I have something to get off my chest - I love Southwest Airlines.  The significance of this statement is I’m an airline snob - for approximately 10 years I traveled frequently for corporate America on the big airlines, accumulating miles (as well as a threshold for pain) and holding the smaller discount airlines in disdain.  And then last year my eyes were opened to a whole new world in the sky - a world where customers are treated as customers - where the words “we appreciate your business” are backed by service that actually makes me feel appreciated as a customer.

Having developed this affinity towards Southwest I started to contemplate their business model and success.  What struck me is the both the genius as well as the simplicity of their model.  Genius from the standpoint that they were able to innovate by addressing the emotional needs of customers while their competitors where focused on the functional needs (this may be a stretch) and relied on monetary loyalty systems to increase attachment (certainly Southwest’s regional expansion strategy helped them to stay under the radar and gain scale but from my perspective this is not why they are still in business).   Simplicity from the standpoint that there model is based on basic common sense - people like to feel treated well, and if we’re paying for service we expect to be treated well.  And while simple, Southwest’s model is darn near impossible for their competitive peers to replicate because it’s rooted in their culture (one of the most challenging areas for a company to change) and the premise that happy employees = happy customers.  This manifests itself across every touch point I have with Southwest - from the gate agent, to the flight attendees (while I may not always find their attendant performances over the PA system necessarily funny or entertaining I certainly respect the effort - it adds one more personal, human element to the experience) and pilots, to the personalized Southwest stories of exemplary service in their monthly magazine.

While there is no doubt I’ve been converted and am an advocate of Southwest - their success, and the success of others like Zappos, begs the question of which industry and what companies are next to be caught sleeping at the wheel - i.e. do not truly understand their customers and their motivations?

CMO tenure is a common topic in our world of strategic marketing consulting and we recently formulated a few thoughts around why we believe this phenomenon exists.

Based on our experiences and perspectives we believe that marketing leaders often focus their energies and expertise on winning in the marketplace and fail to recognize the critical linkage between a strong internal foundation and the ability to execute effectively externally.

To help bring this to life, a colleague used the analogy of being tasked to round up marbles in the center of a room with an uneven floor…an unending, maddening task that will lead to nowhere fast.

In an effort to help marketing leaders diagnose the strength of their foundation and ultimately improve their tenure we propose four areas for marketing leaders to evaluate:

1. strategic alignment,
2. performance measures,
3. management buy-in,
4. and asset leverage.

For more information on these areas and our thinking on the topic please read our article  How Solid is Your Foundation?: Addressing CMO Tenure.

We were intrigued recently with a LinkedIn poll to members of the group, Chief Marketing Officer, requesting members’ one sentence definition of ‘what is marketing?’

We were even more intrigued by the range of answers from CMO’s, marketing VP’s and marketing leaders.

Before we jump into the responses and our thinking we thought it would be worth sharing what the marketing thought leaders from academia say:

• Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.  - Philip Kotler
• Marketing is the whole business seen from the point of view of the final result, that is, from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise.  - Peter Drucker
• Marketing is a tightly integrated effort to discover, create, arouse, and satisfy customer needs.  - Ted Levitt

While reading through the posted answers we notice two themes that were present in each answer:

1. The first theme was associated with what marketing’s purpose is, which primarily fell into two camps; either internally focused (i.e. driving sales and profitability) or externally & internally focused (i.e. satisfying the customer that in turn delivers business results).

2. The second theme was associated with the practices of marketing, (i.e. what does marketing do) and with this respect we found answers that ranged from siloed focus of only including communication to what we think of as an integrated effort involving the full marketing mix (we really do think this regardless that Levitt states this as well).

As we are consultants, we’re obliged to look at these two dimensions in the old two by two matrix, and we thought it would be interesting to map the participants answers back into these four quadrants.

While we are not necessarily surprised by the results of this little exercise we are interested in the correlation between the respondants answers and what this means for their respective businesses. Our hypothesis, and what we have experienced with our clients is that those companies that view marketing as an integrated set of activities (think 4P’s including customer service) to satisfy and retain customers perform stronger then those that view marketing as purely a communication function (i.e. advertising) and or purely to drive internal business results (which in our view comes as a result of satisfying a customers need).

