to report back to the team with recommendations in 3-6 months. If something becomes real he will always try to make it part of the genetics of the marketing organization, and he forces it through training and KPIs.
For example, everyone on his team is knowledgeable about SEO. He also tries to anticipate which technique or function will likely be cannibalized or eliminated if something new becomes real. He then gives that team the responsibility for the new function or the new tool — thus making cannibalization more natural and avoiding silos fighting with one another. Another technique to avoid silos it to constantly force people to have a much broader view of the marketing mix than their own area of expertise — be it demand generation, social, or events.
The advent of social media has forced a shift in marketing content development, one which Aaron describes as a shift from polished content, the way you would create a brochure, to more raw content, the way you would send an email to someone. Social amplifies raw content, not polished content.
Aaron is a firm believer in the premise that culture trumps strategy. At Schneider Electric they are trying to foster a culture that’s mostly driven by speed and a willingness to fail, but to fail fast. They also have a measurement culture, which makes for a self-correcting system. You screw up, you fix it, and you move onto the next thing.
If you do not have speed as part of your culture, and this is true especially for large companies, you can end up with situations where your strategic implementation cycle is longer than the strategy cycle itself — and you fool yourself if you think that your strategy is what the market is actually feeling.
Like with many companies that I recently interviewed, at Schneider Electric they try to have a unified corporate culture that trumps the local cultures, the age-related cultures, or any other culture layers that people bring to work.
The benefits of having a great culture include brand building, employee retention, and less failure of new employees.
Changing or creating culture in a large company is much harder than in a small company. The advantage that they have at Schneider Electric over other more unified competitors is that at those competitors it already means something to be a company person while it’s much more of a blank slate at Schneider Electric. They just need to get people to stop talking about their shared local history, great stories, and local lessons learned and instead focus on talking about the shared vision and how they are going to work moving forward.
In terms of talent acquisition, there is a generational aspect at Schneider. Many of the big problems that Schneider Electric has identified will not be solved in a year — they’re all 15 and 20 year problems. So knowing that a person’s peak in the corporate world is 40-50 years old, it is the 30-year-olds that are going to change the world.
Other things we discussed include:
- How to change a legacy brand and make it relevant while not losing the benefits of the legacy.
- How everything new in marketing, with the exception of the fax is additive.
- On the use of Centers for Competence for various marketing functions.
- The importance of depoliticizing failures and encouraging people to fail fast but document what they did so others can avoid it.
- The importance and real benefits that companies derive when they create cultures of trust.
- The need to measure people not just on KPIs but also on cultural traits.
- How to develop metrics integrated success metrics to avoid friction between sales and marketing.
Tags: aaron davis, culture, gamification, kpis, metrics, schneider electric, social media, sustainability
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For a guy who broke in to LEGOLAND in Denmark with some friends back in September of 1978 when we realized it was closed for the season, being able to have a CMO 2.0 Conversation with Mads Nipper from LEGO felt like being a marketer in a playground.
From all the CMO’s I spoke with, Mads took perhaps the most unusual path to becoming a CMO. He started off as a fisherman, but then realized that the Danish weather was too cold for him, and fishing was actually way too hard. So instead, he went to business school, and started working at LEGO 22 years ago. Mads’ responsibilities do not only cover marketing, but also product development, innovation, and all of the commercial activities.
Digitalization and gamification of their consumer base, trends that have been accelerating since the first introduction of the 8-bit Nintendo machine in 1990, present both threats and opportunities for LEGO. Digitalization has affected all parts of their business, including marketing, retail, and the whole play experience. Marketing campaigns are now always integrated with digital dimensions, e-commerce has become a dominant retail channel, and LEGO so far has sold over 100 million video games developed in partnership with TT Games, which is owned by Warner Brothers.
A major innovation effort at LEGO right now is to bridge physical and digital play, as they believe that is where the future of play will be in the next 5-10 years.
One of the big changes that LEGO had to make as they became more digital was to accept that they could no longer strive for the same level of perfection that they had grown accustomed to in the analog and physical world — the speed of change in the digital world just does not allow that. That does not mean that they compromise on consumer perception and experience, and certainly not on child safety — they just became faster at new products iterations and allowed their corporate product development heart beat to increase significantly.
At LEGO they don’t consider themselves in the business of toys or games; they consider themselves to be in the business of play. That is why Mads uses terms like communicate, socialize, and play when talking about his customers, and not toys, or games. While the concept of being in the business of play was on the mind of the founding family, the Kirk Christiansen family, they did not articulate it explicitly until five to eight years ago as they were emerging from a business crisis. Starting to consider themselves in the business of play, instead of being in the challenging and non-growth toy business, proved to be a very liberating experience. The business of play is right up there with food and love — one of the most important activities in people’s lives.
At LEGO they feel like they never know enough about children and shoppers — agreeing that if they were to know everything there is to know about their customers it would lead to the company becoming arrogant.
While children may display very similar play characteristics across different cultures, the people who buy them LEGO products — the mothers, the teachers, the grandparents, etc. — do not — they are much more shaped by the local culture than the kids are. That makes for a complex marketing challenge for a global company.
LEGO is very much a substance brand — meaning that the essence of the brand is built around the experience and the longevity of that experience. In fact, LEGO products, which are not a cheap play experience, often get more than a 30-40 year lifetime — much more than most other products in the world. LEGO is also a legacy/heritage brand — one that many parents and grandparents grew up with as children. It stays consistent, yet relevant to modern times, by having a digital component as well as a storytelling component while also having a compatible building system and design style with the LEGOs from 20 years ago.
Next we switched to the topic of culture. As you can expect, the LEGO employee culture is a very strong one — with people sharing a passion to make a positive difference in children’s lives. There is also a strong correlation between the internal cultural values and the brand values — and many employees consider themselves brand guardians, without being tasked to act that way by management.
While they do have a strong-shared beliefs system, they do not expect employees to memorize those. They think of their belief system as the smell in the bakery — if you like the smell of the bakery, you will know immediately that you belong. If you don’t, you don’t need a belief system to know that you don’t fit in. One of the ways the belief systems comes to life at LEGO is through storytelling. Storytelling provides the emotional bond that drives the world much more so than paychecks and orders. Employees are also encouraged to bend the rules and processes if it means improving the experience of a child.
LEGO is successful in multiple national and regional cultures because it appeals to a very ancient set of cultural traits — the need for humans to play and innovate. You can then add other cultural layers on top of that, like national cultural elements, or pop-culture elements (e.g., Harry Potter, Star Wars, etc.), but it is the deeper and more ancient human cultural connections that makes LEGO universally successful.
Another interesting aspect of play is gender based — boys like conflict play while girls like socializing. When boys see LEGO, they often ask themselves: What does it do? Can I kill anyone? Can I win over my enemy? Girls, on the other hand, are much more apt to ask themselves: Is it pretty? They don’t have the need for it to do something. They want to create platforms for social interactions.
Other things that we discussed include:
- The importance of content marketing in the marketing mix.
- The role of online communities and social media in the marketing mix.
- How they do not focus on the quality of the building blocks or the games first, but the quality of the experience.
- The differences between marketing LEGO in Western cultures vs. Asia.
Tags: consumer culture, cultural layers, digitalization, employee culture, experience marketing, future of play, LEGO, Mads Nipper, play
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Peter Mahoney, the CMO at Nuance, and I have been crossing paths on and off for the past few years in social media. So, it was great to finally speak in person and prove to one another that we were in fact not social media bots.
After getting a degree in Physics, Peter started his career in marketing and sales at IBM, even though that was the furthest from his aspirations at the time he started to work. After stints at PictureTel he ended up with Nuance, where he has been for the past nine years — seeing it grow from $150M in revenue to more than $2B in revenue this year.
Peter believes that marketing has become more strategic in the past few years — especially in the tech sector, where it had not been seen as a strategic piece of the business on par with some others. It has also become much more technical — involving optimization, lot’s of data, and digital capabilities. However, fundamentally, marketing is still about connecting people with the right product.
Even in B2B environments, marketers need to realize that it is people who are buying products, not companies. Another huge change in marketing has been caused by social media, which allows a marketer to have a different and deeper kind of conversation with their customers. It also allows your customers to have conversations about you without you being there. In fact, engaging in social conversations may be the biggest sea change in the marketing mix.
Nuance has grown primarily through acquisitions, and in the nine years that Peter has been there, there have been around 65 acquisitions. The good news of being in constant integration mode is that there is a good relationship between marketing and IT — a requirement for success as marketing is becoming more and more technical. That being said, marketers also need to beef up their technical capabilities internally.
Part of Nuance’s brand is to humanize technology — they sell, after all, technology that can hear, talk, reason at some level, see you, and have memory and context, — so having a humanized brand, especially the ability to listen to social conversations, comes almost natural to them — it’s part of their DNA.
The role of marketers has really shifted to one of being connectors rather than communicators. Marketers no longer need to consider themselves the spokespeople of the company in market place but instead need to think of themselves as the company advocate within the company.
When it comes to branding, companies need to be honest — and honesty means many different things. It is about connecting the right audience with the right product — not some kind of made up hyperbole. Marketers need to communicate very precisely what the product or service does in the terms that are interesting and relevant to their audience. Honesty is also something marketers need to have when engaging in social media conversations — which at scale are really good at outing falsehoods.
