The implication of this 50 year old survey resonates today, as we struggle with 9+% unemployment and 25M+ people either unemployed or underemployed.  Marketers have to maintain or establish a brand that is trusted, to capitalize on a buyer who is reluctant to risk scarce resources on new products.  Conversely, if the trust is lost, so is the buyer.

This is reflected in this 2009 chart on Brand Trust from Concerto Marketing Group.

Maintaining a brand is one of the more difficult tasks.  In the market, the brand is under attack from competitors who are offering new features, discounts or blended services that are aimed at taking away the brand’s customers.  In the company, the pressure is on the development and manufacturing functions to make the same product, but at a lower cost.  While each change to the product/service may be subtle or appear inconsequential, the cumulative effect over time may cause customers to notice and reject the brand.  Or, the change can come from well intentioned causes, as NECCO found out with their wafers.  Regardless of the cause, once the trust in the brand has been lost, so is the customer.

Marketing’s role in this environment is clear… to do everything to maintain the status quo and to clearly communicate the brand’s value proposition.  50 years ago this was done by print and point-of-sale advertising, today it is done via Facebook pages, twitter and other social media tools.  The objective however is the same; reinforce the brand’s image, its message and its value.

At the same time the Marketing department has to fight the internal battle against changing the product.  This should include significant testing of any changes before allowing them to be introduced, as well as maintaining and expanding the same level of frequency and reach that was used to establish the brand in “good” times, regardless of the cost.

Typically, selling to a customer who knows you costs less than trying to sell to a new customer.  Knowing that customers trust your brand and are buying it provides a base or foundation…providing that you maintain that trust.  At the speed with which changes occur in today’s market, failure to maintain the buyer’s trust can be fatal to a brand.

If internal changes are planned for your brand in 2012, whether in formulation or resources, have you fully tested their impact?  (By testing I mean better testing than what Bank of America and Netflix did before they changed their products.)  Can you anticipate the external attacks and how you will respond?

RHM

11/7/2011

That the “Occupy” movement has gained visibility and traction over the past few weeks is an interesting commentary on our times.  The demographic studies done a few days ago as to who is part of the group seems to dispel the myth that they are white suburban hippy want-a-be’s.  What is clear at this point is that the group is dissatisfied with any one of the following:

• Lack of jobs and/or unemployment
• Student loans
• Mortgage rates/foreclosures/loss of housing
• Wall Street players making inordinate amounts of money
• The demise of the American dream that if you work hard, you will be rewarded
• The inability of elected officials to act positively

My interpretation of this social upheaval and dissatisfaction is less nuanced.   I believe that the average American is born with a fundamental sense of Fair Play.  We intuitively know when something is right and when something is wrong.  The “Occupy” people are expressing this feeling that something is not fair and is wrong, and they want it to be made right.  This does not mean that they want hand-outs, or a more socialistic society, or stronger government intervention.  They want things to be more in balance and more equitable.  (An example of the inequality can be found in this NY Times chart: http://www.nytimes.com/interactive/2011/10/26/nyregion/the-new-gilded-age.html?ref=politics)

What does this mean to Marketers?  Dick and I have written before about “under-promising and over-delivering” and the need to exceed expectations.  If my assumption about Fair Play is correct, the practice of exceeding expectations is now a requirement for every company. 

This does not mean lowering prices, or giving things away.  It means being responsive to customers, whether B2B or B2C.  For example:

• Making it a practice to solve a customer complaint on the first call, or within a designated period of time.
• Beating or meeting all communicated delivery dates, whether it is a product or services.
• Including all elements of a purchase at the time of purchase, not “nickel and diming” the purchase experience.
• Deciding not to charge for something that has been free or bundled in…the Bank of America debit card charge and Netflix streaming video change are two current classic examples of creating customer dissatisfaction.

I am sure that you can implement other actions that are specific to your business or service.  The point is that in America today there is a growing desire for Fair Play in all things.  Recognizing this, good marketers will ensure that their products and services do not run against this current, or if they do, make the appropriate changes.

Do you even know how your products are perceived in the market or do you act with the hubris of BofA and Netflix?  If this movement gains more steam will you win or lose?

