It is not possible to have an effective marketing/communications strategy without a corporate or institutional strategy. You can have effective marketing tactics, but not strategy. The whole point is that your marketing and communications efforts help drive attainment of your corporate goals and objectives.
There is a great article in the April edition of the Harvard Business Review titled Can You Say What Your Strategy Is?
Two import ideas in this article:
1) You need a brief, understandable strategy statement that everyone in the company can understand
2) A good strategy requires trade-offs. If you focus on institutional clients, you may have to give up consumers. If you focus on increasing profit margins, you may need to sacrfice sales.
Too often, corporations and institutions do not have clear, consice strategies that help guide decsion making. Without this clarity, how can a marketer be successful? It is possible, but I would argue it is likely tactical and not sustainable.
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Reading Demographics, Seeing Markets
If you haven't read Richard Florida's new book Who's Your City? you should! As a follow up to his Rise of the Creative Class, his new book makes an interesting argument that directly challenges Thomas Friedman's bestselling book The World Is Flat.
Florida says globalization is real and uneven. Rather than leveling the playing field by making information and commerce flows across borders easier, he argue that globalization is causing a spiky word, a world where development and progress is uneven. It is occuring in what he calls Megatropolises. He also claims the growth of these areas is driven by the creative classes, the educated and mobile.
He uses census and other research data to make his case. Any good marketer has to use census and demographic data. These data define the four corners of any market you are trying to reach.
Read his book.
Florida says globalization is real and uneven. Rather than leveling the playing field by making information and commerce flows across borders easier, he argue that globalization is causing a spiky word, a world where development and progress is uneven. It is occuring in what he calls Megatropolises. He also claims the growth of these areas is driven by the creative classes, the educated and mobile.
He uses census and other research data to make his case. Any good marketer has to use census and demographic data. These data define the four corners of any market you are trying to reach.
Read his book.
Tuesday, April 22, 2008
Don't Mess With My Coffee
I get coffee from Starbucks every morning on the way to work. A couple of weeks ago they unveiled their new (old) Pike Place coffee. I guess it is the coffee they first roasted and served in Seattle back in the early days. They are using this coffee as a way to "get back to their roots" I think. They have Pike's Place as the everyday coffee and usually offer one other type of coffee as well.
But their are several problems - one strategic, several tactical.
Don't Ignore Your Base
Politics 101 says, do not abandon the base in search of new voters unless you know the base has no where else to go......Starbucks is looking for new growth in existing stores. So they have introduced this new coffee. As a long time, addicted Starbucks coffee drinker, I don't like the new coffee. It is too weak. I have always liked the strong coffee Starbucks serves.
So it has me asking questions, doubting my beloved Starbucks. Is this part of an effort to attract new customers who don't like their coffee so bold? Would Dunkin Donuts drinkers really start going to Starbucks because of this coffee? At my Starbucks today, they only had Pike Place. The guy in front of me stormed out because they didn't have another option. He wanted the same coffee I wanted. The old, strong Starbucks coffee.
They are at risk of losing long time customers while not being assured that Dunkin Donuts customers will now become Starbucks drinkers. Starbucks has done lots of research that shows the taste of the coffee is only one reason why people go to Starbucks. For non-customers, it's not about the coffee. It's about personality and brand. They will need to change more than the coffee to attract non-customers. But they could lose loyal customers if they mistreat us while trying to attract non-customers.
Don't ignore the base when they have other options.
Let Your Loyal Customers Be Your Advocates
I actually want Starbucks to be successful. I want to understand what they are trying to do with the Pike Place strategy. But they haven't communicated much to their customers. They have positioned the new coffee as a return to their roots. But my question is why? What about their roots or their first coffee is important? Don't forget that your most loyal customers can be your biggest advocates when adjusting strategy. But they need to understand what you are trying to accomplish.
ROI on the Operational Impact of New Products
The new coffee is causing operational issues. The Pike Place coffee isn't available in prepackaged bags like all their other blends. The new blend requires the baristas to individually pack each bag. My limited observation is that during peak times this is slowing down their throughput. In the morning, every additional person in line creates the risk that you will lose sales. Why not just prepackage it? It is quaint to hand pack each bag, but strikes me as McDonalds trying to build your burger to order. It's not their model.
And the kicker is, I think Pike Place is their cheapest coffee. If you are going to treat a product as special, then make sure it is priced that way so you get a positive ROI on it.
But their are several problems - one strategic, several tactical.
Don't Ignore Your Base
Politics 101 says, do not abandon the base in search of new voters unless you know the base has no where else to go......Starbucks is looking for new growth in existing stores. So they have introduced this new coffee. As a long time, addicted Starbucks coffee drinker, I don't like the new coffee. It is too weak. I have always liked the strong coffee Starbucks serves.
