The New 7Ps of Marketing: Disregard at Your Own Risk!

7 12 2015

Marketing CloudI was reading an article in the recent Forbes online CMO Network by Kimberly Whitler entitled: What are the top predictions for marketers heading into 2016?   Ms. Whitler surveyed some experts, including CEOs, Presidents/GMs, CMOs, authors and executive recruiters.  In a different but recent article, Forbes CMO also ranked the top 50 CMOs.  To me, I would have rather heard their predictions.

I always enjoy reading “predictions” because they keep me on my toes- maybe I missed something- and makes me challenge what I believe are the upcoming trends.  As a businessman and marketer I certainly don’t want to be caught short.

I found the article very interesting and certain worthy of consideration.  I feel after reading the comments that each person is looking at the “elephant” from their unique vantage point.  And frankly, I am not sure they are predictions or wishful thinking based on the viewpoints of the interviewee. Nevertheless, they are certainly food for thought.

From a holistic view, my prediction – or wishful thinking – is that marketers need to start with the customer and realize that marketing has become multi-channel and multi-dimensional.   The smart CMO must orchestrate the new marketing mix. That means they need to simplify messages sent to consumers through whatever channel is relevant to them i.e. digital, small screen, large screen, Point-of-Purchase.  And they need to determine which is most relevant for the target personas.   Moreover, the smart marketer should consider all the tools in his/her toolbox and select those tools that are most effective for getting the right message and INTERACTION with the customer.

When I put this together, i find that the old model of 4P’s is antiquated.  I believe the new prediction is that good CMOs are now considering 7Ps in a holistic view: the original 4 (product including product/service development, price, promotion, placement (digital or traditional), and the new three consisting of process (including customer engagement, referral and loyalty), people as brand messengers at point of purchase or via customer care, and personalization (through technology).

The “traditional” 4Ps of marketing are well known.    In the day, marketing was about creating demand, and to a large degree it still is today.  But the focus was on selling a product to meet a need.   In general, promotion was based on advertising push.  The marketer’s mantra was to shout out the virtues of the product by mass advertising. To some who read the history books, the “soaps” on TV were called that because the consumer goods manufacturers such as Tide, All, and Fab were sponsoring and advertising on the TV shows aimed at the housewives and other stay at home folks.

Pricing was simple.  Manufacturer’s set price and used a price point philosophy of good, better, best. Placement represented where the consumer could buy the product i.e. at the neighborhood store or a mass retailer or even door-to-door sales and home delivery.

Because of technology such as the internet, and the movement away from a manufacturing to a service company, even the original 4 P’s have changed.

FROM                             TO

Product         –>       Solution

Promotion    –>       Information

Price               –>       Value

Place               –>       Access

 

Consumers and businesses want solutions to their problems and want to understand how the product/service will perform.  Due to the internet, both as catalogs of information and online reviews that are omnipresent through a myriad of sources, information has replaced pure promotion.   Certainly consumers and businesses want to find the right product at the right price, yet price by itself has been replaced by value with the value add sometimes being generated by service agreements and extended warranties.  And primarily due to the internet, place (distribution) has increased to a multi-channel access.  Think about the changes from the 1990s when e-commerce was first getting started to today.  Consumers and businesses now have electronic exchanges and other online venues from which to buy goods and services.   And now, coming full circle, we see Amazon opened its first brick and mortar store in Seattle.

Now let’s add the new three elements to the marketing mix.  First is the element of PEOPLE.    When I was head of marketing at US Cellular, we changed our brand and positioned our company using the tag line “the way people talked around here.”   Why did we do that?  In part, we recognized from our research in the late 90s and early 2000s that customers in our market wanted something more than what other cellcos offered.  We were not going to be the most technologically advanced (although our network and engineering were superb), nor were we going to cover the most customers in the country.  What our customers wanted was a relationship with our company, represented by our front line sales and customer service people.  They wanted a company they could trust.  At that point, we realized that people were the brand messengers and in our touchpoint marketing system, represented a way to affect the relationship and alter the buying habits of our consumers.  And it worked.  Our retention rate i.e. loyalty, was the best in the in the business.