Next we talked about the importance of culture in marketing — both employee culture and consumer culture. As many other CMO’s I interviewed recently, Peter is convinced that there cannot be a dissonance between the internal employee culture and what the brand stands for. You cannot come up with a brand attribute and make it happen — it has to be part of your true essence and your values for it to be perceived as real in the marketplace.
The way Nuance deals with the various cultures that come through acquisitions is by celebrating diversity — including diversity of culture — as part of their culture. They don’t try to strip new groups of their personality or their individual group culture, but they instead understand how that links to the overall corporate message and culture. Peter compares it to marrying into a family that comes from a different culture — you do not want to completely throw out the old culture. You want to bring it along and add it to the mix and change it a little, but also recognize the fact that there’s this broader thing that has a set of values and a culture that they are interested in.
Other things that we discussed include:
- The importance to having a good core set of technical vendors as partners to marketing.
- Understanding the role of the marketer in social conversations — when to engage and when not to.
- The changing role of content marketing in the age of social recommendations.
- The challenges for marketers that have products embedded in other people’s solutions.
- The future applications of speech recognition, and the possibilities that open up when you combine speech recognition with data.
- How to walk the fine line of promoting “do good” applications as part of your marketing mix when you in fact help people with disabilities and other impairments.
- What to do when the culture of partners is different from your own culture.
- The importance of understanding consumer cultures as part of marketing.
Tags: branding, culture, customer trust, listening, marketing, nuance, peter mahoney, social media
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I have known Steve Mann for a few years now, and so it was great to have a CMO 2.0 Conversation with him now that he is the CMO for the research and litigation solutions at LexisNexis. Steve has a PhD in neurosciences and started out as a software engineer before joining the ranks of sales and marketing.
Based on his background in neurosciences and marketing, we started the discussion around what the perfect academic background might be for understanding and predicting consumer behavior. We settled on a mix of neurosciences, behavioral economics, cultural anthropology, and the arts.
With customers becoming increasingly digital and social, and taking recommendations from peers while tuning out corporate messages, marketers need to focus on becoming conversationalists and think about the value they deliver within those conversations. Marketers also need to become better listeners — and listening does not just mean listening for what customers want so you can add it to your next marketing offer. They need to listen to what the customer really cares about and then decide whether or not they can add value by becoming participants in that conversation. Marketers also need to become better conversation starters. They also need to realize that the most important conversations are not necessarily those conversations between the brand and the customers, but the conversations among customers and prospects.
Now that the most important content about products and services flows between customers, marketers also have to think differently about the content they put out there — ensuring that the content they create is re-tellable and can make its way into those customer-to-customer conversations that matter. They also need to think differently about their target markets in order to identify these conversation flows that matter.
In the legal space, 76% of customers who seek legal advice will use online resources to identify an attorney that will suit their needs. Being a business that has traditionally been fueled by word-of-mouth, with lawyers recommending one another and passing clients among themselves for ages, it is surprising that they have not been innovators in helping fuel the customer word-of-mouth that now leads to a majority of their new business.
Marketers don’t just need to do a better job at listening — they need to find the actionable insights that may lead to better products, better programs, and better relationships with customers. Marketing in general, needs to become more insights-informed.
When it comes to market segmentation, LexisNexis has thrown away the firmographic segmentation model in favor of a behavioral segmentation model, where they are coupling a segmentation model based on needs, attitudes, and behaviors of buyers with buying personas. Those buying personas are then the starting point for campaign development.
There are 4 fundamental metrics that LexisNexis is focused on when looking at social channels — strength, sentiment, passion, and the reach of a particular customer in a particular social channel. The strength refers to the percentage of brand mentions in a social channel. The sentiment is the ratio of positive and negative mentions. Reach refers to how many people are talking about your brand, and passion refers to how passionate they are — are they, for example,repeatedly talking about you.
As many other CMO’s I interviewed recently, Steve too is convinced that the fundamental premise of employees being the brand ambassadors only works when there is alignment between the internal culture and the brand value. If there is a dissonance between the two, the difference between the voice of the brand and the voice that’s put out there to represent the brand will cause confusion in the marketplace. Eventually consumers will shut down the communication rather than try to understand what the brand stands for.
Steve believes that marketers have had to go through a harsh set of realignments and realizations as to the ownership of brands. You can put out information about what your brand stands for, but it is the consumer that will disseminate that information, either positively or negatively, and thus control a good part of your brand. While companies still have ways to influence their brand, the brand’s influence over its own brand is not nearly as strong as it was in the past. In that process, marketers cannot sit back — they need to go and participate, in an authentic way that represents the core values of the brand in the consumer-to-consumer conversations that happen about their brand in social media.
We closed the conversation on the need for CMO’s to have good balance: Balance among our efforts to drive demand for our products and services, balance to deliver on brand promise, and balance in terms of the amount of effort that you put in customer retention. These all need to be weighed against the appropriate channels that CMO’s need to leverage to achieve their business objectives. CMO’s also need to become strong partners with the CEO and translate strategy into fundamental tactics that will support the business.
Other things we discussed include:
- How law firms leverage social media as part of their business.
- Where potential new uses of social media are in the legal market.
- The importance of a having a well-developed content strategy.
- What the proliferation of consumer choices means to consumer behavior.
- The importance of keeping things simple.
Tags: branding, consumer behavior, consumer insights, content marketing, lexisnexis, marketing, steve mann
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I thoroughly enjoyed conducting this CMO 2.0 Influencer Conversation with the T. Austin Finch Senior Professor of Business Administration at the Fuqua School of Business at Duke University, Chris Moorman — discussing the latest results from the annual CMO Survey. Chris has been in academics for 25 years and a professor at Duke since 1999.
The CMO survey, which has been conducted since August 2008 and happens twice a year, seeks to get the perspective from 500 or so top marketers in organizations on where markets are going, what companies are doing, what some of spending patterns are, and how companies track marketing excellence. While the interview happened before the new February results were published, you can review the latest results of the CMO survey here.
Here are some of the top findings that Chris picked for further commentary in our discussion.
Social Media Spend
Social Media spend, which was at about 7.6% and projected to grow to 18% in the last survey is now at 8.4% and projected to grow to more than 21% in this latest survey, is clearly becoming a considerable chunk of marketing budgets. The interesting part of this budget item is that there are very few in-house people who are actually allocated against it. In August, that number was 3.6 and in the latest findings, that number came down to 1.7 people. So for a fairly sizable portion of the budget, there are very few people engaging with that strategy. Chris thinks that it could be that companies have not quite caught up in terms of building their human capital around this particular strategy.
Interestingly enough, many successful companies are not approaching social media as another marketing silo — instead integrating it as part of the other marketing functions (e.g., lead gen, thought leadership, innovation, customer support, etc.). Even though those companies are probably in the minority, and with the survey showing that most organizations are not well integrating their social media with their marketing strategies, it could account for why the number is lower than what it really is.
The next topic we covered was that of marketing analytics. Companies in August reported they were spending 5.7% of their budget on marketing analytics and that number was projected to go up to 9.1% ( 6% and going up to 10% in the February survey). It is interesting to see a predicted 60% increase in marketing analytics budgets even though overall marketing budgets have only grown by 8.3% in the last two years.
Now keep in mind that this does not include budgets that might be spent in IT to support marketing analytics. Chris believes that when IT departments take over marketing analytics, they spend a lot time creating the infrastructure for it but then don’t spend an equal amount of time and effort on making sure that the information is getting used by decision makers. In fact usage is a problem with marketing analytics in general, with managers not using the analytics that are available to them or that have been requested 62% of the time. Chris is not surprised by this number, as her research in the past 25 years has shown a general tendency for managers to ignore market research. Interestingly enough, when companies have an evaluation process for the quality of the marketing analytics data, the date has a much higher likelihood of being used.
Performance metrics is another area of the CMO Survey that Chris finds interesting. The survey measures a lot of performance metrics, including growth, marketing leadership, and others. They do a really good job at looking at growth rates across multiple geographic areas — finding for example, not surprisingly, that companies were growing strong in China.
A real interesting exercise that they went through, and which Chris describes in one of her blog posts, is how much risk companies are willing to take with their growth strategies. As the economy has tightened up, they have not found an increase in low risk growth strategies, such as market penetration strategies targeting existing customers with existing products and services , but instead found an increase in more risky growth strategies — like launching new products or entering new markets.
Another growth strategy, found especially in the tech sector is — tech, software, and biotech, — through acquisitions. What is interesting in that space, as Chris describes in another great blog post, is that many companies are doing acquisition to acquire patents which they ultimately do not show an interest in developing — so in effect using acquisitions as a defensive strategy.
On the other performance metrics front, many of the metrics are pretty dismal. Customer retention is down, customer acquisition is down, and brand value is down. That trend continued in the latest February CMO Survey. Note that the numbers are still positive with companies still acquiring customers, but the fact that the growth has slowed shows that there clearly is a lot of negativity and uncertainty going around.
Despite the tough economic times that we are going through, a lot of marketing indicators are on the rise — including overall marketing spending. Not surprisingly, the CMO Survey also found that investments in traditional advertising is on the decline. Somewhat surprising is the investments that companies were making in marketing knowledge, developing knowledge about how to market, although that number dropped in the last survey.
