Head of Marketing - Required background?

We have nominated a new head of marketing - she/he has extensive background from marketing communications and advertising from several companies and advertising agencies. Safe bet but potentially with little results. Safe because inside company sales expects tactical support for lead generation (read brochures and leaflets) and other companies have selected as well with this background.

Little results because she/he positions marketing around communications - how company communicates its products... finding potentially a new angle to communications. Totally new advertising campaigns, new messaging, new logos and templates... refreshed communications. Unfortunately revenue didn't jump out from the roof despite internal applause. We even have now new colors.

Marketing is a victim of communications and advertising. Engineers do not communicate, manufacturing staff do not communicate... no one communicates externally - company needs someone to tell the story to the market. So company hires a communications specialist. Mandatory has been done. It is a cost item for the company but suppose to bring good ROI. Marketing manager is busy and has created a metric ROMI which highlights great ROMI returns and defenses his/her hiring. Revenue anyway seems to live its own life despite great ROMI (return on marketing investment).

Business strategies seem to have a tendency to live their own internal life. We will be the leading provider of... something. Financials have their own forecasting model but on powerpoint everything is tied together as a sound business strategy.

Marketing cannot find its relevance nor concrete reason to exist. Therefore head of marketing creates its own marketing strategy filled with positioning, key messages and action items round communications. Friends from advertising agency help in this effort. Marketing lives its own life. Someone from the junior staff helps with revenue generation efforts. Classical marketing stuff.

What if marketing was thought differently - as a key component of business strategy. We need to innovate to transform our offering, pricing, market position, digital presence, customer care.... our whole experience among customers. For sure traditional head of marketing is not on his/her comfort zone.

Who would you choose to lead marketing efforts if given task was following? Someone with advertising background - hardly. Someone from junior staff - hardly. Someone from sales - hardly. Who would you choose?

Marketing function metrics ROM, ROMI - you are lost man

One of the easiest acid tests for marketing, not marketing function, are the metrics. Metrics show how you define marketing. Maybe the worst inventions ever are "Return On Marketing... ROM" and "Return On Marketing Investment... ROMI". When you set those in place you nail as well marketing to be communications aka advertising driven - not to build and nurture customer value. Communicating customer value is world's apart from creating customer value.

ROM and ROMI must have been invented by people with ad agency background. Idea is worthwhile - to make marketing measurable but problem lies somewhere else. Those companies which need dedicated metrics for marketing haven't integrated marketing to business model. Business and managing business is considered to be something else. Revenue metrics are not considered to measure marketing efforts.

ROM and ROMI metrics measure impact of campaigning. In other words you burn money to buy advertising space, materials and actual ads to influence brains of all of us. Unfortunately this is just a thin slice of marketing. Communication is communication not marketing. Many companies have a tight marriage between marketing function and ad agencies. Ad agencies make their money from manufacturing ads. Marketing function buy these ads not support for customer value creation. Internally marketing folks complain why they do not get respect. More likely they should get fired or the person who defined marketing to drive only communications.

In yesterday's world above definition of marketing was just fine. After we got Internet and all the digital opportunities it is no longer "just fine". Companies operate in a very interactive world where every company should define how to utilize opportunities of Internet. Traditional marketing takes Internet just as a new media to promote the company and its products. Social media is in here just a new advertising media. If curriculum of people in marketing has been filled with ad driven marketing for the last 15-20 years - old dog cannot learn new tricks. It is like Kotler trying reinvent himself after preaching 4Ps for three decades that now customer is the starting point.

To change old habits companies  now hire digital natives/Y-generation/less 30 years people. Whole idea is absurd. These young guys without any formal power should teach senior staff about Internet whilst they have very little understanding and experience from running businesses. Sounds like old school of management. Senior management equals to parents and personnel are their children. Parents absorb ideas from children like at home but decide what to do with them.

So yes you should hire digital natives but they are powerless until there are people in senior roles who have power to set direction. People who have both: insights, foresight and vision of utilizing Internet for betterment of business combined with years in managing businesses.

Back to measurement and setting fences for the marketing function. What if your marketing would be integrated with business development? Not sure if you have a function for it but at least on the plans you should have ideas how to develop your business. Once you integrate ideas of marketing and business development (read integrate not bundle) ROM and ROMI metrics make no sense. They make sense for their origin - to measure communications not marketing. Business development centered marketing is measured with revenue generation metrics, brand equity, customer value delivery, channel sales mix, loyalty, share of wallet,... all metrics which have tight connection to revenue creation. Not bad and once marketing equals to business development conflicts and grey areas between sales and marketing can be solved as well (next topic?)

Digital future - Make it a reality today

I just surfed again few trend watching sites such as http://www.trendhunter.com/,  http://www.springwise.com/.  Companies are doing so much cool stuff round the world. Due to my background especially I read digital and online related projects and business implementations. World where we are living is really changing - how we can shop, get ideas, interact and ease our lives.

