CMO 2.0 Conversation with Karen Quintos, CMO at Dell

Written by on June 18, 2011 – 2:54 pm -

quintos_karenI truly enjoyed my CMO 2.0 conversation with Karen Quintos, the CMO at Dell. Karen has somewhat of an unusual background for a CMO at a high tech company. She spent almost half her career in the pharmaceutical industry and did a stint in the financial services industry before landing at Dell 11 years ago – a rich background that was clearly reflected in the conversation. Karen also has a passion for being close to the customer – a good trait for any CMO.

We first talked about social media, a topic we had discussed at length with Erin Nelson, the previous CMO at Dell, and Manish Mehta, the VP of social media and communities, during an earlier CMO 2.0 Conversation. Karen confirmed that social media absolutely has to be built into the fabric of the company and that the (social) customer has to be at the core of everything. In fact, Karen believes that customer centricity is key to win in the marketplace. At Dell, they leverage social media as part of everything they do – product development, sales, marketing, HR, IT, finance, and service and support.

Karen then described the evolution of IdeaStorm, the Dell innovation communities, and how they now include Storm Session – focused and directed customer feedback sessions bound in time. Examples of successful Storm Sessions included discussions with CIO’s around virtualization, sustainability, and data center-type solutions – where customers could discuss how they think about ROI and total cost of ownership rather than just talk about technology deployment issues.

The Dell Social Monitoring Command Center, which was launched last year, is set up for employees to monitor, respond, and trend the conversations that are going on about Dell all over the world. On any given day they get upwards of 25,000 different conversations about Dell. A small team of people triage the conversations  by coding them red, orange or green, and feed them into processes like product development. Karen made the point that when it comes to social media monitoring companies need to realize that it should not be about hearing, but about listening and making sense.

“Leveraging social media cannot be a bolt-on strategy,” said Karen, “it has to be built into the culture…it cannot be someone’s second job, it cannot be something that they think of once a week. It has to be something that’s integrated into their day-to-day operations.” Right on! But amazing to hear that and then realize that more than 60% of those companies that participate in our Tribalization of Business Study (co-sponsored with Deloitte and the Society for New Communications Research) have 1 or less than a full time person associated with these efforts. Those companies need to wake up and listen to truly Hyper-Social organizations like Dell.

There are of course risks associated with social media. One of the early risks that Dell identified was to react too quickly – either latching on to negative comments first or latching on to proposed product ideas that very few people want. Sounds a lot like not giving in to the “tyranny of the minority” and instead reacting to real trends. Another risk they identified early on was around transparency – especially when eager employees don’t disclose that they work for Dell. Karen believes that many of the risks can be mitigated through training and education.

As many other CMO’s at successful Hyper-Social Organizations, Karen pointed to the importance of having simple values to ensure consistency across the multiple employee touch-points that they have with their customers – in their case be open, be transparent, be simple, and be caring.

Next we switched to the topic of culture, which Karen believes is, if not the most important, one of the most important elements in a company’s success. She considers Dell’s culture fairly young at 27 years old, but truly believes that is what guides behavior and brand. She also believes that it is extremely important to link your own culture(s) with that of your customers – especially in the B2B and public sector space, which make up 80% of Dell’s business.

An important part of culture is the culture of innovation. Over the last two years, Dell has fueled innovation not just from within but also through acquisitions. Interestingly enough, but not surprising (the world is not flat after all), Dell sees aquisitions from major innovation centers like Silicon Valley as being totally key to continue to bring the spirit of innovation within the company.

We closed the conversation by talking about a super-cool program that Dell is doing in partnership with the University of Texas – the Dell Social Innovation Competition. It’s open to higher education students around the world who have a passion for taking a social issue that they see within their community and coming up with a plan to address it. They submit ideas, business plans and videos which get voted on. The best ones get to travel to Austin where a finalist gets selected. With kids from India, Nigeria, France and the United States competing with one another, they are able to create a cauldron of diversity of thought necessary for innovation that would be hard to create in any corporate environment.

That is definitely something I would want to tell my 16 year old son about!

Other things we talked about include:

  • The recommendation for companies to listen and engage with the both the good and the bad in social media, and how the sooner you engage the more successful you will be
  • How Dell has training programs in place to teach people (9,000 people trained so far) how to listen and how to engage
  • How to ensure that the proper experts get involved in deeply technical discussions
  • The importance of trusting employees to do the right thing
  • The importance of being able to trend conversations and launch more in-depth discussions with customers about important topics
  • The importance of hiring people with a passion to win
  • The importance of tying compensation and rewards to a set of behaviors – not just “what” behaviors, but also “how” behaviors
  • The importance of social rewards in fostering the right culture
  • The importance of employee rotational programs to foster innovation

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CMO 2.0 Influencer Conversation with Grant McCracken, author of the Chief Culture Officer

Written by on June 17, 2011 – 10:28 am -

grant_mccrackenHaving known and admired Grant McCracken for a few years, I knew I was in for a intellectual treat with this CMO 2.0 Influencer Conversation. Grant is an academic with a background in anthropology, economics and complexity theory, a blogger and also the author of multiple books, his latest being The Chief Culture Officer, how to create a living, breathing corporation.

Grant has always focused on contemporary American Culture, making his knowledge a real treasure trove for marketers who are trying to understand people’s buying behavior rather than shoving products down people’s throat. His interest in economics comes from the fact that when you study American Culture, you quickly see that it comes from the interaction of culture and commerce.

Having so many definitions of culture out there, we started the discussion by defining what culture means for Grant. Forgive the technical nature of this part of the conversation (and also the fact that Grant was cut out for a bit – we my rerecord that part in the future), but being a new student of Culture, it was important to me. Grant does accept the classic definition of culture as presented by Geertz – which says that culture if a transmitted pattern of meaning embodied in symbols by which people communicate, perpetuate and develop their knowledge about and they attitudes towards life.

Grant then took us through the evolution of culture over time. In hunter gatherer societies, culture was very egalitarian, like language – everyone shared it and nobody had a disproportionate influence over it. In more developed and structurally more complicated societies with hierarchies, we saw the creation of elites who decide what meanings should be and what shape culture should take. In Western societies and all the way into the 20th century we had magazine editors, the keepers of mass media, marketers, and agencies that shaped public opinion and cultural meaning making. In the last 10 years, we have entered a new era, one in which the production of meaning and culture became more egalitarian once again. A kid with $2,000 worth of computer equipment in his parents’ basement can now influence public opinion as much as the elites do. A question in Grant’s mind is whether, with the democratization of culture and the emergence of the long tail, we may lose the centricity and shared-ness that Geertz was talking about and end up with a solipsistic world when everyone is their own universe. We both agreed that while it is structurally a possibility to end up there, we probably will never see that happen.

Next we talked about the importance of culture in business – and started with the example of Coca Cola, which without culture would be nothing more than sugared fizzy water. In the early days Coca Cola had the world to itself, with Pepsi not showing up for another 30-40 years. At the time, Coca Cola’s advertising shaped America’s concept of itself and even influenced how we think about Santa Claus. But then came the competitive phase , and a market crowded with alternatives. Brands now had to keep up with contemporary culture rather than shape it – you would pick a trend and ride that wave into mainstream acceptance. Now that world has completely gone as well. With culture coming from so many places, in so many forms, and lasting such a brief time. It’s like a perfect storm out there, you pick a trend and it’s gone before you know it. And so many companies end up engaging in a desperate game of catch-up, which means that they don’t really have any strategy at their disposal.

That is why Grant makes the case that every company should have a Chief Culture Officer (CCO).

We then talked about the role of agencies in the marketing and meaning making mix and how Grant believes  that  30 seconds spots are still powerful tools in shaping meaning. Contrasting a Volvo ad with the Ford Fiesta Movement program in social media, he argues that the Volvo ad did great things for the brand that could not be achieved in social media. In fact, and while the Ford Fiesta Movement was a brilliant program, it did not sell any cars.

Next we talked about slow culture vs. fast culture, and how most companies forget slow culture. Fast culture comes from the cool hunters who know only the hippest things. What they don’t understand is that 80% of all the meanings in our culture are relatively ancient – they come to us from the 19th or 16th century, or even beyond that. Focusing on the 20% cool hunting or fast meanings is what causes everyone to play the desperate game of catch-up he talked and to constantly repudiate their own brand.

I could have written a book with all the information that flowed during this conversation. You will have to listen to the recording to hear Grant talk about some of the other things we discussed, which include:

  • How many companies have lots of CCO kinds of people on staff, but no-one in the C-Suite
  • How agencies will have to adapt moving forward and how cultural intelligence is so important that you cannot outsource it to them
  • How successful brands are a set of meanings that are exquisitely responsive to the consumer and delicately and brilliantly crafted by the tactician, the brander, the marketer or the ad agency.
  • How brands are bundles of meaning that need to be manufactured and can be a conduit for sociality
  • The lack of culture training in business education
  • Whether co-creation of meaning making with consumers can work
  • How the older generation had multiple group memberships while teenagers have multiple selves
  • How social status no longer plays a role in American culture and how it was replaced by celebrity culture
  • How Gen Yers get their security from their networks where we got it from the workplace

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CMO 2.0 Influencer Conversation with Author Paul Gillin

Written by on April 30, 2011 – 5:42 pm -

pgillinHaving known Paul Gillin for years, I knew this would be an informative and rich conversation. Paul is a veteran technology journalist and the author of multiple books about new media. Most recently he co-authored “Social Marketing to the Business Customer: Listen to Your B2B Market, Generate Major Account Leads, and Build Client Relationships,” a great book if you are trying to find out what best to do with social media as a B2B company. He also recently became the father of twins.

As usual, our conversation started with Paul giving us some background on his career. Paul spent most of his career as a technology journalist before he turned his whole focus to social media and published his first book, The New Influencers in 2007.