What this means for 74% of respondents to this survey is there is an opportunity to deliver more meaning and value to their respective organizations through either shifting their focus to delivering on their customers needs and satisfying them day in and day out and or shifting marketing’s sphere of control to encompass all aspects of their business that impact their customers’ experience and satisfaction.

In full disclosure, one of our partners, Russ Lange weighed in with the following; Marketing is the sum total of everything a company does, intentionally or unintentionally, that affects current and future customers, competitors and partners.

At CMG we stress collaboration and teamwork both when helping our clients solve problems and when turning inward to find opportunities for our own business. One of the nice perks of operating this way is that you have plenty of stimulation to get the wheels turning when a thorny issue arises (and the support to keep you honest). It’s a benefit of working across a variety of industries and a wide range of marketing disciplines as well. We learn from working with clients in one industry and get to apply those ideas to clients in another. And for most of us, that kind of diversity is one of the big draws of working in consulting.

What we’ve learned through our conversations with CMO’s (as part of our CMO Agenda research) and through our experience helping companies is that this type of knowledge and inspiration is truly coveted by marketing leaders. It’s a big part of what led us to kick off our CMO Agenda research, now in its second phase. We are not only getting the opportunity to have fascinating conversations that provide insight and inspiration to our team, but we’re able to pass on the ideas and learnings from participating senior marketers to their peers and our clients.

Here’s an article we published with the CMO Council in their monthly e-journal Marketing Maginified that explores seven thought starters for active leaders looking to transform their organizations. These concepts flowed both from our CMO research and our work, and we hope they spark an idea or two for you.

You can find out more about the first phase of our CMO Agenda research effort by reading our executive summary or requesting a copy of the full report.

This is the fourth in a series of short posts related to The CMO Agenda research. Informed by recent CMO conversations and CMG Partners‘ collective experience helping top marketers develop marketing strategy, we have compiled a list of seven ideas or jump starters for further conversation. These are meant to spark discussion, ideas, and action as we all enter a difficult 2009.

The transparency and accountability of brands is increasing as new uses of the Internet drive the democratization of voice — shifting knowledge and control from marketers to consumers. This trend is forcing marketers to adopt non-traditional methods of brand management to ensure the brand is consistent not only in communications but through all customer touch points. As one CMO put it, “everything we do communicates.”

If you believe that the true definition of a brand lies with the perceptions of consumers not with the marketing leaders, then the extreme brand management practice would be for consumers to drive the expression of the brand. Well maybe not, but this is exactly what the maker of Skittles has done (knowingly or unknowingly).

In March, Skittles re-launched their website, which used social media tools for content: Twitter for “Chatter”, Facebook for “Friends”, Wikipedia for “product information” and YouTube for “Media”. This was heralded by some and refuted as a circus trick by others (see a previous post for my take).  Unfortunately, I have not been able to find information on the performance of the campaign.

This example, whether good or bad, does provide a new theory for brand managers and bring to reality the old phrase “a brand is what others say about you, not what you say about yourself.” How will you begin to renew your brand management practices to align with consumer voice?

Mirror post at alanhart.wordpress.com

This is the third in a series of short posts related to The CMO Agenda research. Informed by recent CMO conversations and CMG Partners‘ collective experience helping top marketers develop marketing strategy, we have compiled a list of seven ideas or jump starters for further conversation. These are meant to spark discussion, ideas, and action as we all enter a difficult 2009.

For many companies, innovation means creating a new product, but this is only one of many potential growth drivers. As a lead marketer, your job is to get close to your customers and find other ways to innovate and deliver value – through service, new methods of distribution or new avenues of consumption.

How can you achieve this level of innovation?