The second new element is PROCESS. Many companies loathe the word process because they feel it is bureaucratic.  To me, process is the mechanism for repeatability. We want processes to help the customer in building its relationship with the company and also empower the employees to do their job to satisfy the customer.  Clearly, it is a tricky balance!   The processes today – mostly enabled by technology- relate to tools that help the company serve the customer.    There is a dizzying array of tools that the marketer has to understand and use.  See Marketing Technology Landscape by Scott Brinker or some of the Lumascapes by Luma Partners.  Some of these tools include ways to mass customize a product or service to the customer needs.  Witness the new companies entering the market to build relationships with consumers and business buyers.  There are processes enabled by digital and web technologies that enable social engagement and the marketers use these new tools to build and maintain relationships with their customers.   This improves value through new services and interactive engagement in the eyes of the buyer.

The final area is PERSONALIZATION. Several of the interviewees pointed out that understanding the customers’ persona is critical to segmentation.  Once you understand who they are, the company has to satisfy their unique requirements.  I have always been a fan of mass customization (read Joe Pines original work) or macro-niching as I use to call it 5 years before mass customization became vogue.   Personalization is easy today with technology.  You can see it when you buy a car.  Go into a BMW or Jaguar dealer in their store or online and the system will build the car for you.  Buy a house from Toll Brothers and you get a platform and options to tailor the house to your needs.   Go on the web and find a case for your smart phone and you can easily customize it with your school logo and colors.   Consumers want to feel special and that ensures a solid on-going relationship with their customers.

Traditional and Social Media MarketingMarketing has changed and will continue to evolve over the next several years.  Clearly there will be a natural bonding between the CIO and CMO as marketing technology has become more important in defining the marketing mix.  While Ms. Whitler did not ask my prediction for 2016, I will share it with my readers.    I predict that marketing will be more about the customer and the great marketer will find the right combination of the 7 elements to build and sustain relationships with that customer.  At least I hope so.

I would be glad to continue the dialog or share additional thought.  Feel free to visit us on our web at www.clevelpartners.net or contact me at dfriedman@clevelpartnes.net.

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Successful Management in Two Words.

3 04 2015

Rudyard Kipling in his poem, “IF,” (see http://www.poetryfoundation.org/poem/1757720) said:  “If you can keep you head about you while all about you are losing theirs…… then you will be a Man, my son!”

Management

I was talking with one of my mentees today regarding his question of how to stay on top of projects and tasks and making sure he doesn’t get overwhelmed, i.e. keeping his head about himself.  Clearly there is a relationship and an opportunity to quote Kipling.  My mentee is a student who is working with a team to develop a new product/service and is doing this through the Center for Entrepreneurship at Chapman University where I am a lead mentor.    Since I have many more years of experience, I shared some of my learnings and some of the tools I have used and developed.

I was taught in my early career about good management by a disciple of the late Harold Geneen who was the architect of the rise of ITT Corporation as a successful conglomerate. Over time, I developed my own spin and teach this and consult with others who want a simple powerful system to implement.  The basic principle is simply stated in two words:  FOCUS and PODFU.

Focus is pretty simple.  Make sure you know the two or three most important things to do.  Simple to say yet sometimes hard to do.   In fact, as an executive you should be even more myopic and focus on the ONE key thing that needs to get done.  When that is complete move on to the next item.   The reality is that you cannot get overwhelmed by trying to tackle too many tasks at one time.  This also entails discipline and priority setting.

Second, as a young entrepreneur, my mentee is working with other young entrepreneurs and has to learn leadership and management.  Leadership means that he needs to convey his vision and excite the team so they can be engaged and successful. Management means the ability to ensure what needs to get done, gets done and gets done on time.  And this is where PODFU comes in. The acronym is Plan, Organize, Delegate, and Follow-up. It sounds so simple yet is also surprising how many fail at this.

