At MLC, we’ve been harping on innovation for a few years now – why its important for marketers to be active participants – if not leaders – in the innovation process, bringing to bear important consumer perspectives that only they can offer. We hope you were listening, because for many industries, the time is coming fast where innovation won’t be a luxury but a necessity to stay afloat.

For an example, look no further than the auto industry. The recession years saw a few automakers nearly go out of business, while others, like Hyundai, Kia, and Subaru, posted double-digit increases in sales and market share – albeit in a seriously depressed market. In particular, Hyundai accomplished this by offering an excellent price-to-value proposition and with a few catchy campaigns that engendered a ton of consumer trust, like their Hyundai Assurance program – which allowed buyers to walk away from their car loans if they lost their income or were disabled during the term. Read More »

If previous “ages” of marketing could be described as eras of Big Brands, or Madison Avenue, this age of marketing can probably just as well be described as the era of New Channels – a time when one of Marketing’s principal jobs is to navigate new communications technologies and the shifting consumer behavior that results. It’s something that lies at the heart of what marketers tell us about agility – the subject of this year’s B2C research – marketers and their organizations need to be prepared for what’s next at all times.

It’s the organizational part that’s more difficult, though – people naturally get stuck in routines, are averse to change, and executives are loath to take risks on projects that have uncertain chances of success. We’ve collected our best practices in getting organizations to adapt in our Make the Case to Invest in Social Media challenge center, and most of the lessons there hold true for channels like mobile, as well.

With that in mind, we also thought we’d take a second look at an interview we did a few years back with Susan Lavington, former SVP of Marketing at USA Today. She was at USA Today during the heyday of social adaption, and led that paper – a progressive one, by print journalism standards – through a difficult transition to social.

MLC members can read the interview in its entirety.

It started off innocently enough.  Back in the 1980’s when the first Special Economic Zones were established there were only a handful of places you even dared talk about as “consumer markets” in China.

As a modicum of affluence appeared in Shenzhen, Guangzhou, Shanghai and Beijing, companies began making more concerted marketing efforts on a market by market basis.

Deng Xiaoping’s “Southern Tour” in the fall of 1992  unleashed (or ratified) individual efforts across China focused on the pursuit of wealth.  Soon, some people were talking about more markets than they could count on two hands.  Impressive.

Somewhere along the line in the run up to the turn of the century, discussion of “Tiers” emerged to facilitate sharing of information and depth of market penetration.  Where you only spending media in Tier 1?  Was your product showing up in Tier 3?  This was merely shorthand for talking about the big four markets, the other provincial capitals, and the rest.

The problem is that the rest is actually some amalgam of 361 official cities, 2,811 couties, and 34,171 townships.  Over the first decade of this century, some MNC’s were actually seeing their brands reach every corner of the country.  Others were managing points of sale across hundreds of cities.

Despite the blunt tool, business executives were stuck with tiers to discuss their market coverage.  These conversations could be quite frustrating.  We might all agree on Tier 1, and maybe had an 80% overlap for Tier 2, but then your Tier 3 was different from mine.  You had a tier 4, I had a tier 5.

The reocognized disconnect was that each company’s “Tier” definition was different.  And if I needed to create a market expansion plan to grow from 30 markets to 100 markets, which 70 were supposed to be my priority.   Some efforts started to appear that attempted to index all the markets in China by certain economic statistics, but if you’ve ever worked with Chinese economic statistics you know how you felt about that.

Well, I think the new decade is finally bringing around some sound thinking about how to talk about China market coverage without putting up a list of 600 cities:  Clusters.  Most recently advanced rather publicly by McKinsey, the concept was already in practice as executives looked at the total market and preceived newly defined regions that did not adhere to provincial boundries or other traditional market maps.

The cluster approach won’t surprise any practioner.  Afterall, who would ignore a neigboring market that absorbed your media, was easy to distribute to, and spoke the same dialect as your sales team?  Just because it was indexed 40 spots lower?

Talk of Clusters recognized not the indexing of cities, but the interconnectedness of markets that emerged in the wake of rapid infrastructure development, personal car ownership, and the reach of the internet.  Manageable in number (less than 30) these geographicly defined areas offer scalabilty and reach to brands that need efficiency.  Tackling 31 provincial capitals at the same time offers none.

