In an incredibly engaging panel discussion facilitated by Satmetrix at our Distinctive Purchase Experience conference, the discussion focused on three major barriers to moving VOC (and in particular, NPS data) from merely data collection to actionable organizational change:

1)      Product-focused B2B organizations that don’t fully appreciate the growth potential inherent in customer-focused strategy

2)      Data captured in organizational silos with little visibility into how and when that data could drive customer-centric change

3)      Limited empowerment of employees to act on customer feedback and even more limited understanding of how employee behavior change links to company growth

Facilitated by Deborah Eastman of Satmetrix, we heard from three NPS practitioners – Lara Wise of tw telecom, Eric Murphy of Ingenix, and Desirree Madison-Biggs of Symantec. Three diverse businesses yet a common theme – all three maintain organizational ownership for driving customer-centric change via NPS. This isn’t a side-of-the-desk project by a mid-level staffer. Customer centricity when executed properly is a firm-level priority driven by c-suite buy-in. All three mentioned in their responses the necessity of full empowerment from the CEO to act as a customer advocate.

Eric made an interesting comment that caught my attention – “what customers really want to buy is results, not just widgets.” What a perfect tie-in to our conference theme, that B2B companies need to provide customers with insight that helps them raise revenue or reduce costs. Commercial excellence is about delivering results to customers through insight tied to our unique differentiators – but we can’t do that unless VOC becomes the fulcrum of marketing and sales.

Desirree made an equally critical point – although NPS is just one metric (and a good one at that), change only results from an end-to-end customer experience initiative. Symantec’s Customer First program tracks progress quarterly to make explicit connections between the NPS metric and required improvement in broader customer strategy. This echoes MLC research that a customer’s experience is not merely the sum of all touchpoints, but the explicit delivery of unique benefits at critical junctures within that experience.

Lastly, Lara’s key takeaway for tw telecom: after their first batch of NPS results came back, employees simply said “so what?” and “what’s in it for me?” That’s perhaps the biggest hurdle, but one most necessary to overcome. Lara said the change was driven by action and commitment – it wasn’t a one-time fleeting idea; VOC and NPS became a cultural focus. From a knowledge management portal to developing appropriate incentives, customer centricity wasn’t just another consulting buzzword, but a new way of life for the organization.

And certainly, it doesn’t hurt when, like Ingenix, your CAGR stats double within two years of customer-centric implementation. I can’t promise such astounding returns, but I can promise that without any customer focus, the storm that is today’s economy will likely just leave many treading water.

Take each of the two customer experience challenges in turn. First, the necessity of supporting multiple sales channels (online vs. phone vs. in-person agent) can often put marketing objectives in conflict – and requires a more measured approach than the proverbial ‘squeaky wheel gets the grease.’ This typically requires silo-busting, forcing separate channel managers to arrive at a single view of the target customer. While likely that different sales channels appeal to varying demographic or behavioral segments, it is equally likely that the customer’s underlying emotional need remains quite similar. Thus, internalizing the brand’s focus across stakeholder groups is a prerequisite to displaying a unified external view, regardless of sales channel used.

While arriving at that single customer view, insurance marketers will tangle simultaneously with the second experience challenge – the explosion in communications channels. Traditional approaches to marcomm planning are quickly becoming obsolete (see MTV here), and merely building off the previous year baseline is a sure-fire way to remain behind. Yet, there is a growing expectation from customers that insurance companies will keep up, if not lead the way. With digital, social, and mobile media ‘always on,’ insurance is no longer just the monthly premium direct debit; the expectation of two-way interaction grows.

With this growing channel complexity (channel used in both senses of the term), there’s a drive within some of our insurance members to reinvent the wheel – but I don’t think that’s the wisest course of action. Understanding customer preferences still remains the crux of the issue, particularly in identifying their most powerful emotional and functional needs, and which sales and communications channels insurance brands can utilize to activate those.

1)      Experience-Driven Touchpoint Planning – Learn from Kimberly-Clark’s process that selects marcomm touchpoints based on their power in the customer decision-making process.

2)      Customer Value Equations – Learn how to prioritize customers’ emotional and functional needs to make the necessary resource tradeoffs

3)      Customer Experience Storyboards – United Services (financial services pseudonym) maps out their entire customer experience to find brand-busting moments that could either subvert or highlight their brand promise.

The ubiquitous (and I can’t say illogical) choice is social media, utilizing their built-in technological advantage to engage customers who are by no means digital neophytes. Yet here’s the rub – our research shows that driving B2B loyalty requires insight marketing, marketing grounded in the supplier’s ability to use content to disrupt how prospects perceive value. That’s an incredibly high bar to clear through social media, particularly when sub-par online content just feels like traditional brochures or white papers ‘pushed’ to another channel. High tech marketers must exercise incredible care to respect the inherent interactivity and customer-led nature of social media. Proper execution requires two frameworks: one for managing entry into social conversation with frame-breaking content , another to manage the social media enterprise more generally.

