September 2009

IN THIS ISSUE

 

A Letter from CEO Michael Dunn

We’re in the home stretch of what, for many, has been one of the most difficult years in recent memory, and yet has also been one of the most exciting. It has certainly made us rethink our attitude toward business and uncovering areas for growth in tumultuous times.

In 2009, while some of our thinking revolved around the recession and how to work smarter in challenging times, we also discussed taking this time to take the longer view around sharpening the marketing function and its leadership. Our approach to marketing accountability and the shifts required in capabilities and mindsets of CMOs created a splash with the publication of three books: my own The Marketing Accountability Imperative; Scott Davis’ The Shift; and David Aaker’s Spanning Silos. All three are aimed at helping marketers and organizations succeed now, and in the future.

In this issue of our newsletter, we give you more of a taste of the strategies found in our books. In “Shifting in Response to Customer Discontent,” Scott Davis and Peter Dixon look at the implications of The Shift on the retail sector. Read an interview with David Aaker in “Aaker Shares Thinking for Brilliant Results.” And learn about marketing effectiveness and smarter sponsorships in a piece by Fred Geyer and Chiaki Nishino entitled “Getting More Value From Sponsorships.”

Until our next newsletter,

[Signed, Michael Dunn]

Michael Dunn
Chairman & CEO
m_dunn@prophet.com

Shifting in Response to Customer Discontent

By Peter Dixon and Scott Davis

Retailers are marketing around a new season these days — the “season of discontent.” It’s characterized by customers who prize value if they’re going to open their wallets.

Staying ahead — or just afloat — is forcing management to weigh their three key business drivers of merchandising, price, and service against customer expectations instead of their traditional operational concerns.

It’s one of a series of shifts that are being undertaken by business growth leaders, and is epitomized by Walmart. It began shifting to a relentless customer focus during the last recession, with its highly successful, everyday low pricing policy.

Retailers hoping to achieve even a small amount of Walmart’s storied success would do well to examine how they undertake the philosophical, cultural, and organizational shifts that are required to become truly customer-focused – and reap the business benefits it creates. Here are some starting points:

  • Assess your company’s ability, desire, and openness to align around the customer. Map out functional areas’ relationship to customers and understand how each helps or hinders the sale.
  • Determine which makes the most sense for your business: a top-down mandate to become customer driven or a bottom-up business case to sell decision-makers. A cross-functional team should lead the process.
  • Create alliances with groups that directly or indirectly touch the customer, with a focus on those that will help score the quickest wins (however small), create trust and credibility, or may be the most challenging to win over.
  • Understand the nuances of centralized versus decentralized and single versus multiple/diverse businesses and geographies. Be transparent in how these affect your organization’s approach in organizing around the customer.
  • Start small, with a geography, a line of business or a functional area, and start organizing for greater impact on the customer’s expectations of the relationship with your business.

Achieving growth is more important and more difficult than ever before. Companies must understand that they report to the customer. These times demand this type of alignment. This shift is a process that will likely come with some bumps along the way, but the rewards are guaranteed.

Scott Davis and Peter Dixon are senior partners of Prophet. This article is based on Davis’ latest book, The Shift: The Transformation of Today’s Marketers into Tomorrow’s Growth Leaders. The full version of this article can be found here.

 

Aaker Shares Thinking for Brilliant Results

From marketing as a strategy partner to the trouble with silos, Prophet Vice Chairman David Aaker hits on some hot buttons in a recent expansive interview with Brilliant Results magazine. Among the topics discussed:

Why marketing should be integral to business strategy: “Marketing is the voice of the customer at the strategy table. Firms that develop strategy without marketing as a full partner can expect to generate inferior if not flawed business strategies.”

On the impact of silos on marketing efficiency: “When brands span product and country silos and each silo has control of the brand in its context, the result is a confused brand without direction or soul. The effort is dangerous in the market and equally damaging internally, because there is no driving force bringing the employees and partners together as teammates.”

