IN THIS ISSUE
- A Letter from CEO Michael Dunn
- How Financial Services Marketers Should Deal With Crisis of Confidence
- When Marketers Put the Cart Before the Horse
- Aaker on Spanning Silos
- Recommended Reading
- News and Events
A Letter from CEO Michael Dunn
The virtual meltdown of the financial markets has businesses of all sizes and shapes scrambling. While better marketing may not be the ultimate panacea that keeps your business whole, it does have a critical role in driving business performance, and times like this demand that you go about it smarter and more effectively than ever before.
That’s why we’ve focused this newsletter on equipping you to demonstrate marketing’s relevance in times like these.
Partners Fred Geyer and Chiaki Nishino offer up timely advice for financial services brands who have been affected by the recent financial crisis in “How Financial Services Marketers Should Deal With Crisis of Confidence," and Fred Geyer provides some additional thinking by posing five areas of backwards thinking that can compromise strategies in “When Marketers Put the Cart Before the Horse.” And we are happy to provide you a sneak preview of vice chairman David Aaker’s new book, in a piece titled “Aaker on Spanning Silos.”
Best regards while we all buckle down,
CEO & Chairman
How Financial Services Marketers Should Deal With Crisis of Confidence
By Fred Geyer and Chiaki Nishino
As the global financial meltdown spreads, it’s clear that financial brands have been profoundly damaged by a crisis of confidence among their stakeholders. Brands that until a few weeks ago were pillars of the community are today widely distrusted.
Marketing leaders didn’t get financial institutions into this mess. But they will be instrumental in repairing the damage. Yet to date, they appear to be just as paralyzed as their stakeholders: Few major financial brands have adjusted their messages to address stakeholder concerns, appearing out of touch with the crisis as a result.
What can financial services marketers do right now? Actions are dictated by circumstances.
Firms that have acquired struggling enterprises have an opportunity to take advantage of the equities in their parent brand to reposition themselves. One step is to create an integrated campaign communicating the advantages of the acquisition and demonstrating that the new entity understands and is taking actions to address stakeholder needs. In this process, they should consider the remaining equities of the acquired troubled brands to see if that plays a role.
Large financial services companies that have not made an acquisition face a different set of challenges in rebuilding consumer confidence. They should proactively demonstrate that they are credible players in the changing marketplace and take credit for staying outside of the fray. In addition to proactive, customer-facing initiatives, employee engagement is crucial. Open dialog that keeps them informed and reinforces the company’s dedication to meeting its long-term strategies creates the opportunity to turn employees into valuable brand advocates.
Strong regional banks are in a good position to take advantage of the damage to the reputation of the national brands to gain market share. A crucial part of this effort should be communications that distance these brands from Wall Street, showing how their independent, local approach has better protected stakeholders from the crisis.
Stakeholders – not only shareholders, but customers and employees – desperately want to hear that someone in the industry understands their concerns and can help them do something about them. Greater transparency and provision of practical advice will go a long way in regaining their trust.
Click here for an expanded version of this article.
When Marketers Put the Cart Before the Horse
By Fred Geyer
For all the great marketers and great marketing, we still see too many instances of what I call “cart before the horse” marketing. The cart, of course, is marketing tactics, while the horse is the need to meet critical customer needs. The result is strategies and initiatives that falter before the finish line.
This sort of marketing isn’t just wasteful, it damages brands by making them less relevant to their customers – a danger when competitors are increasingly aggressive, and customers, increasingly savvy. Here are five questions to help you assess whether you’re practicing it:
- Are you putting the media before your message? The pressures to let the medium drive the message are great. But succumbing means you’re dwelling on surface considerations like production values and entertainment, not the brand’s core promise. Better to be a media agnostic at the beginning of each new initiative, focusing on the core message and then choosing the media that fits the message.
- Do you focus on attraction before satisfaction? Too many marketers seem to believe that great marketing is all about attracting new customers, concentrating on more seductive advertising and promotion to increase awareness and consideration instead of driving current customers to buy more. Achieving that requires the considerably less glamorous task of increasing satisfaction, which poses institutional challenges in giving marketers more input into pricing and product development decisions, among other issues.
- Do rollouts occur before research? We hear too often, “We don’t do research because we can’t afford it.” In fact, investing in a new product or service launch without asking customers what they want is an enormous waste of money. Indisputably, the cost of research is typically insignificant compared to the cost of a failed launch. Modern Internet research is inexpensive. And many do-it-yourself research options are available for startups and entrepreneurs.