Enter Cisco on both counts. In its drive to push into product and service adjacencies, Cisco needed rich content but also customer permission to enter the space. Rather than dive in head first and risk outright rejection from the target audience, Cisco sought influentials’ social media ‘watering holes’ that were potentially overlooked.  Once found, Cisco acclimated to the existing conversation, deliberately merging their content with the topics prevalent in customer discussion, constantly listening to ensure tone and substance matched appropriately (see graphic below). Only with social permission granted could Cisco fully convey the expertise it possessed, cleverly pushing customer thinking toward its differentiators in the discussed adjacencies.

Given that high tech marketers tend to be more active in the social media-sphere, fostering firmwide collaboration on all social efforts is no small feat. Whether it’s brand building or product adjacencies, our research highlights strong marketing leadership as a hallmark of successful social enterprises. Cisco wins here too. With a social media Center of Excellence focused on expertise building, Cisco’s Social Media Marketing Director looks to drive adoption across the enterprise, but adoption aligned to a common strategy. Evangelism is often priority #1, but policy oversight and change management come in a close second to ensure that common strategy doesn’t become multiple priorities.

With a content-rich strategy combined with credible oversight, high-tech firms can quickly reap the rewards from insight marketing combined with social media. Technology always forges ahead; hopefully high-tech marketing continues to follow suit.

MLC members, for more on Cisco’s social media work, please read the key findings from our 2010 research pieces: Insight Marketing: Shaping Customer Decision Criteria to Your Advantage and Closing the CMO Leadership Deficit in Social Media.

And that is exactly where our manufacturing members find today’s economy – a late summer afternoon, with limited predictive ability as to coming market conditions. They’ve seen the sun peek through the clouds (11 straight months of sector expansion per ISM’s Report on Business) but with markedly slower growth in June’s new orders, that grey cloud seeps back into the picture. With a consumer-driven economy, manufacturers can’t be too pleased that June housing starts also dropped 5.0%, while consumer confidence hit a low not seen since August 2009.

I’ve harped on uncertainty in markets since the genesis of Wide Angle (see here and here, shameless promotion, I know), yet it continues to dominate the mind of forward-thinking B2B marketers, manufacturers in particular. Manufacturing to a high degree is based on certainty and predictability – large capital requirements force long-term assumptions that must hold true for profitability to result. Senior marketers’ assumptions as to projected customer inventory levels, market size, and overarching GDP growth rates can make or break a company.

But with uncertainty comes opportunity for those manufacturing marketers savvy enough to push forward. Just because the market halts for the occasional thunderstorm doesn’t mean the marketing discipline required to produce growth stops as well. Manufacturing has never been the sexiest of marketing industries (for better or worse), but it does provide opportunities for incredible experimentation to assist in leapfrogging the competition:

1. Utilize social media to develop deeper individual customer relationships – Too often, manufacturers internalize the business-to-business aspect of industrial marketing. Social media offers the chance to build individual advocates on a 1-to-1 basis, rallying support across the customer organization. At the core of every B2B sale is a collective group of B2C customers, all with different motivations; social media can quickly shine a light on how to use those differences to your advantage in the sale.

2. Experiment with Discovery-Driven Planning – Designed to drive certainty from uncertainty, this planning methodology enables constant assumption testing, moving forward with projects only as data collection turns known unknowns into facts. Our sister program, the Corporate Strategy Board, has published some great research from Air Products utilizing this method.

3. Refine your Insight Marketing strategy – Markets may be uncertain, but members still control their ability to teach customers new insights that link explicitly to their differentiators. Learn more about how to embed this strategy in your organization.

Perhaps one day in the not too distant future the skies will fully clear. But until then, the cloud of uncertainty will reign supreme. And I promise, no more bad metaphors in subsequent posts.

(photo courtesy of mikebaird)

There’s also this large sporting event coming up (in case you haven’t heard): the 2010 FIFA World Cup. Or rather, “the-every-fourth-year-global-football-tournament-to-determine-a-single-country-champion,” as FIFA would like me to refer to it in this space.

FIFA is playing brand police here in South Africa, and a ruthless outfit at that. You can find just a taste of their efforts in this article. My personal favorite – their request of Kalula, one of South Africa’s low-cost airlines, to withdraw its slogan “Unofficial National Carrier of the You-Know-What.” While fully understanding that FIFA and its corporate partners paid truckloads of money for brand exclusivity at the tournament, the brand management tenacity at play here seems to far exceed rational boundaries.

When you’re shutting down a street vendor for selling a scarf with the words World Cup on it, it seems a bit beyond the pale – especially here in South Africa, where the World Cup may be the lifeline to a better livelihood for that precise street vendor.

FIFA is even removing any brand mark from legitimate products sold in stadiums that are not linked to its corporate sponsors. FIFA’s marketing director Thierry Weil said this: “The restriction is, it must be unbranded, but you will still make money, so this unbranded one is not harming anyone.” By his stated logic, this is facially absurd. FIFA clearly believes that brand is paramount to financial success (as do we here at MLC), hence the restrictions on those brands not associated with it. The brand removal must be at least somewhat harmful if protecting even the omnipresent name World Cup proves so important.