If one bigger corporation would implement all the best ideas in integration with its core business and future core business... it would become very cool state of the art company. However it seems that best ideas are implemented in isolation from one another. Very few companies if any is implementing trend setting ideas in a row one after another.

Why bigger companies cannot create coherent and consistent approaches to digital opportunities which would really shape their business model and consumers' (or business customers) customer experience? For smaller companies reason is obvious - you need to have a well targeted offering which has scalability thus not a wide spread ecosystem of great implementations.

I have seen a large number of digital strategies, read a number of related articles and interacted with many experts. In most of the cases bigger companies have very lame digital strategies. With lame I mean strategies which have no great insights and a story to tell - no imagination of how things could be. Yes, imagination is the key. Imagination of how customers could and should live their lives, do their shopping, get served and manage their daily & weekly activities supported by your company. Instead of companies have road maps when next technology version is implemented.

Great digital strategies combine thinking from service business ideas, development of customer relationships and digital space opportunities enabled by technology - no matter in which industry you are in. Starting point should always be a customer - how we live our lives and manage home occasions (similarly in B2B: how we manage our companies and try to improve our businesses). Underlying problem is that you cannot outsource strategy creation - you need to have the vision and story to tell. Different service providers should just act as an enabler and adviser in different areas to strengthen specified area knowledge.

If we ask a digital agency with advertising background to define the strategy - focus will be too much in communications not how we execute business and create customer value. If we ask an IT company to define the strategy - focus will be too much in technology development not how we execute business. If we ask a strategy management consultant - focus will be too much in numbers and outcomes in processes. When the company does not have its own strong vision and story - outcomes are too much dependent on the service provider and they will shape it according to their home turf. If the home turf is colored with some specialty then the strategy will get same colors for example over emphasizing mobility, social media or online store development.

So who should be your digital imagination officer? Functional organizations have a silo effect. Imagination and implementation of future multi-channel experience belongs to no one. But opportunities are unlimited. My insight is that companies should combine responsibilities of business development, marketing and digital development to design the future - to make the future a reality today.

Embedded CRM - New fad or finally something relevant in CRM space

Have you heard about "embedded CRM"? Well you should not because I have created it by linking these two words together. For a number of years I have taken it granted and implemented ideas in many companies but finally I have created this term to describe it. Have you heard about CRM failures? Most likely you have because majority of CRM implementations are more or less crap or at best have very limited value for business.

Some of you must have worked in a company which has a CRM program trying to create cross-sell and up-sell opportunities, laying in the outer circles of business management. Program has its own management (CRM manager/team) and it reports either to IT or marketing communications management. Marketing has its issues with the CRM program and team managing the program because actual marketing has nothing or very little to do with initiatives under CRM program. They live separate worlds. There you have your failure reason number one - CRM has very limited success odds as a program

Some other of you must have worked in a company which has CRM implementation as a software. B2B sales is asked or forced to store all client interactions into this program. A few years (or many years) back there had been a lot of internal buzz and excitement about implementing CRM approach (later to be realized it was only a software) in the company. Today some people in the organization are very passionately filling client contact details, meeting memos and funnel management activities to the software but many wonder the benefit of it all. Actual sales approach is living its own life because that is hard core sales not CRM. There you have your failure reason number two - CRM has very little business value as a separate software.

Some of you have taken the path that CRM is so past and CEM = customer experience management is the right path. Again CEM as CRM was implemented as a program or as a software. Few years will pass and another acronym will pop-up with new promises and CEM is so past. There is an enormous industry trying to create new acronyms, fads and software so there will be no lack of these in the foreseeable future.

Embedded CRM? Very simple yet difficult to implement because you need to really make some real and concrete changes in you company. Nice about taking CRM as a program or software is that you don't really need to change anything in the core fundamentals of business management.

Embedded CRM has the idea that CRM is embedded in your business model and core fundamentals of business management. So when do you have your CRM embedded? Examples
- When your online store tracks existing customers buying behavior and you treat them with these insights
- When your corporate sales program is measuring customer revenues and analyzes customer transactions data for the benefit of sales activities
- When your service business utilizes customer data (transactions and customer log-in profiles) to create customized experiences
- When your offerings are understood customer-in, not inside-out
- When you segment your customers based on their motivations and offering usage occasions not on demographics... and you have activated this model to daily operations
- When your strategy has a) above things embedded and b) your strategy defines customer market spaces where you compete (market space = clustered life and daily life occasions or clustered business usage occasions vs. your production line defines your industry)
- When your management agenda has no more CRM terms as a last item but CRM is embedded in different core topics

So CRM should be understood as a customer-in mindset powered with CRM capabilities (databases, analytical tools, software, etc.). On paper very simple, as said here many may disagree that that is not CRM and in practice very hard to implement. Mindsets are more difficult to change than visible assets company has - but you need them both because then you have embedded CRM into your mindset and assets.