How social networking, the Internet, et al impact marketing: “The mistake that many make is to attempt to develop a social technology or Twitter or Facebook strategy sometimes using a specialist in that vehicle. Social technology needs to be actively managed as part of a larger marketing and customer relationship system. Don’t toss out what you know about marketing. You decide on the target audiences, what type of relationship is desired, what programs will develop and strengthen that relationship, and what media can play a role. Then if a social technology vehicle is helpful, it will come to the fore.”

David Aaker’s latest book is Spanning Silos: The New CMO Imperative. Click here to read the complete Brilliant Results article.

 

Getting More Value From Sponsorships

By Fred Geyer and Chiaki Nishino

Corporations around the world are expected to spend nearly $100 billion in sponsorships this year, between sponsorship fees and the cost to advertise and promote the programs.

Yet a study by Performance Research and IEG found that only 20 percent of companies evaluate the fit of their sponsorships through primary customer research – and are more likely to ask what competitors are sponsoring than to investigate how their programs appeal to customers.

The challenge is to extract more value from sponsorship investments without over-investing in programs that may not show a strong return on investment. Making that challenge even more daunting is the lack of metrics to evaluate sponsorships’ impact.

How can marketers escape the “black hole” of sponsorships, and achieve immediate and sustainable results? Click here to read the full text of this article and learn more about the strategic system that will enable effective marketers to better evaluate opportunities and weigh the outcomes. 

 

Recommended Reading

What do CFOs have that CMOs don’t?
By Francisco Pinedo and Scott Davis
We have to admit: As marketers we can be good at many things; but marketing ourselves is not one of them. Time and time again in the race to occupy the CEO seat, CFOs win. CFOs are increasingly becoming the CEO’s right hand, and we are watching the CMOs struggle to get a seat at the table. (utalkmarketing.com, August 2009)

What Every CMO Needs to Succeed  [Podcast]
By David Aaker
David Aaker explains to listeners what the pitfalls and dangers of operating in a silo environment are, highlighting the key takeaways from his 2008 best-selling book, Spanning Silos.

Brand Valuation: A New Path To the Boardroom [PDF]
By Roger Sinclair
If the marketing budget — which always ranks very high on the schedule of costs on the income statement — was viewed more like the investment in assets, more marketers would sit on the board and have the ability to explain and report on the crucial assets within their purview. (July 28, 2009)

The Advertising Show: Focus on Marketing Accountability [Podcast]
By Michael Dunn
In this one-hour interview, Michael Dunn discusses concepts from his latest book, "The Marketing Accountability Imperative," and challenges the traditional thinking behind marketing accountability. (The Advertising Show, June 26, 2009)

 

News and Events

Scott Davis recently spoke to Fast Company about the brand strategy behind AmazonBasics, in an article titled, "Amazon Basics: Branding Advice for Jeff Bezos from 11 Marketing Experts."

Vanessa Cohen provided a viewpoint on CRM in Marketing Week for the article titled, "Who Should Manage Your Relationship?"

Roland Bernhard commented to Swiss publication NZZ on the strength of the UBS brand – how it successfully protected the company in difficult times as well as its role in stopping the drain of assets. *Please note this story is in German.

David Aaker joins AMA’s Marketing News as a columnist.

Vanessa Cohen talks to MarketingWeek about O2’s move into financial services.

Scott Davis talks to The New York Times about J.C. Penney’s bet in opening its first store in Manhattan.

Spotlight on Speaking

Brand ManageCamp
October 5–6 — Las Vegas, NV
Michael Dunn is presenting concepts from his book, "The Marketing Accountability Imperative" at this annual event. For special pricing and packages, click here.

National Signage Research and Education Conference
October 13–15 — Cincinnati, OH
Peter Dixon is presenting on the topic "Innovative Integration of Signage in Design, Marketing and Branding."

IIR Innovation Immersion
October 19–21 — La Jolla, CA
Prophet is happy to sponsor this event themed, "The 360° Experience: From Ideation through Commercialization." Andy Stefanovich will be speaking in a session titled, "The Inspiration Discipline." We're offering a 20% discount on the price of admission. Click on the link above and use code SPKRM2118 to get the discounted price.


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