With Clusters, executives can dismiss with talk of cities.  They can focus on reachable populations within defined geographies.  The market becomes manageable again – almost intuitive.  Distribution centers, media spend, and trade marketing investments scale up better.  Focusing on three or four clusters is naturally simpler than focusing on 50 or 75 markets.

Clearly, I’m a fan of clusters.  I recommend you adopt it in China.  Like all good ideas, this one isn’t new, but it sure feels good when you use it in a new location for the first time.

Many B2C marketers these days are turning to data and analytics to drive customer-centric outcomes. But the higher you go up in organizations, the more difficult it is to get a true picture of what your customer is like – competing priorities and the abstraction needed to run a very large enterprise run counter to focus on details of the customer experience.

Payless, an American shoe retailer, faced this problem a few years back. Facing competitive threats from big-box discounters, a deteriorating customer experience, and a management team far-removed from the average customer, the company’s CMO tried to drive improvements in the customer experience but predictably failed due to lack of senior management buy-in.

Realizing that the company needed to make the lack of customer focus “real” to senior executives, Marketing arranges a series of executive-immersion sessions. They listen in on focus groups to learn the characteristics of core segments, then “act out” those segments in a series of visits to Payless and competitor stores – a constraint that forces them to remove their functional hats and view stores from the perspective of a consumer, rather than an operations or a finance executive.

A key part of the visits to Payless stores is that they are unannounced and incognito. Executives, assuming their roles as a particular customer persona, shop in the store as any other customer would, avoiding the problem of stores “preparing” for pre-announced visits.

The end result? Executives quickly figured out where the customer experience was lacking and identified a few key elements to fix, leading to higher same-store sales and increased foot traffic and customer satisfaction.

MLC members, check out the full case, or listen to this webinar replay on how companies – including Payless – have pioneered consistent, differenteated, and delightful customer experience.

While it’s looking like 2012 might be a better year for business than 2011, it’s still essential that marketers focus on ways to ferret out waste and inefficiency in operations – both to minimize the impact on corporate bottom lines, but also to remain flexible for the new channels and investments that are sure to pop up in the coming 12 months.

And so, we measure everything – campaign effectiveness, brand investments, even the internal operations of the marketing function. But a marketing organization is a complex organism, and can be measured in an infinite number of ways – ways that might be contradictory or misleading.

Unsurprisingly, MLC members have come up with a number of ways to measure marketing’s effectiveness. Here are a few of our most popular strategies:

Measure adherence to the brand promise. Large organizations face inherent difficulties in consistently delivering on ambitious brand promises, and FedEx was no different; performance to brand promise was wildly inconsistent across channels and geographies.

In response, the company created a scorecard that boiled down the brand promise into discrete employee behaviors, incenting the front line to comply in the process. MLC members, read the full case here.

Measure marketing’s contribution to firm financial performance. This one can be difficult to figure out – it’s hard to determine, with any sort of certainty, which marketing activities have led to which performance benchmarks at the corporate level.

Xerox moved to this model after years of throwing large volumes of performance data at senior decision-makers. They used a lean Six Sigma process to arrive at a manageable number of insightful metrics aligned with broader firm performance, leading to higher levels of senior-staff buy-in. MLC members, read the full case here.

Measure marketing’s contribution to firm goals. We highlighted this case in this week’s post on sustainable brand growth, but it also explains a key insight into what Marketing should prioritize when it comes to effectiveness measurement. Given the somewhat ambiguous nature of marketing, it’s key that senior folks buy in – and most often, getting buy-in is contingent upon answering the question “What have you done for me lately?”.

One MLC member solved this problem by creating a purpose-built dashboard that shows exactly how marketing and branding initiatives align with and contribute to corporate goals. MLC members can see the whole case here. We’ve also blogged about this case.

The main benefit of mass media –its broad reach– is also its downside: a high percentage of wasted impressions on non-target customers. The precision that marketers can now achieve in targeting has far outgrown traditional media planning and media buys.

Marketing at Kimberly-Clark found a way to generate more effective communications by making principled shifts in media spend.  The secret?  Rather than beginning with mass media and then making other investments if budget allows, they plan media touchpoints outward from the consumer first.