Marketing function - Focus in communications or business development?

I know I should not write about his because I am swimming against the main stream and many of you will just judge me "you don't have experience from our special industry". I will anyway write about it even I think this topic is "those who get it have known it for years and those who does not will continue have glazed eyes if these ideas arise in conversation".

Yes as the topic states we are talking about the role of marketing function in corporate environment. Out of 30 companies/corporations I know pretty well (both from B2C and B2B segments, including a few very well known) only two have genuinely integrated marketing and business development - all the rest have decided to take the communications path.

Oh man how these two companies have delivered over the years - from the revenue, customer value and innovation standpoints. Rather soon they discovered that they leading competition when they didn't even focus on competitors but on creating customer value. All the pieces of the puzzle: customer segmentation, product development, innovation, marketing communications, customer relationships marketing, online business, subscription models, from products to services transformation, multi-channel marketing, CRM, social media, churn mgmt, customer profitability, loyalty development, share of wallet development, etc. ... all the stuff just fitted perfectly to the imagined and designed puzzle in coherent and consistent manner.

No issues with buzz words, one idea gurus or running after latest trends as many other companies tend to do. Yes these so called other companies have defined their marketing with communication as the central idea. Business development can be found either close to R&D, manufacturing or sales (in sales business development tends to equal with closing new deals with new customers). For these companies marketing is marketing communications and as I have seen in these "28" example they are not delivering - or if they are it is not because of marketing. Currently these functions are chasing glory from social media... as an isolated effort. Nothing wrong with social media - unfortunately it just cannot really fly in these cultures and how its being understood.

Why few companies get it and majority just bangs their heads while trying to figuring out "what to do with marketing and what the heck marketing actually means"? As I have explained to myself answer is rather simple - majority of companies still take the inside-out view to the business "pushing manufactured products to unknown customers" while these few winners take the outside-in view... and have integrated marketing and business development... and marketing strategy to business strategy.

Sounds simple.

VP of sales and marketing.. or Leading sales engineer

"We are searching for a VP of sales and marketing who has deep understanding of our core technology and products. We value your previous industry experience and management roles in similar companies. Highly appreciated but not necessary is your experience from R&D or manufacturing environments. As we tend to say in our company we qualify only the best of the bests - this time the best VP of sales and marketing."

"Your role is to build our international direct sales & reseller model, sales organization, CRM system, PR and communications, online store and social media approach, etc."

John Tech was selected among many candidates. John had a solid long time experience from similar products and had worked as a sales manager in the industry for a long time. His track record from national and neighboring countries sales was solid. John's technology knowledge was best among candidates because he had in his earlier days worked in R&D and was an engineer. John started in his new role.

John was able to deliver sales in home market. John knew the people so the task was not that difficult for him. John started to build in much slower pace international reseller network. He signed agreements with new reseller partners but actual sales numbers were nothing to celebrate. No one had asked in the interviews whether John had ever built new reseller models or in the markets which were new to him. John forgot to design performance based agreements with new resellers, just agreements to sell. Actually he had never built new networks just sold earlier in his career to resellers.

John was sent to Asia as well.... maybe the booming market could ignite international sales. Well John had never operated in Asia so local cultures, customs and decision making was new to him. He and other management kept on wondering how the sales is not booming in the booming market.

John started to build CRM. He had never built a CRM approach just used few CRM IT systems earlier in his career. John selected a CRM system and company implemented it as an IT project. No one in the company actually understood including John that CRM is a customer management approach enabled by IT. John urged everyone to store different customer visits to the system. Eventually no one  understood why they had the IT system in place because it didn't seem to deliver any incremental sales.

John had no clue or interest towards marketing therefore he hired a marketing communications manager  Mary Message to execute all kinds of communications stuff. Mary had worked all her life in PR and communications so in her new role kept on delivering all kinds of leaflets, brochures and customer events. John's advise to Mary was "I want that kind of advertising which gives me more sales". Nor John or Mary had any experience or interest to define customer strategies or other more strategic approaches to marketing. None were created.

Mary had earlier in her life belonged to communications function which handled company's website. Mary was a natural choice to build online presence. She had never built an online store but had hired consultants to create social media campaigns. Online approach including brand new online store didn't deliver greater success. No one actually paid too much attention to this because they were in the business to sell products not create online success.

Company decided to change its strategy. There is no point to sell products when software as a service is so much hotter trend. Who wants to sell products when you can sell it as a service. No one in the company including John or Mary had any experience from service business. New approach was launched with high hopes but still they couldn't conquer the world.

Eventually company decided they had wrong product (or a service as it was defined later) because it didn't deliver sales results - and they started to R&D new products. John was chosen to lead the whole company because he had best technology knowledge from new products they were developing. Owners appreciated this new strategy and had been patient because they believed in great products and eventually they could develop one.

No one questioned whether their sales and marketing had anything to do with poor results.