Should I grow the type of work by adding a new specialty, add more consulting talent, think about acquiring another firm or its assets, merge with a similar but more established good firm like Chasm, and the list goes on. The choices are many. People — clients, other CEOs, jealous grad-school buddies seeking a job — have approached me for years to ask the “when are you getting bigger?”, “are you growing fast enough?”, “You’re still just 6 core people, how do you plan on growing?”, “When will you begin to really grow the company?”, “Why have you decided not to grow the company?”

For the first 7 years of Rubicon, I would probably mumble something in the hopes they heard what they wanted to, and would simply stop asking. I had no idea what size was “good”, whether we were “big enough” etc. Uggh, what a question! It’s equivalent I would think to being asked by others “when are you going to have another child?”. Yes, you have one but certainly you want more, is the inference. You must want more.

Now, in year 8 of leading Rubicon, I have an answer.

Well, I have a directional answer.

At the root of the question is what is right size and growth strategy for the company. People assume our size is not right. I get the perspective that many, many people believe that bigger is better, yet frankly I’m not convinced. No man-related joke here, but sometimes bigger is not better.

Here’s my answer to the question: I want to grow without “growing”

What that means to me are things like this:
I never want to get so big that we take work for the sake of work.
I want all of Rubicon-ites to have a real joy and passion for what we do. The people who are here have to really love and really get strategy at the deepest level. I want our customers to get a group of people who like this strategy stuff enough to keep doing it for a while. We're not just looking for the next gig or looking to land a gig at one of our clients.
I love the idea that when a client needs us again, we can effectively have enough context so we can add more value. We need to price and build the business so we're around for round II of the market expansion plans.
I want us to keep advancing what we can offer. But not about "more". Rather than doing more, I want to keep finding ways so we keep adding loads of value (and offload stupid costs).
I want to leverage the best of talent, every where.
I want our customer depth of relationship as well as base to keep growing.
Certainly, I want our revenues to keep growing. Because our value-add is growing.
I always want our customer satisfaction to stay high and if possible, grow!
I want us to create the right impact at the company, division, industry and perhaps even the personal level -- such that they achieve the transformation they were seeking towards their goal.

I've intentionally set up our business so our headcount doesn’t need to grow linearly with our key business deliverables. We’ve been finding key parties that can help us scale without losing quality. We’ve been streamlining all the places in the business so we don’t waste our time and ask clients to pay for it. We make things clearer, simple, and thus we eliminate headaches on all sides. I want that to continue.

Our partnerships are growing. I wish I could announce a few but it always takes longer than I’d like. By setting up partnerships, I’m making sure to vet the right solutions and then do good handoffs to people who can really deliver with their model the highest value. There's a firm out there than can create scalable readiness inside a firm by training and advising them to have one framework on how product management is done. That firm is one I want to highly recommend and leverage.

We could hire "business development" people to focus on the revenue side, or we could simply continue to deliver unbelievably strong strategy and ask our base of clients to refer us to people like them. I don't want to spend in marketing or sales. I want to focus on doing great work and creating advocates. Passionate customers who really get the value we created for them will get us where we need to be. Create delighted customers and this will yield to great value over time, not just a quarterly or annual blip. And I would recommend that -- if you are building a business -- you realize you are going to make a series of choices about what is "enough" and what makes you "successful". My advice: It's important to distinguish the point of value-add and then to stay true to it.

Let's be real about the tension all this creates. Do we need more people today? Absolutely. We could use another person or two right now, with a couple new capacities I'd like to see on our core team. But it's okay to be stretched. At this point, you're on the edge. And, the edge is where you are forced to be creative. It’s where your decisions are sharper and more informed. You make calls because you have to, not because they are convenient. “We can’t do this right now because that is more important.” Being at the limit forces you to think about value and we think that’s a great place to be.

It would be a little flippant to say I want to be the best in the category. And at one level it's true. But it doesn't capture the essence of we're seeking.

This is the kind of growth I want: The kind that builds and maintains great value in the world. Value not just in money but in relationships, in the quality of ideas -- the things that people remember for years and years. Enduring value kind of growth.

Hope your New Year is off to a great start.

