Monday, May 28, 2007

Marketing Executives are Short-term. How can Markerting survive?

A recent issue (June 2007) of Business 2.0 has a short but notable article that states that the average tenure of a CMO among the Fortune 100 is 23 months. We've all seen the turnover among some of the most senior marketing executives in the country over the past few years, but 23 months average tenure seems to be particularly brief.

Why be concerned? It stikes me as being a very limited period for marketing initiatives to turnover and be tested. Sure, a new CMO needs to come aboard and have immediate impact. However, in many organizations marketing programs are locked in 6-9 months before the programs launch. So a new CMO has 3 months to craft a new approach in order for the programs to hit the market within a year. A year later and the CMO is gone. Is this really sufficient time to implement, learn, revise, and execute? It certainly doesn't allow time to cycle through the learning to make adjustments.

Marketers must adjust to this new reality. Perform now or die. It makes sense to demand performance, and marketers should certainly be held accountable for results. But we run the risk of driving marketing programs back to the short-term discounting behaviors that we all strive to avoid. After all, price-cutting to gain volume is as old as marketing. It may boost short-term numbers but it's a long-term death spiral. Marketers are human (really!) and behavior will tend toward the path of least resistance - and that means short-term promotional behavior.

Saturday, May 12, 2007

How to Ask Naked Questions - Marketing Smarts

Naked Questions. It sounds a bit risque, but it's not. Marketers must always ask the 'naked questions' when formulating marketing strategy if they want to achieve solid marketing ROI. The term comes from Aesop fable in which the emperor wore no clothes. Remember the child who calls out "The emporor isn't wearing any clothes."? For marketers, defining sales and marketing strategies means asking the core questions about the business drivers without making assumptions that management already knows the answers. Often, the business has built a set of assumptions that define the way it operates. Those assumptions become so ingrained that senior management assumes the assumptions are fact based. Marketing ROI cannot be achieved if strategy is based on unproved assumptions. A "Naked Question" asks a fundamental question about the business that exposes management assumptions.

What are some of the "Naked Questions" that marketing strategy should ask? The basics might include: How does the company make money? How does the company generate positive cash flow? Who are the key stakeholders in the business and what defines their success?

My favorite is to ask what business the compnay is really in. Traditional banks and credit unions are in the financial services business, but today many will tell you they are in retail. Are the airlines in the transportation business or are they in a customer experience business? Dell may be in the computer hardware business, but they thrive on being a retail service business. Ad agencies are traditionally in the business of creating advertising and placing the advertising in the media (and earning repeated income from the ad based on promoting higher media spending). That model is largely a dinosaur. Ad agencies (who still call themselves that) are in the marketing strategy business and increasingly focus on adding value by helping clients define marketing strategies will deliver sales and marketing ROI. (Note that in the old model the ad agencies didn't focus on sales measurement so much as they focused on media spend levels to drive cash flow).

So....always look for and ask the Naked Questions. It's fun, and you might learn something about the business.

Friday, May 11, 2007

How to Think of Sports Leagues as Brands

Sports leagues as Brands have changed dramatically over the years. It's interesting to consider the major sports leagues as competing brands chasing the dollars spent by sports fans across the country, and internationally. The National Hockey League has struggled for years to grow out being a distant fourth to the NFL, NBA, and MLB. Truth be told, it's actually a distant 5th because NASCAR has been a high growth brand for many years and continues to gain loyal consumers (fans). The NFL is a share leader while the NBA has seemingly declined from being a shining star. The NBA has let its brand equity slide by allowing its product image to become tarnished. The NFL has been on the verge of the same thing. MLB has its struggles maintaining a strong brand equity as it faces the imminent prospect of Mr. Bonds hitting #755.

As you sit and enjoy your next game on TV, consider the strength of league as a brand.

Wednesday, May 02, 2007

Marketing Witz: Spiral of Expectations

Marketing Witz: Spiral of Expectations

Spiral of Expectations

I've spoken often on the topic of the "Spiral of Expectations" in marketing and customer service. My use of the phrase evolved from the "Rational Expectations" theory of economics. As it relates to marketing, it is intriguing to note that consumer expectations continually spiral up. We've all seen it. We all do it. Once a company offers better service, better prices, faster delivery, extra toppings, larger quantities, fresher ingredients, bigger guarantees (and on and on) we come to expect that level of performance from all companies. Not only from other companies in the same category, but from companies in other categories. If Hertz can check me out and process payment right at my car without a visit to the counter shouldn't the airlines be able to scan my ID as I board without my ever needing to stop at a counter or gate check-in? If the grocery store lets me use self checkout for my convenience (is it really for my convneience?) shouldn't I be allowed to self-scan at Lowes or Home Depot ( I can). I can't wait for the day when I can self-serve at the dry cleaner rather than wait for the clerk to search for shirts (which always seem to be at the other end of the automated hanger rack).

As marketers, we need to be aware of what is happening in the lives of our customers across all categories, not just our own. Consumers don't segment their lives into our product categories. We shouldn't set our service expectations by our category definition. It's a trap.