Perhaps I’m going overboard and am blinded by the incredible hospitality the South Africans have shown on my trip thus far. I’d love to hear what our members think on this topic. Certainly, my colleagues in our Communications Executive Council have produced much research on the importance of reputation management; I would never argue with the merits of brand standards and guidelines produced by marketing.

Yet something about this example strikes me as going one step too far, taking brand management far beyond its intended purpose. It isn’t as if the public doesn’t know the World Cup brands. Official credit card: Visa (thank you Morgan Freeman). Official soft drink: Coca Cola. Official restaurant: McDonald’s. And now we have an official brand police officer – FIFA. To invert McDonald’s line, I’m not lovin’ it. But wait, am I allowed to write that?

Discerning a common thread among those on the Fortune list isn’t easy, especially since most would rarely appear on an ‘innovative company’ list. You could certainly argue that value positioning helped tremendously, i.e., the right economic proposition to capitalize on retrenched consumer spending. Companies like Dollar General, Dollar Tree, and Ross Stores certainly fit the bill. Yet, there are plenty of ‘value’ retailers that noticeably didn’t make the cut, from Family Dollar to the granddaddy of them all, Walmart. There isn’t an easy industry lens to the list either – in what was generally another poor year for financial services, USAA, Wells Fargo, and Erie Insurance beat the odds handily. Even with oil prices up across 2009, there isn’t an energy company to be found.

There must be something all these companies are doing right. Judging from those on the list that are members of the Marketing Leadership Council, I can say with certainty that part of the secret sauce is marketing-led customer centricity. Marketing doesn’t play a bit part in corporate strategy; it leads it. The customer isn’t an afterthought in marketing planning; it is the plan’s foundation. Brand positioning doesn’t waver; it remains crystal clear, enabling the customer to know with precision the value they will receive. Customer loyalty isn’t another consulting catchphrase; it’s pursued with intensity.

So in dueling lists, we have shrinking companies that are considered innovative and rapidly growing companies that some consider formulaic. Maybe it’s just a matter of semantics. But to parrot the Council’s own jobs/outcomes phrasing, the fundamental questions are these: first, what is the core task that we as marketers seek to accomplish? And second, what outcomes will tell us whether we have achieved success?

To my mind, our core task is to satisfy unmet customer needs through the right product and service offering. We’ll know success when customers not just purchase, but repurchase and advocate for our brands – which our CFO happily measures as increased revenue and profit. Sign me up as an advocate of revenue growth over innovation, muddily defined, any day of the week.

Not because of the leading companies on the list – the old standbys of Apple, Google, Microsoft, and IBM still head the class. What was more startling was that 11 companies had declining revenues and 17 companies had declining margins across the 2006-2009 survey period. You can play devil’s advocate with the recession all you’d like, but in a top 50 list of innovators, more than 20% falling shy of growth raises an eyebrow.

What moves these results from head-scratching to startling to flat-out frightening is the methodology BCG uses to calculate the ranking. A survey sent to 2,000+ senior executives around the globe accounts for 80% of the final ranking. My conclusion: leading executives are awarding innovation points to companies that are fundamentally missing the goal of innovation – to better satisfy customer needs in a manner that grows the business. Declining revenues aren’t quite the signal an executive should look for when judging innovation.

Caveat time: I don’t know the precise questions BCG asked or whether revenue performance would have been worse without the identified innovative spirit. Yet throughout the article, the word ‘customer’ is notably absent. For those familiar with MLC’s jobs and outcomes framework, the goal of innovation properly defined is to devise ways to help customers get their jobs done better. Certainly companies can sink millions into research and development, streamlining supply chains, or building new distribution channels, and those may be the right moves to cut costs or expand footprints. But unless those innovation dollars are spent in the service of better meeting customer needs, they are innovations without purpose.

Renowned consultant Peter Drucker once quipped that, “There is only one valid definition of business purpose: to create a customer. Therefore, any business enterprise has two – and only two – basic functions: marketing and innovation.” As innovation budgets open up, marketing executives should own the innovation engine, working back from customer needs to produce products and services that boost acquisition and loyalty. Without innovation, those revenue numbers will continue to fall – and we’ll be stuck with a 2011 list that looks less innovative and more sclerotic.

MLC members, be on the lookout for an upcoming diagnostic designed to help you benchmark your innovation capabilities. We’ll also be kicking off a breakfast meeting series on (revenue-generating) innovation in cities across the country beginning in May – stay tuned!

But frankly, this too often turns retailers into myopic, proximity-biased incrementalists in their customer strategy (too harsh again?). Imagine my encouragement when I see retail CMOs begin to tout the very elements of customer-focused strategy their CPG peers have long known.