I suggested a few tools that he can use in his regularly scheduled project meetings.  This tool can be repurposed for operational and dashboard reviews as well. The tool is shown in the following Excel spreadsheet with the listed columns.

PODFU Chart

In the example there are four main objectives and supporting tasks to be completed by a variety of people.  In this case my mentee is trying to get a new product/service into the market and this template displays the format and the kinds of activities he and his team might undertake.  (Note:  this is notational only and not representative of his project.)  There is clarity in the metrics to determine if the milestone/task was complete, a time period, a person accountable (if you use the RACI system, the is the “A” in RACI), and a color chart indicating if the task is on target (GREEN), potentially may miss date (YELLOW), or will miss or has missed the due date (RED.)

In each meeting, those tasks due at the meeting date and ones that are due at the next meeting date are discussed. If the task is “green” then there is little reason to discuss it unless there is something that must be brought to the attention of the team.  If the task is yellow, the comments should summarize what will be done to get back on target.  If the task is red, the discussion might go deeper- we call this a deep dive- to see how we can complete the task and if the completion affects other tasks, how might the team get back on schedule.

Of course, there is more to managing and leadership than just a chart.  Yet this template presents a very powerful way to manage using only these two words:   FOCUS and PODFU.  This system can help managers be successful.

If you or your company wants to explore how this tool can be adapted to your unique needs, please contact me at dfriedman@prodigy.net, visit my LinkedIn profile at www.linkedin.com/in/davidfriedman, or call me at 949 439-4503.





What Can You Do to Make a Difference in 90 Days?

18 01 2015

As an advisor to executives that recently were promoted, I have been asked how to get off to a good start in the new job.  This new job can be within the existing or for an entirely new company.  I am sure many of you faced the same questions as you progressed in your careers and many of you who are currently in job search mode have been asked during interviews by company executives about your short term plan to achieve success.  The plan can also be used as a “restart” plan where either the strategy of the organization has changed, the competitors have changed, or the management and vision has changed.   It gives an executive an opportunity to pause and rethink of the best path forward.  One of my favorite pictorials is the following and this blog will address how not to be confused.

If youi see a fork in the road

I want to share with you some thoughts and a high level template that can be used to develop your plan.   Additionally, I would like to suggest a book by Thomas Neff and James Citrin called “You’re in Charge- Now What?” as a nice complement to this blog.  Neff and Citrin are recruiters with Spencer Stuart and their book focuses on an 8 point plan for the most senior executives.  But their plan can be adapted to executives at any level.

Why a 90 day plan?  In 90 days, the new executive should have enough time to understand the new environment in which he or she operates and begin the process of executing a plan to makes changes.  Most companies have a relatively short term view and public companies report on a quarterly basis.  This plan can dovetail with the reporting systems and be used to tell the market (or customers or partners) that there is change coming.   And within this 90 day period, I believe that an executive can always find one or several different areas that can be improved and that can affect the top or bottom line of a company… or at least move in that right direction.

Let’s focus on a newly appointed executive in a new or expanded role.     While the specifics may change based on the individual executive, the type of company, and where on the growth curve that company lies, the following principles and templates can be used and modified.  The executive needs to detail the major proposed activities to be accomplished in the first 90 days, the major tasks and accompanying rationale;   Information required , tied to each task, and the rough timing and budget to perform the task.

The objectives of a 90 day plan are to:

  • Learn about the strategic initiatives, culture, customers, and suppliers to the company.
  • Build strong relationships with peer group within the company and with customers
  • Build trust among the team (executives, peers, and employees)
  • Set a strategic and tactical plan in motion.
  • Design a plan for future growth and profitability, cost efficiencies, manufacturing excellence, better customer support, better margin growth or other functional attributes.
    • Determine ways to drive the organization to realize its full potential through existing programs– benchmarking and process management, execution
    • Develop ways to grow the future business significantly through new products or expansion of our eco-system of suppliers and partners
  • Communicate the plan and the expectations to the constituents and  execute to the plan

The template to do this is as follows and specific activities, some of which are outlined below- are shown.