The CMO Survey also has a great set of interviews with CMO’s that can be found here.
Other things that we discussed include:
- How lack of integration of the various marketing channels leads to not being able to track the customer journey.
- How marketing analytics really should be supported by both IT and Marketing.
- Why Apple has consistently won the CMO Survey Award for Marketing Excellence.
- How customer priorities are shifting towards price and what that means for marketers.
- Top rated skill sets that marketers were looking for in their new hires.
Tags: Chris Moorman, CMO Survey, Duke, Fuqua, marketing excellence, marketing performance metrics, marketing spend, social media
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My CMO 2.0 conversation with Jim Davis, the CMO at SAS was insightful and covered a lot of ground. Jim grew into the CMO position through the ranks of R&D and product management — a great path for a technology company. At SAS, Jim is not only the CMO, but he also runs HR, professional services, and education; positions at the executive table that should work much more closely together than they usually do. With his responsibility, Jim can not only focus on providing a great product experience for the customer, but also a great place to work — resulting in being Number 2 on the Great Places to Work ® list and having a 2-3% employee turnover rate in an industry that averages 20-22%.
We discussed the long term benefits of investing upfront in the employee base and how unfortunately, public companies, driven by Wall Street’s relentless search for cost-cutting, cannot always make those investments. For Jim, there are three types of relationships: the company-customer relationship, the customer-employee relationship, and the company-employee relationship; which is where most people fall down. At SAS, they are convinced that if you can satisfy the last leg of that relationship triangle, the other two will work well as well. Or as their CEO, Jim Goodnight, says — “If the employees are happy, then the customer is happy and if the customer is happy, the business thrives.”
While the cultural SAS Way and attitude in terms of how they treat people is the same all over the world, employees in different cultural regions have different expectations of what it means to work for an exceptional employer — hence the need to execute a little bit differently depending on where you are in the world.
Realizing that people spend the majority of their waking hours at work, they treat their employees as family. A great example of that was what happened when the global financial crisis hit in 2008. Instead of hunkering down and laying off employees, as most companies would have done, the CEO did a global webcast and said, “I want to tell you something right now: I promise you I will guarantee no one will lose their job. I just need you to look after the company, look after the expenses and continue to produce quality software and build great relationships with our customers.” As a result, employees did not rush to update their LinkedIn profiles, and instead watched out for the business — resulting in the most profitable year in SAS’s history.
Next we talked about the impact of customers becoming increasingly digital and social on marketing plans and strategies. Gone are the days of marketing getting the message out. Instead marketers now need to focus on listening and responding to the sentiment of the crowd. Marketers no longer need to be the company advocate in the marketplace — customers will do that, — but they instead need to become the customer advocate within their company.
Next we switched to the topic of big data and big data analytics. Jim described the various big data problems companies have and mapped them out in a two-by-two matrix that includes Business Intelligence (BI) and Big Data BI, both focused on reactive analytic capability; and Big Analytics and Big Data Analytics, both focused on proactive analytic capabilities. Jim has a great blog post detailing the different big data problems that companies may have.
Big data didn’t just happen. We have always had it. What was missing was the ability to gain meaningful and actionable insights from it to allow us to proactively make future marketing, product, and customer decisions.
We also talked about the benefits of real-time analytics, which has recently become in vogue. When you can place real time analytic models in line with the process by which we’re communicating with the customer, amazing new up-sell and cross-sell opportunities present themselves.
In a recent poll SAS did with 800 executives at their Premier Leadership Series conference, 81% of respondents said that they are not doing a good job in terms of real-time, fact-based decision making. While we are still in the early stages of maturity, big data is definitely going mainstream, often driven at the board level.
In order to truly capitalize on the promise of big data, CIO’s and CMO’s need to work hand-in-hand. A good way to make that happen is to make sure that the CIO and the CMO have shared metrics for success. If the CMO is measured on customer retention or customer response or cross-sell, up-sell, then the CIO needs to be measured on those same metrics, not uptime and fall within budget. Here again, we are in the early stages of seeing this marriage between CIO’s and CMO’s happen, with many CMO’s still going at it on their own.
Lastly, we talked about the need to develop a fact-based decision-making culture — one in which human decision making gets supported by analytics and data modelers. If the human decision maker gets replaced with analytics and modeling, then we are in for big trouble — just look at the derivatives and the subsequent financial collapse.
Other things that we discussed include:
- We briefly reviewed the results of the Social Workplace Trust Study that Human 1.0 produced with The Great Place to Work Institute, IABC and the Society for New Communications Research.
- How they do not differentiate between consumer brand and employee brand.
- The benefits of not being a public company with a quarterly time horizon.
- How SAS has a deep culture of innovation and what that means.
- How agencies are struggling with the decision to get into data or not — with the value of how you address the customer not being available in external data.
- How to leverage social media data as part of Big Data solutions.
- Metrics used by the SAS CMO to gauge progress and success.
Tags: big data, big data analytics, culture, employee culture, jim davis, sas
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My CMO 2.0 Conversation with David Roman, the current Lenovo CMO, was a great one. I had spoken with the previous CMO at Lenovo and needless to say that many things have changed at Lenovo in the past few years.
Like many CMO’s I spoke with recently, David is a true marketer. He spent 14 years at Apple in a variety of marketing jobs, had a few stints with startups, and returned to the corporate world to run marketing communications for Nvidia and HP. He joined Lenovo 2 1/2 years ago.
Branding is one of the top three initiatives at Lenovo and so that was one of our first points of discussion. David explained how Lenovo, driven by the industry-wide consumerization of IT, where employees increasingly bring their own devices to work, is now trying to become a leading consumer brand — not just a B2B brand which is what they have historically been known for. To be a leading consumer technology brand means that you need to appeal and be relevant to the youth market. They are the ones that care about technology in an emotional way, and they are the ones who determine what’s cool and what’s not. According to David they are also the generation that cares the most about their brands — they expect their brands to not just enable them to do what they want to do, but also to share their social values.
To appeal to the youth market and be relevant to them, Lenovo focuses, not on the computer itself, but rather on what you can do with it. A lot of the attitude and personality of their latest branding campaign centers around celebrating the cool things that people can do with the technology. Interestingly enough, they can have a somewhat uniform campaign around the globe because they found that culturally youth have more in common with one another worldwide that they have with their local cultures.
Because consumers prefer to get their recommendations from peers rather than from companies, Lenovo had to rethink how they communicate with their audiences. David told a real cool story to illustrate his point. They have computers that will now boot up in 10 seconds and had this idea to throw a computer out of a plane with the computer controlling the parachute. If the skydiver could not boot up the computer in less than 10 seconds, there would not be enough time for the parachute to deploy and it would hit the ground. In the old days you would have faked the scene and produced the ad as cheaply as possible. They actually did the whole stunt and had two guys that had done a lot of films for MTV document how they did it. That movie went viral. So in effect they got people to watch the ad by having the meta-ad go viral. Pretty nifty if you ask me. Marketers now have to develop content in such a way that it will be used and travel as part of peer-to-peer recommendations.
Just as in past interviews, David too believes that you have to live the brand inside before you can credibly portray that brand in the marketplace. Their aim is therefore to have a unified employer and consumer brand.
David then explained his three principles of marketing. The first one being balance — with the need to balance between short term and long term impact. The second one is simplification — where the simpler something looks from the outside, the better it is. The third one is that you should always try to “wow” the customer — and they have to notice it. It has to stand out, and it has to be differentiated. If you cannot have the wow factor, don’t do it.
Next we switched to the topic of culture — a topic near and dear to Lenovo. Being a truly global company and growing through mergers and acquisitions all over the globe, it has always been important for Lenovo to have a unified culture — they call it the Lenovo Way, which is embodied in the slogan “We do what we say and own what we do.” It is a culture of commitment and one steeped in the Human 1.0 characteristic of reciprocity. As with other successful companies that have strong internal cultures, Lenovo makes the four shared values that lead up the culture part of the annual HR review process.
As with most technology companies, innovation has always been a big part of the Lenovo culture. It has changed over time in two aspects. First, by recently becoming the leader in the marketplace, they had to start thinking about doing things differently. As a challenger you tend to focus more on execution whereas a leader you need to focus more on innovation — which also means having a different risk profile. The other cause for change is that they now want to rely on all employees and customers for innovation, not just the technology geeks in R&D.
As usual, we closed out the conversation with a discussion around metrics. At Lenovo they track the usual metrics for demand generation — number of leads, price point at which you’re selling, etc. For branding, which has a longer term consequence, they use two metrics — purchase consideration, with the goal of being in the top three, and brand premium, which looks at what percentage of the dollars you are getting in any market category.
Other things we discussed include:
- How content that you put out about your brand has to be genuine and authentic — and what that actually means
- How to let go of the need to control the message as a marketer
- How Lenovo leverages its 27,000 employees, who in many cases are also customers, as part of their marketing efforts.
- How companies have to focus on tribes rather than market segments
- The importance of keeping a balance between ongoing continuous improvement innovation and breakthrough innovations.