This new focus on the customer take two forms: organizational structure and marketing communications execution. Take Express, for instance. Organizationally, Express CMO Lisa Gavales (follow her on Twitter here) now owns all e-commerce activity. From a communications perspective, every touchpoint – be it on the store floor or the web homepage – displays the same visual branding. Express is Express, no matter where the customer encounters it. While a recent development at Express, MLC research would clearly indicate that customer-focused, channel-agnostic marketing communications will yield far higher returns to the whole portfolio than category- or channel-specific campaigns.

At Macy’s, you practically have CMO Peter Sachse committing marketing treason, saying, “What we don’t need to do is get new customers.” Yet he’s right, because he too has placed the customer at the forefront of marketing’s strategy, rather than a distant second to classic merchandising techniques. And what better way to do this than. . .wait for it. . .asking the customer! Sifting through NPD Group data, interviewing shoppers as they left the store, all in an effort to generate customer centricity. Much like Express, the end result is an inevitable broadening of Marketing’s scope of control (which of course we as marketers enjoy). Sachse states specifically that the web should be the brand’s hub, which can lead to innovative uses of the web as a marketing communications vehicle, as in this recent Macy’s campaign.

Yet for many retailers, the transition to a customer-driven marketing organization may not be as simple as having charismatic leaders like Gavales and Sachse. That’s where MLC research can help build the business case for customer focus:

• See how Tesco created an annual customer plan to implement improvements to the shopping experience grounded in customer insight.
• Read how Food Lion co-opted cross-functional partners by pre-committing them to next steps on customer-focused projects.
• See how Victoria’s Secret filters all customer-focused investments to ensure alignment with the brand and target customer.

The trend toward customer focus in retail is more urgent and necessary than ever before, as the sector seeks to reinvent its offering coming out of the recession. Those that fall behind in satisfying customers’ needs will likely get trampled in the next Black Friday rush.

The Council’s work on marketing communications has always stressed the primacy of client-side creative brief writing. Many heads of advertising will tell us they can ascertain the relative success of a campaign in advance simply by reading the creative brief sent to the agency. Our research shows that the best briefs contain three can’t-miss elements:

1. A precise target audience beyond demographics, including behavior and psychographic traits

2. A core insight that synthesizes the motivations behind consumer behavior (or non-behavior, as the case may be)

3. A single communications task that will move the audience from their current attitude/behavior to the desired attitude/behavior.

Knowing these, it’s difficult not to look at odd-ball television ads and reverse engineer them back to the brief that started it all, wondering if the ad’s ’success’ will merely win it a Cleo or truly accomplish the communications task. Given the marketing and advertising know-how of this blog’s readers, I’d like to start a series designed to get your take on exactly these types of ads, using the key elements of a creative brief as grading criteria. The first ad that came to mind is Old Spice’s ‘The Man Your Man Could Smell Like’ video that debuted on YouTube in February, made it to television shortly thereafter, and now has nearly six million YouTube views.

The ad is deliberately provocative, and at times, utterly illogical. The actor is speaking directly to females in the commercial, yet the target audience – as stated publicly by Procter & Gamble over the past few years – is teenage males. This audience overlaps tremendously with Unilever’s hyper-sexualized Axe brand. Perhaps the distinction between the two is the addition of the female secondary audience and the impact of that audience on the teenage male purchaser.

So I ask of our readers: does the campaign work? What is the insight behind the campaign that makes it distinct from Axe? Does the associated campaign have a single communications task? Hone your responses by adding a comment above; I’ll add further MLC perspective as the comments expand.There’s no right answer, but this type of thinking can sharpen your saw for the creative briefs you write – ensuring that catchy campaigns also translate to business results.

Then I must ask the rhetorical question: how close do marketers come to that definition when it comes to marketing planning? The search term ‘marketing planning’ has appeared in the top five search terms on the MLC website for 24 months running. Our annual executive survey has reported ‘planning’ as a top-five area of improvement nearly every year since the poll’s inception.

Sincerely now, what do marketers keep doing year after year that keeps yielding the same underwhelming results?

There are two near-constant mistakes that prevent most organizations from building successful marketing plans:

1. They replicate the previous year’s marketing plan, subtly tweaking resource allocation and marketing activities from the previous year, which was only slightly different from the year before that, and so forth.

2. Interim changes to plans are either made with little regard to the original strategy, or not made at all. In layman’s terms, some call this tactic the ‘stick-it-in-a-drawer’ method of planning.

Taken together, these mistakes yield plans that are unresponsive to changing market conditions, miss shifts in customer needs, and produce tactical plans reliant on ‘traditional’ media.  With continued uncertainty in today’s economy and social media shifting the communications landscape daily, an incremental, unadaptable marketing plan is the surest path to wasted effort and misguided strategy.

So rather than simply expecting different results, how can marketer do planning differently?  For starters, marketing plans must link to corporate strategy – it’s the only way to demonstrate the function’s contribution to the ultimate arbiter: shareholder value.  Marketers should implement metrics immediately after settling on strategy – not after selecting tactics. Cross-functional leaders don’t much care how many Facebook fans you have; they want to know whether your strategy worked … which most CFOs measure in dollars. The closer your metrics are to financial outcomes, the stronger the case for marketing investment becomes.