Here's a great example: The online whiteboard. It's a well designed and executed idea that lets the brand tag "imagination at work" actually become real. You can go to the site, get a marker, and then draw with friends or colleagues or anyone. You can save it, send it, etc. So you have a reason to capture an idea and then use GE to share that idea.

Good job GE!

Technorati Tags:
GE, Online, Web Marketing

We want it, and we want that process to continue to raise the caliber of what is created, and the value it offers. But there is one rule that allows that level of innovation, and that is the rule of when there’s a winner, there’s a loser.

There are several companies out there facing their Netscape Moment. No, not the crazy every-one-who-matters-wants-to-work-here and were going to make a $1M for each day we show up to work insanity. But the day that MSFT announced they would enter the category, and Netscape never recovered. They lost their mojo, and along with it the market.

When we talk about competition in the pristinely clean halls of offices, we reduce it's value and effect in high-tech. We think about it like there's dollies and high tea will be served soon. But we've got to start thinking of competition, people as a bar-fight. There's one winner, and one loser and you better get in the fight if you expect to win.

Why, might you ask am I writing this on a Friday afternoon. Frustration, that's why. I see companies thinking that "there'll be time" and it's people who haven't seen the truck slam up side the car to see the kind of destruction that will happen. They weren't perhaps around and paying attention when Netscape and all the good people who worked there lost their mojo. Sometimes the thing an operational background gives you is perspective.

Vmware is facing a battle equivalent to the Microsoft-Netscape battle of today. They have virtually created (pun intended) the virtualization category yet they’ve done it in a way that no one has an allegiance to create more market momentum in that direction. They’ve also created the category without making sure they are the rightful beneficiary of the category growth. This, while notable and worthy in the category of innovation is like spending money to water the neighbors yard and not your own. It makes the neighborhood look good but doesn’t build value in your own real estate. To overcome this, VMware needs to change approach. They need to become a brand bulldog. Picking their turf carefully and then defending it with the tenacity of a junkyard dog guarding his bone. Forget about parity and go for distinction. Get clear on your brand position and make sure everyone in your company knows it and can articulate it. Make sure however you define your offer is truly unique and you can lay claim to it, you have a way to fight differently. Customers want you to articulate why they need to follow you. Go VMWare, Go. And get rid of the gloves. This is a street fight.

Which leaves me with a question for all of you -- are you prepared to fight for your competitive ground? How so? Let me know...

Technorati Tags:
VMWare, Microsoft, Netscape, Competitive, Strategy

And I think Google may be trying for this trifecta solution.

Google has been making forays into the SMB market of course, trying to take the low end of the enterprise space as they attack Microsoft on the underbelly. SMBs, a largely unpenetrated market, has been a “holy grail” for many enterprise technology firms: greatly desired, often sought after but not obtainable. and you've heard me talk / blog about how the Web has placed the ever-elusive SMB market within the grasp of software companies. This wee thing called the web allows firms to leap over former barriers included poor distribution vehicles, and the large advertising investment required to build brand awareness, and an inability to affordably target SMB segments. So it makes p-e-r-f-e-c-t sense that Google, the one who practically created the ability to do broad reach go to the SMB market and serve them with online apps, etc.

With the recent acquisition of Postini (for $625M for its 35K customer base) they got two things. Security surely, and a “scalable architecture” based on the press release. I have no idea what that means but I’ll buy it for now.

So that gives Google, on the face of it at least, 2 of the 3 things enterprises need: security, scalability and support.

And then, a few weeks ago, Ingram Micro signed a deal with Google.

Put that together folks. Ingram Micro -- old school and Google -- new school, got together and talked about doing something together. It kind of surprises me a bit to see this move.

So perhaps this is the support model. Not because I don’t think Google couldn’t build a channel (they seem to be able to do anything with their nearly endless supply of talent and capital) but it seems contrary to who they are, doesn’t it? Google has built a company based on no-touch, and thus my team mates and I at Rubicon sometimes call Google the 6 letter word for “no-support” as if we were part of a NYT crossword puzzle answer. But, hey, let's be real support is not in the Google model. So when their blogger technology goes down and doesn’t come for a few days, hey stuff happens. It's free, what more do you want?