We then moved on and discussed the need for a B2B-specific book on social media. It was my experience that the lessons to be learned from social programs in B2C or B2B were the same – since successful programs don’t involve B’s talking with B’s or C’s, but people talking with people. While that is true at the highest level, Paul and his co-author Eric Schwartzman make a good case for why there is a need for a B2B specific best practices book, and they do a real good job in providing guidance to B2B marketers. The main difference in B2B and B2C marketing that calls for a different approach lies in the buying process, which is collaborative and deliberate in B2B companies vs. individual and often impulse-driven in B2C environments.

One of the most frequently used social tools in B2B environments are corporate blogs, and of course it does not take all that long to look around and see that many corporate blogs are failures – corporate-speak-laden web sites that fail to capture comments and viewers, or sometimes don’t even accept them. Paul argued that most failed blogs come from organizations that consider them, along with Twitter, Facebook and LinkedIn, as channels through which to promote corporate messages, rather than social environments in which people have conversations with one another. Not only that, but in a recent study of resellers and system integrators, they only found 15 companies out of 100 that actually had a corporate blog – making you wonder whether those companies feel like they have nothing interesting to talk about with their partners, customers, and prospects…

Next we jumped onto the online trust issues and how some people claim that you cannot trust what you hear online. While true that it’s easier to tell a lie or spread a rumor online than it is in person, it is very hard to get a lot of people to believe it for a very long time. The crowd will usually “out” those falsehoods and that’s the reason why you don’t have big myths and big hoaxes going around online.

Social media should never be a goal, according to Paul,  and you shouldn’t have a social media strategy. Instead you should have business goals and business strategies that may or may not include social media.

If social media makes sense as part of your business strategy, then there are a number of ways in which you can sell it to your executives. One is what Paul calls shock-and-awe, where you show executives how people are already talking about you in the marketplace, and how your competitors found ways to join those conversations where you didn’t. For those companies that may be smaller and may not have a lot of conversations going on around them, a stealth or guerrilla approach may be a better way to get going. Another way is to do market research and bring back an overwhelming volume of case study evidence.

Paul did not necessarily agree with my assertion that in most social environments we would eventually see the Facebook effect, where over time one community per topic becomes dominant. He believes that fragmentation in many markets will continue to exist and thrive.

You cannot turn your organization into a social organization from the top down only, nor can you become one through grass roots efforts without the support from the top – becoming a social organization requires support from all levels of the organization. There are many different variants in which organizations transition from hierarchical organizations into social organizations, and Paul took us through some of them.

We also touched on the risks associated with social media and how companies need to develop social media policies that are encouraging use rather than discouraging it, but also need to educate and train all their employees on what works and what doesn’t.

We closed the conversation by talking about Social CRM, a topic that Paul writes and speaks about frequently. Paraphrasing Paul, he said “at its core CRM is about managing relationships with customers and whether those relationships involve social media channels or not should be irrelevant – so the social is really just an unnecessary adjective.”

Well said!

Other things that we discussed include:

  • An in-depth discussion on the differences between B2B and B2C marketing, especially as it relates to social marketing
  • Crowd dynamics and how crowds tend to be smarter than individuals, as well as the pros and cons of crowdsourcing in marketing and innovation
  • The importance of using guerrilla tactics and knowing when it can and cannot work
  • A more in-depth conversation of what happened with Dell
  • The impact of new communication tools and open communication on business performance
  • The consumerization of new technologies and how many social technologies come into organizations through the back door
  • The importance of having values and living by them in empowering your employees

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CMO 2.0 Conversation with Ted Smyth, EVP, Corporate Affairs at The McGraw-Hill Companies

Written by on March 18, 2011 – 2:23 pm -

smyth-100If you want to meet a truly insightful CMO 2.0, meet Ted Smyth, the Executive Vice President, Corporate Affairs at the McGraw-Hill Companies. Ted has a really interesting background that started with a 15 year long  career as a senior Irish diplomat. He then switched over to the world of business by joining Heinz, where he spent 20 years before joining McGraw-Hill 2 years ago. One of the main lessons learned from this diverse background is that companies have to embrace performance with purpose – you don’t want to achieve profit goals at the exclusion of what’s good for society. Young people especially, will not want to leave their persona’s at the company’s front door, they will want to continue to do good for society while being at work. Another obvious benefit of mixing do-good with company performance  is that as a company you will increase the passion of your employees in the context of their work – which is clearly a win-win proposition.

We quickly delved into the topic of innovation, a hot topic at McGraw-Hill, where many of the industries in which they operate are undergoing tectonic shifts, and many of their businesses are going through the classic innovator’s dilemma. Innovation and customer focus are two major initiatives at McGraw-Hill. They strive to delight customers and prospects, and seek out people who are brilliant, courageous, curious, competitive and driven to do so – both inside and outside the organization. Innovation at McGraw-Hill is both a grass roots as well as a top down initiative, and celebrating wins, benchmarking themselves against other innovators, and developing an understanding of societal needs is all part of their culture of innovation. Ted is a firm believer that innovation needs to be structured and attached to people’s work routine. It needs to be disciplined to succeed and you always have to be on the lookout to not just innovate according to your capabilities, realizing that sometimes you need to upgrade your capabilities to develop what customers want.

Next we talked about education and learning, an important part of McGraw-Hill’s business, and a perfect example of what Ted meant when he talked about achieving business success while also doing good for society. Learning and education are clearly becoming digital activities that can help fix the current system, which is failing our kids – with kids who are slower than average falling behind and those who are faster than average getting bored. Digital courseware helps alleviate these problems. In digital environments, teachers and educators are freed up to become coaches with the ability to provide one-on-one help for the kids. While digital learning can remove some of the social barriers that sometimes inhibit learning (e.g., humiliation for not getting it), digital learning needs to be a very social/collaborative activity in order to succeed.

We then talked about the changes in how people consume content and where they get their buying recommendations from, and how that impacts marketing. The way McGraw-Hill thinks about marketing and advertising has obviously changed, with much more activity shifting towards  thought leadership and relevance in social media. Just like other Hyper-Social Organizations, McGraw-Hill realizes that you can only ensure consistency across all the different touch points that you have with your customers by living your mission and values. They have a very clear mission - need for knowledge, need for capital, need for transparency -, and a set of values that are easy to live by – objectivity, integrity, candor, diversity (especially of thought), and independence.  These simple concepts unite all employees across all divisions and help drive consistent decision-making across different markets with different customers.

Ted finished the conversation with two words of wisdom for marketers – we need to introduce more humor and emotions in communications and better articulate great societal causes. In closing he quoted some lines from an Irish poem by Nobel Laureate Seamus Heaney from the Canon of Expectation that got recited at a St. Patrick’s Day event he attended the day before our interview: “I yearn for hammerblows on clinkered planks, the uncompromised report of driven thole-pins, to know there is one among us who never swerved from all his instincts told him was right action,who stood his ground in the indicative, whose boat will lift when the cloudburst happens.” That is where we as individuals, communities and companies need to be, we need to stand our ground in the indicative, and our boat will lift when the cloudburst happen. We need firmness of purpose and be able to express it emotionally, poetically and humorously – that is where communications needs to be in order to be effective in this cluttered world.

What a great way to close a conversation with a truly great human being. Thank you Ted!

Other topics we touched on:

  • The importance of the fundamentals of conflict resolution in business
  • The role of training in fostering innovation
  • The balance between understanding unmet needs and prospects vs existing customers needs
  • The importance of serendipity in innovation
  • The lessons that can be learned from game designers in education
  • The need to bring down silos in stimulating innovation and learning, both in education and businesses, and the importance of social networking in doing so
  • Generational differences in learning
  • The importance of content curation in the publishing industry
  • The dynamics of the current knowledge economy

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CMO 2.0 Conversation with Eran Barak, SVP of Marketing and Community Strategy at Thomson Reuters

Written by on March 16, 2011 – 6:18 pm -

eran-barakMy CMO 2.0 Conversation with Eran Barak, the SVP of Marketing and Community Strategy at Thomson Reuters was a good way to restart the series.

Eran has been involved with social technologies for a very long time, dating back to the precursor of ICQ (sold to AOL) when he was in college. He joined Thomson Reuters in 2004, just about the time when blogs and podcasts were becoming very popular – turning everyone into a content creator, and potentially a competitor. He quickly realized that social media was a great way to interpret content – and not just a way to syndicate/filter user generated content. Using the “Who Wants To Be A Millionaire” game show analogy, Eran described how social media allows financial analysts to now have three lifelines instead of one – call on experts, call on people they trust, or rely on the crowd to analyze situations.

It’s very clear that for Thomson Reuters, Social Media is all about the social and not about media – an interesting perspective coming from a company with deep media roots. They use social media to connect their customers with one another, and not to try to raise awareness about their company in the markets they operate in.

At Thomson Reuters they take the social seriously,  applying lessons learned from the wold of epidemiology and sociology to their sales and marketing processes. Specifically they leverage the friendship paradox to penetrate accounts and to make their marketing messages go viral. The friendship paradox says that if you recommend a friend, that person will be more connected (i.e., have more friends) than yourself. So by having their sales people ask prospects to recommend others within their organization that they should talk to, they get closer to the center of decision making than by navigating through the traditional hierarchies. Thinking about the social in business outside of social media is a trend that we increasingly see happen within successful organizations. Humans have always been social, but for some reason we leave our social being at the front door of our companies. Bringing that back in business the way Thompon Reuters does it with their sales force is a powerful business driver.

The two “must have” criteria for the social to succeed in financial related businesses, according to Eran, are trust (knowing that the person you are talking to is indeed who she claims to be) and security of the interaction between people (knowing that what I am talking about and sharing will only go to who I want it to go to).

We also talked about risks associated with social media and how it is better to deal with them by educating people and make them risk intelligent rather than developing policies and rule books to try to control every possible risk contingency.

Every industry is faced with accelerating change, but the ones in which Thomson Reuters operate are seeing their core foundations shift. The innovator’s dilemma is not just a periodic occurrence, it’s a constant. Eran talked about how you innovate in an environment like that – by hiring really smart people, allow them to do crazy things, and by developing a sound acquisition strategy. At Thomson Reuters, they also leverage social media to crowdsource business and product ideas with customers.

