Only 25% of Companies Are Managing Marketing Effectively, Study of 400 Companies Links Performance to Specific Marketing Management Best Practices
Only one-fourth of companies believe they are managing their marketing efforts effectively, according to the results of a survey of more than 400 companies by my firm, CMG Partners, and market research firm Chadwick Martin Bailey. But the study also found that those companies that actively use marketing effectiveness best practices are reaping positive results in areas such as share gains or revenue growth.
The study, entitled The Marketing Performance Advantage, surveyed more than 400 companies across a variety of industries and company sizes to determine the key attributes of successful marketing organizations and to understand what marketing practices they employ.
“We found a high degree of interest in marketing measurement, but surprisingly very few executives reported success with translating that interest into improved marketing effectiveness or bottom line results,” observed Rich Schreuer, senior vice president of Chadwick Martin Bailey.
For example, the study found 75% of participants expressed interest in measuring the performance of their marketing initiatives yet….
- only 27% of companies are fully integrating their marketing measurement insights into marketing planning,
- only 20% believe they excel at measuring the performance of marketing initiatives, and
- only 24% believe they are improving business results based on this information
For more visit the site, The Marketing Performance Advantage.
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The IDC released a preview of their upcoming report, IDC’s 7th Annual Tech Mktg. Benchmarks Study. I was stunned at the marketing kingdom protection rhetoric and support of empire building for marketing leaders. Most of the trends were aspects that have been underway for some time — shifting budget online, focusing on sales and marketing alignment. Where is the insight?
On a related note, it has been a while since publishing a meaty post due to finishing a research project for CMG Partners called CMO 2.0: The next step in the evolution of the Chief Marketing Officer. The executive summary is out today and you can sign-up for the free full report to be released to the public on Oct. 26th.
It is the CMO 2.0 research that forces me to question IDC’s relevance. In speaking with 30+ CMOs in this latest round and 60+ to date, we propose an evolution is occurring in marketing leadership. CMOs of the future will be much more like what we have coined as a “Chief Transformational Officer”. This attainment is earned by demonstrating enterprise value not creating empires or protecting kingdoms as IDC suggests.
To earn the broader, more strategic role described above, lead marketers must accept accountability for business drivers and demonstrate impact. Three components include:
- Accountability for revenue: Marketing should be driving the business, but this role is earned, not a birthright. Demonstrating value can take many forms, but a central theme was accountability for sales or revenue, which ultimately provides the opportunity to have a greater voice in setting business direction and more latitude to experiment.
- Cut first or be cut: In the downturn, marketers that were fairing better emotionally and professionally made the first move in identifying where dollars could be conserved, and how to shift resources to higher quality or more measurable initiatives. In doing, so they clearly demonstrated corporate citizenship over defense of the marketing kingdom, and earned the respect of their peers.
- Adopting the role of strategic advisor: Market-driven processes like new product development or voice of the customer programs provided a more rigorous and formal opportunity for marketing to assume a leadership role. Many leaders are using external market-facing processes such as these to increase influence in other areas like engineering, operations and customer service, and step closer to the role of strategic advisor.
What are your thoughts? Which side of the fence do you support?
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The story continues from my previous post, “Microsoft: leading by following“. Read the latest from Mashable at RETAIL WAR: Microsoft Cherry Picking Apple Store Employees.
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I am currently writing a summary of CMG Partners‘ second round of CMO Agenda research, which consists of 31 interviews with lead marketers. This topic is a central theme that determines the role and value of a CMO. Stay tuned for the release of the findings.
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Recently, I have taken a bit of a hiatus from this blog, which gave me a chance to get consumed by client work and personal adventures, but I am back!
One item that rarely gets talked about in business today is “risking it all”. The concept is usually associated with a mad man or women who is potentially throwing away their money or a companies money on a BIG BET. Why is this always seen as scary and potentially the dumbest thing anyone could do?
In a recent New York Times article, The Birth of ‘Just Do It’ and Other Magic Words, the author highlights great bets that advertising people have been taking in copyrighting and concepts based on the documentary Art & Copy, directed by Doug Pray.
Enjoy the trailer!
The bottom line
Despite what this documentary says about a function or industry, being bold and risky seems to be a very, very good thing – Just do it!
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The Wall Street Journal is reporting that IBM plans to acquire SPSS for $1.2B all cash deal, which is roughly a 42% premium.
Watch out, SAS!
This match-up will be fun to watch… the massive public company, IBM, takes on the large private company, SAS — Abbreviation vs. Abbreviation. For those interested in the analytics that each is pushing the “abbreviation” comment has more to it than meets the eye. Each company is trying to help users make sense of their vast amounts of data through the use of statistics or business intelligence tools. Now, why is the “abbreviation” concept funny? Well by synthesizing data each company’s typical analytic process tries to make sense of the data by creating “buckets”, like an average or a customer segment. The consequence of “bucket-izing” or summarizing is data is lost for the greater good of manageability — International Business Machines becomes I.B.M and many much younger than I have no idea what IBM use to stand for.
O.k. so why are you still reading after such a failed joke? The main reason is that this is a big bet by IBM and SAS is already seeing the payoff as the market for these tools increases faster than the market for other technology solutions. Thee two companies largely now “own” this market and IBM with the acquisition hopes to offset a dying/shrinking annuity stream with a new growing one. The real fight for superiority in analytics is occurring in the new advances in econometrics and applications of mathematical models and hardware advances that make “abbreviation” or elimination of data a thing of the past. More simply, the power to treat a given customer the way they need to be treated and not like the generic segment they have been defined in.