Tags: branding, cmo 2.0, consumer behavior, consumerization of IT, corporate culture, David Roman, employer brand, human 1.0, innovation, Lenovo, wow
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My CMO 2.0 conversation with John Kennedy, the head of corporate marketing at IBM, was a truly great discussion. John started his marketing career at one of the best on-the-job training companies for branding — Proctor & Gamble, where he worked on some well known brands like Downy, Spic and Span, and Cinch. Following that he joined IBM’s consumer division in the mid-90s, and subsequently, spent 8 years with IBM in Tokyo in a variety of product marketing, geography marketing, and sales roles. So, John is another true and true marketer in this ongoing series of CMO 2.0 Conversations.
According to John, the main causes for the recent changes in marketing come from the digitization of business and the increased interconnectness of people. The fundamental change that marketing has undergone is that it has once again become a social science — it is about understanding how people connect, what they aspire to, and what motivates them to do what they do.
At IBM they use three lenses to understand how the marketing function is fundamentally changing — knowing the customer, knowing markets, and knowing audiences. In the past marketers were mostly limited to understanding their customers in terms of big demos and big psychographics. Now, big data allows marketers to understand their customer at the individual level. Big data also gives marketers the ability to serve market segments better — moving from a transactional focus to a much more customer-centric conversation around the benefits of products and services. The last lens relates to the fact that both companies and customers now have a much higher visibility and transparency into one another’s business — with customers who now being able to see behind the firewall and assess whether the way a company operates actually matches with what it promises through its marketing.
Like other leading marketers that I interviewed recently, John too believes that the brand is not just embedded in the promise that marketing makes about its products and services and how well those products and services deliver against that promises, but it is also embedded in the culture of the company — how the company actually behaves behind the firewall. Along those lines, IBM has done a lot of work in humanizing its brand by allowing the IBM brand to be defined by the IBMer. They see themselves as an intellectual capital company, with their employees delivering the value that gets created and offered for their customer.
Next we talked about the shifting advocacy role that marketers need to embrace. They increasingly need to take all the learnings that they develop about the customer and bring that back to the C-Suite rather than think of themselves as the corporate spokesperson in the marketplace. While marketers will continue to have the need to communicate messages to the marketplace, a majority of the content about a company’s products and services now flows through word-of-mouth.
Once again, marketers need to become more inter-disciplinary, and be concerned about more aspects of the company’s operations than they have traditionally been involved with. With the brand being impacted by so much more of the company’s operations, marketers need to think way beyond the four P’s when they think about their role. Not only do they need to become more knowledgeable, they also need to rely on more of their C-Suite counterparts to help execute the brand. And with marketing becoming increasingly technology-enabled, which is especially true of their relationship with the CIO.
Marketing in the future will not feel like marketing. It will increasingly feel like a welcome service. With marketers developing a better understanding of consumer behavior, both through social sciences and data, marketers will be able to deliver a whole new level of value to their customers. In order to so, however, marketers will need to develop a level of “digital empathy” — by not only contacting customers with the goal of achieving commercial results.
Following this conversation on the changing role of marketers, we switched to the topic of culture. According to IBM research, leading marketers are focusing more on corporate character than on the products they sell. As I said before, marketers have to become concerned with not only how a company comes across in its marketing, but how the company actually operates — and that is called culture, or in IBM parlance corporate character. Culture, of course, is the externalization of shared corporate values and beliefs.
We closed the conversation on the topic of measurements and ROI, which is increasingly tricky as marketing contributions spans both the range of hard things and soft things. Marketers are going to have to be careful to select those key analytics in this growing amount of information that best represent their contributions.
Other things that we discussed include:
- How market researchers need to shift their thinking from consumer segments to consumer tribes.
- How to leverage social media and communities as part of marketing.
- The importance of listening to what is being said about your brand and gauge the sentiment of those conversations.
- The importance of matching internal tribes with external tribes.
- The changing need for talent within the marketing department.
- How the promise of gaining actionable insights from big data is still very much in the early stages.
- How to transition from a transactional customer relationship to one that is focused on the customer journey.
- How to balance an historic/iconic brand like IBM with having a brand that appeals to new generations and consumer tribes with the example of Smarter Planet as a platform to make that happen at IBM.
Tags: big data, changing role marketing, corporate character, culture, francois gossieaux, human 1.0, humanizing brand, ibm, john kennedy, marketing advocacy
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My CMO 2.0 conversation with Phil Clement, who is the CMO at Aon was truly enlightening. Phil is an anthropologist by training with a background in econometrics as well — which makes for an interesting mix. Throughout his career, Phil has been in business development and marketing roles. He joined Aon, a $10B company operating in 120 countries, 7 years ago and recently moved to London to have better access to their worldwide operations.
Aon grew primarily though acquisitions — 419 acquisitions in fact. They range from startups to companies that have been around for more than a century — making for a rich mix of cultures, but also resulting in a tough job to brand a unified company. They built the brand from the inside out and spent more than two years making sure that everyone inside the company lived the brand promise before embarking on an external branding campaign. Phil truly believes that the 62,000 Aon employees are the ones that have the biggest impact on their brand. That is why they made the five qualities of the brand (e.g., teamwork, innovation, etc.) also an integral part of their HR system — with employees being evaluated by the same characteristics that are important to their clients. They truly “humanized” the Aon brand.
They account for local cultural difference in marketing through a program called Jazz — in which a global marketing platform gets developed and locally customized. One such platform was the sponsorship of Manchester United, one of the most recognizable soccer franchises in the world. In fact, more people have conversations about soccer than about religion, politics, and family — hard to believe. They developed a global marketing program whereby a football would go from one office to the next until it reached London, but what happened at the local offices when a football reached that office was totally localized — some might have a feast while others might have a show with native dancers for their customers. So they achieved global consistency while staying locally relevant.
Aon has not quite reached the level where they can do heavy customer segmentation based on behavior-based segmentation, which is one of the promises of big data, but they do know what makes a difference at different stages of the sales cycle.
Phil then explained how they have been moving from a more traditional insurance conversation to one that is centered on what we term “risk intelligence,” or he calls “empowering people’s decision making.” The main reason for this move is that their overall product footprint is now too large for the brand to stand for any particular offering.
Content marketing is a very important element in Phil’s marketing mix. It allows them to let the customer see how they think, it furthers their image and reputation, and it helps explain the depth with which they are approaching the problems in both risk and people. When they think about content, they use the acronym CUTT. Which is, Is the content compelling? Is it useful to the person? Is it timely? Does it lead to a transaction, or is it information about things you actually sell?
Next we delved deeper on the topic of culture. Phil being an anthropologist by training, of course, means that he focuses much of his marketing thinking on human behavior. He looks for hierarchies and symbols that dictate behavior, he looks at what gives people status and power, and always tries to understand social roles. He is also very aware of consumer cultures, and how you can sometimes influence those cultures. Internally there is a global work culture at Aon, one that emanates from their internal branding efforts mentioned earlier. Shaping culture can be very effective — in the absence of rules or the absence of a management decision, for example, culture dictates you what to do.
Lastly, we talked about the need for measuring the impact of marketing, and the difficulty associated with measuring some of the softer elements of marketing that we talked about. Phil thinks that marketing cannot be faith-based and wants to be able to measure everything. He will not embark on a program that cannot be measured. Measurement-based marketing is the only way to achieve consistency in marketing. The soft stuff, like the fact that a 15 year old will always see Aon as a big company in their life because of the Manchester United sponsorship, has to be a bonus — it cannot be the reason you embark on a marketing program. Good metrics include unification of the company, number of leads created, awareness increase, renewal rates, shortening sales cycles, etc.
Other things that we discussed include:
- The importance of excellence in marketing and branding
- What it truly means to have a team-work based culture
- The importance of having a global brand on marketing budgets
- How marketing is a mix of quantitative analysis and creative
- The findings of the Social Workplace Trust Study
Tags: aon, branding, content marketing, culture, francois gossieaux, human 1.0, phil clement
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My CMO 2.0 Conversation with Martine Reardon, who is the CMO at Macy’s was a great one. As usual, Martine started by describing her career path that led to becoming CMO at Macy’s. She started her career in retail early on with an internship at a local Brooklyn retailer, called A&S. During her career in retail, Martine covered just about all aspects of marketing, from PR, events, direct marketing, media buying, and analytics – so she is a real deep-rooted marketing person.
Next we discussed the biggest change that Martine has seen in the world of marketing – that of course being the shift of media into the digital space and social space. The pace at which the shift happened is astounding. The shift in technology, the shift is how people use it, and the rise of millenials all have forced marketers to challenge themselves to stay ahead of the curve.
Macy’s does an especially good job at integrating the digital space with the bricks and mortar stores. There are clearly no walls between the digital marketing efforts and the marketing efforts for the stores — it’s all one integrated branding campaign. They focus much effort in making sure that people have similar experiences online and in stores — something many companies could do a better job at. There are challenges in doing that — stores don’t have the rich navigation capabilities that online environments have, and online you cannot really recreate the richness of merchandising displays that you can have in stores. So they focus on taking best of both worlds and making sure that both worlds have the best of each other. They put technology in stores to enable customers to share potential purchases with friends, and they are making online navigation real easy by adding hints and rich media to allow the online customer to put their whole outfit together.