With linkage to corporate priorities, Marketing’s performance is inextricably linked to the performance of peer functions. Harness that cross-functional input during planning – solicit input from Sales (particularly B2B companies); understand how the R&D pipeline will impact future sales; make sure Market Research provides the best customer insight. Lastly, practice integrated marketing communications, with each medium and touchpoint serving a clear purpose toward the achievement of marketing objectives.

Implementing these principles will at least break the insanity habit, but by no means will they alone yield long-term success. There remains a need to build a repeatable process embedded in daily workflow, where the plan is a living document referenced throughout the year.

MLC Members, if you’re struggling with planning, we’d love to understand your specific challenges so we can build better resources to support you on this perennial pain point.  Please take this two-minute survey about the state of your organization’s marketing planning process or e-mail my colleague Abhaya Menon, and we’ll be sure to follow up!

Let’s face it – as the frontline for cutbacks in consumer spending, traditional retail has suffered through a miserable two years. Abercrombie & Fitch gambled that higher prices would keep its panache and lost terribly. Sears Holdings’ stores had their best quarter since 2005 – with a 2.3% year-on-year same store sales decline. Even the McDonald’s ‘I’m lovin’ it’ juggernaut stumbled to a 0.7% same store sales decrease this January. Does the rest of 2010 provide any hope for recovery? And if so, can retailers take advantage of it?

Before the good news, let’s dispense with the headwinds that still face the retail sector:

• Consumer spending, although rising across January and February, still has a long way to go to absorb the steep cutbacks felt across 2008 and 2009. Economists aren’t predicting rapid spending growth anytime soon because.
• Chronically high unemployment continues to limit the available dollars for discretionary spending. The unemployed don’t have the money required to reinvigorate the economy, while those who are employed have become far more frugal. That’s certainly a wise economic choice because. . .
• Wages aren’t rising. Although this typifies each recessionary period, wages tend to rise when the economy starts to tick up. That’s not the case now, with factors ranging from underemployment to the skyrocketing cost of non-wage benefits like health insurance.

What makes this potential recovery even more complex is the fundamentally different nature of the retail environment this time around. From Amazon and eBay to Craigslist and other secondary markets, this is the first recovery where the maturity of self-serve web retailing forces stand-alone retailers to adopt different strategic choices. Even with all these obstacles, there’s room to run, and here’s how the winners are leading the race:

• Inventory Management, Done Right – Slashing inventories (and the restocking that led to strong Q4 GDP growth) helped retailers weather the storm, but on the way back, consumers want leading brands on the shelves at the right price. Walmart’s already rethinking its SKU strategy; there’s an opening for competitors to recapture share by matching the right brands with the right target consumer.
• Revisit the Competitive Landscape – Best Buy doesn’t compete against Circuit City anymore; Amazon and Walmart pose the biggest threats. The former brands of May Company are distant memories; Macy’s only holds one price point within what was once a much broader spectrum. It’s time to take a wider and deeper view of retail competition, offline and online, to re-evaluate supposed differentiators.
• Reinvigorate the Brand – Readers of my posts know my faith in brand as a difference-maker. I can’t hold it up as success yet, but JC Penney’s brand re-launch during the Oscars was a bold step to move up-market and engage a new consumer audience.
• Harness Social Media – It’s as simple as this: if you’re not in social media, you’re behind. From its power as a one-to-one mechanism to the wealth of consumer data available, neglecting social technologies is an abdication of Marketing’s role in retail.

MLC would love your thoughts on what’s driving retail forward (or for that matter, still holding you back). We’re exploring the possibility of an informal retailer roundtable to better address the concerns of our B2C-direct members and I’d love your input. E-mail me at dhutton@executiveboard.com for more information; I look forward to hearing from you.

Following my last post on globalization and its ramifications for the structure of global marketing functions, I spent a week trying to unplug in Italy (thank you, Starwood points). What spurred the above introduction was the amazing difference in marketing communications techniques required in the Italian market versus the United States – both industrialized Western countries with heavy penetration of traditional and digital media. Similar on paper, far different in practice.

Two examples to illustrate the point: the U.S. has more television channels than anyone can possibly absorb; Italy is lucky to top out at 20, with RAI and Mediaset accounting for most viewership. Micro-targeting by consumer preferences, geography, and niche TV channels, while so prevalent in the US, could hardly exist in any meaningful fashion for Italian campaigns.

Or take outdoor advertising – billboards, posters, street signs. You can’t turn a corner in Rome without seeing an ad plastered on exterior building walls; street names adorn the top of 2×3 foot signs displaying the latest Versace gown. Put those same posters in downtown Chicago or Washington D.C. and you’d be handed fines for littering or defacing private property. In both examples, touchpoints deemed critical for one media consumption culture have little to no value in another.