Flow of 90 day plan

Discovery:

Discovery is the most critical in my opinion as it sets the stage for the agenda and the tactical plan.   Included in discovery are the following elements:

  • Review general company, industry, competitor, customer, supplier material
  • Establish productive relationship with my boss
  • Face to face meetings with your team, top customers, sales/field VPs, other stakeholders to build trust and “seek to understand”

> Determine biggest challenges and opportunities

> Hot button issues (things that I call landmines which if not immediately acted upon                   can derail your success.)

  • Establish relationship with peer group: lunch, attend their staff meetings
  • Set expectations and convey those expectations to your team and other constituents.

I have always found that a written “discovery” document works wonders to get people on the same page and to ferret out where differences might lie.

Set the Agenda.

To set the agenda, there are two parts: drive to full potential and planning for the future.   The agenda is based on your specific objectives, the company strategy and the ability to start getting some meaningful results.   For a marketing person who is trying to bring their team to realize its full potential the agenda might include quick wins on revenue generation, or the execution of a product introduction plan or even defining a more cogent business or marketing strategy.  For a COO, the plan might include quick wins on operational efficiency, curing issues that customers deem important and where the company has failings.  In either case, part of driving to full potential is an analysis of the team and a plan for improving skills and changing or adding appropriate team members

In some companies, and for some positions, the focus is on growth.  Planning for the future might include things such as redefining growth objectives or planning for new customers or new applications or new eco-system partners or forming new strategic, operating, marketing and sales plans.

Execute the Plan.

The final –part of the plan is to communicate and execute the plan to perfection.   Focus on three or four major objectives at the most.   The key issue for success for the executive is FOCUS- focus on those areas most important and that will have the greatest effect. Once you gain credibility you will have the chance to do more.  Regardless of the specific tasks and the plan to execute, make sure you have a clear battle rhythm i.e. how you will manage your function or the business unit and memorialize that in a clear operational dashboard which can be shared.

Flexibility is key during the transition period and will change based on “discovery,” input from the board, executive bosses, peers, team, customers, and suppliers.  However, it is a roadmap that will put you on a path to success.

Glad to get your take on the plan.





Customer Jujitsu: Leveraging Customer Needs for Strategic Imperatives

28 10 2014

I am a New York Yankees fan and grew up with Mickey Mantle, Whitey Ford, and the incomparable Yogi Berra.  Now, many people think that Yogi is known for his Aflac commercials, yet many don’t recognize that he is the holder of the record for a player who won the most World Series (10) and who has the most hits (71).  Yogi is also famous for his statements of the obvious.  The one that strikes a business cord is depicted in the following diagram.  Yogi said, “if you see a fork in the road, take it!!”

If youi see a fork in the road
Another business person very conscious of the competitive environment sees what the competitor offers and chases after solutions to outdo the competition.   After all, if a company can outdo the competition on items such as features, benefits, and technology, wouldn’t that company achieve share gains?   Maybe, although features and benefits and even pricing by themselves will not necessarily win customers or their loyalty.Normally, a business executive sets strategies in one of three directions, or combinations of the three.  These degrees of freedom include: competitor, competencies of the company, and customers.    Unfortunately, many business people, especially those who are driven by sales, “pivot” or change direction so rapidly as if they are taking Yogi’s advice literally.    It is not always advantageous to do so.  A new technology based on what R&D has discovered may be immediately thought of as the way to certain riches.  Remember that the greatest inventions have created some of the largest companies with rewards reaped by the business and executives.