The next topic we tackled was branding – and how Macy’s deals with the fact that while it is a national brand, it also needs to stay locally relevant. They deal with that in three ways – through marketing, products, and local events. On the marketing front, they have dedicated regional marketers who have their own budgets. They integrate with national marketing campaigns but also add a local flavor. So, for example, while they may be marketing a national fall fashion event; California may be talking about sandals and sleeveless dresses for the fall while Oregon may be highlighting fall boots and coats. They divide up the country into cold, mild and hot for seasonal events. Another way to stay locally relevant and be a real part of the community is by celebrating local events. So, for example, they celebrate the Kentucky Derby by buying Derby hats and marketing those locally with a tie in — “Come to Macy’s for Refreshments after the Derby.”
Another marketing challenge that Macy’s faces is that while they are a national brand which has to stay locally relevant, they also need to stay relevant to different generations, different genders, different ethnic groups, and different type of buyers (e.g., value-conscious buyers vs. fashion buyers). They do this by making sure to balance the marketing calendar with big store-wide events that would appeal to all and other events that are very targeted to millenials, or the beauty customer; or just a men’s customer.
Martine then talked about how in the last three to four years they have been able to leverage customer data to come up with a better customer segmentation system. So, for example, they can now focus on women that like to buy fragrances and jewelry versus the ones that like to buy for the home and children. They also have identified new types of customers, like the service seeker. Those are the people that want hands-on sales associate interaction. They want to be taught how to apply their makeup. They want someone bring them three different shoes, or they want someone to tell them “if you like this, you might also like this.” Another example is the practical spenders — those who, like me, just get in and out when we need to replenish something.
The promise of big data surely seems to be realized at Macy’s. Mining the rich data that they collect through many channels allows them to become more customer-centric and also to be able to focus more on the customer lifetime journey rather than just the transaction. That is especially powerful for Macy’s considering that when they start engaging with a customer at 18-19 years of age, they generally keep them for life. So, being able to follow a customer throughout their life is important — college, first job, first home, holidays, etc.
The last topic we tackled was that of balancing the iconic brand, which dates back 156 years, with the need to develop a brand that also has a future and will appeal to future generations. Using the heritage of the brand allows them to instill trust, loyalty, and credibility in the mind of the customer. At the same time they are an entertainment brand and use their heritage in new and innovative ways to continuously be part of pop culture. A good example of this is the 85-year-old Thanksgiving Parade, which they have been able to keep new every year, with new licensed characters or new artists.
Other things that we discussed include:
- The importance of content and user generated content in marketing
- The importance of listening to customers
- How to leverage the fact that shopping is a social experience
- The importance of loyalty programs in the marketing mix
Tags: big data, customer centricity, customer journey, human 1.0, macy's, marketing, martine reardon
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I was truly looking forward to my CMO 2.0 Conversation with Jonathan Becher, the CMO at SAP, and I was clearly not disappointed. Jonathan came to SAP through the acquisition of an analytics company, where he was the CEO/CMO. Within SAP he went up the ranks through product marketing before becoming CMO 15 months ago. He is responsible for the development, oversight, and execution of marketing strategy worldwide.
Next we discussed Jonathan’s views on the changes that marketing has undergone in recent times. For SAP one of the biggest challenges is the need to change the legacy perception that they are the big expensive German ERP vendor, when in reality they now play in five distinct product categories and have price points that are all over the map. Another big shift in marketing is that we have to move away from the notion that we can control the message to a mindset where we orchestrate the conversations. Jonathan also feels that being in B2B or B2C is an arbitrary distinction. Buildings don’t buy from buildings, people buy products from people, and so marketers need to focus on people, not B’s or C’s.
In order to change positioning in a world where you cannot control the message anymore, you need to take on an outside-in view more so than an inside-out view of the marketplace. That means developing an understanding of what people already believe and what they are already saying, and developing stories that describe impact that will be able to fit within the existing narrative and travel among networks of people who do not work for you. At SAP, they are trying to turn every single employee into a brand ambassador who can tell such stories, not just the marketing people.
People have always been social and making a buying decision has always been a social process. What changed is that the technology and media have become social, allowing the social for which human beings have been hardwired for eons to scale. People can now make social buying decisions about anything without having to rely on the vendors that sell the products. Jonathan quoted research that says that 80% of customers do not visit corporate web sites prior to making buying decisions – leaving marketers to wonder whether to put a lot of energy in their own web site or engage where people are. At SAP they do both, but they have a goal of having 50% of their own website content authored by third parties in the future.
Jonathan believes that in the future Marketing will be responsible for 5 things: represent the voice of the market, be the champion of the overall experience, the steward of the brand, the evangelist of the future, and the integrator/force multiplier. Representing the voice of market is bigger than representing the voice of the customer: It encompasses what your competitors are talking about as well as people who never bought from you.
Next we switched the conversation to a favorite topic of Jonathan, which we actually share – that of culture. Internal employee cultures can stand in the way of strategic initiatives and external customer cultures can stand in the way of successful product launches. Jonathan gave several internal examples of cultures that stood in the way of collaboration, and at the end he says, many teams achieve a local maximum without ever achieving a global maximum. We talked about the importance of shared beliefs and shared objectives in creating cultures that are more conducive for collaboration, and more acceptant of change, and which are requirements to make new strategies work. One of the strong shared beliefs they have at SAP is “All Brains on Deck” – meaning that when you see a problem, even if it is not within your area of responsibility, you own it.
Passion in the workplace is important, but if it is not connected to productivity it can be useless. Passion needs to be organized, it needs to be channeled, and otherwise it can become misdirected compared to where the company wants to go. Another reason why passion needs to be channeled and connected to productivity is because traditional hierarchical management structures are set up to measure KPI’s, not passion.
On the consumer culture side of things, SAP has started taking consumer cultures into consideration for their product positioning as well. Right now they do it primarily around regional cultures. For example, Americans like analytics for the exception management capabilities that it brings, while Germans use it to bring order to chaos. We also discussed the challenges with finding transnational tribes that might have a shared passion, shared interest, or shared pain – such as people who share a passion for sustainability worldwide. One of the issues is that if you do not get deep enough into the essence of the passion, you may be focusing on tribes that are too nomadic. So, you might have focused on the Star Trek tribe only to realize that when the show stopped, most people left the tribe. If you had focused on the Sci-Fi Tribe instead, then people, who were Star Trek fans and left, are most likely still part of the Sci-Fi tribe.
We finished the conversation by talking about the changing nature of measurements in marketing. While people at SAP are huge believers in analytics, Jonathan cautioned that not everything that can be counted counts and not everything that counts can be counted. Measuring the wrong thing can be as detrimental as not measuring it.
Other things that we talked about are:
• How to retrain internal people to tell compelling stories that can easily be retold.
• How to measure the success of social media exchanges.
• Why social should not be used as a shouting platform, but rather as a listening platform.
• The three rings of social.
• The changing roles of sales and marketing.
• The new methods for market segmentation.
Tags: culture, future marketing, jonathan becher, marketing, positioning, sap
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My CMO 2.0 Conversation with Steve Pinetti, the SVP of Inspiration and Creativity at Kimpton Hotels was inspirational to say the least. Steve has been with the company since the beginning and embodies all that Kimpton stands for. He did not end up with his job by design, but by happenstance and serendipity — which is why Steve is a big believer that everyone needs to keep themselves open to possibilities. If you’re open-minded to possibilities, things will come. If you’re closed-minded, you miss.
The vision for the company came from Bill Kimpton, the founder of the company who loved travelling and staying in small hotels that had great food and good wines. From the get go, the way he managed was to empower his people to make sure that every guest had a terrific experience — no matter what it takes. That allowed them to rely on word of mouth to grow the business and to never have to focus on advertising. Steve considers it a good part of his job to make sure that the legacy of Bill Kimpton lives on as the company keeps growing and as they hire more people. His primary goal is to inspire people and make sure that the spirit of creativity is alive in everything they do — from the wake-up call to how to greet the guest at the front desk, how to say goodbye when they leave, and so on.
Kimpton is a very people-centric company which focuses first and foremost on the well-being of their employees. In fact, they don’t necessarily see themselves being in the hotel and restaurant business, they consider themselves being in the business of people. They realize that if an employee is not happy, then the guest won’t be happy and the investors won’t be happy. That is why in the last Fortune top 100 companies to work for, they came in number 16. They also realize that you can only empower people, and achieve consistent emotional connections with customers, by having a shared set of strong values, not rule books or scripts. In their case the values are: focus, passion, creativity, integrity, commitment to self-leadership and continuous improvement. All this employee-centricity leads to very low employee turnover, and very high investor returns.
At Kimpton, humanizing the brand is not an empty slogan — they truly want the personalities of their employees to come through and to be the representatives of the brand — not some faceless corporate personality. One of the important tools that they use to successfully achieve this is Kimpton University – where senior executives spend at least a quarter of their time training others. A formal mentor program in which at least 300 senior level managers are being mentored forms the other part of the investment they make in their employee commitment to continuous education. Another promise they make to their employees is that they’re going to have a safe workplace — one in which people feel comfortable coming to work and one where they feel comfortable with the people they work with.
Next we tackled the topic of creativity — which is hugely important for the company — dating back all the way to its origin. Interestingly enough, Steve is convinced that creativity can be taught. Creativity at Kimpton is focused on how to do things differently so that “when customers finally make their Kimpton stop on their journey of trying different places we want to blow their hair back, we want to stop them in their tracks.” It centers not just on big things but also on small things like what to tell the customer when they get out of the cab, or how to make the wake-up call more memorable. Everyone has to be creative at Kimpton — you cannot have employees wait for the marketing department to become creative.