We wrapped up the conversation by talking about the fundamental changes that are happening in marketing. What is important to Thomson Reuters’ marketing is making sure that they develop content that travels among their customers and prospects. Eran truly believes that the messages that you put out in the marketplace need to be short and simple – so people can remember them and repeat them in conversations. You need to be able to distill your value proposition to one or two sentences. If you want to turn your customers into word of mouth engines, the story needs to be so unique and compelling that people want to tell their friends. If they don’t retell your story, your marketing dollar stops with the few people that are listening to you. Spending on traditional, old school advertising and marketing programs is something Eran really cannot wrap his head around in this day and age. Marketing needs to embrace simplicity and differentiate on the basis of emotion.

Eran, who truly deserves the CMO 2.0 title,  ended the conversation with some final and very valuable words of wisdom for fellow marketers – when thinking of social media, don’t start with social media (e.g., we need a Twitter feed or a Facebook page). Think through what your strategy is and then see if you can leverage social media as part of that, and ask yourself whether you can develop a message that is compelling to the point that people will want to retell it to all their friends.

In a lot of ways not all that different from what we say in our book The Hyper-Social Organization: find you tribes and what makes them tick, and engage them where they hang out.

Other things we discussed include:

  • Social media in heavily regulated markets
  • The importance of having social media policies that are encouraging rather than discouraging
  • How you keep a good balance between providing high quality professional content and being a curator for user-generated content and how to use social filtering to deal with the increasing “infobesity”

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CMO 2.0 Conversation with Erin Nelson, CMO at Dell, and Manish Mehta, VP of Social Media and Communities

Written by on March 4, 2010 – 6:52 am -

erin-nelsonmanishMy CMO 2.0 Conversation with Erin Nelson, the CMO at Dell, came with a bonus in that Manish Mehta, the VP of Social Media and Community for Dell joined us as well. I hope you will enjoy this CMO 2.0 Conversation as much as I did.

Erin is responsible for Dell’s Global brand strategy, social media, global communication, as well as for the talent development of the Dell marketing teams – where she focuses on reinvigorating the way Dell marketing works. She has been with Dell for 11 years, while Manish has been with them for 15 years. Manish is in charge of social media and communities, including, their intranet and their extranet.

One of the first things we discussed was the role of social media and communities within Dell’s business strategy – and how they got to become one of the leaders in social media adoption. On the one hand, dealing with customers directly through social media is a natural extension of what the Dell brand has been all about for the past 25 years – having a direct relationship with the customer. On the other hand it was also precipitated by what has come to be known as “Dell Hell”, when prominent blogger Jeff Jarvis and others had some not too flattering things to say about Dell in public forums. The latter incident gave them no choice but to jump full force into embracing the social on a large scale. As Erin said, it wasn’t a question of test, learn, and measure, it was actually a question of survival – with their brand under severe pressure. In hindsight, Erin believes that this has been a huge benefit for Dell, saying that you cannot get into social media by just putting a toe in the water – you are either all in and it becomes part of your culture, or you’re not.

As we argue in our upcoming book, the Hyper-Social organization, we could not agree more. Companies that successfully embrace the social are those, like Dell, that make it part of the fabric or DNA of everything they do – it cannot just be managed as bolt-on programs to existing strategies. It is also interesting to note how companies like Dell and IBM, which have managed to totally transform themselves, were able to do so only after “near death” experiences (and those are my words/observations, not Dell’s). Dell truly rebuilt itself with the customer at the core of everything they do – how they sell, how they market, how they service and support, how they communicate, and how they design new products.

The scale at which Dell interacts with customers online is staggering – with billions of connections every year through the purchase path, the support path, and through the community path of learning how to use technology and achieve more with it. All that cross-functional customer interaction required them to set up a cross functional governance council, with member representatives from across the entire company – business units, marketing teams, service organizations, and product organizations. They meet on a regular basis to share the learnings, and to make sure that the learnings become embedded within all company processes.

Next we talked about the lessons learned from listening to what is being said about the company in the marketplace and from deciding how and when to engage in those conversations. As many other successful Hyper-Social organization CMO’s told us, they do not always engage. Listening is incredibly important, but often times hearing, learning, and acting upon what is being said are the real keys to success – not direct engagement. It is also important to realize that in this new world, notwithstanding that you can have a common brand spirit, you cannot really have a singular voice of the company anymore. At Dell they have 100,000 team members who are experts in what they do and who will speak out in their own voice.

We also spent a fair amount of time talking about how best to measure the impact of social media and community initiatives – especially in view of the recent announcement that Dell sold $6.5M worth of products through their Twitter channel last year. Obvioulsy being engaged in social channels such as Twitter is not all about generating revenue (although that is a nice side effect). At Dell they try to gauge many other things, including level of engagement/connectedness, sentiment, the value that they are adding in the customers’ buying decisions, and whether they add value in how customers utilize their technology better.

Lastly we talked about some of the recent changes that Dell made to their IdeaStorm environment, and how they felt the need to expand their successful online suggestion box concept with directed and time-bound innovation jams called Storm Sessions through which they ask the community questions in real time, sometimes for days, sometimes for weeks, and sometimes for hours. They have found this real time learning capability, which they use both inside and outside, to be extremely powerful.

Other things that we discussed include:

  • The importance of assigning roles to employees who engage in social media – making sure, for example, that technically unqualified employees do not attempt to respond to tech issues
  • The challenges associated with integrating acquisitions within your corporate culture (specifically the acquisition of Perot Systems, which increased the number of employees at Dell by 40%).
  • How making the social part of the fabric of the way they do business changed the way they think about market segments – thinking more about customer clusters or tribes rather than classic demographically based segments
  • The importance of ratings and reviews in leveraging the social as part of your business
  • The two types of customer interactions that happen online – disgruntled ones where you need to turn their sentiment from a negative to a positive, and fans, who are brand amabassadors and who you want to engage to influence the influencers
  • The importance and risks of status in communities
  • How talent acquisition shifted from looking for people with existing expertise to people who can develop new capabilities

As usual, you can listen to the full podcast below.

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CMO 2.0 Conversation with Christa Carone, CMO at Xerox

Written by on March 2, 2010 – 10:35 pm -

ccaronesmI had a very insightful CMO 2.0 conversation with Christa Carone, the CMO at Xerox. As with many other CMO’s I interviewed on this site, Christa has had a pretty long tenure at Xerox – 14 years to be exact, with the last 1 1/2 years as CMO.

Being the CMO at Xerox is a unique position in that the company is in the business of helping its customers market themselves better. So not only do you need to market your company, you also need to serve as a best practice for your customers – you need to walk the talk.

Early on in the conversation we talked about the dramatic changes that social media brought to customer communications and go-to-market strategies. Christa described how Xerox is very active in social media and how they have a real cross-functional approach to social marketing. They found that the cross-functional team that they put in place, which consists of existing social media enthusiasts, is keeping a much higher level of energy than typical cross-functional teams. Part of the reason for this is that they enlisted people who had a personal passion that they could now put to work on behalf of their company.

They obviously listen to what is being said about themselves, and they pay a lot of attention to what conversations  to participate in, and perhaps more importantly which ones to stay away from – realizing that sometimes participating in conversations can hinder more than help. An interesting problem that they face in listening to what is being said about them is that the term Xerox is often being used as a verb and returns a lot of content that isn’t relevant to them.  They also get the fact that sometimes you can start a conversation on your own platform, but that often times conversations already exist somewhere else and that in these cases it is better to engage people where they are rather than try to attract them to your own environment. As Christa said, you can build it, but if nobody shows up, you are not getting any return on your investment. Unfortunatelly, and according to the results of our yearly Tribalization of Business Study, most companies do not realize that – resulting in many dead company-sponsored forums and communities littering the web.

At Xerox, they encourage every employee to become part of the voice of the company. They developed friendly guidelines that empower employees and encourage them to use social media on behalf of the company. By tapping into employees’ passion they are achieving a level of virality with new product launches that they never saw before. In order to do this they had to give up some control, but the benefits are tremendous.

Next we switched the discussion to some more traditional marketing issues – including how to deliver a consistent brand experience through a complex distribution channel, and the impact of the economic downturn on the marketing mix.

Xerox has over 10,000 resellers and more than 6,500 authorized sales agents – making for a lot of customer touch-points. While they are incredibly disciplined on branding, they, like everyone else, are losing some control of how the brand is being perceived by the customer. What perhaps keeps  the brand perception across all those touch points the most consistent is a shared passion for the brand by both employees and channel partners.

The economic downturn and the associated reductions in marketing spent has had three major effects on Xerox’ marketing mix. First they doubled down on cross-media customized content (one-to-one) as part of their direct marketing campaigns – dramatically improving their rates of return from their target markets. Second, they redefined marketing programs for which they had long standing contractual obligations like sports sponsorships – turning them into business functions where the customer hospitality actually has a business purpose. Not only did they get business value from it, the hospitality piece allowed them to strengthen the relationship with their customers. Third, and they are still working on that, they developed an integrated communications/messaging platform that has tentacles across all lines of business and that is more than just a tag line or ad campaign  for the company.

Another interesting part of the conversation was when we talked about how Xerox transitioned from being a research lab-driven bastion for innovation to a customer-driven innovator. They still have their research centers, but even the researchers get out of the labs and participate in the periodic “dreaming with the customer” sessions that are now at the core of the Xerox innovation process.

We closed the conversation by talking about the need for new marketing metrics in this new socially-enabled business world. As some other CMOs said in previous CMO 2.0 Conversations, Christa reminded us that there is a certain level of subjectivity that goes into what we do in marketing. There is this gut check that says that something’s working, especially when you are looking at brand based marketing that is not intended to have a direct and short term revenue-generating objective to it.