SMBs like many markets need some hand-holding. And that support gap represents a great opportunity for the channel to come in and make sure the full solution is complete. So the move with Ingram seems some evidence that will embrace the channel. But, hmmm. It just don’t feel right. Maybe it’s that I know how many companies have done the Ingram PR announcement only to “not get” the channel. I remember winning an award from VAR business when I worked at Apple. It came with a letter that effectively said, “we, at VAR business, are surprised to find you guys pulled your head out of your a** and so give you this award.” It was funny then, it’s funnier now. It’s that SO many vendors do it badly, that its just practically amazing to see a fully integrated plan that allows the channel to be an extender of a strategy that includes the total picture.

Time will tell if Google is serious about offering support through the channel. This will be an interesting one to watch.

Technorati Tags:
Market Expansion, Google, SMB, Postini, Channel

Marketing is no longer considered contributing to the corporate performance of a company; not in any strategic kind of way. It hurts to think of this profession that I value, I respect and I know can be a key driver of growth as well as bottom line profits has come to this. It can be turned around, and it should but to get there from here, is going to take a revolution of sorts.

Instead of Marketing (the big M kind) being a strategic thrust with a clear charter, marketing within a company has become much like the children’s game of telephone. In this case, knowledge regarding customer needs is diluted on its way from idea to product or service. Organizations are not tapping the power of their customers—and what knowledge they do have keeps leaking during the process. Decisions that drive fundamental profitability and competitiveness are distorted by this game. The inefficiencies in the traditional marketing process show up in many ways. One of the most insidious is that downstream groups don’t trust the information and insights gathered by upstream groups. In severe cases, they may not even understand or receive such data. As a result, research is repeated and insights are lost. Companies incur higher costs from duplicated effort, yet operate on fewer real insights. Ugggh, it's a mess.

IS THERE A PATH BACK?
If Marketing continues on its current vein, then it’s quite possible it’s not appropriate to have it belong to the C-Suite. It could be that Marketing will become a function of Sales, just creating a services organizational aligned to drive revenue activities. Or it could be that marketing will move towards a business unit operations to make sure the business unit goals are arrived which include brand positioning as well as sales activities and perhaps some product PR thrown in.

But if the CMO role is going to become a contributor to the bottom line, a fundamental shift of things must be done. What are those things?

WHAT MUST BE DONE?
I am going to assume for a minute there is significant untapped value in this c-level role, and look at what can be done. With a focus on what must CEOs and CMOs do to make the role relevant, and a contributor to the bottom-line.

3 things that could cause the necessary turnaround of this role, and my thoughts for what “the answers” are.
1. Framework. We collectively need to redefine the architecture for the role and specifically define what is its role in the company.
2. Connecting the Pieces. What are the interdisciplinary pieces that form the value chain and what can be done to connect it.
3. Create ownership of something. If CIOs own the infrastructure support, CFOs own the overall bottom line, Sales owns the topline, CEOs own the vision thing, what does the CMO own? I have a proposition for it.

FRAMEWORK: The role.
First, we need to establish a framework for what the role is. Is it as some companies define the role of marcom service, or in other places the lead PR role, or is it the customer voice into the company. In other words, marketing can be a combination of product management, product marketing, field marketing and brand and it’ the only place in a company where a functional thing is cut up into pieces and then spread throughout the organization. It’s almost as if we’re afraid of what would happen if all the pieces were to stay together. With out a common defined job description and clarity of what is in or out of that bucket, the success criteria can never be developed nor can we achieve new levels of achievement.

I’m going to suggest that the CMOs role is much like the role of a quarterback of the football team. They should have the process skills to know what the company needs and how it works enough to navigate the natural market evolutions the company needs to go through. 2nd they need to know the product; what it is, what it could be so they can figure out how to provide the full range of marketing onto that story whether it be personality marketing, market and competitive positioning, value proposition communication, etc. 3rd they need to know the market and the latent customer desires so they can help “guess” what is going to be next and what the company needs to be considering for the next phases of evolution. And what a mix that would be: market, process and product savvy. Marketers, at least the best ones, tend to actually have that mix but have been somehow focused ot be incredibly process centered. That’s why I see this big “ROI” focus in every CMO council group that exists. ROI is what you focus on when the CEO has no confidence that you’re contributing enough to the bottom line. It’s a decoy that is distracting the marketing leadership from playing the role they need to play which is to bring together the interdisciplinary aspects of the business views much like a quarterback does to a football team – and thus creates a winning formula that leverages all parts of the organization.