Next we switched to some more traditional marketing topics — including branding. Originally Kimpton Hotels was branding every property differently — with its own style, its own restaurant and its own local environment. As they grew, and since they do cater to a business audience, they developed the need to provide customers with an umbrella brand. In developing their corporate brand they went from zero to 100 overnight and it actually resulted in a significant uplift in business — with customers now easily finding the boutique hotels they wanted, but with consistent corporate promises like being pet friendly, having kids’ programs and wellness programs.
If you doubt whether people-centricity can pay off, think again. 60% of all their first time customers are there because of word-of-mouth — that compares to 20-25% being considered successful in the industry.
Other things we talked about include:
- How to maintain a startup mentality in a 31 year old company
- How Kimpton built in guerrilla marketing as part of their culture
- A successful corporate wide ideation campaign they are currently running
- The importance of loyalty programs to focus on individual preferences
Tags: creativity, culture, francois gossieaux, human 1.0, human centric, humanize, inspiration, kimpton hotels, people centric, steve pinetti
Posted in CMO 2.0 Conversation | 3 Comments »
CMO 2.0 Conversation with Michael Mendenhall, COO & President at Lipman and former Head of Marketing at HP and DisneyWritten by Francois Gossieaux on October 25, 2011 – 11:12 am -
The CMO 2.0 conversation with Michael Mendenhall, who is currently the COO and President at Lipman and who was formally the CMO at HP and the Head of Marketing at Disney, was most informative.
Michael started his career with a small agency and later developed a rich background in corporate marketing at Disney. At HP, he learned a great deal about technology and consumer behavior, content and storytelling, and social and mobility. Most recently he became part of a group that bought Lipman, an 80 year old advertising agency, where Michael is trying to rebuild an agency with an outdated advertising model into a modern marketing, branding and digital communications consultancy.
During our conversation, Michael mentioned that one of the biggest mistakes that marketers made was to allow new media marketing to bifurcate off from the rest of the marketing group. Based on their lack of understanding on how to monetize new media, and justify ROI’s to their CFO’s and CEO’s, marketers set up groups on the side and gave them minimal dollars to test and beta. Not only did they allow those groups to be siloed, they were also underfunded. Marketers did the same with e-cmmerce groups, which became disjointed from the people developing the corporate web site. And they are doing it again with the social – CMO’s are once again not sure what to do with it and are under-funding those efforts in small groups on the side. The marketing department became functionally aligned with channels – a social channel, an e-commerce channel, an m-commerce channel, etc. Agencies did the same thing, aligning themselves against those same channels – resulting in the rise of social firms, digital agencies, commerce types and mobile shops, etc. The problem with a siloed marketing department it that it forces the CMO to spend a lot of time trying to integrate all those groups so that they have one voice instead of focusing their efforts on what matters: How will I grow the business? How am I increasing share? How am I increasing margin? How am I taking share?
It also makes it difficult for the marketer to focus on the customer journey – from discovery to purchase and hopefully repeat purchase and evangelism. The customer does not think of a company as a set of siloed groups or channels and will engage with companies across all those channels at different stages of their journey. In addition, the customer will increasingly engage with touchpoints that are not controlled by the company – peers, friends and other tribal members that are out there making buying recommendations. When Lipman engages with their clients, they try to break those siloes by having every single expert at the table – the head of brand, the head of technology, the head of digital, the head of creative, and the head of media buying.
A new skill-set requirement for marketers in this digital age is the analytical skill-set – the ability to develop a 360 degree view of the customer as they go through their buying journey; the understanding that information is knowledge that gives you a competitive advantage; and the idea that raw data coming from the bricks-and-mortar transactional environments can shape R&D, as well as customer engagement, cross-sell and up-sell opportunities, and even shape customer loyalty. Most marketers do not reap the benefits from all the rich customer data that resides in their repositories. Understanding that opportunity will become as important for marketers as understanding the importance of the compelling story that will engage their customers and prospects. When CMO’s don’t have the wherewithal to deal with big data, they should team up with their CIO to make sense of it. The problem is that CIO’s often focus on storing the data, securing it and serving it up – not so much on providing services to help the business glean insights from it. At Lipman, Michael is trying to fill that gap by having his own Consumer Insights Group and by acting as a go-between between CMO’s and CIO’s. If you are interested in this topic, and are involved with Digital Marketing, you may consider taking the Digital Marketing 2.0 survey which we just launched with the Society for New Communications Research (or pass along the URL to the survey to a colleague - digitalmarketingtwo.com)
All that being said, marketing and advertising are not likely to be become pure technology plays – according to Michael – because what makes the difference is the content and the storytelling that you use to express your brand. Technology, which can be used to make us smarter about when, where, and how to engage with prospects and customers needs to be balanced with great content.
It’s important to understand culture, not only consumer cultures but also corporate cultures. For companies that have a considerable heritage that can be especially tricky. You want to build on that heritage, by pulling out those attributes of the heritage that are relevant in today’s marketplace, without building a museum out of your brand. When it comes to consumer cultures, too many companies chase after the “cool factor” or the novelty – which can be very short-lived and which often detracts from building solutions that have a real purpose,relevancy, and are tied in with current initiatives.
On the future of how companies measure the impact of the relationship they have with their agency, Michael does not think that the push toward sharing risks and rewards will work, because agencies do not control the whole process that determines success. Marketers will need to monitor KPIs that the agency can actually affect, such as KPIs on the information side, and not the internal KPIs related to product success.
In closing Michael had the following words of wisdom for fellow marketers – don’t lose focus on the customer and their journey. While this may sound basic, with most companies being structured around functions and channels, and in some cases having the wrong skill-set, that is not usually something that comes naturally.
Other things we talked about:
- How agencies have been successful at buying all the functional expertise through M&A’s but often failed to do a good job at the integration of all those functions.
- The importance of having stories that are authentic and transparent, because through technology the customer can see and hear almost everything you’re doing as a business
- How consumer data can give you insights into all aspects of the customer-buying journey – when they will buy, when they will leave you, etc.
- How most companies should focus on existing customers rather than new prospects that can cost as much as 10X in terms of customer acquisition cost
- How listening has to become a great shill for marketers
- How the trend towards purchasing creative through procurement is a real bad idea
Tags: big data, consumer insights, Disney, francois gossieaux, Hewlett Packard, HP, human 1.0, Lipman, marketing technology, Michael Mendenhall
Posted in CMO 2.0 Conversation | 1 Comment »
(Re-posted from the Collaborative Innovation Community) It was a pleasure to interview Steve Shapiro about his latest book – Best Practices Are Stupid. I love the title, although for reasons that are slightly different from the reasons that Steve gives in his book. For him, implementing best practices is copying what others have already done and therefore not the best way to innovate. For me, best practices are so context sensitive, that it is really hard to recreate them within a different organization. Companies are better off understanding worst practices and avoid those rather than recreate best practices – no matter how you look at it.
Many companies try to innovate by asking customers and employees for ideas – not a good practice when it comes to innovation. As Steve explains, when you ask people for ideas you end up with a whole bunch of really bad ideas. The signal to noise ratio in open ended idea generation campaigns is typically very low. The sheer volume of ideas that needs to be sifted through to find the good ones would stretch the organizational capabilities of most innovation departments – creating frustration among those who have to manage the process. Not only that, but the low number of ideas that typically gets implemented also frustrates the idea submitting community, who feel like they are not being listened to. So frustration all around and poor results – maybe it’s time for companies to STOP asking for ideas.
Instead what companies should do is focus on giving employees and customers business challenges – problems for which you are actively seeking solutions. A good example of that is when Netflix launched its $1M Netflix prize to get outside teams to help them refine their recommendation engine by 10%. Not only did they only pay for results, they also outsourced the failures that are typical with the serial trial and error nature of innovation processes. In the podcast we discussed the differences between innovation tournaments and innovation bounty campaigns and when to use one over the other or when to set them up as competitive challenges versus collaborative challenges.
We also talked about the power of the crowds in innovation, and how crowds are notoriously bad at helping you find the good ideas among a mountain of ideas. If you use the simple voting up and down system, like the ones that are very popular in crowd-sourced innovation programs, you often end up with the most popular idea – not the best one. A better use of the crowd is to have them help you identify the duds – something they do really well.
It is amazing to realize that the main reason for new product and service failure is still “not meeting customer expectations.” While companies are getting better at doing market research, most need to change as their “market research really sucks.” Instead of asking people questions that make their conscious part of the brain find an answer, which is not the part of the brain that makes buying decisions, companies should use anthropological techniques and metaphor based methods to uncover people’s unconscious needs. They also need to get out there and talk to non-customers instead on blindly focusing on their in-house customer data.
Motivators are another important factor to understand when managing innovation – and companies should understand the limitations of monetary incentives to stimulate proper behavior.
Steve closed the conversation by talking about USAA and how they found a way, through an innovation center for excellence and innovation ambassadors within the business units, to make innovation part of their DNA. This should be the ultimate goal of companies looking to change their practices. As an organization, you need to create an adaptability to change that will match the rate of change that is happening outside your corporate walls.