Other things that we discussed include:

  • The role of one to one communications in marketing
  • The challenges associated with shifting marketing resources to social media marketing (discretionary budgets vs. headcount)
  • How to use Facebook as an extension of your employee communications strategy
  • How to strike the right balance between being taken hostage and spending the right amount of energy with those people who have the largest social media megaphones
  • The importance of surrounding yourself with people who can make good judgment calls on behalf of the company
  • The changing role of market research in defining the marketing mix
  • The importance of employee passion in getting things done

As usual you can listen to the full podcast of the CMO 2.0 conversation below.

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CMO 2.0 Conversation with Larry Flanagan, CMO at MasterCard

Written by on March 1, 2010 – 9:44 pm -

larryflanaganMy CMO 2.0 Conversation with Larry Flanagan, the CMO at MasterCard was a good one.

As is usually the case with these interviews, Larry started off by giving us some context to the career that led him to become CMO at MasterCard – in his case a background that includes a stint in the advertising business, as well as client side experiences with Proctor & Gamble and L’Oreal, where he was involved with major acquisitions. He joined MasterCard 13 years ago when the brand was in dire straits, and became CMO 5 years later. Not surprisingly, one of his main yardsticks in managing global marketing campaigns for MasterCard is Marketing ROI.

MasterCard has an interesting and fairly complex business model. On the one hand, they deal with partners, for the most part banks, but also merchant partners and non-financial institutions, who are basically franchisees. On the other hand they deal with consumers, who are the carriers of the cards. That makes for a business that is not just into B2B or B2C, but also into B2C2B and B2B2C – resulting in interesting and unique challenges as it relates to balancing the marketing mix and branding.

We then talked about the challenges associated with delivering a consistent brand experience when you have as many customer touch-points as MasterCard has – most of which are not in the company’s control. Brand is especially important for MasterCard as it is fully intertwined with the value propositions to their partners. At MasterCard, just as is the case with many other companies, branding has undergone dramatic shifts over the last decades. Larry described how branding went from being a process that consisted of a one way dialog in which companies told the consumers how they should think about the brand, how it’s differentiated from competitors, what the key benefits and value proposition are, to a many-to-many process in which the brand exists in the consumer’s daily experience, and is influenced not only by what the company says, but also by what is being said in consumers’ social networks, and what friends are telling them. Larry calls this a consumer inside-out view of the brand – one in which the brand truth lies with the consumer.

What that means for marketers is that they have to think differently about the channels through which they try to influence consumers. Sometimes the best way to have a dialogue with the consumer is through third party influencers and stake-holders who enjoy a high level of trust within their communities and networks.

In Larry’s view, social media and digital technologies have ignited a revolution that has leveled the playing field between individuals and corporations. In a way, it has enabled word of mouth, which has always been one of the most successful means of influence and decision-making, to become word of mouth on steroids, with everything being amplified and traveling much faster than before. That is true in all aspects of business, not just in marketing, but also in the way we recruit and manage talent, and how job applicants select the companies they want to work for. And while we may not fully understand the long term impact of social media on our business – one thing we know for sure is that as companies we have to be part of those conversations.

One of the challenges facing marketers who are investing in these new channels and leveraging these new-found opportunities to engage with consumers, partners, and competitors, is how to measure the impact of those programs, and how to attribute value to all those new behaviors so that we can influence the ones we want. Clearly there are no good models out there to do that and Larry believes that many companies will develop proprietary models.

We then talked about an issue that is very specific to the financial sector, yet applicable to all industries – that of trust. It’s no secret that the last economic downturn have severely damaged the trust that consumers have in their financial institutions. When you are hit with a trust confidence crisis like this – how do you overcome it and how do you regain that trust? According to Larry, the key to overcome this is by first listening to the marketplace and truly understand what is going on. Next is to engage with the marketplace in a manner that is transparent and value driven. Specifically for financial services companies that means convincing consumers that they want to make their lives easier while not hiding the fact that they are for-profit commercial institutions and not charitable organizations.

Other things that we discussed include:

  • The changing role of reputation management in a social media world
  • The importance of listening to what is being said about your company and how to select the conversations in which you want to engage
  • The skill set of people needed to successfully lead you through the current changes
  • The importance of mobile applications in the marketing mix
  • The role and valuation of impressions and engagement in paid media, earned media, and owned media
  • The balance between global/local needs in the marketing mix

As usual, you can listen to the full podcast below.

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CMO 2.0 Influencer Conversation with Don Peppers, Author and co-founder of Peppers and Rogers

Written by on December 7, 2009 – 4:57 pm -

don-peppersI’ve been a long time champion of Don Peppers’ work and so it was especially fun to conduct this CMO 2.0 Influencer Conversation with him. Don is the co-author of  eight books, his latest one being Rules to Break and Laws to Follow, and he is also the co-founder of Peppers and Rogers.

We started off by having Don give an overview of his latest book, which came out last year. At a high level, the book deals with the evolving landscape of business competition and the changes that are caused by the rise of social media – with customers increasingly talking with one another.

In it, Don and his co-author Martha Rogers argue that while businesses operate under a set of assumptions that sound logical, they are, in fact, fundamentally flawed. And, as the title of their book advocates for, it’s these rules that need to be broken.

The first one is that the best measure of success for your company is current sales and profits. They think that this is a false assumption because customers don’t just buy things from you today. When they do buy things they also have an experience that changes their impression of you or their affection for you, which in turn changes the likely amount of business you’re going to get (or not get) from that customer in the future. So, the customer lifetime value goes up or down based on current buying experiences, and that is the metric companies should track – not current sales and profits.

The second rule to break, or false assumption that companies operate on, is that with the right sales and marketing efforts you can always get more customers. In reality, they argue, we have a surplus of products and services, and a shortage of customers – customers are the new scarcity and should be thought of as a productive resource the same way we think of capital or labor as productive resources. You cannot just get more customers with more marketing – there is a limit. Note that Don and Martha are not attacking the whole notion of customer acquisition, they just don’t think that it’s the only way to create value.  The other side of this coin is that capital is an infinite resource – you can always get more capital.

The third rule to break, also widely accepted as truth by most businesses, is that company value can be created by offering differentiated products and services. Products and services don’t create value – customers do when they buy those products and services. Customers create value in two ways. Short term, by buying products from you now. Long term, by buying more from you later and by creating additional business for you through their referrals.  So you should think of customers as productive assets.

Don then talked about a new customer-based metric that companies can use to measure the efficiency with which they are using customers to create value – Return on Customer. Return on Customer is very analogous to Return on Investment. If I have a customer who has a lifetime value of $100 and I make $5 in profit on that customer by selling him stuff during the year, and by the end of the year I’ve been able to increase his lifetime value to $110, then my Return on Customer is 15%.

We also talked about customer acquisition strategies and how you need to evaluate the total customer lifetime value when you prioritize which customers to attract. The least valuable customers come in for the most valuable offers – so having a customer acquisition strategy focused on discounts is not exactly the smartest thing to do. Research that we found as part of research for our own book, about which I will blog about separately, showed that customers who are acquired through word of mouth have not only a higher lifetime value than those acquired through traditional marketing programs, they also bring in more new business through their referrals. So, when you calculate customer lifetime value you need to include the business that will come to you because of a customer’s positive word of mouth. That is especially true in light of other research that Don mentioned, which shows that your highest spenders are not always your highest referrers.

We then talked about another important topic in all of Don’s writing – trust. Customers make most of their buying decisions based on trust, and they think that you are creating the most value for them when they trust you. So if you want to maximize the value your customers create, you need to focus on earning and keeping their trust. And you cannot have a trustworthy business unless you trust your employees.

We closed our conversation with a discussion around the evolution of CRM, and how CRM systems will have to start incorporating people’s social profile, not just their buying history with the company. Don also warned that if companies think of their CRM system as a tool to sell more things, they will fail. CRM systems should be put in place to create more value for the customers – create better offers, better delivery, or whatever will increase value for the customer.

Don had an interesting parting piece of advice for marketers:

…in the era of social media you should always step back from whatever marketing policy you’re considering, whatever kind of new idea you have and ask yourself, ‘Gee, if this became public, would it be an embarrassment to us? Would we be proud of it? Would some of our customers hold it against us?’

Because, you know what? It’s a really good chance it will become public in today’s age and if you want to protect yourself then you really have to have clean hands, not just a good alibi.

Other things we discussed include:

  • How trust is a combination of intent and competence
  • The impact of technology on corporate hierarchies and processes
  • How successful companies of the future will have a high degree of self-organization
  • The importance of culture in successful companies
  • How the most influential customers don’t want to be sold to

As usual, you can listen to the podcast below.

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CMO 2.0 Conversation with Gail Galuppo, CMO at Western Union

Written by on November 2, 2009 – 1:47 pm -

Gail GaluppoMy CMO 2.0 Conversation with Gail Galuppo, the CMO at Western Union was both fun and refreshing. Talk about the challenge of being in charge of a legacy brand that totally had to transform itself, with the added complexity of serving 15,000 distinct customer communities. Not an easy task, for sure, but one that Gail and her team seem to enjoy thoroughly.

As usual we started off with Gail giving us some context by describing her background. In her case, she learned to put the customer at the center of all decision making while being trained on Six Sigma at GE Capital. She then had a career that took her from financial services to retail and back into financial services and which allowed her to experience various places worldwide. At Western Union,  she deals with offices in 202 countries and 400,000 retail locations – six times as many retail locations as McDonald’s, Wal-Mart, Starbucks, and Citibank combined. Talk about a challenging footprint to deliver a consistent brand experience worldwide. As mentioned earlier, they serve 15,000 distinct customer communities, who behave very differently from one another – from Ghanaians in France, to Kenyans in the UK, Filipinos in Dubai and Guatemalans in the US – just to name a few. Their customers are work emigrants who send money back home.