Are our marketing departments structured to take advantage of these diverse media environments? As consultant-speak as it sounds, glocalization must become a capability of global marketing functions if those organizations want to achieve some semblance of communications resonance in diverse markets. There are multitudes of trade-offs for marketing executives to consider here – which capabilities to keep tethered to a global center, how to overlay behavioral segmentation with media consumption, how local the ownership/creation of communications must become. All the while, executives must keep brand consistency and customer experience foremost in their minds. The power of today’s technology means that a misstep in Italy can mean headaches in the United States; local can become global instantaneously.

MLC members, browse our collection of marketing communications organizational profiles to see how your peers are tackling the organizational challenges behind communications resonance, and also see how Ford has overcome the challenge of selecting the right channels for each market through strong test-and-control experiments.

Whither globalization? I beg to differ.

There was a bit of consternation at the Davos confab earlier this year as to whether the era of globalization was the root cause of the global financial meltdown, and as a result, perhaps it was time to roll back some of that interconnectedness. Nicolas Sarkozy was particularly pungent in his argument to this effect. Granted, globalization certainly hastened the onset of recessionary tendencies the world over; international capital flows have only increased since the Asia financial crisis of the late 1990s sent a minor shock wave through the system.

Yet it stands to reason that with the right safeguards, globalization can again be a force for good.  In fact, many Western companies look to the BRIC nations (Brazil, Russia, India, and China) to provide the next wave of business growth. Success in those nations requires continued flows of money, goods, and labor around the world; protectionist measures would only make re-investment more difficult.

As a result, marketing executives must actively consider and act on the consequences of globalization, the recent economic meltdown, and the structural changes that may be required to optimize a global marketing function. To steal the cliché, what is the best mechanism to think globally and act locally?  Members are taking stabs at this from all angles – some pursuing greater centralization, others pursuing regional strategies. Then you have the Goldilocks approach (a compliment here) of HSBC – an amazingly consistent brand image worldwide, yet similarly strong local resonance.

To come out of the recession stronger than before, companies must rebalance their global portfolios to better adapt to emerging market opportunities and capitalize on untapped segments in the developed world. The way marketing structurally supports that global portfolio will have a large impact on company success. Substantive discussions should precede any structural changes to ensure the selected model best meets global business needs.

Personally, I think globalization will do a world of good for everyone, if pursued properly. It certainly makes sitting in an Amsterdam airport more interesting. And there’s my boarding call for BA 8456 to London City…

Very rarely does one member conversation spark a complex web of issues, but one yesterday with a senior marketer at a consumer firm in a mature industry did just that.

The firm has reconfigured its entire new product development process, from stage gates, to resource allocation, to organizational structure and ultimately, the locus of innovation – a conscious shift from incremental to disruptive.  Simultaneously, the company placed brand management among its top priorities for the year.  Our dialogue quickly turned to the intersection of the two and which was actually driving the bus.

The mixture of brand and innovation creates multiple thorny dilemmas:

1. If a company needs innovation to survive coming out of the recession, how does it reconcile a brand image that may be out of sync with the new technologies it develops?

2. How far can you push the envelope on brand positioning in advance of worthy innovations that demand a tweaked or entirely new value proposition?

3. Where does the customer fit? For B2C indirect firms like this one, innovation must satisfy end-consumer needs while also enabling retail success – a retailer not entirely focused on your one category.

4. With customers having more control over the brand and product experience through social media, how can companies bring external sources to bear on innovation without undermining the brand essence?

As we hear more from members that innovation is re-emerging from its two-year recession hibernation, there is an unfortunate pull toward playing product catch-up.  ‘We need to find the next great product,’ or so the story goes (unfortunately, Apple’s iPad may fit here).  Not so fast.  Progressive firms seem to be taking a holistic approach to innovation that anchors all efforts in the brand and consumer.  The brand leads, innovation quickly follows.

This is not to say your brand is a roadblock to blue-sky thinking; it does mean that the strategic focus of the brand has to be incredibly precise and internalized by all those that touch innovation.  In both B2B and B2C, pushing the brand to an emotional level – be it through a shared value or unique benefit – opens far more innovation doors than brands that stand for functional features that may be obsolete by the time you blink.

MLC Members, check out these case studies that can help manage this brand/innovation dichotomy:

• Philips Oral Healthcare uses a segment-focused roadmap to enable long-term consumer-centric innovation
• Lego harnesses the enthusiasm of consumers to improve NPD
• Wrigley’s creates a separate innovation process to ensure non-standard sources of insight lead to potentially disruptive innovations

1. Savvy social media-ites can cite their business objective clearly and succinctly. All members of the social media team know what their efforts are designed to achieve.

2. You’ve made principled decisions on your target audience. You know which customer segment to pursue and what social media vehicles they’ve adopted.

3. You know your customers’ outcomes and how social media facilitates the achievement of those outcomes better, faster, and cheaper than other methods.

4. You act on the intersection of customer outcomes and your organization’s broader unique strengths, creating strategic social media advantage within your competitive set.