- Are attributes more important than benefits? It’s understandable for marketers to fall in love with their products and services. But that love tends to dominate the message, instead of looking at the offering from the customer’s perspective. That makes marketing a telling exercise masquerading as communication. Customers want solutions, not to be told what to do.
- Do you price to cost before determining what customers will pay? Too little effort is actually expended in pricing to maximize current and future profit. Instead, it’s based on internal costs and results in two predictable outcomes. One, some products are overpriced to the market and will be replaced by alternatives perceived to have better value. Two, some products remain underpriced, and the opportunity to build demand by using the extra margin dollars to support the product is lost. Better to undertake empirical, market-based experiments that test the impact of price changes on demand.
Strategies and plans that take customers into account must guide tactics. When they do, marketing generates optimal top- and bottom-line results.
For the complete article, click here.
Aaker on Spanning Silos
Great marketing that’s not just stunningly creative, but achieves measurable business results is the aim of every CMO. Success is hard fought, however; powerful product, functional, and country silos present nearly insurmountable barriers and result in misallocated resources, inconsistent messaging, absent scale economies, and underleveraged successes. Brands and businesses are thus in jeopardy.
Solutions to silo-created marketing problems may best be devised by senior-level marketers who can adapt a leadership style that’s less in the mode of strategic captain and more in that of a facilitator.
That’s one of the key messages that David Aaker conveys in his latest book, “Spanning Silos: The New CMO Imperative,” published by Harvard Business Press which arrived at booksellers Oct. 21. Based on a combination of his academic and consulting experiences and interviews with over 40 CMOs, he identifies the biggest marketing management challenges in a silo-based organization and best practices for overcoming them.
“The decentralized business structure has long been a fact of life, and it suits business in that it makes managing increasingly complex enterprises more feasible,” he says. “But it also creates issues, since customers, products, and marketing programs live across the silos this structure creates.”
Often, CMOs are put in something of a reactionary mode — those new to the job, for example, are typically mandated to reduce the number of ad agencies. “That might be a useful thing to do, but it shouldn’t be the objective,” says Aaker. “The objective should be to find ways to integrate marketing management across those silos or to develop better silo-spanning offerings.
“The ability to achieve those objectives requires marketing leadership that can effect change. That need has popularized the concept of the aggressive CMO taking on the mantle of strategic captain who moves hard and fast to centralize and standardize operations,” he says.
“One of the most surprising things that I discovered during the course of my research is that this is not necessarily the right role or the right course of action,” he explains. “Unless you have strong field support, a marketing challenge, or an organizational crisis, it’s probably not."
“Often, the more prudent and effective approach is to engage in roles that may be less threatening than strategic captain as a means of bringing about organizational change,” Aaker explains.
He describes a strategic captain role as that where the CMO team takes on the conception, selection, and management of marketing strategies and programs, as well as interpretation of trends and insights into customer and competitor dynamics. Other roles include:
- Facilitator. The least threatening in a decentralized organization, this role is designed to enable business units to develop marketing strategies without the CMO team’s active participation. Tasks may include designing a common planning framework, creating data and knowledge hubs, and enabling cross-silo collaboration.
- Consultant. In this role, the CMO team advises the business units in developing and executing marketing strategies. Activities may range from participating in or leading analysis of each unit’s markets, competitors and customers to generating company-wide insights.
- Service provider. Here, the CMO team is “hired” by the silo business units to provide marketing services, whether research or employee training; manage sponsorships or promotions; and select and manage third-party suppliers.
- Strategic partner. In this role, the CMO always has a seat at the silo strategy table, and the CMO team works collaboratively with the silo’s teams in creating and applying a marketing and branding strategy.
How well equipped are today’s CMOs to play any of these roles effectively? “It’s mixed,” he acknowledges. “At issue is the individual career path, and whether marketers have been able to grow within central marketing groups without feeling out of the mainstream,” which might limit their comfort with roles best suited to bridge silos.
For further information on “Spanning Silos,” click here.
To see Dave discuss his new book, click here to watch a video from the September 2008 European CMO Summit.
The Future of Wall Street Brands [PDF]
By Joseph Gelman
The global financial services crisis raises issues for CMOs who now find themselves with new brands in their portfolios. Actions undertaken to protect brand equities of all the players — whether acquirers or acquired — must be carefully considered against a backdrop of customers, comparative health issues, and strategic compatibilities.