The first marketing challenge we talked about was that of international marketing – how to operate as a global brand, while being relevant to your local communities. The job gets further complicated by the fact that even within their distinct customer communities, there are fundamental differences in needs, expectations, and lifestyles. A migrant from Puerto Rico who immigrated to the US 30 years ago has a very different lifestyle and other needs than one who’s in the country for 3 months or 3 years. And if you thought that was it – think again. They also need to appeal to both senders and receivers of money. With this many permutations and message requirements, nobody could blame you for having a marketing conniption. The way they resolve this seemingly insurmountable and massively expensive problem is in two ways – through a hyper-national brand campaign based on common consumer tribe attributes for all immigrants worldwide combined with a hyper-local set of programs focused on the separate customer communities within each country. Worldwide, their research found that the common attributes that binds all immigrant customer tribes together are pride, sacrifice, adventurism, dreams for their family members, positivity and can-do spirit. Based on that they created the Yes! campaign, the first global brand campaign for Western Union. At the same time they also continue to celebrate the differences between their consumer tribes by having hyper-local programs (like concerts with bands from their native country) that are led by people from those consumer communities – so for example, they have Chinese, Kenyan, and Togolese employees leading the local marketing efforts for those groups in France.

It would be interesting to see if you could harness this consumer tribal behavior  into a true global online community. Members would be attracted to the community by what unites them worldwide and would remain in the community by what makes their own tribes unique. They could hang out in sub-communities with their own people and help one another get adjusted. Western Union could strengthen the relationship with their customers by recommending community-specific products, and services, and by providing advice. From a technology enablement perspective it certainly would work as 90% of their customers have cell phones and are over-indexed on the Internet – the community would have to have a strong SMS component to it.

Another interesting aspect of the Yes! campaign is that the primary audience for the campaign was not the actual customers, but the employees and the Western Union partners who operate the storefronts.The effort, called “Project Galvanize,” was actually meant to change the culture from one where people were thinking of customers in terms of transactions into a much more customer-centric culture. When you have 400,000 customer touch-points worldwide, it’s hard to deliver a consistent brand experience if you focus on the transactions rather than the humans and their motivations.

We also talked about the role of social media in the marketing mix. While Western Union is in the early stages of leveraging social media and communities as part of their marketing – they do have a initiative on FaceBook called World In Motion – they definitely intend on expanding that. They are monitoring what is being said about them in social media, but here too they want to take this to the next level.

Lastly we talked about growth – and whether they focus on expanding the array of services for existing customers, or look for new markets first. The answer for Western Union is both. They are coming out with a series of new mobile applications for existing customers and are also getting into the small business market – not just the generic small business market, but that part of the small business market operated by immigrants. A new consumer tribe that probably would thrive online as well.

I can totally see how Gail thinks she has the best job in the world.

Other things that we talked about include:

  • The details of the Yes! campaign and how they measured progress and success
  • The importance of a values-based system in managing all the possible agent scenarios worldwide
  • The role of customer analytics in marketing
  • The importance of integrating marketing with customer service
  • The challenges related to recruiting a true diverse workforce worldwide

As usual, you can listen to the podcast below.

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CMO 2.0 Influencer Conversation With Alan Webber, Author and Co-founder of Fast Company

Written by on October 25, 2009 – 6:10 pm -

alawebbersmHaving been a customer of Fast Company since the first release and having been an early advertiser in the magazine, I truly enjoyed having my CMO 2.0 Influencer conversation with Alan Webber, the co-founder of Fast Company, and most recently the author of a great book called Rules of Thumb.

As usual, we started by having Alan give us some context about himself – incidentally, one of his rules of thumb (#32  – “content isn’t king, context is king”). I had forgotten what the first cover of the magazine said: work is personal, computing is social, knowledge is power, and break the rules. Talk about being ahead of your time – that was 1995! That was a true manifesto which led to Fast Company becoming one of the fastest growing publications and the second largest acquisition in U.S. magazine history.

Rules of thumb pulls together 52 core lessons that Alan learned during his 40 years of working in government, academia and publishing at the Harvard Business School, as an entrepreneur at Fast Company, and as a globetrotting, global “detective,” as he describes himself, trying to make sense out of all the changes that are currently going on in business, politics, and society all over the world.

Next we touched on Alan’s Rule #15 – “every start-up needs four things: Change, Connections, Conversation, and Community” – and how that happened at Fast Company. Fast Company, of course, was one of the first companies to successfully leverage communities as part of their business model. Readers of the magazine formed a real tribe – one that wanted to hang together in the context of ideas and conversations about the trajectory of change in business, work, competition, and in individual’s careers. The tribe, as you may recall, was called Company of Friends – and like most successful communities it became a true movement, one that the company would have been hard-pressed to close down.

Bouncing around a bit we next talked about rule #42 – the survival of the fittest is the business case for diversity. Not only did they have tremendous diversity within their employee base, with people coming from all over the world, with different backgrounds, different educations, race, color, etc. , they also had a lot of diversity among their readers. The diverse employee gene pool allowed them to be very innovative – for example making them one of the earliest magazines to turn their customers into co-marketers by giving away their web content for free with the first “send this page to a friend” feature.

Next we spoke about a number of rules related to talent and leadership, including Rule #19, “memo to leaders: focus on the signal-to-noise ratio,” or Rule # 21, great leaders answer Tom Peter’s great question: “How can I capture the World’s Imagination?”, or (maybe my favorite) Rule #26, “the soft stuff is the hard stuff.” Alan sees a shift from leaders who have all the answers to leaders who know the best questions to ask. He thinks that in the wake of this economic crisis, many of us feel like we’ve been let down by those leaders who were supposed to make sound business decisions. The problem is that they did not ask the right questions and in many cases did not ask any questions. Good leaders, he explained, are those people who start out thinking they are not necessarily in positions of authority to give everybody answers. They’re in a position of authority to ask really tough questions that make their organization think very hard about what they’re doing and why they’re doing it. Good leaders in this period of economic retrenchment should have a mix of intelligence and humility – they don’t need to be the smartest person in the room, but they do have to be the person who’s willing to ask the hardest questions and insist on really good answers. As a leader you need to have clarity about your purpose, honesty about your values, and focus about your metrics.

Next we talked about the importance of  knowledge flows and how you absolutely have to have trust within organizations for knowledge to flow. We also touched on talent being one of the key drivers in successful business and the irony associated with the fact that while most leaders will agree to that, they will also promote CFO’s before HR VP’s, and at the first signs of trouble ditch the talent in order to get their stock prices up.

Alan then spent a fair amount of time talking about a new movement he sees emerging, that of social entrepreneurship and social innovation – a topic he covers in his book as well. People are no longer waiting for governments to come up with solutions to small and big social problems – they are assembling the best of business practices with a strong social mission to tackle the problems as for-profit, non-profit, or hybrid organizations.  They are baby boomers as well as young people right out of college. He believes that social entrepreneurship, which is a true global phenomenon, is changing the world.

In a way, Rules of Thumb is very much a book on leadership. It tries to get people to be leaders on their own terms, and to mint a new group of people who don’t look to others to provide the rules.

Other things we talked about include:

  • The need to match left brain people with right brain people
  • How most successful magazines mobilized a community that didn’t know it was a community until the magazine came out and gave it the organizing principles so people knew they belonged to a community
  • How leadership is a test of character
  • How you need metrics to show people how they are doing but how you cannot have too many metrics

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CMO 2.0 Conversation with Ted Gilvar, EVP and Global CMO at

Written by on September 29, 2009 – 7:19 am -

Ted GilvarMy CMO 2.0 Conversation with Ted Gilvar, who is the global CMO at Monster (and also a customer of ours), was a really interesting one as I have a fairly high level of familiarity with their business. It is also fascinating to see how some themes, even though they are sometimes called by different names, are recurring among CMO’s – even when they are operating in very different lines of business.

As is customary with CMO 2.0 Conversations, Ted started off by talking about his background and the business challenges he is facing. In his case he had a life-long career on the agency side before taking on the role of CMO at Monster 2 years ago.

Having come into existence by being a classic business model disruptor, we quickly started talking about where the next disruption might come from and how to leverage innovation to get prepared for it. Not surprisingly, the biggest shift on the horizon is the advent of social media and how this allows “the social”  to become part of the talent acquisition and development process again.

When they think of innovation at Monster, they think about it both from a product point of view as well as from a marketing point of view, says Ted. The biggest recent innovation on the product side was to add semantic search to refine searches – and that innovation came to Monster through an acquisition. On the marketing side, one of the more recent innovations was getting people to trial the service – even though Ted did not really call it that. That happened when they organized the “Keep America Working” tour, which offered a a free career fair to any employer who had jobs. In marketing, Ted believes that success cannot be predicted based on what happened in the past – and so you need to be willing to innovate all the time, even when looking at traditional marketing programs.

After this we spent a fair amount of time talking about the impact of social media on the talent acquisition and development process – a process that is inherently social to start with. One of the cornerstones of their social media strategy, community-based talent acquisition and development,  happened through the acquisition of Affinity Labs. They host affinity-based communities centered around professions – where members can network with like-minded professionals and get inspiration to help one another further their careers. With this community-based approach, they are transforming the relationship that they have with professionals from an episodic transactional-based relationship, where you interact with them only when you are looking for a job,  to an ongoing peer-to-peer community-based relationship. With the most recent recession, and people being forced through painful job/career transitions, the reciprocity that powers those communities – people wanting to help others and be helped – has been very strong. Other benefits of this community-based approach include:

  • The fact that people’s profiles will not just have static career/job information but will now also contain some social context – which is very powerful.
  • The fact that besides search based-matching, the process of matching people to opportunities now has an added social filter.

Another important lesson that we can take from Monster is that while they have a destination site, they also realized that they need to supplement that by being other placdes job seekers are, and so they syndicate their content to other sites. A federated approach like that allows them to get a larger share of attention from job seekers – and especially from the coveted passive seekers.

Next we talked about the impact of Monster audiences becoming increasingly digital on market segmentation and marketing programs in general. Not surprisingly, most marketing budgets at Monster are focused on digital marketing – giving you a quick and accurate sense of what works and doesn’t. Moving forward, community based marketing is expected to play an increasing role in the marketing mix.

Ted also spoke about the importance of social media monitoring and engagement as part of their marketing strategy. Seeing the fusion of marketing and customer service in social media was one of the most interesting learnings from engaging in those conversations, he said. If done properly they see social media based customer service as an opportunity to diffuse an issue before it becomes one.