So it has me asking questions, doubting my beloved Starbucks. Is this part of an effort to attract new customers who don't like their coffee so bold? Would Dunkin Donuts drinkers really start going to Starbucks because of this coffee? At my Starbucks today, they only had Pike Place. The guy in front of me stormed out because they didn't have another option. He wanted the same coffee I wanted. The old, strong Starbucks coffee.
They are at risk of losing long time customers while not being assured that Dunkin Donuts customers will now become Starbucks drinkers. Starbucks has done lots of research that shows the taste of the coffee is only one reason why people go to Starbucks. For non-customers, it's not about the coffee. It's about personality and brand. They will need to change more than the coffee to attract non-customers. But they could lose loyal customers if they mistreat us while trying to attract non-customers.
Don't ignore the base when they have other options.
Let Your Loyal Customers Be Your Advocates
I actually want Starbucks to be successful. I want to understand what they are trying to do with the Pike Place strategy. But they haven't communicated much to their customers. They have positioned the new coffee as a return to their roots. But my question is why? What about their roots or their first coffee is important? Don't forget that your most loyal customers can be your biggest advocates when adjusting strategy. But they need to understand what you are trying to accomplish.
ROI on the Operational Impact of New Products
The new coffee is causing operational issues. The Pike Place coffee isn't available in prepackaged bags like all their other blends. The new blend requires the baristas to individually pack each bag. My limited observation is that during peak times this is slowing down their throughput. In the morning, every additional person in line creates the risk that you will lose sales. Why not just prepackage it? It is quaint to hand pack each bag, but strikes me as McDonalds trying to build your burger to order. It's not their model.
And the kicker is, I think Pike Place is their cheapest coffee. If you are going to treat a product as special, then make sure it is priced that way so you get a positive ROI on it.
Friday, April 11, 2008
How To Undermine a $2.8 Billion Ad Budget for $10/Hour
A friend of mine has been a Verizon wireless customer for at least ten years. He is an accomplished former CMO of two Fortune 50 companies, but is not a technophile and occasionally has problems with the gagets in his life. Last week he went to a Verizon store where three sales ladies provided a customer experience would make any marketing executive cringe.
First they ignored him, even though he was the only one in the store. Then when they did pay attention to him, they condescended to him and laughed at him to his face. He is dropping his service and is telling anyone who will listen how horrible the experience was.
According to Ad Age, in 2006 Verizon had a $2.8 billion ad budget, ranking it as the 5th largest advertiser in the U.S. that year. What is remarkable is that three sales associates making $10 or $12 per hour managed to render those advertising dollars useless.
This to me is part of the challenge Chief Marketing Officers face and perhaps part of the reason the average CMO only lasts 22 months. My guess is that Mike Lanman, CMO at Verizon Wireless, doesn't have control of the retail channel. At the very least, he should control the types of people who are hired for their retail stores. Create a hiring profile and partner with HR to drive it into the front line hiring.
The product, pricing and promotion are important. But where are your customers interacting with your product and your company? Bad service trumps a good product in a commodity business like wireless.
We live in a multi channel world. If the CMO doesn't have control of the customer experience in every channel, the life expectancy of the CMO will not increase.
First they ignored him, even though he was the only one in the store. Then when they did pay attention to him, they condescended to him and laughed at him to his face. He is dropping his service and is telling anyone who will listen how horrible the experience was.
According to Ad Age, in 2006 Verizon had a $2.8 billion ad budget, ranking it as the 5th largest advertiser in the U.S. that year. What is remarkable is that three sales associates making $10 or $12 per hour managed to render those advertising dollars useless.
This to me is part of the challenge Chief Marketing Officers face and perhaps part of the reason the average CMO only lasts 22 months. My guess is that Mike Lanman, CMO at Verizon Wireless, doesn't have control of the retail channel. At the very least, he should control the types of people who are hired for their retail stores. Create a hiring profile and partner with HR to drive it into the front line hiring.
(Seth Godin wrote about Verizon and their CMO in 2005. Looks like much hasn't changed in three years.)
The product, pricing and promotion are important. But where are your customers interacting with your product and your company? Bad service trumps a good product in a commodity business like wireless.
We live in a multi channel world. If the CMO doesn't have control of the customer experience in every channel, the life expectancy of the CMO will not increase.
Tuesday, April 8, 2008
What is Marketing?
My last boss was not a "marketing guy." He started our first meeting by posing this question. After spending ten years in consumer marketing, all I could do was stare at him. Well? What is it? There is an entire industry of authors and consultants who attempt to answer this. When you type What is Marketing? into Amazon, you get 8,749 titles. So if it takes several thousand authors 300 pages each to answer it, perhaps the answer actually is complicated.
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