Over the last two decades, marketers liked to believe that they have significant progress in making marketing results more scientific. Furthermore, they have tended to believe that with the advent of Customer Relationship Management (CRM) technologies, that they are building relationships with customers. This belief couldn’t be farther from the truth and the reality may be a little disappointing. The term “Relationships" has been used in marketing lexicon since the 1980s. However, there is little consensus on what that term is and what is means within marketing circles. There is an over simplistic notion that if we treat our customers well they will return, again and again, and that’s what customer “relationships” are all about. Well, marketers couldn’t be more wrong about this. Many of my CMO friends expressed their full agreement privately.
Moreover there is little common ground in marketing circles on how marketing is defined and the process involved in deploying the marketing function. What is marketing? Is it a common set of goals put into action through a process of marketing analysis, strategic decision making, formulation of tactical marketing mix programs and operational feedback and controls? So what exactly is marketing?
The practice of marketing should not be confined to any one discipline; it actually lies at the intersection of five disciplinary areas: corporate strategy, economics, consumer behavior, design and technology. In strategic terms, the practice of marketing, is focused on the firm’s strategic intent, its growth requirements and appetite.
In economic terms, the practice focused on the demand side of strategy. In consumer behavioral terms, it is focused on the customer side of strategy. Because of this focus on the demand side and the concern with the customer environment, “marketing strategy” has a more specific meaning than” business strategy” or even the broader concept of “corporate strategy”. Similarly, it has a somewhat different meaning from “competitive strategy”, which focuses mainly on the industry structure and competitive dynamics. In design terms, marketing is incorporating design as part of strategy and thus far in the industry, there is little in terms of framework or tools available to facilitate the interdisciplinary bridge building that successfully combines the economic logic and customer behavioral logic. This is drastically different from the logic of industrial economics, which the competitive strategy literature of the past decade is built upon.
Some even ask whether marketing is dead? Moreover, there is a general disillusionment with the inability of even of senior marketers to deal with the business realities of the day. They are often accused of not understanding the economics of the business or different channels of distribution or of emerging disruptive technologies. Many marketers are not equipped to take on new challenges that include creating experience-based differentiation and branding in a cross-medium network environment. There is no leadership in the industry anymore; in ad agency, media and marketer worlds, few dare to stick their necks out, stand up and be counted.
The consumer has far more control than ever before. Successful marketers will have to learn to listen and participate in the conversation that surrounds that control and put the bullhorn in mothballs. Emerging technology will provide us with an infinite number of new opportunities to be innovative and creative from an experiential marketing perspective. We cannot even begin to comprehend the extent of change in the industry, as Google and Microsoft completely alter the advertising value chain.
John Hagel, an independent consultant and author, while addressing a CMO Summit in New York pulled together a number of themes from his speaking notes on where marketing is going. Here’s from his notes:
Redefine marketing strategy
These shifts have broad implications in terms of marketing strategy, branding and marketing performance metrics. To start with marketing strategy and again at the risk of over-simplification, conventional marketing is built upon the three “I’s”:
Intercept – target and expose customers to your message wherever you can find them.
Inhibit – make it as difficult as possible for the customer to compare your product or service with any other options.
Isolate – enter into a direct relationship with the customer and, wherever possible, remove all third parties from the relationship.
Actions to take: to navigate through this fundamental shift in marketing, CMOs will need to recognize that this is an organizational change challenge, something that most CMOs are not very comfortable in confronting. They would much rather design and deploy a clever marketing program than figure out how to change the hearts and minds of people throughout the organization.
John’s observation is excellent. I have often heard people throwing statistics saying that the average tenure of a CMO is 16 months. Whether it’s 16 or 24 months – it isn’t as important as what it shows us - organizations are more impatient these days. The shortness of the typical CMO’s tenure is a tangible manifestation of corporate management's frustration with the inability of marketing to provide measures that correlate to the creation of economic value let alone the inability to drive change through customer experience innovation.
The reason is that many of these CMOs are traditional marketers who are usually great tacticians. Trained for years in traditional brand management system, their primarily focus was in marketing communications activities to build brands. Many lack the strategic thinking to bring their case to executive management and even if they do, their focus is entirely on market share and not market creation. What is needed is a new type of CMO, one whose job is to be the one in charge of customer experience innovation. This CMO can then engage all functions of the organization, and not just marketing communications and advertising agencies. The CMO’s responsibility is to integrate “customer experience” into every part of an organization's process. He or she should ensure that an organization comes up with the right value proposition and delivers the appropriate experience on the enterprise level. And a big part of that is through digital interfaces and technology-enabled human interactions.