Kimberly-Clark begins by identifying a clear overarching creative concept called an “Engagement Idea” that drives touchpoint selection.  A well-developed Engagement Idea also provides necessary support and rationale for initial budget allocation into nontraditional media channels.  It develops the “Engagement Idea” through four steps:

1. Understand the brand – Ensure comprehensive knowledge of the brand’s positioning and the consumer-centric rationale behind it.
2. Brainstorm ways to drive engagement around the brand– Use consumer feedback to find potentially resonant ways to represent the brand.
3. Screen potential ideas for flexibility – Test the Engagement Idea for flexibility (i.e. it can last for two to three years’ worth of campaigns) and breadth (i.e. it doesn’t directly prescribe specific touchpoints)
4. Identify touchpoint roles – Determine which touchpoints are best suited to conveying the Engagement Idea as well as any others needed to drive people towards those touchpoints.

To get Marketing to accept this new approach and the ideas produced, Marketing also takes an aggressive sales approach to convince internal audiences to accept nontraditional touchpoint mixes.

In Jack Johnson’s first US hit, he sang “I want to turn the whole thing upside down… I’ll find the things they say just can’t be found.”  Turn your media planning upside-down, and maybe you’ll find a more efficient media mix.

MLC members, read more about this process here.

By Chris Frank, a former marketer at Microsoft and the author of a new book on decision making.

We have become a world of data addicts. But with more data comes the feeling of, “How do I make sense of all this? Can’t we break this down into a handful of simple points?” Critical questions about market demand, customer buying behavior, subscriber acquisition, brand positioning and your product’s roadmap are great. However, the interesting discussion comes to a screeching halt when the data arrives. Instead of being a well-arranged piece of music, it is a mash-up of sounds. The volume drowns the substance.

Data Rehab

Information is essential to making intelligent decisions, but more often than not, it simply overwhelms us. The 24/7 data explosion around us is both troubling and addictive. Consider that this year, The Economist estimates we will create 1,200 exabytes of data or more than 22 million times the amount of information contained in all the books ever written. That’s eight times the amount in 2005 and the annual volume is increasing geometrically.  The question isn’t how to stop the deluge, but how to get real value from it. How do you find the truly essential nuggets of information and use them with confidence to effectively grow your business and distinguish yourself in your company?

The answer, ironically enough, is found in asking questions. The smartest person in the room is the one that knows the questions to ask to separate the wheat from the chaff. This leads to discovering relevant facts, developing insights and delivering them with impact. Adapted from a new book, “Drinking From the Fire Hose”, below are three questions to ask yourself whenever you are suffering from information overload: Read More »

Want to get a peek at what B2B marketing leaders are spending their money on in 2012? Look no further than our 2011 Marketing Investment Benchmarks.

Here are the big four headline trends for spend this year:

Read More »

As my colleague Connie wrote last week, analytics can help companies like Capital One, Amazon, and Caesars grow by providing incredibly rich data on how to reach consumers.  These companies, along with a few others, have used their data to better segment consumers, allowing them to offer more targeted offers and product recommendations, which encourages the consumers to buy the products.

But not every company is maximizing their use of data.  One common problem is that individual employees aren’t using the data correctly.  As this quarter’s Executive Guidance says, only 38% of employees are Informed Skeptics, or employees who make good decisions based on data by combining the knowledge gleaned from the data with their own personal judgment.  Instead of balancing the qualitative and quantitative, almost half of employees (43%) trust empirics over their own judgment, while 19% ignore the data.  MLC members, to learn how your employees can become part of the 38% of Informed Skeptics, read the Executive Guidance here. Read More »

By Ana Lapter

A deepening debt crisis in Europe is making “austerity” the word du jour. To avoid budget cuts, many executives are under increasing pressure to demonstrate the ROI on marketing expenditure.  Historically, this was never an easy thing to demonstrate; many marketing activities are designed to build brand awareness or engage customers, things that are hard to quantify in a strict ROI framework.  But continued economic softness heightens the need to increase marketing productivity – the amount of value we get for the work we do.

How can a marketing organization become more productive while avoiding unnecessary costs?

The easiest approach is to cut staff and expect the remaining employees to do more with less. This, however, is not a good solution from the perspective of staff engagement and retention.  As one MLC member put it: “We’ve freed up a lot of money by streamlining staffing expenses already; there’s nothing left to gain from further cutting.” In addition, hiring has become a difficult proposition. In fact, many organizations design hard-to-fill-jobs that require an individual to master multiple skill sets that were traditionally split among multiple employees or were built in- house via extensive training programs.

Redefining marketing productivity in this recessionary climate calls for different actions. Here are three ways to boost productivity – without cutting staff: Read More »