Other things we talked about include:
- How companies who are 2nd or 3rd in their markets need to change the game in which they are playing rather than to play by the rules of the leader
- VC like boards in innovation management initiatives
- How Innovation Centers and giving people 15 or 20% of their time to innovate outside of their area of responsibility is better for recruiting purposes than for actual innovation
- How measurements can kill your innovation initiative
- How you need constraints to foster innovation
- How expertise and innate cognitive biases can kill innovation
- The importance of culture in innovation
You can listen to this podcast on the Collaborative Innovation Community.
Tags: best practices, best practices are stupid, culture, innovation, stephen shapiro, worst practices
Posted in CMO 2.0 Influencer Conversation | 1 Comment »
Dan Greller, the former CIO at Legg Mason, and currently technology innovation consultant, speaker and writer (with a great blog), was kind enough to join me for my second CIO 2.0 Conversation.
Dan has 30 years of experience managing global technology organizations, mostly within the financial services industry. Having first entered the job market when the debate between mainframe and desktop computing was raging, Dan has seen his share of technology innovation battles – which made it particularly interesting to discuss this latest battle between innovation and control taking place within most companies around adopting new technologies.
According to Dan, that balance between innovation and control has remained the hardest balance for CIO’s to manage. Between the increasing demands that organizations put on their IT departments and their CIO’s, the accelerating pace of change, and the ease with which employees can now bypass their IT department – that balance will become harder to manage, not easier.
The consumerization of IT, which refers to the phenomenon that consumer technology innovations are increasingly driving enterprise tools development, and also to the fact that many employees now expect their personal tools – their phone, tablet and home laptops – to work within their work environment, is clearly here to stay. The user experience that enterprise tools provide sorely lacks the experience that consumer services provide. Think of doing a Google search vs searching for content in your corporate knowledge management system, compare your corporate procurement process with the Amazon buying process, or look at how your corporate software provisioning differs from the experience you have in the iPhone or Android app stores. There is no comparison, and it is that difference in experience that leads to the consumerization of IT. CIO’s react to these forces in different ways – some say NO, and some put their head in the sand. Clearly neither one of those strategies is a workable strategy. Both will leave your users dissatisfied and relegate your IT department to irrelevance. CIO’s need to partner with key constituents and business unit owners and decide on strategic technical directions that match the culture of the company and deal with the risks associated with those strategies – human resource (HR) risks, compliance risks, legal risks, reputation risks, security risks, IP leakage risks, etc.
Risks are a thorny issue for many companies, and one that can stop innovations in their tracks. Many people, who by nature are averse to change, will hide behind potential risks, often unreal ones, to avoid having to deal with that change. In assessing risks, Dan suggests that people look at the Netflix manifesto about their culture, where they talk about a concept called the waterline. The way they look at decision-making and risk is that they think of their company as a boat, and they think of decisions being above or below the waterline. If a decision is below the waterline, then the risks of having something go wrong is much higher than if the decision is above the waterline.
We then talked about the changing role of IT and CIO’s as it relates to shifting their position from order takers to strategic business partners. CIO’s need to be the leaders who understand technologies and how they apply to the business. They need to be the ones that recommend and provide guidance on how to leverage social computing, mobility, universal access, cloud computing and “big data” as part of business processes.
Social computing should be on every CIO’s agenda, not because it’s a fad, but because eventually it will have to become part of every enterprise process and the systems that support them.
On the topic of measurements, Dan believes that there are two types of measurements – hard measurements and the anecdotal comparisons with peers. And while Dan is not a big proponent of hard benchmarks, which would require the ability to compare apples with apples, something that is virtually impossible in diverse organizations, he does believe that comparisons with other people and companies in your industry are important. This makes sense in a competitive environment where the winner is the one that can stay ahead of the others. One of the most important measurement criteria for IT departments should be customer satisfaction, but that needs to be balanced with metrics that reflect the increasing strategic partnership that needs to exist between IT departments and the business units.
Culture trumps all and CIO’s should be thinking about culture as part of everything they do. It is what motivates people to do what they do, and it is what ultimately determines the effectiveness of all organizations. Dan believes that companies should listen to Daniel Pink when he says that people have three motivations, autonomy, mastery and purpose. They want to have a say in their destiny, they want to be recognized as a master in certain fields, and they want to be connected to a higher purpose. It’s important to have a culture that understands and promotes those values, both for your employees and also for your customers.
To create or change a corporate culture, you need to articulate where you want the culture to be, communicate it clearly with your employees, walk the talk, and reward and recognize behavior that supports that culture. The latter is especially important for IT departments, where metrics around on-time delivery and zero tolerance for failure have often stood in the way of creating a collaborative and innovative culture.
Dan ended the conversation with a few pieces of advice for IT professionals – don’t just focus on the bits and bytes, but focus on humans, their cultures and their biases; reach out to other disciplines like psychology and economics; think beyond your technical expertise when you think about the competencies that are needed to get your job done.
Other things that we discussed include:
- How smart companies now deal with risks through a combination of education and guiderails rather than through policies alone
- The importance of e-discovery and archival systems in regulated markets
- The positive aspects of operating in regulated environments where everything gets recorded on business communications
- The importance for CIO’s to stay abreast of what happens to their industry by networking with peers
- How companies and individuals deal with innate human/cognitive biases like the confirmation bias
Tags: CIO 2.0, cloud computing, culture, dan greller, human 1.0, IT department, IT strategy, legg mason, mobility, netflix, social computing, technology leadership
Posted in CIO 2.0 Conversation | 4 Comments »
My first CIO 2.0 conversation with Shirley Cunningham, the CIO at Monsanto, was truly a 2.0 conversation. Shirley has a rich background. Hailing from Scotland, she held many positions in MIS departments (Management Information Systems) across various industries before joining Monsanto in the late 90′s through an acquisition. She became the global CIO 3 years ago.
As CIO at Monsanto, Shirley is a member of the strategy team. Becoming a member of the strategy team came with a change in role for IT – that from being an order taker to a strategic partner sharing responsibility for the business’s growth. They morphed from being the implementers of ERP systems and other technologies to a team that now worries about customer space transformation though information and technology, advanced decisioning, and customer and product pipeline. And while the IT department at Monsanto supports all functions, most of its resources are dedicated to R&D and the customer space.
Being a strategic business partner rather than a support organization requires a deep understanding of the business – that is why over 35% of Monsanto’s R&D IT group has science backgrounds with 10% having PhD’s. They don’t just support the product development process – they are a key driver of it. This shift from being a more traditional IT department not only required a whole new level of leadership; it required a complete mindset shift. If you would have asked a random person in IT what they were doing a few years ago, they might have answered “I am an Oracle DBA.” Today, you are more likely to get the answer “I support a system that helps us collect $3.5B in revenue.” People now think of their jobs in terms of the value that it delivers to the company, which is not just great for the company, but also energizing for the individuals. And therein lies a virtuous circle – when people are more energized, you have more innovation, more creativity and thus more energy and excitement.
They have a metric-driven culture. Not just one where they focus on understanding the cost of transaction and other classic metrics, but one where they measure the outcomes and values of technology usage. So they will measure the value of being able to assemble a genome on their product pipeline and their ability to commercialize products. A dedicated, and very agile, enterprise information management group helps them do that.
Word of mouth is very important in the agricultural space – with most of it happening in coffee shops. As some of those conversations are moving online, it will be very important for Monsanto to have a seat at those virtual coffee shop tables. That is one reason why Shirley thinks there is a lot of value in having employees be active in communities and social media. They are still in the early days, but plan on developing this capability in the future.
Monsanto is of course known for its culture of innovation – which is driven by its overarching goal to double the yield in agriculture within the next few years. They are passionate about innovations that impact sustainability and they think really big when it comes to their mission. This “change the world” type attitude makes for a great innovation culture – one in which people constantly think beyond the boundaries. It also helps with the type of people they attract to the company.
Monsanto actually started an innovation lab – which is unencumbered by corporate standards – and where people can work on getting early proof of concepts. Employees first submit ideas to peer review, after which a VC-like board approves funding for further development.
Innovation at Monsanto is not contained to its corporate walls – they also co-innovate with suppliers and academia. Cross-enterprise innovation takes a lot of effort on both parties, and there always needs to be clear win for both of them.
Another interesting aspect of Monsanto’s culture is the fact that they are non-hierarchical. They have been operating that way for 15 years and they seem to be one of the only companies that has been able to achieve this at scale. Solid lines and dotted lines like you would find in typical matrix organizations are non-existent – everyone has multiple solid lines. Those employees that come from more structured organizations take a while to get used to this non-hierarchical structure, but ultimately it makes for a great place to work. People know that they can walk in and talk to anyone, including the executives.
In closing Shirley had a few words of advice for executives at other companies – CIO’s need to step up and take ownership for things that they traditionally would not have done before so that they can have a bigger impact on the business, and they need to take more risks.
Well said – Shirley is clearly a 2.0 CIO.