RHM ­- 10/27/2011

Q4 is the usual time for pulling together plans and budgets for the following year.  In the past, I have written about the problems and issues that this process generates, but decided this year that a checklist might be of better use.

  __  Strategy, goals and objectives – Are the goals and objectives for 2012 articulated?  Is the strategy to reach these goals and objectives clearly spelled out, with priorities specified?

__  Budget and staffing – Is the budget for 2012, even at an approximation level, available?  Is the headcount forecasted to go up, down or remain the same?

__  Support groups – Are all the support functions (customer support, field services, product services, etc.) in line and capable of supporting the plans.

__  Events – Are all the major events/milestones known, i.e., new product introduction in Q1, major trade show in Q3, major partnership agreement in Q1?

__  Cost and profitability – For multi-product companies, are the costs, by product, going up, down, or remaining the same?  Will pricing remain the same or change?

__  Policies – Is there any need to change or modify customer facing policies or social media policies?  For example, has the current “Response” policy and procedure been effective?  Is the policy about employees discussing the company on Facebook and twitter clear and being followed?

__  Target market – Have you identified the target market?  Is it (audience) the same as it was in 2011?  Does it have the same segmentation?

__  Campaigns – Are there developed campaigns (strategies) to support all the marketing activities?

__  Marketing mix – Is the 2011 allocation of Marketing spend applicable to 2012?  For example, should more resources be devoted to social media, or to trade shows?

__  Tactical product pans – Will the 2011 tactical plan be effective in 2012?  Specifically is the “volume” product still competitive and profitable, is the “loss-leader” able to generate sales, and are there contingency plans in place in the event of competitive inroads?

__  Sales relations – Is there agreement on what constitutes a qualified lead?  Is Sales looking for additional support in the form of Product Managers?  Are Sales’ lost sales reports meaningful in helping to define the Marketing mix?

__  Social media – Which 2011 metrics have been the most useful to Management?   How can these be improved or expanded in 2012, and at what cost?  Additionally:

• Is this the year to redo your website?
• When is the last time you updated your SEO activity/measure?
• Do you have a content calendar with confirmed inputs for Q1, the year?
• Can you improve your utilization of content?
• Are you up-to-date on the latest Facebook, LinkedIn, and twitter changes?

This checklist is meant to be a memory jogger, as each company and situation is different.  The point is that in approaching the 2012 budgeting process without a checklist, key things can be overlooked or forgotten.  The importance of a checklist has been proven by pilots and doctors, and should be used by all good Marketers.  (See: The Checklist Manifesto: How to Get Things Right by Atul Gawande)

Have you constructed your checklist for 2012 yet?  How many items are checked off?  What other items would you add to this checklist?

PS.  If all this is confusing, you can find help in our Marketing Resource Optimizer (MRO) product.  Click here to obtain a copy of Part 1.

RHM  10/20/2011  

Typically companies go from a very simple organizational structure to some form of corporate or divisional or strategical business units (SBUs).

Start –ups or small size companies are typically managed by one or two people (entrepreneurs) who have the vision and passion to get things started. The environment is usually flexible, dynamic, has little in the way of processes or procedures and is freewheeling. 

Unfortunately when the company hits a certain revenue size or development phases, the entrepreneurial skills become secondary or more bluntly, other skills are needed to move into the next growth stage.

Skills like marketing, sales, or financial become critical for the company to grow.  Again it is more often than not that the original founder does not have the required skills for the next phase.

Here are examples what some call “crisis of leadership” that happens every day:

A small software company was started by a very talented engineer and their initial revenues came from personal referrals, which helped the company grow to a certain point , then the stall point happened and no one seem to know what the problem was. After close to a year of stagnation, a consult concluded that this company was not doing any marketing what so ever, mainly because the founder believed “if we make it, they will come”.  Eventually the founder hired a marketing person and gave her ownership not only for creating some marketing programs but developing the next wave of market development documents.

Another example is about an extremely passionate person who started a charity organization and again grew it to a certain “donation level” and once again things came to a halt. In this case the founder tried to do everything from fund raising to printing the next newsletter. The problem was no one knew who was responsible for what and what their contribution was, so most just sat back and waited for the founder to take action.  Again, objectives and goals were personal and not for the overall benefit of the organization.