More to come in follow-on posts as to the advances in analytics and implications, but until then check out Sentrana, a partner of CMG Partners and company with a superior science and technology. Read a Sentrana blog post debating the merits of IBM’s string computing claims.
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The New York Times is reporting that ESPN is rolling out their local site experiment that started in Chicago to three additional markets – Dallas, Los Angeles, and New York. In the Chicago test market they are now the top sports site, passing the local newspaper. This move will be one to watch.
The strategy is brilliant! Take a content mega engine and splice the coverage into micro sites that appeal to a more targeted, regional audiences. They are also using local resources from their owned radio stations with the option to use additional resources in affiliate station markets. Sports coverage is one of the easiest to plan and resource because sports by their very nature are planned events and have a ready source of data (e.g. box scores, etc.).
The Bottom Line
Keep you eye on this move as it could but another nail in the newspaper coffin. The one tricky part for ESPN will be scaling the advertising model effectively for Tier 2 and beyond markets. The cities they are going after next should be relatively easy to replicate Chicago’s success, but Charlotte or Detroit will be another kind of challenge. Stay tuned…
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Microsoft must be doing some damage to Apple based on Adage report, which Apple is asking Microsoft to pull their laptop hunter ads. Being a commodity must be working out for Microsoft….
“We’re just going to keep running them and running them and running them,” — Kevin Turner, Chief Operating Officer, Microsoft
More disturbing, is the mention at the end of the Adage report that Microsoft plans to open retail stores right next to Apple Stores.
“We’re going to have some retail stores opened up that are opened up right next door to Apple stores this fall” – Kevin Turner, Chief Operating Officer, Microsoft
The Bottom Line
Having a follower strategy has worked for lots of businesses, especially those that are market leaders and have the most to loose. What should be of more interest is the impact on investors (see stock performance chart).
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Failure is not the end of the world. With GM now restructured and the financial crisis coming to an end, should we be celebrating?
Yes, IF you have learned from your mistakes.
Fail fast and move on
Many business people I know, have worked with or read about in the press, shy away from talking about failure. Failure is an opportunity. Failure should be expected some percentage of the time no matter what business you are in. The trick to capturing this opportunity is to quickly learn from the act of failing and move quickly to what is next — someone I know coined the phrase “fail fast and move on”.
Ask “why”
Companies and business people usually get blinded by the negative side of failure and do not critically ask “why”. Why did this failure occur? Was it a breakdown in our analysis, strategy, execution, management or the team culture? What ever the reason without delving deeper you have eliminated one of the most important opportunities to understand your performance and whether you or the organization has the foundation to succeed in the next opportunity.
The power to unite or divide
Experiencing failure can be one of the most positive drivers of unity or division. I think about my dad’s experience in Vietnam or other vets that have great stories of how challenging moments can bring a team or a unit closer together. This can hold true in business as well, given the right foundation is in place. The foundational element that is absolutely a must is that everyone in the team shares the pain. I have seen team leaders call out team member failures and destroy an individual and their own ability to lead the next team. On the flip side, I have also seen great leaders share the pain or even take more of the heat in tough times. It is these leaders that inspire dedication and motivate those that work for them to jump higher and achieve more. I would caution that no leader can or should take all the “heat”. The team needs to feel the pain or you miss the opportunity to unite.
How will you celebrate your next failure? Please comment!
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This post is a tribute to a mentor of mine, Alan “Big Al” Johnson. Big Al should be credited for the idea of lust, fear and greed… at least that is how I remember it. Big Al was ahead of his time in understanding human behavior in the business world or maybe just too raw in his explanation, but that is what you get from a poet.
Lust, fear and greed are three of the most powerful drivers of people in business and thus business itself. If you are someone are trying to created action or movement inside an organization, this framework/theory may help. I will explain each component of lust, fear and greed and then describe how the conceptual framework could help.
Lust
Have you ever been in a meeting when someone says, “I love that idea” or “We HAVE to do this”. Well witness the lust of a business professional. The object of lust could be noble like a competitive advantage or differentiation or could be that my peer CEO has a corporate jet, so I want one too. What ever the object, one thing holds, this is a powerful force of human behavior and drives both rational and irrational business decisions.
Fear
Fear is most likely the reaction to competitive pressures like missing out on an opportunity or being trampled — “The competition is close to locking up an exclusive on a technology for 6 months, we have to move faster!” Fear can also be related to costs overruns as well — “costs are increasing faster than expected, we need to figure this out before it gets out of control.” Fear can also be personal, such as fearing that your management will see you in a bad light because of a recent failure.
Greed
Greed is the easiest to comprehend and see in action. Most of the time it is related to the accumulation of wealth either for the company or personally. There is also the greed of power, which can either manifest in infighting of business units or actual managers.
The bottom line:
The take away is that these are very power forces individually, but I have a theory that nothing really happens until at least two of these forces are at work in the same situation. As an example, for a project to get funded “greed” must be at play (ROI or positive NPV), but it will not be initiated unless either lust or fear are present. You might see this manifest with a competitive response to a competitor’s move or an executive that wants badly to be in a new market. What I have found helpful is in using the simple terminology of lust, fear and greed to understand and deal with a situation. If I am trying to drive action or change, then I know that at least two forces need to be at work.
What are your thoughts? Do you have a great example or story to share? Please comment.
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