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How Marketers Will Win (or Lose) in the Age of Digitalization

Organizations are spending millions of dollars to “digitalize” themselves, as a way to become more agile and responsive to customer needs. As Gartner says, “Companies should be able to ‘react at Internet speed’ with real-time analytics to better understand individual buyers, and how to serve their unique needs.”

The payoff of these efforts is a more competitive and innovative organization that provides a consistent and engaging customer experience. As the organization become flatter and more transparent, it also brings a certain degree of risk. And, increasingly, that risk is falling on one group.

Yes, you guessed it: marketing.

According to HBR’s Designing a Marketing Organization for the Digital Age report, marketing is not only responsible for creating a consistent customer experience across the enterprise; perhaps even more challenging, it’s responsible for getting the organization to embrace change.

Ramping up the organization to operate at the new “Internet” speed of change is critical, according to McKinsey’s Cracking the Digital Code global survey. Forty three percent of executives surveyed said that high-performing digital companies go from idea to implementation in less than six months.

And let’s not kid ourselves about the herculean effort this may involve. Twenty five percent of executives who participated in the survey expressed concerns about their organization’s ability to keep pace, and its ability to adopt an “experimentation” mind-set required to make this transformation.

Marketing is, however, well equipped to take on the challenge; it has always advocated for customers and their experiences. Now it’s being empowered to take ownership of it across the entire enterprise. Marketing has long been the “tip of the spear” for digitalization, operating as the “hub” of digital interactions with customers for years. No other group has had to embrace and operate at the “speed of the Internet” like marketing has.

So it’s not surprising that 75 percent of marketers expect to be responsible for the customer experience, according to the Economist Intelligence Unit.

If marketers can successfully bring about the change needed to digitalize the organization, it should also yield additional organizational benefits that go beyond the customer experience. For example:

Improving the culture. 89 percent of senior executives said that great companies build cultures that consistently create excellent customer experiences. Corporate culture also plays a critical role in attracting and retaining digital talent, according to McKinsey.
Aligning customer service to the brand message. Although this has been discussed for years, companies are increasingly aligning the performance of customer service to brand health metrics, according to the HBR report. The Aberdeen Group also noted that when customer service is in sync with how marketing manages the brand, company revenues rises, as do social media mentions.
A new organizational model. According to Frank van den Driest, author of The Global Brand CEO: Building the Ultimate Marketing Machine, in a digital world, marketing will evolve from expertise in “things” like television, ecommerce and media, to “thinkers” who excel at understanding and using data, “feelers” who are immersed in customer behavior and interaction, and “doers” who implement campaigns, creating content and measurement.

Given the importance of this digital transformation, improving the customer experience is now the No. 1 CEO expectation of their chief marketing officer, according to Gartner. For years, marketers have been asking for a seat “at the table,” and now they have it…and it’s a hot one.

Building a Corporate Persona is the Key to Differentiating Your Company

Take out a piece of paper, and write down what you think makes your company different from its competitors. Now, Google your competitors and see if you can tell the difference between what you wrote, and how they describe themselves. If it sounds the same, keep reading.

Let’s say you’re the CEO of a fortune 500 company looking for some advice. Two top tier global consulting firms are recommended, and based on their website descriptions of “Who They Are” which one would you chose?

Can’t decide? That’s the challenge I’m talking about. Although one firm uses “advisors”, they are describing what the firms do, not who they are, and as you can see, the sound the same. If some of the smartest guys in the business are getting it wrong, and they’re the “advisors to the world’s leading businesses” you shouldn’t feel bad.

Why is it so hard? There are two key reasons; the first being in B2B, we are conditioned to think that what we do is who we are. It’s the Achilles heel of effective marketing communications, the bad habit of over communicating and focusing what you sell (what you do) versus who you are (what makes you different).

Making things worse is when B2B marketers talk about the value of what their company does, they use terms associated with business value, the functional benefit or business outcome of the product or service being sold (e.g. increase revenue, reduce cost, retain customers, etc.). It’s non-differentiating because competitors use the same language, and that’s the second major challenge to overcome.

Over the years, marketing communication has evolved from talking about how great the company was to talking about what it does for customers. Thankfully the “we’re number 1” days are over but unfortunately, the “what we do for customers” has been defined by what the company sells. It is time to evolve again and speak to more about the “DNA” of the organization. Research from CEB has shown that buyers figure out what companies sell (what you do) relatively quickly. It takes them much longer to figure out why they should buy from one company or another.

And surprisingly, when they do make the decision, it often has little to do with “business value” of the product or service itself, and more to do with the emotional connection they feel to it, or to your brand. Buyers are not the rational beings we once thought, they do business with businesses for very personal reason, according to the CEB research. As a result, they want to get to know the company as well as they know the product or service.