A third example is about Larry Ellison and Oracle.  Larry Ellison has great vision and a passion for his company, but Oracle also hit a stall point, but in this case Larry saw he was part of the problem and hired some financial experts and he focused on the next innovations.

For those at the top, here are some things to avoid according to J. Hamm “Why Entrepreneurs don’t scale” Harvard Business Review.

1-Don’t be to loyal to your comrades

2-Don’t become too task and detailed oriented

3-Be careful of single – mindedness,   because this can develop into tunnel vision

4-Don’t work in isolation, leaders lead, do not hide

If you see any or all of the above situations within your company, I would suggest seeking some outside advice in order to get a third party’s point of view.

Remember, a management strategy is just as critical as having a product or service strategy.  Not having a strategy is like sailing a ship without a rudder.

RHL  10/13/11

 I stated that customer satisfaction is the responsibility of EVERYONE!

Everyone “touches “  the customer and how everyone performs their job relates to the customer being satisfied.  I also listed several steps for starting a customer satisfaction program within any company. Lastly, Marketing should always look at their activities from the customer’s “glasses.”

Several people asked about research on customer satisfaction and activities that a company can perform and linking it to either starting a customer satisfaction program or improving their current customer satisfaction program.   Well the answer is a definite YES!

There are a number of approaches, companies and experts on this subject, but they basically boil down to a relatively small number of activities that help improve customer satisfaction.

Fundamentally, customers (both B2B and B2C) are looking for value (see my posting on good value propositions) and value is benefit minus cost.    Given this basic premise, one can link activities that focus on benefits and cost, and if one improves on these activities it will result in an improvement in customer satisfaction and in most cases have a positive impact on the company’s revenue stream.

Two examples of this relationship are:  One, developing a quality product that addresses a customer’s critical issues, resulting in a perceived benefit and subsequent purchases of that product or service. (e.g. disposable diapers)  Secondly, by developing a great relationship with the customer base or creating a wonderful image of your company that will be viewed as a benefit to the customer and again resulting in a purchase of the product or service. (e.g., Apple, Disney)

Bradley T. Gale’s book titled “Managing Customer Value” talks about developing a matrix of attributes related to customer satisfaction consisting of “levers” that when improved will result in an increase to the benefit attribute or when levers addressing costs are improved will also increase the overall value and thus the potential for increased revenues.   The key point is incremental or small improvements in some or all of these attributes have a multiplying impact on the revenue improvement factor.    So just a 1-5% improvement in several areas can result in increased revenues.  

So, as I stated before, everyone can impact customer satisfaction and there are metrics that can be put in place that do not require a major undertaking to measure overall customer satisfaction AND increased revenues. 

Have you stated your customer satisfaction program; if not why not?

RHL 8/16/11

Last week my barber gave me a first hand lesson in how confidence impacts the economy.  As I usually do, I asked when I got in the chair, “How’s business?”  His response was that it was down.  “How could that be?” I asked, “Everyone needs a haircut.”  His response captured the confidence problem that is sweeping the country. 

“Assume 1,000 customers,” he said, “who usually get their haircut every four weeks, but because of their confidence in how things are going, they decide to put off their haircut by one week.  What does that do?”  I did some quick math.  If a person gets a hair cut every four weeks, that is 13 haircuts a year (52/4 =13).  If he does it every five weeks, that is 10.4 haircuts a year (52/5 =10.4). The result is a 20% drop in business (10.4/13 = .8).  Assuming an average bill of $16.00 (not counting any tip), a 20% decline in the number of haircuts translates to a $41,600 revenue decline.  Tony’s business is not off 20%, but the point was made.

So, because some of his customers are unsure where the economy is going, and feel that it may be best to economize, they are cutting back a little.  This has ripple effects through-out the economy.  Tony and Jim probably won’t take the boat or RV trip they thought about in the spring.  Their purchase of supplies is down. And their fixed costs are edging up.  To offset this they are now open to 7:00 PM on Thursday, and have kept their prices stable for over a year.