We also talked about the importance of content in all aspects of marketing. When peer-to-peer communication is becoming the most important form of communication, companies like Monster need to think differently about content – developing it so that it travels in the networks that matter.

Ted also pointed to the fact that marketers should spend more time monitoring the quality of the content that they put out, not just the strategic fit. People vote on the quality of your content with their time and attention, and that is why you need to produce content worthy of consumption. It will be interesting to see the increasing role of user generated content as they go further into community-based marketing.

Other things that we discussed include:

  • How they connect their traditional marketing programs with social media
  • The halo effect of social endorsements in the recruiting process
  • The potential benefits of adding hyperlocal community activities to their affinity-based communities
  • The challenges of segmentation when you have a mass appeal and limited budgets
  • The think locally act globally strategy for international markets
  • The changing profile of people who staff successful marketing departments
  • The dynamics of the emerging Gen Y workforce

As usually you can listen to the podcast below and soon we will be publishing a transcript as well.

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CMO 2.0 Interview with Marty St. George, CMO at JetBlue

Written by on September 24, 2009 – 8:33 am -

Marty StGeorgeMy CMO 2.0 Conversation with Marty St. George, CMO at JetBlue was truly enjoyable – especially since I am intimately familiar with the service they provide and biased in that I am a big fan of the company. JetBlue managed to turn what has essentially been a commoditized service by other airlines into a brand that is far from a commodity.

JetBlue’s original mission was to bring humanity back to the airline industry. So the first topic we tackled was how you can humanize a brand when there are so many employee touch points that can make or break that brand promise. It turns out that for JetBlue, the most important ingredient for success is having a values-based culture – one in which every single employee bases his or her actions on those values. Not surprisingly, the values that drive the JetBlue culture are fairly straightforward and easy to live by:

  • Safety (the most important of course)
  • Caring
  • Integrity
  • Fun
  • Passion

All employees get screened against those values during the hiring process, go through extensive training on it after they get hired, and get constantly reminded of those values throughout their career. The end result is that everyone at JetBlue feels part of a big team, single-mindedly focused on improving the customer experience and by proxy the JetBlue business. Front line crew members are empowered to make independent decisions based on those values, and because of that values-based approach they end up with a self-enforcing culture that has built-in organizational learning. Off course, and in order to make true empowerment work for a company, you also have to have a tolerance for failure.

Marty further talked about the importance of transparency in forming a cohesive workforce – one that focuses on them (the customers) and not us (the employees). Briefing employees on how the business is doing and addressing their concerns in a timely manner is at least as important to JetBlue executives as it is to deal with investors.

Surprisingly (or maybe not because it is an effective marketing strategy in just about any other industry), one of most effective marketing techniques at JetBlue is getting customers to try the service. I say surprisingly because I would have never expected an airline marketing executive to talk about trials. But if you look at the All You Can Jet program (#aycj on twitter), where people can fly as much as they want during a 30 day period for $599, or their “JetBlue Cheeps” program (@JetBlueCheeps on Twitter), where they announce cheap fares between selected locations every Monday, that is exactly what they are doing – getting people to try the product. The results are very good because they are confident that once they get someone to fly with them, they’ll get them back again.

As usual we touched on the marketing mix impact of the fact that most of their audiences have gone digital. And since 80% of all JetBlue tickets are sold on, it is not surprising that most of their marketing spend is online – with very strong marketing metrics as a result. Even though I would consider JetBlue a strong adopter of social media-based  marketing and customer service, Marty believes that there is still a ton to learn and plenty of unearthed opportunities for them (and others). Twitter is an especially successful channel for them – providing both a window into the brand and as said before a tremendous source for trials and customer service-based interactions. As they engage with disgruntled twitterers they constantly have to make sure that they don’t undermine the decisions made by empowered front line employees – they do not want twitter to become a court of last appeal. Fortunately that is where a values-based culture comes back into play – they can predict 99% of all decisions made by front line employees and reinforce those decisions where needed on twitter without having to check with those decision makers.

Lastly we spend some time talking about the importance of innovation as part of JetBlue’s success. While the innovation process is informal and organic, it is part of everyone’s job to think about innovation. They also have a few avenues for customers to get involved in innovation. According to Marty, one of the key ingredients to make innovation with customers and employees work, is to be a good listener and to always provide a response – positive or negative – to every suggestion. As with many other CMOs we interviewed Marty does not believe that you need a reward system to incentivize innovation – it should all be based on a social contract.

On a closing note, Marty mentioned the simple mission statement that he has for his marketing team, the 3 B’s – “Brand, Buzz, and Butts.” You got to love simplicity when it works like this.

Other things we talked about include:

  • The pros and cons of adding social media information as part of your CRM profiles
  • The importance of internal review teams to allow for lateral communications and sharing of best and worst practices
  • Their social media monitoring and engagement process
  • How you have to stay small as you become a big company
  • The importance of customer privacy and the impact of social media profiles on that privacy
  • How their JD Power award, which they have won for multiple years now, is going on tour to all their local centers, much like you would have a hockey trophy going around
  • Other ways through which to create passion for your brand

As usual you can listen to podcast below and soon we will publish a transcript.

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CMO 2.0 Conversation with Rob Spencer, Chief Idea Management Officer at Pfizer

Written by on September 22, 2009 – 12:38 pm -

Rob SpenserAs usual I had a great deal of fun conducting this CMO 2.0 Conversation with Rob Spencer from Pfizer – this one focused on innovation.

Rob started out by providing some context around his job and the innovation processes he manages at Pfizer – although he does not call them that, preferring instead “collaborative problem solving.” He helps people from all over the company tackle challenges through electronically facilitated problem solving techniques – and he does that for all sorts of problems, not just drug discovery related challenges.

The underlying process used for problem solving is actually an old one – one that he calls diverge/converge. First you define the problem, you lay out some clear goals, and you broadcast it widely . You then set up a  review teams that includes technical reviewers as well as business people and you make sure that you have a good balance between people who will benefit from the solution and those who are willing to pay for any future solution. This latter concept is a very important one if you want to ensure that your solutions will get funded. Rob will typically assemble problem solving teams ranging from 200-4000 people, and occasionally will run problem solving challenges with tens of thousands of people.

Next we talked about the difference between collaborative problem solving and a social innovation process. You collaborate with people you know and they do it because it is part of their job. A social innovation process is one where people help you solve a problem without knowing one another and without it being a part of their job. Rob uses different language, based on Chris Anderson’s Long Tail concept, to mean the same thing. He talks about the head of business problem solving – which involves those people whose job it is to solve a problem in a very directed way – and the tail of problem solving – which involves electronic media to greatly expand the scope of people who may participate to groups whose job it is not to solve those problems. At Pfizer they use both the head and the tail, although there is a dominant use of directed innovation with the head of problem solving.

When we talked about breakthrough innovations at the edges Rob reminded us that innovation in health care is heavily constrained by the human genome – which is actually very small. Being bound like that by nature limits the innovations at the edges – most innovations in the health care space come from within the genome. This  is why directed innovations work so well in the pharma space.

An interesting concept that Rob brought up is the importance of individual thinking in problem solving. While there are great benefits to be had from collaborative problem solving, collective individual problem solving is an important component of innovation as well. At Pfizer they try to have people first come up with individual ideas and only after that do they ask others and groups to build on and review these individual ideas.

As we have in other conversations, we also touched on the role of rewards in innovation. Rob uses recognition instead of reward. Of course there is an inevitable dichotomy when you deal with employee teams, especially with those at the head of business innovation. For them it is their job and therefore they get both rewards (in the form of salary and bonus) and recognition for solving problems. That being said, Rob reminds us that it is important not to monetize what are essentially social contracts. Monetary rewards can also be very distracting from the core business challenges at hand and add unnecessary bureaucracy to the business environment.

We also spoke about the role of constraints imposed by government regulations and patent law. Without constraints you have runaway innovation with people falling in love with every single idea that is being proposed.

Other things we talked about:

  • The importance of technology to scale innovation to the far corners of your organization
  • The need for proper framing of the challenge that is being considered – and the need to constraint the problem as well as expand the scope of the problem
  • The benefits of scale in innovation
  • How altruism may be a level above the highest level in the Maslow pyramid
  • The importance of details and hard work in innovation
  • How you could leverage fear to trigger altruism, but only occasionally – as opposed to good behavior which can be done chronically
  • The importance of flexibility to change in promoting and recruiting people

As usual you can listen to the podcast below and soon we will publish a transcript.

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CMO 2.0 Influencer Conversation with Dave Logan, Senior Partner CultureSync

Written by on July 27, 2009 – 10:01 am -

Dave_LoganI had another great CMO 2.0 Influencer Conversation with Dave Logan, the co-author of “Tribal Leadership,” professor at USC and co-founder and Senior Partner at CultureSync.

Dave started off by talking about the research that he and his colleagues, John King and Halee Fischer-Wright, did over a period of eight years and which led them to uncover five distinct organizational cultures. The context: as you move up through the various stages, everything you want – such as effectiveness, productivity, and innovation – increases, while everything that you don’t want – such as stress, anxiety, and even workplace violence – decreases.

Dave then took us through the aspects and details of the five tribal leadership stages and what the key motivator is for each. Worth noting: the reason they settled on a tribal metaphor is because they found that it is not the individual that determines a company’s culture, nor is it the organization as a whole. Rather the culture gets determined by ‘tribes’ – those naturally occurring groups of 20-150 individuals in organizations through which the work gets done.