Other things we talked about include:
- What worked and did not work with the “two-in-a-box” concept of pairing up a business leader with a technology leader
- The consumerization of IT and how all companies will have to be ready for that
- How they deal with risks, like IP leakage risks, through awareness and education
- The importance of being active on a local community basis while being a global company
- The role of rewards and recognition within an innovation culture
- The importance of a successful collaboration culture in an innovation culture
- The role of values and the importance of reinforcing those values to ensure a good corporate culture
Tags: CIO 2.0, human 1.0, innovation culture, monsanto, shirley cunningham
Posted in CMO 2.0 Conversation | 2 Comments »
I truly enjoyed my CMO 2.0 Influencer conversation with Tom Asacker – who I consider a friend and also admire as an original marketing thinker. Tom is the author of multiple books, including Opportunity Screams: Unlocking Hearts and Minds in Today’s Idea Economy, and also blogs at A Clear Eye. Before becoming a successful author and speaker, Tom started his career at GE, where he participated in a management buyout of an electronics firm. After that he became the founder and CEO for a medical devices company.
The first topic we tackled is that of marketing in a world where everyone, including executives, is increasingly overwhelmed with the amount of information that is coming at them. Tom is convinced that most executives need to pause and rethink their purpose and how they will execute that purpose. While the priorities of marketing have not changed all that much - drive top line growth and grow marketshare -, those are results that come from understanding and feeding the hungers of your audiences and the customer insights, and from better defining one’s brand and how to deliver a differentiated value proposition. Marketing executives cannot optimize their way to success by measuring everything and everyone to death. They need to care deeply about their audience and create unique value that improves their audience’s lives. You cannot expect results from spreading messages all over the place hoping that somehow you will connect with the feelings of your audience – you have to really care.
Marketers also have to rethink their content, and develop it in a way that it will travel in those circles where buying recommendations are being made. That means that we have to understand what value people will derive from using the content we develop with others. After all, most people only do what they value – and that is true for making recommendations and reusing vendor content. Marketers need to switch from their traditional inside-out perspective and start looking at everything they do through the eyes of their audiences.
People need to realize that everything in the marketplace has changed – the amount of products and services is overwhelming, and the amount of information is overwhelming, buyers’ attitudes about how they filter and process information and how they are making their decisions has changed.
Next we switched to one of Tom’s favorite topics – branding. Branding is of course something that exists in the mind of a customer – it’s an expectation of value that gets created through interactions in the marketplace. Those interactions can include advertising, pricing, social exchanges with other users, packaging, financing options or interactions with company employees. As you can see, many of these interactions are happening with touch points that are somewhat controlled by the company. So to say that the consumer owns the brand is a fallacy. Tom wishes we would have a Deming-like figure in the branding space – someone who could influence how everyone in a company feels responsible for the brand.
About engagement, Tom said: “People at successful companies love what they do, they believe in what it is they get up in the morning and go to work to do every day. Secondly they love who they do it for; the’re interested in in their audience and what they’re all about and how to improve their lives and how to make things better. And the third thing, is which I call engagement, is that they like the process of keeping what they do and what they love connected to others: others’ interest and others’ values. They love the idea of injecting energy into their idea and bringing it to life for everyone’s benefit.” How is that for a definition of engagement? Much better than most definitions being bantered around in the agency space if you ask me.
Continuing on the topic of engagement, Tom described the three steps you need to follow to engage people – three steps that are described in more detail in his latest book “Opportunity Screams: Unlocking Hearts and Minds in Today’s Idea Economy.” The first step is you want to engage people’s conscious attention. How do you get someone to stop and think about what’s being presented? You do that by charming them and by providing some cue to value. Once you feed their hungers and you’re reflective of them and their self-identities, you entice them to participate. All they want to do then is believe, and you can help them believe in what you do by conveying purpose through your actions, by stimulating interaction and sharing like you discuss all the time. But you always have to have value and unfortunately most businesses don’t believe in the distinctive value they add to people’s lives.
You cannot have a conversation with Tom without talking about culture and so we talked about this whole notion that culture trumps strategy, and what that means for older companies that may not have ideal cultures to roll out new strategies. In older companies you often have what Tom calls cultural immune systems that end up blocking new ideas and new perspectives. Leaders need to be aware of this and be willing to take off their cultural glasses and expose themselves to new ideas (Note that we will be conducting a research project on culture and strategy in partnership with the Schulich School of Business at York University, email me if interested).
“Business is about people, it’s about culture, it’s about feelings, it’s a way to help people feel prosperity and well being. It’s not about numbers,” said Tom, and I must say that I could not agree more.
We talked about a lot more things than can be captured in this blog post. I hope you will find the time to listen to the podcast.
Other things we discussed include:
- How Drucker’s moto that business is marketing never materialized
- The importance of the last transaction on the brand perception
- How the expectations that we have from brands has soared
- The role (or lack thereof) of agencies in meaning making
- How engagement is not the same as sustained attention
- The resistance of middle management to cultural changes
- Ways to change corporate cultures that do not involve a near-death experience
- The importance of finding meaning at work and being able to bring passion to work
Tags: branding, consumer culture, culture, drucker, employee culture, engagement, francois gossieaux, marketing, marketing strategy, social media, Tom Asacker
Posted in CMO 2.0 Influencer Conversation | 3 Comments »
My CMO 2.0 Conversation with Tom Nightingale, the CMO at Con-way, a $5B publicly traded transportation and logistics company, was very enlightening to say the least. When I spoke with Tom, he had been the CMO at Con-way for 5 years, where he overlooks public relations, web and digital marketing, product marketing, lead generation, events, direct marketing, new product development, customer satisfaction and voice of the customer – generally what you would expect the responsibilities of a CMO to be. He is also responsible for internal communications and enterprise sales management. One of the things that was intriguing, and that I think we will see more of as part of a CMO’s responsibility in the future, is that he is responsible for recruitment marketing, a major effort as they recruit over 6,000 drivers a year at Con-way (Note: we will be launching a research project on recruitment marketing in partnership with Monster.com — more on that later, email me if you have an interest in participating).
When Tom talks about being in charge of recruitment marketing, he talks about having the responsibility to fill the funnel, which then gets processed by his partners in HR. His role is to bring in quality candidates who align with the Con-way brand and their employment value proposition. Being in charge of employee communications means he communicates with employees from the day after they process through the HR funnel till the day that they leave.
Like most CMO’s, Tom has seen some big changes in marketing over the past few years, with the two most notable being the rise of social media and the decline in effectiveness of TV and print advertising. Another big change is the increase of content curration across all channels.
As in most industries, word-of-mouth is an important vehicle to reach customers, prospects, and prospective employees. At Con-way they make sure that the content they create can easily travel and be used when friends recommend them as a potential vendor or employer. A good example of that is how they share their job feed on their Facebook page for others to see and share with friends.
As said earlier, social media has made a big difference in Tom’s job over the past couple of years. While on the commercial side of their business the use of social media is still in the early stages, they see it playing an increasing role in customer service related inquiries as well as in requests for proposals and quotes. They also use social media internally, one example being the use of twitter to connect truckers with their load boards.
An interesting challenge facing Con-way marketing is that they have thousands of customers with whom they have a pretty shallow relationship, in essence moving freight for them from point A to point B, and which differ from one another on a regional basis. They also have several hundred customers with whom they have very deep relationships – those that outsource their entire supply chain to Con-way, and who have needs that are different based on industry. Tom is convinced that the latter group presents a bigger opportunity to connect customers with one another using social media or social CRM – ensuring that the collective becomes smarter than the individuals. When he thinks about a community for those customers, he also envisions hyper-local and face-to-face components – which is the right way of looking at customer communities when you have that opportunity.
We also talked about accountability and metrics – a topic that is top of mind for many marketers. At Con-way, marketing is accountable for three things – reducing the cost to acquire and retain customers, attracting and retaining the best and brightest employees, and positioning the company for growth. All metrics that are being used at Con-way support those three overarching goals.
The conversation then switched to the role of culture in a services company like Con-way. Con-way has a simple set of values that they truly live by – integrity, commitment, safety, and excellence. With a business where the brand is impacted by lot’s of employees who interact with customers, it’s critical to the brand to have simple values that everyone can live by. That is also why the employee brand and the customer brand have to be the same – if employees are the ones that will influence the brand promise in customers’ minds, they need to live that brand promise. The values at Con-way are so important that they are discussed every day during pre-work meetings with 8,000 drivers who interact with an average of 25 customers every day.
We closed the conversation by talking about innovation. At Con-way, they make a distinction between process innovation and product innovation. Process innovation is key when you have to constantly increase efficiency in a low margin industry to maintain profitability, while maintaining very high levels of customer service. Product innovation at Con-way is based partly on Voice of the Customer and partly on trend spotting to see where the industry is headed. Launching new products in a service company like Con-way can be a tricky proposition. Unlike with product companies, where they can launch a product that is 80% complete and fix it later, in a services company the product has to be 100% perfect when you launch it.
It’s really interesting to see how the issues of a CMO in a more traditional business are not all that different from those in more recent industries, like for example the high tech space.
Other things that we discussed include:
- The importance of alumni in marketing and new employee training
- More detailed conversation on how the overarching goals drive metrics
- The integration between sales and marketing
- Marketing content co-creation with sales
- The use of social media for internal communications
- The importance of content curration and thought leadership
- How you need to adjust your business practices to the local culture
- The differences in employment marketing in different cultures
Tags: con-way, culture, employment marketing, francois gossieaux, HR, innovation, recruitment marketing, tom nightingale
Posted in CMO 2.0 Conversation | 4 Comments »
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