A third, however, thinks about the customer and satisfying his/her needs.  This is a customer intimate or customer focused philosophy and if done right is the essence  of customer Jujitsu.   It may not work all the time for various reasons, yet I believe that there is a higher probability of success in sustaining profitable revenue growth by leveraging the knowledge and preference of the customers.   You engender trust and build relationships and isn’t that the fundamental platform of good business?

Over time, in these newsletters and blogs we will cover various aspects of technology and competition and how we can grow profitable revenue through each of these elements separately or in combination.   It all starts with the customer, however, and we want to share some tools to understand the customers’ needs and drivers which can be leveraged for developing strategic initiatives as well as tactical plans.   We call this attribute, Customer Jujitsu, because you, the business person, can leverage the understanding of the customers to refine and augment your business strategy.  It seems simple but the tools and discipline needed are keys to success.

Here are some of the tools ranging from simple to more complex.

  1. Pulse surveys. Normally for the B2B market, these are simple questions asked of the customer on a regular basis to find out how things are going?   This is different from a sales call and the agenda is strictly to understand how well your company is doing in various areas to help the customer succeed.  It results in building better communications and trust.  If you ask enough customers, you can get a good perspective on how well your company is doing.
  2. Bounce back cards/online surveys/follow-up calls. These are effective in understanding a specific transaction.   Through the data you gather, you can discern trends and issues that might arise.   You might be able to notice a trend but generally this information is not used to set the strategic agenda for the company.  As we say, it is necessary information but not sufficient.
  3. Customer surveys via tools such as Survey Monkey. This is a great, simple on-line tool and very inexpensive (or free) to ask questions to customers on a sampled and regular basis.  There is a wide variety of questions that can be posed and the output can be graphically displayed.  If the surveys are performed, say quarterly, companies can see trends in certain areas.  Those negative trends can be corrected via functional or business strategies and those positive trends can be highlighted in marketing and business material.
  4. Mystery shopping. This can be performed for both business companies but normally performed for consumer oriented companies.   Either a third party or the marketing department performs mystery shopping, acting as a real customer in buying your products.  These mystery shoppers can “shop” your stores (online or brick and mortar), your customer service, and operations departments to find out problem areas vs. your own standards or vs. the competition.
  5. Customer Satisfaction Studies. This is probably the most complicated way to get information from customers and it takes time to set up the right questions as part of a continual program.  Yet the information obtained is very valuable.  If done correctly, the business person can get a feel for items that are IMPORTANT to a customer as well as how well the company has PERFORMED.  Those areas in which the company has performed well and are important to the customer can be leveraged as part of the company’s brand.  Those areas which are important to the customer yet performance has been lacking, form the basis of a strategic initiative for the company.

Having gathered the information is part of the equation as they say.  The information must be shared and discussed – particularly at the executive ranks – to see if there is something missing in your strategy, your development work, your distribution, customer service, training, price plans, logistics and similar items.   The ultimate goals are twofold:  First, and most importantly, to find out the temperature of the customer (i.e. customer satisfaction), and whether the customer will buy your products or services again and whether the customer will refer you to a colleague or business acquaintance (the ultimate question).  Second, if customer satisfaction isn’t where management believes it should be and the company is underperforming in areas important to the customer,  then management’s responsibility is to determine what is required to improve satisfaction – and the most cost-effective means of getting there.  This could include the development of new products, or process improvements and even the potential for partnerships, mergers or acquisitions.





The Bottom Line for Marketing

24 06 2013

Image

Sometimes I wonder if Marketing Execs should wear a helmet!!!  Many CEOs whom I know want marketing to be successful (in essence moving the cheese) but complain that marketing execs have no accountability.    And I think that is a shame and the crux of why many marketing people are not as highly regarded as they should be and why many are not invited as a C-level sitting at the table with other senior executives.