Here is a summary of the five stages of Tribal Leadership:

  • Stage 1 is motivated by the motto “life sucks.” This is the domain of workplace violence and it makes up about 2% of tribes.
  • Stage 2 is motivated by the theme “my life sucks.” These tribes move very slowly, they don’t collaborate and they have very low performance – in fact they do the bare minimum not to get fired. They also have a high degree of cynicism (done that, been there) and they comprise 25% of the tribes.
  • Stage 3 is where people think “I am great, but you are not.” Productivity and effectiveness in these tribes increases, but they need to verbally compete to operate.This stage is very typical of professions where knowledge or personal achievement is key – or where you need to outperform you peers to get ahead. Again there is very little collaboration at this stage and people talk a lot about themselves. They comprise 48% of the tribes.
  • Stage 4 is where people are motivated by “we are great and they are not.” You find those cultures primarily in young organizations and high tech environments where there is little bureaucracy, making it easier to get things done. Because they are based on shared values, there is less politicking going on, less anxiety and much more collaboration. They make up 22% of the tribes.
  • Stage 5 cultures no longer need rivals and their theme is “life is great.” It’s focused purely on values – e.g, curing cancer. This is where the breakthroughs happen and they make up 2% of the tribes.

As a leader, you need to stabilize the level that your tribe is operating before you can work on moving them up to the next level. If you do not push into a new level from a stable position at the previous level, your tribe will operate in a position of weakness and have a high likelihood of regressing back. Of course, that also means that you cannot skip a level. Dave used the example of many dot.coms to make that point. They deluded themselves into thinking they were operating at level 5 without having gone through the previous stages. When the bust hit, many of those tribes regressed multiple stages – some as far as Stage 1.

As he describes it, one’s goal should be to reach Stage 4 and then stabilize your tribe there. That requires you to constantly review the values that you share with your team – always making sure that you are still fighting for the same thing. You also continuously need to connect people with other people as Stage 4 is characterized by fused relationship – where groups of three operate as a single unit.

Organizational change can come by changing one tribe at a time, and if you want to change the level of an organization as a whole, you have to start with the most senior executive tribe first. That is especially hard considering that traditional management structures are very much designed as Stage 3 environments – the leader is great and most others are not, they are dominated by two-people relationships, and they are very political.

The most important leadership skills for tribal leadership are: 1) the ability to notice and identify tribes, and 2) the ability to assess tribal stages, which is primarily based on listening skills to uncover what language tribes are using and what values they share. Transparency is important as well. Without it you cannot build the trust to get to Stage 4 and 5.

Other topics we discussed include:

  • Co-existence of the different tribal leadership stages within companies
  • How people in Stages 1-3 feel threatened by people who are better than them and therefore hire people who they can control – and how companies at Stage 4-5 develop processes to avoid this
  • Some simple techniques to help move an organization forward
  • How people can belong to multiple tribes, some of which span the corporate boundaries, and what that means for companies.
  • How good leaders get (re)defined by their tribes

As usual you can listen to the recorded podcast below and soon we will be putting up a transcript.

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CMO 2.0 Conversation with Mark Gambill, CMO at CDW

Written by on July 20, 2009 – 9:48 am -

Mark GambillI just had another great CMO 2.0 Conversation – this time with Mark Gambill, the CMO at CDW. As usual we started by having Mark provide some context about his company and his focus there. In this case the company is an $8B provider of software, hardware and services to a variety of industries that has more than 400,000 customers.

The conversation then moved to how some of fundamental changes in the industry – e.g., the fact that people are making their buying decisions based on information they gain online and in social networks, that they increasingly bring their own tools to work, and that mobile devices are more and more looking like full fledged computers – is affecting marketing. Mark talked about the blurring lines between consumer and business applications and about the need to not flail as a marketer when it comes to integrating social media as part of your marketing mix.

He also talked about the need to segment customers differently and how deep consumer research allowed them to uncover six customer profiles that help them better answer the questions: “what do we stand for?”, “who do we serve?”, and “how do we win?” Interestingly enough (and we see more and more marketers follow this trend), much of the segmentation was based on behavioral characteristics of potential buyers and not traditional market segment data. Other information that came with the profiles include data on where those people like to hang out, how they prefer to receive and consume their information, who else they are listening to, and more. All of this allows them to create and distribute content – both online and offline – in a much more effective way than what they were able to do before.

We then talked about the challenges of developing a recognizable brand when you do not manufacture your own products but instead distribute those of companies that may have pretty strong brands themselves. The way CDW tackles this complex problem is by being “technostic” (meaning technology agnostic) and by positioning themselves as a trusted solution partner. They also realize that buyers establish trusted relations with people more so than with companies or organizations, and so every customer gets a dedicated account manager. With a maniacal focus on customized personal service for every customer they hope that this is what will allow them to deliver against that “trusted partner” brand promise.

We also talked fairly extensively about CDW’s commitment to and use of social media. They had started a small business community but then decided that they would be better served by engaging, as participants as well as sponsors, in places where people were already hanging out. (It is always good to speak with a marketer who resists “the not invented here syndrome” that we have witnessed so many times when companies deploy communities as part of their business processes. They feel like the only way to be successful is by hosting the community on their own platform, even if a strong community already exists on some other platform.) Mark sees social media as a meaningful way to engage people in the context of customer support, but he thinks there is a scaling issue when it comes to leveraging it for lead generation. This is something we have heard from other marketers who need hundreds of thousands, if not millions of customers to be successful. The key here may be to develop a comprehensive leader/ambassador strategy and to understand how those people will help amplify everything you do across the various platforms where your customers, prospects, and detractors hang out.

Although, as usual, we ran out of time, we did get to talk about the types of people that Mark is looking for in staffing his marketing department. Besides finding people who are a good fit from a corporate culture point of view, Mark is looking for well rounded people who, while they may not yet have the full battery of skills one might desire, can be trusted to learn them as well as embrace future skills that we don’t yet know will be valuable. Another important hiring criteria in Mark’s business is diversity. Mark is also convinced that a CMO has to increasingly become a well rounded generalist, with knowledge that goes well beyond marketing.

Other things that we discussed include:

  • The importance of face-to-face meetings in customer relations
  • The importance of good customer service in brand building
  • How they are monitoring what is being said about them in the social media space and how they are engaging
  • The importance of understanding “human 1.0″ in explaining what is happening in a web 2.0 world
  • The importance of appealing to the altruistic part of the brain instead of the pleasure side of the brain when running communities
  • The impact of the “green wave” on technology sales
  • The importance of ROI, customer loyalty and other marketing metrics

As usual you can listen to the interview below and soon we will put up a transcript of the call.

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CMO 2.0 Influencer Conversation with John Hagel, Co-Chairman of the Center For the Edge at Deloitte

Written by on July 8, 2009 – 7:19 am -

John_HagelI had a lot of fun conducting this CMO 2.0 Influencer Conversation with John Hagel, the Co-Chair of the Center For the Edge at Deloitte, and one of my all time favorite business thinkers.

John started off by explaining the meaning behind the name of the center which he co-leads with John Seely Brown – the Center For The Edge. For them, the edges are those areas on the periphery where you first see emerging new opportunities. The challenge with the growth opportunities at the edges is to scale them – either by connecting them to the core where all the money and all the people are, through collaboration, or through competition. There are many different types of edges, including geographic ones (think China, India), demographic edges (e.g., the younger generation entering the workforce), marketplaces with unmet needs, or technology edges. The key take-away for executives is to keep focusing on those edges as they are the places where future growth opportunities will first show up. They also need to realize that many of those edges are not part of their organizations or their existing ecosystems.

Next we talked about the newly released  Shift Index, a set of three indices and 25 metrics designed to make longer-term performance trends more relevant and actionable (you can download the full report here). The Index, which was based on a yearlong research project, helps explain, among other things, the intensification of competition that many companies are witnessing today, and which has lead to the mean for company survival to come down to 10 years compared to 75 years in the 1930′s. Other metrics within the index help executives measure the consequences of that intensifying competition and also allow them to measure their performance relative to others. The research also uncovered some concerning trends – one of which is that ROA (Return On Asset) in the US decreased by 75% in the last four decades. And that in the face of consistent increases in labor productivity over that same period.

One of the key conclusions of the study is that competition is intensifying and that companies are not doing so well – their existing management practices are not keeping up with the changes.

We talked about some of the things that companies can do in order to cope with the changes afoot. One of those is to shift from a knowledge stock mentality, where you aggressively protect and hoard proprietary knowledge, build scalable offerings around it, and then extract value from it for the longest possible time, to a knowledge flow mentality, where you realize that what you know today has rapidly diminishing value and where you refresh your knowledge stocks by participating in knowledge flows. One of the big challenges for companies is that unlike information or data flows, knowledge does not flow easily – as it relies on long-term trust-based relationships. So the key to success in this new economic reality is to move from a transactional world to a long-term trust-based world. Examples of taking on a knowledge flow approach include letting your key customers participate in product innovation, or turning them into affiliates to allow them to help one another.

In this increasingly fast-cycle world, John believes that the role of serendipity will be progressively more important. He defines serendipity as “unexpected encounters that are valuable and generate pleasure when you encounter them,” and rather than believe that serendipity is based on pure luck, he believes that we can shape serendipity – both by increasing quality and quantity of unexpected ecounters. One way of doing that is by selecting location. By choosing a “spiky” physical location where there is a high concentration of talent you are much more likely to encounter serendipity than if you were on a farm in Iowa. The same is true for the virtual locations you decide to hang out in – whether social networks or communities. Choosing location by itself won’t do the trick however. If you want to shape serendipity you still need to set yourself up so that you are attracting attention, and increasing visibility and findability for yourself.

Another thing that companies need to focus on to better deal with this new economic reality is to shift from a push model to a pull model – one in which you attract partners, customers and talent, instead of pushing out products and messages. John reiterated the importance of shifting from an intercept, insulate and inhibit marketing mentality to one of attracting, assisting and affiliating customers and prospects.

We wrapped up by talking about John’s evolving views about business communities since he wrote Net Gain almost 12 years ago (to date, and in my biased opinion, probably still one of the most important books on business communities). He would reaffirm that there are huge challenges to building communities, but that if you build them around the needs of the members they can be very powerful. He would also expand on the need for three distinct, and sometimes conflicting, skill-sets or cultures that  are required to ensure successful communities – centered around content, social interactions, and economic business models. Unfortunatelly, most communities only have one or two of those skill-sets engaged.