A consistent and constant review of your business model and practices can reveal many new opportunities. In other organizations, culture is the driving force which allows for employees to surface new ideas. I recently heard from Jeffrey Phillips, VP of Sales and Marketing for OVO and author of Make us more Innovative. Jeffrey focuses primarily on innovation processes necessary to build a sustainable innovation capability.

Some examples of innovation:

A recent example of a innovative concept I heard was at an HVAC equipment manufacturer. The company leadership decided that they are in the “refrigerated air” business vs. the air conditioner product business. This shift is thinking has many different implications from R&D to value delivered. One idea for commercializing this concept is to sell the service of refrigerated air like a utility. This would increase the number of touchpoints with customers and involves a deeper understanding your customers’ businesses to deliver on this new business model. While this is an innovative idea, it has not been commercialized yet which should be the yardstick for actual innovation. 

You need creativity and invention, but until you can connect that creativity to the customer in the form of a product or a service that meaningfully changes their lives, I would argue you don’t yet have innovation. - A.G. Lafley, CEO of P&G in a recent BusinessWeek Interview

Another example that has been commercialized and can be seen in a grocery store near you — Red Box.  Red Box has redefined the video store rental model and all for $1 per day per movie. (Disclaimer: I use and love Red Box.) Red Box has a great value proposition that makes it difficult for the troubled Blockbuster to compete and is now in the sights of the CEO at Netflix as he states they are the chief rival now.

Mirror post at alanhart.wordpress.com

When we asked leading marketers about their roles and priorities during our recent CMO Agenda study, we heard a lot of commentary on the need to step up and drive major change inside their organizations. One CMO of a mid-sized CPG summed up these responses perfectly by describing his main priorities as “defining marketing as a verb rather than a noun” and “taking proactive leadership” that allows the brand and its main steward, the CMO, to be at the center of efforts.

Read more on the idea of how to make marketing a verb within your organization in our article “Marketing: Noun or Verb?” recently published on MediaPost’s Marketing Daily Commentary.

This is the first in a series of short posts related to The CMO Agenda research. Informed by recent CMO conversations and CMG Partners‘ collective experience helping top marketers develop marketing strategy, we have compiled a list of seven ideas or jump starters for further conversation. These are meant to spark discussion, ideas, and action as we all enter a difficult 2009.

As one CMO I recently spoke with said, “We should define marketing as a verb rather than a noun. We need to be more proactive.”

Marketing should be a transformational change agent
Companies looking to grow are often in need of a new way to look at their business and a new vision to work toward. If your title is CMO, the job of creating this vision and pushing the organization to achieve it falls on you. More than any other function, CEO’s should look to marketing to lead the charge for change.

Why is marketing “right” for this?
Marketing is the most cross functional part of  many organizations due to the customer orientation that puts them in contact with engineering to customer service. Would you really want IT to lead your customer centricity effort?

Marketers by definition should be driving better insight, understanding and motivating desired behaviors inside and outside the enterprise. Marketing should be driving the organization to capture value.

Now might be the perfect time to ask yourself whether you’re shaking things up enough.

Mirror post at alanhart.wordpress.com

A recent study performed by ANA showed that 71% of marketers report budget decreases for 2009.  Now I’m not an economist nor do I pretend to be one but I would like to think that the stock market’s performance this week is a signal that we have seen the bottom of this economic recession.  Unfortunately due to the domino effect that is taking place in the market, near term demand will most likely continue to suffer and what this means for most marketing leaders is a second, maybe third round of budget cuts is coming down the pipe.

While this is the reality for marketing leaders, now more than ever is the time for marketing leaders to be the voice of reason and truly be the chief customer officer to ensure that investment and cost cutting decisions have your organization’s customers in mind.  If a company is not careful it may perpetuate a business “death spiral” where cost cutting impacts customer satisfaction and demand, which in turn impact top-line revenue creating the need for yet further cost cutting.  As the name alludes to, this downward spiral typically results in difficult position for any business to re-emerge from and can be avoided by maintaining a customer perspective during these trying times.

For more information on common steps that marketing leaders can take to address this challenge check out our article, Go to Battle for Your Customers.