The funny thing is that I hear more and more that start-ups as well as more mature companies want marketing.  Notwithstanding the fact that many of these companies are not exactly sure what they exactly want, it is clear that all companies desire good brand positioning and messaging as well as demand generation.  As an aside, I am part of TechCoastAngels in California and entrepreneurs are always asked about their marketing and sales efforts and the positive answers are required prior to funding companies.

In the old world of marketing, we had the push marketing i.e. promoting the product to the sales people and the distribution channel for them to “push” the product to consumers and businesses, and pull marketing, i.e.  promotion, and free samples coupled with  heavy-up radio and TV advertising.     As many realize, though the world has changed and the customer is extremely capable today.  Technology, primarily through social media (Facebook, Yelp, and YouTube) and the internet (via special portals, clubs, and exchanges) has been the driving force.  This is the era of customer enlightenment, engagement, and emancipation.  Marketing, today, deals more with the content that the company (as championed by the marketing executive) provides, the ability to be found by the customer, and the clear use of analytics and tools to manage the marketing process.

The Marketing Leadership Council and Marketing Roundtable of the Corporate Executive Board defined 23 attributes of a world class marketing organization.  I know that not all companies – except for the largest companies- cover all attributes. Even if they do, the emphasis is on only a few.  This is particularly true if the company is a startup or small.  Yet, regardless of the size and the attributes which the company considers the most pressing, there are some common items that the marketing executive needs to consider.

A marketing executive today, in my opinion, needs to have the following characteristics to be successful.  Here are my prescriptions:

  • Accountability:  Gone are the days of making something “pretty” or merely creative.   Most of my friends and colleagues know me for saying this is “fluff and stuff.”  And I don’t mean to denigrate anyone who is creative and artsy.  I think those areas are necessary but not sufficient to assuage the CEO and be part of the team.  The marketing executive (CMO or Head of Marketing) needs to be accountable for top line revenue growth as well as MARGIN (bottom line) growth.  If you are not accountable you don’t belong in the C-suite.
  • Innovation:  If I have one idea and you have one idea, we each now have at least two.  We have more because layered ideas may propagate.  Since technology and ideas proliferate almost at the speed of the internet, marketing execs need to remain focused on innovation.  I don’t believe fast followership works today because customers want to be associated with a leader.  Innovation doesn’t have to mean product innovation.  It could be the way the product is merchandised, distributed or otherwise marketed.  And it can certainly affect the way that sales enablement is developed to support the sales team.
  • Customer passion:  Marketing executives need to be out in the field supporting sales peoples in front of customers and be talking to customers to see and listen to how customers use their products.  How many marketing executives do mystery shopping?  (How many executives actually play the role of Undercover Boss?)  It is critical not only to be in the field but to use technology such as Twitter, Yelp, Facebook, LinkedIn Groups, and online “clubs,” to listen to what customers are saying.  The tools exist and the marketing executive needs these listening posts.  Then, more importantly, the exec needs to be the linking pin from the outside world of the customer to the inside world of manufacturing and production.
  • Analytics:  I have to admit I am an engineer and have a business degree in economics.   I love quant!!!  The marketing executives today must be able to measure nearly everything to show that an investment in dollars will provide a clear return.   This goes a long way towards accountability.   Analytics represents the tools to provide the numbers. They can include tools from your CRM system or Google Analytics. More importantly, though, the analytics have to measure the right thing that makes the business run.  Metrics may include cost per gross addition, average revenue per user, order size, return rate, and even some customer satisfaction and loyalty metrics.
  • Business perspective:  Above all, the marketing executive needs to have a solid business perspective.  The marketing plan and the marketing team are there to support the overall strategic and business plans of the business.   As the linking pin between the outside world of the customer and the internal production and operations world of the company, the marketing executive can contribute significant knowledge that can help generate profitable revenue.  The best complement a marketing executive can obtain is when the CEO says that you are a good business person.

Marketing is an interesting and complex discipline not well understood by many CEOs. I do believe that some of the above prescriptions can help put our discipline in a new light and that we won’t have to wear our helmets when we try to move the cheese.