The lesson learned from this is that how the decision maker feels about the economy is often the key to a purchase or not.  If he/she can feels that this is the time to hold back, due to a lack of confidence on where things are going, they will do so, whether it be a haircut, a new set of tires for the car, a new dress, or going out to eat.  If they are confident that things are going to be better, then they may be more likely to get their hair cut every 4 weeks.

This applies to those who control the purse strings in companies.  If they personally feel that the economy is trending down, they may re-think purchases and/or commitments.  Certainly Dick and I have seen this behavior in our consulting business.

The net of all these delayed haircuts is that the economy continues to settle to a new, lower equilibrium or steady state.  After all, men do have to get their haircut sometime, and tires and cars do wear out, and new capital equipment has to be purchased.  For the CMO, this means that his product or service has to be top of mind when the purchase decision is made.  And that the product/service sold surpasses the buyer’s expectations.

I will continue to go to Tony, as I have been going there for over a decade, and it is where I learn basic economics.  But I wonder how the other product/service providers are positioning themselves as their markets sort themselves out.

My advice to help turn the economy around…go get a haircut!

RHM  8/11/2011   

The stumble in the economy could not come at a worse time.  Most companies are going into their planning for 2012, taking the first six months of 2011 as a baseline, estimating the balance of the year and using that information as the basis for 2012.  The information is not pretty and the forecasts are ugly.

This situation will produce the same old aphorisms and phrase; “Do more with less,” “Work smarter, not harder, “When the going gets tough, the tough get going” and so on.  The problem is that these trite phrases are the ones that have been repeated over and over since 2008.

There are 5 truisms that you, as the CMO, can use in planning for 2012.  If applied they will help, but not ensure that you will make the year.

1. Make sure that your product/service is differentiated.  If you have a “me-too” product you will only be able to compete on price, and no one wins a race to the bottom.  Lead with a differentiated product that offers more.
2. Provide quality.  Buyers, whether consumers or business, are looking to spend as little as possible over the long term.  They get this from quality products and service.  Poor quality reflects on their decision-making, and in the base of a business buyer, may be a career-limiting move.  Prove to the buyer that your product/service is superior in quality.
3. Service the buyer.  The day of “kiss and sell” is over.  Treat each customer as though they are unique, because they are.  The implementation of CRM tools makes it easy to personalize each buyer, both before and after the sale.
4. Match expenses to revenue.  For the next 18-24 months, the economy is going to be flat to down.  Unless you have a unique product in a growing segment, e.g., iPhone, plan on minimal growth and plan you expenses accordingly.  For example, if you are competing in an oligopolistic segment growing 2-3% a year, pouring money into building your brand may not be the best use of scarce resource.
5. Invest in Marketing.  This is not the time to cut back on Marketing.  Both Product Marketing and Product Management need to be fully funded.  The objective of most firms should be to maintain their market share, and if possible, grow it at the expense of competition.  This can only be done by fully funding marketing.  Moreover, everything is cyclical and this downturn will eventually correct itself.  When it does, those companies that have invested in Marketing will be the ones in the best position to take advantage of the upward curve.

For a related discussion on this topic, see the recent McKinsey article, We’re all marketers now…https://www.mckinseyquarterly.com/Marketing/Strategy/Were_all_marketers_now_2834

The next 18 months or so are going to be ugly.  There is no leadership emerging, either from Washington or from Wall Street.  The economy, worldwide, is drifting downward.  Companies that focus on their mission, and follow the 5 steps above will succeed.  Those that engage in attempts to win share and/or drive revenue by providing cheaper products, and choose to compete on a price basis, will lose.

Where are you in your 2012 planning?

RHM  8/4/2011

If you are facing this situation, here are three suggestions:

1.  Increase marketing expenditures and step up advertising and promotion.  In 2008, I researched which companies succeeded during the Great Depression.  I found that those that advertised were much more successful than those that cut back on their marketing expenditures.  Moreover, if your competitors know this, and step up their marketing expenditures and you do not you may get overwhelmed. 
2. Stress value.  Increase the perceived value of your offerings by adding something; be it free shipping, an extended warranty, additional support, etc.  Make the buyer feel that they are getting more “bang for their buck.”  By doing so you not only differentiate your product/service from the competition, you also make it easier for your inside advocates to speak for you.
3. Focus on solutions, not features.  Today’s buyer wants help in solving problems.  Identify the customer’s problem and point out to them how your product/service solves that problem, better than any competition.  For example, if a buyer is concerned about ease of installation and security regarding a software package, show him/her how easy yours is to install and secure.  Do not talk about the customer’s ability to design a custom user interface and report writer.
4. Keep it simple.  Decision makers at all levels will be facing increasingly difficult choices as the year unfolds.  They do not want to wrestle through complicated pricing plans, confusing rebate programs or long-term obligations.  Your message should be, “Our product (which is the best) solves this problem and will cost you this much.”
5. Use social media, when and where appropriate.  The different social media tools are effective when tailored to fit your individual company’s customers.  There is no universal application that works.  Understand how your customer base likes to talk, and then engage them at that level, which can range from a monthly newsletter to daily interaction on twitter and Facebook.  One suggestion, if your product is the least bit complex, explore the use of video as an adjunct to your pre and post sales customer support. 

Will following these 5 steps ensure that you make the year.  No.  However, focusing on them will help you remain competitive and help maintain your slice of the pie. 

Do you have any additional suggestions that your can pass along?  Comment below.

RHM  6/23/2011

When customers look for value, it does not have to be just from the product or service but in how they are treated in the whole buying, selling and post sales process.

So who should own customer satisfaction?  Should sales own it? Should marketing own it? Should customer service own it?  Should the IT organization own it? Should your partners own it?

Let’s look at each group and see if they should be responsible for customer satisfaction.

Sales:  Well sales “touches” the customer every day, they are the ones who know what is going on with the customers.  So clearly it should be sales.

Marketing:  Marketing does the research on customer needs and pain points and develops the messages and branding that resonates with customers, so they should own customer satisfaction.

Customer Service:  Wait, this organization response to the customer’s requests. They handle the customer’s problem that no one else wants.  Clearly they should own customer satisfaction.

IT:  They are responsible for customer facing applications like call center answering systems, web site for users and order processing systems.  So, clearly they know the needs of the customer in order to make them satisfied.

Your Partners:  Hold the phones, most partners do some or all of the above functions so they really should own customer satisfaction.

Well, I would offer a different answer to the problem.  Customer satisfaction is the responsibility of EVERYONE in ANY company!

Everyone “touches “ the customer and how they perform their job relates to the customer being satisfied!   The developer of a product should develop something that addresses a customer need. The people in manufacturing should make sure that what is shipped is of highest quality and ship what the customer requested.  The call center person answering the phone should treat each phone call like it is the president of that company calling in. Sales and partners  should listen to their customers and address their needs and not selling them something they do not want. Marketing  should always  look at their activities from the customer’s  “glasses”.

So, what steps should you take to have all around customer satisfaction?    A customer satisfaction program does not have to be a very complex or a costly situation.  Here is a very basic form of a customer satisfaction program that one can get started quite easily and be effective.

Step One; Train each and every one within your organization on what customer satisfaction is and how every department has an impact on the results of good customer satisfaction.   Show them some case studies or examples of bad and good customer satisfaction situations.

Step Two, Create some posters or banners or have article about customer satisfaction in the company newsletter.  Have each group meetings or conference calls set aside a session about customer satisfaction.

Step Three, Have some one or small groups set up some goals and start collecting data on how the company is doing on creating good customer satisfaction on a regular basis.

Note:   There is actual real world data that shows that companies who have created some form of customer satisfaction program have not only improved customer opinions but have seen an uptick in net new revenues.

RHL 6/7/11

Recent news reports have highlighted lower housing prices, lower consumer confidence and fewer jobs added in May than anticipated.  One housing observer commented that "we are bumping along the bottom."

So readers, it is time for a poll:

1. Do you think the economy is going to get better, stay the same, or go down for the balance of 2011?

2. Has your (or your firm’s) view of the economy influenced resource allocations and/or buying decisions?

3. Do you believe Marketing, using both old and new tools, can help generate revenue regardless of the state of the economy?

You can post your answers below in the comment section, or email them to me: bob.mannal@firealarmmarketing.com.

Thanks, and I will summarize the respnses.

RHM 6/1/2011