5. Fast-cycle test-and-learn experiments comprise your tactical social media endeavors. Each experiment is hypothesis-led.

6. The team holds hands and pre-commits to next steps based on each social media experiment’s result. This facilitates buy-in upfront and limits time lost to analysis paralysis post-experiment.

7. Teams lay out required resources for each experiment to boost transparency for budget owners and pave the way for measurement clarity.

8. With ROI still a mirage for many, social media winners link transactional metrics to attitudinal and behavioral objectives that the broader organization knows have an impact on financial performance.

9. Social media teams don’t hide the ball. They are upfront with the risks each project faces, and utilize RACI methods to mitigate them.

10. Social media teams tell other marketing teams how much more fun they’re having working on this topic. What, you thought all ten were going to be serious? And I’m only somewhat kidding.

MLC Members can put these 10 habits to work in our upcoming workshop in Dallas, Texas on Thursday, March 4th. You can register here.  In this workshop, you’ll actively develop your company’s social media strategy based on these proven best practices, with facilitation by MLC experts and input from your peers. If you’re responsible for social media initiatives and execution at your organization, this is an event not to be missed. We look forward to seeing you there.

In the best of worlds, I see Marketing as the general management function of the company (don’t tell Sales). In it resides the most critical elements of commercial success: the customer and associated insight. Subsidiary to that, it contains market assessment, competitive position, brand development, marketing communications, etc. No one makes a customer-impacting decision without Marketing’s input and stamp of approval.  Again, best of worlds.

Yet oh how far most organizations are from that ideal. Marketing clamors to prove value with metrics and dashboards, struggling to remove itself from the dreaded SG&A CFO line item. The term “cross-functional” is more worn than an old suit. Not that Marketing can go it alone, but to live a day without subsisting on the beck and call of the next desired piece of sales collateral – that would be heaven.

Progressive marketing organizations are using the opportunity provided by the recession to rethink old-world organizational relationships. A direct question from a B2B software provider last week: “Who typically owns the customer experience?” Answer: typically no one function. So why not Marketing to drive the required coordination? Another question from department-store retail: “Social media impacts every function in our company – who should take the lead?” Why not Marketing as the subject-matter expert? More companies than ever are asking why their disjointed commercial operations are artificially delineated by Marketing and Sales. Why not an integrated function?

There is latitude for organizational realignment in 2010 as executives demand a return to growth, and a pressing need for marketing leadership within a forever-changed customer landscape. Without insight into rapidly changing customer needs, any effort by R&D or Sales will fall short. Without social media guidance, HR and Legal may shut down burgeoning efforts to produce low-cost, high-quality insight. There is opportunity for Marketing to assert its primacy in the portfolio of corporate functions and the case is clear. The only question remaining is whether the function can seize the chance.

Political affiliations aside, government touches more elements of our consumer-driven economy than ever before. One policy change here, another there, ripples through the system with unprecedented speed (like perhaps, an unintended consequence). If banks feel less wealthy as a result of taxation and more limited mortgage support, the less likely they are to expand credit. Tighter credit, as we saw vividly in the fourth quarter of 2008, leads to lower business investment and greater consumer savings – starting another cycle of money removed from our economy exactly at the time it needs capital injected.

Senior leadership teams don’t want excuses, though. After two years of stumbles, most executives look to 2010 for growth. Yet the number of extraneous variables affecting that potential growth is incredibly high, hence marketers’ collective uncertainty. Just take several possible scenarios that could happen across 2010:

• The U-shaped recovery currently underway transitions quickly to V-shaped as the government spends the bulk of stimulus bill dollars
• Health care reform passes with an individual mandate to buy insurance, changing the corporate benefits landscape and take-home pay
• Certain state governments can’t balance their budgets, leading to heavy cuts in government contracting

Will any of these come to pass? I don’t know. Should we be thinking about what happens if they do? Absolutely. Two major solutions come to mind to stave off the adverse affects of market unpredictability:

1)      Build an agile planning process that includes short-term scenario planning. Specifically in 2010 as the U.S. electorate gears up for midterm elections, be sure to include government action (or lack thereof) as a critical variable.

2)      Determine the jobs and outcomes your customers are trying to achieve and invest smartly in forecasting how those jobs may change under each scenario.

The 2010 winners won’t be those that wrote a plan in January and followed it unwaveringly all year. The winners will be those who understand how the market changes and can react fast enough before it changes again.

I’m an airline junkie. George Clooney’s character in Up in the Air hit a little too close to home. But suppose you’re a leisure traveler now subjected (as of today) to a $25 one-way charge for your first checked bag, and a $35 one-way charge for your second. You may call this a fee, but the airlines call this ‘ancillary revenue.’

From the airline’s perspective, the logic here is simple – collect additional revenue from an activity the customer already does. Yet people respond to incentives, and the incentive here is clearly don’t check a bag. How about those unintended consequences? Passengers don’t check bags; suitcases get larger; security lines back up, overhead bins fill up faster; gate-checked luggage increases (where there is no penalty for checking those bags); on-time departure decreases; upset business traveler who followed the rules misses his meeting.  The customer behavior change is easily predictable in this instance because the penalty is large enough, yet the unintended consequences and negative externalities abound.