We also talked about:

  • The need to shift from firewall around the company mentality to a modularized firewall around core company IP
  • How you cannot participate in knowledge flows for very long if you are only a “taker”
  • The importance of face-to-face in building trusted relationships
  • The importance of having hyper-local face-to-face components in large online community
  • The balance between the need to increase the number of partners we engage with with the need to build deep relationships in order to allow knowledge flow
  • The talent Dilbert paradox and how talent is motivated by the talent development
  • How you need a high growth strategy to attract and keep talent
  • The importance of the “collaboration curve”  in scaling the organizational learning, which they described in detail on their new blog - The Big Shift
  • The importance for companies to start adopting a federated view/architecture for their online community efforts

You can listen to the actual CMO 2.0 Influencer Conversation below and soon we will be putting up a transcript of this conversation.

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CMO 2.0 Conversation with Ram Menon, CMO at Tibco

Written by on June 8, 2009 – 2:52 pm -

Ram menonMy CMO 2.0 Conversation with Ram Menon was an enlightening one, and definitely another conversation with some real teachable moments. Ram is a no-nonsense marketer with a great deal of common sense.

Ram has an interesting take on the changes in technology marketing. He believes that the 90′s spoiled technology marketers. There was an unprecedented technology boom with plenty of IT  budgets to go around, so as a technology marketer the only thing you had to do was set up a pretty web site, put out some collateral and declare victory. In the last few years however, budgets disappeared, technology buyers became disillusioned with technology solutions, and new technologies turned traditional marketing on its head. Consequently, the marketers who did not keep pace are finding themselves in tough times.

One of Ram’s interesting points of view is that bonding is the new branding. You have to bond with 1000′s of people, and at any time…you can no longer plan for a launch, come up with nice messaging, launch and then forget about things until the next launch. In todays world we are facing launches that are on 24/7 and that require ongoing bonding to all of our constituencies.

Marketers need a good understanding of the technologies that are at their disposal to allow them to become better marketers. While he does not see much of a change in the type of people they hire in marketing, that is probably due to their culture of focusing on hiring people who are smarter than you – not necessarily people who have a lot of past experience. For Ram, past experience is no indication of future success.

We also talked about the fact that even though the number of different value propositions for different buyers keeps increasing and that the channels through which you can reach those buyers keeps multiplying, his job as a marketer has in fact become easier and cheaper. The main reason for that is that the most important conversations are no longer the ones you have with your customers and prospects, but instead those that happen among them.

That led to an interesting follow up conversation on their use of communities. They run both a customer community as well as a sales community. Early on they realized that by providing a platform for customers to talk with one another and to help one another, they could in fact make their own job easier. Plus it allowed them to reduce their cost of customer support in the process. They also understood that for the community to work, they needed to be ready to engage – so they encouraged all their engineers to engage with their customers through the community. On the sales side things, they found the same forces at work. By giving sales people a platform in which to help one another, they found that sales professionals started to actually do that across geographic boundaries. Not only that, they started modifying marketing materials and mashing up content to make it work for micro-segments that marketing could not have served in a cost effective way. In effect, they turned their sales process into a social process.

Of course we could not have had a conversation with the CMO of a technology provider who markets a sales and marketing analytics solution without talking about marketing measurements. As we have seen in previous CMO 2.0 Conversations, one of the most important metrics for Ram is customer loyalty. And while they are very metrics-driven, which could in some cases stifle innovation, they support marketing innovation through a dedicated marketing R&D budget.

Other things that we discussed include:

  • Offshoring marketing
  • How they use social media as part of marketing
  • Integration between marketing and customer service
  • The issues related to letting go of control
  • The need for marketing to formalize sales enablement
  • The shift from physical events to virtual events in the marketing mix

As usual, you can listen to the podcast below and we will be posting the transcript soon.

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CMO 2.0 Influencer Conversation with Dan Ariely, author and Professor in Behavioral Economics at Duke University

Written by on May 24, 2009 – 3:51 pm -

Dan_ArielyMy CMO 2.0 Influencer Conversation with behavioral economist Dan Ariely, who is also the author of one of my favorite books, Predictably Irrational, was particularly insightful and instructive.

Dan started the conversation by talking about his past, and how a life changing event – having about 70% of his body burned  by a magnesium bomb that detonated close to him – led him on a path of human experimentation.

We quickly moved to one of my favorite topics – how people make decisions either in a market framework or a social framework, and how mixing the two, which inevitably happens in the world of business, is not a good idea.

People are inherently social creatures, and when we talk about money we create a different set of expectations than the ones we have in our social world.  The social world and the market world have different rules and regulations. What do you think would happen if instead of taking a bottle of wine to a dinner party you were to give the host cash so that she could buy her own bottle? It would no go over so well, would it?

In the business world we have no choice but to mix the two together, as we hire people in return for a salary, but also tap into social drivers that money cannot buy (i.e., an extreme example of that is firefighters putting their own life on the line, which could not be motivated by any amount of money). Too many companies try to put a monetary value on things where they would be better off leaving it in the social realm. They need to understand the trade-off between economic efficiency and social efficiency. Who would be more motivated to work overtime when you need it – the person who got a $1,000 cash reward for doing well or the one that was sent on a trip to the Bahamas worth $1,000? Research shows that it is the person getting the gift. The same is true for healthcare – why put a monetary value on the healthcare services that you provide to your employees? It does not buy you social efficiency which you could otherwise derive from providing them with that service as a social reward.

Next we talked about group dynamics, especially herding, and how that affects people’s buying behavior. People tend to herd – buy the music that got the most downloads, stand in line at the restaurant that has the longest line, etc. We also follow the herd of our own self, meaning that we buy things based on the way we bought before – even if that was based on a random act.

Dan also reviewed recent research that shows how we internalize the social. In an experiment he gave some people shirts with the term generous printed on it and others with the term stingy printed on it. After wearing the shirt in public for awhile people who had the generous shirts were behaving in a more generous way than those that had the stingy shirt. The interesting part of the experiment is that he got the same results when people were wearing shirts with the same terms printed on the inside of the shirt – so in a way that they were the only ones to know.

Another issue near and dear to many marketers is that of free trials. Free trials for products that are known quantities, i.e., Godiva chocolates, will not lead to the depreciation of value of those products in our mind. Free trials for products that we do not know, and do not assign value to, will diminish the value of that product so that when you start charging for it we will refuse to pay for it.

Other things that we talked about include:

  • The dark side of social rewards
  • How the feedback you get from focus groups can be very suspect because people have bad intuitions about their own behavior
  • How ideation works best when other people can build on your ideas
  • The importance of experimentation and business education in business
  • How pricing is not determined by supply and demand and the importance of self-herding
  • Behavioral economics and its impact on the economy and the stock market
  • The honesty mindframe and its influence on cheating

As usual you can listen to the podcast below and soon we will be putting up transcripts of this CMO 2.0 Influencer Conversation.

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CMO 2.0 Conversation with Porter Gale, CMO at Virgin America

Written by on May 15, 2009 – 9:03 pm -

Porter_GaleI was looking forward to interviewing a marketing executive from the airline industry, and speaking with Virgin America’s CMO Porter Gale was no disappointment.

As usual, we started the conversation by setting some context – in this case we are talking about a new airline which started flying just one and a half years ago, has 28 airplanes, and 1,400 employees.

The motivation for Virgin to start a new airline in the US was driven primarily by the opportunity that presented itself to redefine the category in the face of rapidly deteriorating customer expectations. I think that is putting it rather mildly – and would have categorized the state of the industry as one in which the service providers seem determined to make their customers lives’ miserable while they are with them. At any rate, it was a perfect fit for Richard Branson’s philosophy for Virgin companies to be customer champions.

We spent a fair amount of time discussing the essence of the Virgin America brand, and how they are making deliberate efforts to humanize the brand and the service. In order to ensure consistency of this experience throughout all the customer touch-points, and to get buy-in from all the employees, they have a very rigorous hiring and training process. Showing respect and a human face to the customer may seem like common sense, but it is a tough thing to scale – it requires the right culture and zero tolerance for mediocrity. Another important aspect of Virgin America’s success in humanizing their brand is not to brainwash people into telling the corporate story, but rather to empower them to tell their own stories. To support that personal passion they also continuously focus on making sure that they have a product that employees can be proud of – so it is a big closed loop system.

Porter spoke at length about the importance of social media in customer support, branding, innovation, and marketing. From how they monitor everything that is being said about them and deploy customer recovery actions when someone twitters or blogs about a bad experience during flight, to how they empower people to act as they see fit when they see some negative comment online. For some reason they attract a very tech-savvy crowd, which makes it a natural choice for them to social-media-fy their marketing, or to use Porter’s words “to explore the digital space, look at all of the trends that are happening, the social media changes, and find more ways to engage and have deeper relationships with people who love the brand through digital.”

Another interesting aspect of Virgin America’s marketing strategy is that they find themselves to be not just be an airline or travel company, but also a media company (which I think will be increasingly true for companies who are successful in harnessing consumer movements, communities and tribes). In the case of Virgin America, they were basically able to fund the launch of a new city through a paid media partnership with HBO.

Other topics we covered include:

  • How there are totally new career paths in marketing
  • How they are continuously trying to reinvent the category
  • The importance of fairness in how you deal with customer problems
  • How they focus hard on ensuring brand consistency throughout the travel “ribbon” – including the flight experience, the website, check-in, and where they can, even the terminal experience.
  • How Wifi in the airline industry is a true game changer
  • The role of advertising in awareness building when launching new markets and new offerings and  the shift to social media after awareness is created.
  • How they were able to create a movement before they even flew – rallying people around the cause to let Virgin America fly

When you have an airline and passengers write to you to tell you that they wished the flight was longer, or that they rescheduled their honeymoon so they could fly with you – you know you are doing something right. I wish I could interview some other CMO’s from the industry to get their perspective.

As usual, you can listen to the podcast below and we will start posting transcripts next week.

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