So, how do you “humanize” the company? Here are some tips to get your started:

Ask customers – sounds obvious, but rarely happens. Ask them why they do business with your organization and others. You might be surprised by what you’ll learn; it may have nothing to do with your products or services. Use this information to communicate back to them “who you are” in the language and context that is meaningful to them.

Survey employees – this may help uncover why the organization can’t get on the same page when it comes to defining the company. Employees have a tendency to define the company and what it does, based on their own experience with the products they know, and customers they serve. As a result, they have a myopic view of the organization. You will find multiple views on your value, and the type of company you are, across your organization.

Decide on the type of company you are – pick up a copy of Michael Treacy’s Discipline of Market Leaders. In it, Treacy and Fred Wiersema define three value proposition types based on business models; Operational Excellence, Product Leadership, and Customer Intimacy. Use this framework as a starting point to define your organization and its’ language. It also helps get everyone on the same page.

Create a persona – once you have consensus on the type of organization and its value to customers, it is time to figure how to differentiate it. In this step, use brand archetypes to help define the company persona. Here’s a free list of 40 archetypes. Create a working session and have the group discuss how the company views the world, how it reacts to bad or good news, how it speaks — what is the tone? Keep the conversation away from what the company makes or does, and on the organization itself.

Buyers have changed. They want to know who you are, because they already know what you do. And they’re looking for a little of themselves in your brand. Relate to them on a human level. Tell them who you are in a way that connects with them. If you do, it will differentiated you, because like people, no two organizations are exactly alike.

5 Ways CMO’s Lose Credibility with the C-Suite

This post was originally posted on July 8, 2011. It also appeared on Forbes.com

Here’s a hypothesis: Given the greater focus on ROI, marketing automation tools, and enhanced tracking of results, marketing is more of a science than ever. Therefore, marketers’ ability to defend and validate their value among peers should be easier than ever before.

So why does a recent study by Fournaise show that CMOs still lack credibility with CEOs?

The study points to several deficiencies with an emphasis on communication – are you sensing the irony? Further, marketers tend to sabotage themselves in everyday interactions with the larger executive team, and in many cases, have no idea they are doing it.

Here are five common mistakes among marketers:

Stumble explaining the value of marketing. Asked almost daily, and rarely answered properly. The key is to understand how the inquirer perceives the role of marketing. The question behind the question is “what is the value of marketing … to me?” According to the study, it most often relates to “revenue, sales, EBITA or even market valuation.”
Limited product, service, and customer knowledge. Even the savviest marketer will arrive DOA in the credibility department if they fall short on this one. And it is not about feature or functionality, but rather customer use and application that matter most and those factors vary by industry and size. Leave “speeds and feeds” to the product organization. Marketing’s job is to differentiate and develop compelling value propositions that sell. If products are built “inside-out,” then bring the “outside-in” perspective.
Can’t Dance. Marketing comes with highly visible risk and things are going to go wrong. When they do, marketing needs to learn how to dance. Handling these situations will define how marketing is viewed. Keep best and worse case scenarios in mind when briefing the executive team. Truth is, if marketing isn’t making a few strategic and tactical mistakes, it’s not moving fast enough. As a former IBM client told me, “If you fail, and you will, fail fast.”
Isolation. A favorite question from sales: What have you done for me lately? And the product team can be equally demanding. However, marketing has to build, nurture, and maintain strong relationships with these groups. For Sales, it is helpful to establish an integrated sales pipeline and hold weekly pipeline meetings; this will build rapport and create a common sense of purpose. It’s also an opportunity to put marketing metrics in a sales context. The key to a successful relationship with sales is about communication and performance. For the product group, marketing needs to clearly define points of integration for research, content, and value proposition development. The key to a successful relationship with the product team is about process and integration.
Where to invest – or cut – an incremental dollar. This question is posed by the CFO at the end of the quarter when numbers are off, and by the CEO who wants to redirect budget. It’s also used as a test. As a holder of discretionary dollars, marketing has to be prepared to answer “where” and “why” along with stating the business impact. In talking about CMOs, 72% of CEOs say, “[marketers] are always asking for more money, but can rarely explain how much incremental business this money will generate.”

To call out the sense of irony, most of these issues are communication related. The same rigor brought to external communication needs to be applied internally:

Know the audience
Understand their needs
Communicate to them in their language.

While the Fournaise study states that executives think in terms of “revenue, sales, and EBITA,” most make judgments based on their emotions. Marketers are advised to use their creativity in delivering the message.

Friedrich Nietzsche said it: “All credibility, all good conscience, all evidence of truth come only from the senses.”