Why our Automakers are Eating Competitors' Dust [PDF]
By Andrew Pierce
The U.S. automotive industry presents yet another cautionary tale of how myopic thinking can decimate, if not destroy, brand equity and financial performance, leaving an iconic sector of American business choking in competitors’ dust. (Marketing News, October 1, 2008)
Make the Endorser Strategy Work [PDF]
By Kevin O'Donnell
I’m as fond of Mrs. Butterworth and her syrup as the next person. Splashed on pancakes or waffles? Delicious. As a special sauce to make my insurance bills a bit more palatable? Maybe not so much. (Marketing News, September 2008)
Where Do the Best Ideas Come From? The Unlikeliest Sources [PDF]
By Kevin O'Donnell
There's a "secret sauce," as a friend would put it, to creating a recipe that works for serving up innovation success. But if businesses have trouble getting it quite right, it's because they're short on a critical ingredient: inspiration. (AdAge, July 16, 2008)
Most frequently downloaded from www.prophet.com
Despite its promise as a primary source of organic business growth, capitalizing on innovation’s potential is an elusive goal for many businesses. Our 2008 Best Practices Study, developed in collaboration with Play, reveals how “model” innovators do it — with approaches that point the way toward better innovation success for others.
Other articles of interest
The Five Biggest Digital Marketing Cliches
Advertising Age, September 29, 2008
Once upon a time — say, 2002 — digital spending was a negligible portion of total marketing budgets and we lived in a world where few marketers would dare go "beyond the banner." Fast-forward to 2008, and in some cases we have the opposite problem. Digital spending is still too low, but in the spirit of wanting to appear current, some marketers have rushed to embrace any and every new digital tactic.
Best Buy Launches Store for and by Women
Springwise Newsletter, October 7, 2008
Reflecting the fact that women make the majority of consumer purchase decisions these days, a number of companies have begun exhibiting signs of female fever, as our sister site trendwatching.com would put it. We've already covered instances in the automotive, construction and transportation industries, to name a few, and now consumer electronics giant Best Buy appears to have succumbed as well.
Design is More Than Packaging
New York Times, October 5, 2008
The word “design” tends to conjure up images of crisp graphics, nicely arranged interiors or pleasing packaging. But a growing cadre of advocates say the world of design has much more to offer corporate America.
For additional interesting articles and factoids from the world of marketing, brand, and innovation, check out Prophet's blog - BackPocket.
News and Events
October 10, 2008
Vanessa Cohen comments in Marketing about Pizza Hut temporarily changing it's name to Pasta Hut. more ›
October 10, 2008
Vanessa Cohen provides her opinion in the Marketing Society Forum within Marketing about the return of “retro” brands. more ›
October 7, 2008
David Aaker’s newest book, Spanning Silos: The New CMO Imperative, explores silos senior marketers must span for success. read ›
September 27, 2008
Joseph Gelman spoke to Cinco Dias about brand strategies for confronting the current financial crisis. Gelman argues that brands can define whether a company is a winner or a loser. He illustrates his argument with concrete examples from the banking, consumer and mobile phone sectors. *Please note this is in Spanish. download ›
September 25, 2008
Scott Davis talks to Brandweek about how some marketers are using the upcoming election to score a few laughs. read ›
Spotlight on Speaking
AMA Radio Show Author Series featuring David Aaker
This radio show will feature Prophet Vice-Chairman David Aaker, as he discusses his upcoming book "Spanning Silos: The new CMO Imperative." Please tune in beginning at 11:00 a.m. CST.
Marketing Society Business Leader Dinner with Arun Sinha
October 30 — London, UK
Prophet is sponsoring this dinner, featuring Arun Sinha, Chief Marketing and Communications Officer, Zurich Financial Services.
New York CMO Executive Summit
November 7 — New York, NY
Prophet is proud to sponsor this by-invitation-only event. Featured speakers include CMOs from GE, IBM, Aetna, Eastman Kodak Company, and more.
ANA Regional Meeting
November 18 — San Mateo, CA
Jay Milliken, Partner, will be presenting on the topic "Building a Brand-Driven Business."
Critical Eye breakfast briefing: Focus on innovation
November 19 — London, UK
Vanessa Cohen, Partner, is a panelist at this meeting titled, "Using innovation to create sustainable business advantage."