But ultimately, here’s the question – does it work?  Not even close. Check out Joe Brancatelli’s analysis here. Ancillary revenues are great, but how about top-line revenues, the ones that count? The only major airlines to avoid double-digit revenue declines in 2009 are the two that do not charge for the first checked bag (Southwest and JetBlue). Account for the fact that a greater percentage of the top line is coming from non-ticket sources, and you see that the bottom has dropped out for most of the major hub-and-spoke carriers. People respond to incentives whether we like it or not.

After a year of upheaval in 2009 where many struggled to stay afloat, marketers must remember the simple truths of consumer economic behavior:

• Do our businesses account for different scenarios if A occurs rather than B?
• Do we understand both the rational and emotional incentives to which consumers respond?
• How has social media changed the incentive structure for our consumers?

Members, join us for a webinar on January 28th on recession-era insights you can’t afford to forget.

So how about an even-handed assessment of things to watch for in 2010? Even the cynic can provide that.  Here are three big macroeconomic and marketing-specific trends every marketer should follow in earnest:

Macroeconomic Trends

1)      Consumer Behavior and Economic Recovery – It’s unclear whether a true recovery stimulated by increased consumer spending will occur. Regardless, marketers should closely track the salience and imprinting of consumer behavior patterns exhibited during the worst of the recession into 2010. Is the ‘cool-to-be-frugal’ mindset permanent? Is consumer spend retrenchment category-specific? How do smart marketers stimulate similar consumer behavior for their brand? Members, join us for a webinar January 28^th to hear our take on the recession lessons marketers might soon forget.

2)      U.S. Federal Debt and the Declining Dollar – With continued weakness in the world’s reserve currency, US-based companies will find overseas operations ever-more expensive, while the US activities of firms headquartered in Europe or Asia will be hit once by the lack of consumption and a second time by miserable exchange rates. As Congress raises the national debt ceiling, foreign governments will continue to raise red flags on US creditworthiness, potentially impacting cross-border direct investment around the world.

3)      Unemployment and Labor Markets – With very few predicting improvement in the overall employment picture, the fact that it correlates too well with discretionary consumer spending bodes poorly for 2010. But for our businesses, there is incredible opportunity to hold on to and find the right marketing talent, without whom the hill to climb will be even steeper.

Marketing Trends

1)      Social Media 2.0 – In case you haven’t noticed, social media is kind of a big deal. 2010 will tell us how big a deal. From how Twitter will endure to the privacy concerns inherent in Facebook, the churning sea of social media will quickly separate marketing winners from losers. Fast-cycling failure and embedding social opportunities into marketing communications planning are just two ways to keep up. Members, see our full suite of social media resources here.

2)      Organization Structure – Now more than ever, marketers are asking us about the ‘right’ organizational design. Whether looking to achieve cost savings through efficiency, embed digital/social without upsetting entrenched hierarchies, or simply find a new way of doing business, structure conversations are unavoidable.

3)      Resurgence of Innovation – As pipelines dried up along with innovation budgets across 2008-2009, there’s a remarkable gap in many categories between the last disruptive innovation and today’s drastically changed customer outcomes. Leading marketing organizations are finding creative ways with budgets to ensure innovation is no longer under-funded as they look to beat competitors into the daylight the economy seems to show.

Best wishes to all our members on a successful 2010. Let’s hope the realist in me becomes a bit happier across the year and puts the cynic to bed.

• Circuit City still had stores last year at this time
• The Dow Jones Industrial Average opened the year at 8776 and currently resides at 10497 after a nose-dive to near 6500
• Dubai went from filthy-rich monument of opulence to debt-ridden monument of opulence
• TARP transformed from economy-saving crisis relief to four-letter word that Citi and Bank of America can’t shed fast enough

These events and others sent our marketing executives on an emotional roller coaster that won’t soon be emulated.  Let’s play emotion-by-quarter.  Q1, scared.  Consumer demand plummeted, banks still teetered precariously.  Q2, uncertain.  Job losses mounted, spending retracted further, but the cliff’s edge didn’t seem quite so close.  Q3, ambivalent.  Everyone hoped for the turnaround, but no one had complete confidence it would come.  Today, encouraged (even hopeful, perhaps).

Back to the clichéd learning-from-the-past bit.  If ever there was a lesson that said so much yet gave so little guidance, it applies to 2009 as we look to 2010: expect the unexpected.  By no means will 2010 be easy for marketers.  Consumers have more control over your brand through social media at the same time companies need to define it to achieve growth.  Businesses will continue to haggle on price at the same time unique benefits rule the day.  Major legislation sits before Congress to transform sectors of our economy from health care to energy, with potentially long-lasting effects.  Buck up, my friends.  Another wild ride is coming.  Don’t say you weren’t warned.