Value Connection: the need to connect the pieces.
The interdependent groups of product marketing, product management, field marketing and brand are part and parcel of the different ways a product is both created and sent into the market. Using the football analogy again, these interdependent groups play with each other and for the company; they are one team even though the skirmishes on the field may not look like that. These roles comprise the key set of knowledge-based activities that connect customer needs and knowledge back into the company. They are the biggest source of un-optimized activity in most firms.

Therefore, we need to create a marketing value chain much like supply chain management. Unite tactical parts of the company that are disconnected, we need to unite the pieces into a strategic and cost-saving initiative. Related to this, we need to address the knowledge efficiency of marketing: product management, product marketing, field marketing and brand management.

Finally, use marketing value chain management to control the entire marketing chain, from product requirements to product marketing right through to sales and customer care. Just as supply chain management addressed specific, measurable goals, marketing value chain management has three primary goals:
1. Increase competitiveness by increasing the relevancy of the solution (this can be both near-term and far-reaching).
2. Increase sales by being better positioned and understood
3. Increase gross margins by lowering the amount spent on messaging, research and headcount

Ownership: own something.
The revolution is waiting for CMOs with vision and leadership ability – but in order for them to have a relevant seat at the table, they’ve got to own something. Something tough. Just like sales owns a number, and the CEO owns the vision, the CMO has to own a piece of the major pie on something as important and perhaps as intangible.

And if I search under the many things that are published and discussed in the starbucks remote offices, I can see that CMOs today own very little or at best, own pieces of a total solution. They might own a qualified leads # in support of enterprise sales, or a particular rate of return on marketing spend. But is that owning enough to qualify for a seat at the table.

By owning something, there’s got to be more at play. More intuition and less process. More skill and less detail. And it’s gotta matter.

And so here I go with a crazy idea. I’m going to propose that the Chief Marketing Officer (in the role I’ve defined above) is going to fundamentally become a contributor when they own the customer. They need to own everything that makes that customer experience. Everything. They need to have services repot to them because they need to be accountable when the promise isn’t kept. They need to own the product management requirements in case what is built isn’t right. And then they need to own what is used to communicate to and with the customer so that total picture of “what they need” to “what we say” and including “our interactions with them” is about the CMO. The CMO needs to become that crucial to the business. Because without it, there’s someone not represented at the C-Suite and that’s the customer. Currently they are owned by everybody and thus nobody. How about we make someone really good at owning the customer and then make them create the inside game to run the field and score a touchdown on behalf of a customer.

That’s a role worthy of the C-Suite. But it’ll take a revolution to get from here to there. I look forward to being a part of it.

Technorati Tags:
marketing, Leadership, Business, CMO

Jeffrey Swartz, the CEO of the Timberland Co., strode purposefully into a New York office packed with McDonald's executives. Dressed in a blazer, jeans, and Timberland boots, he was there on this mid-August day to convince the fast-food behemoth that it should choose his $1.5 billion shoe and clothing company to provide its new uniforms. The executives waited expectantly for him to unzip a bag and reveal the sleek new prototype.

"We didn't bring any designs," Swartz said flatly. Eyebrows arched. Instead, he launched into an impassioned speech that had virtually nothing to do with clothes or shoes. What Timberland really had to offer McDonald's, Swartz said, was the benefit to the company--and the world at large--of helping it build a unified, motivated, purposeful workforce. "Other people can do uniforms," Swartz said, his Yankee accent asserting itself. "This is about partnership. We can create a partnership together that will be about value and values."

Compare that to this story:

The chief executive of Whole Foods Market posted messages on a Yahoo chat forum under an alias for years, talking up his own company while predicting a bleak future for Wild Oats Markets, the rival it has since sought to acquire.

Company CEO John Mackey posted messages on a Yahoo financial forum under the user name "rahodeb," according to a court document filed by the U.S. Federal Trade Commission and postings on Yahoo.

The spin he tries to put on it in recent news over the weekend is almost pathetic. “I was just having fun.” Suuure, posting to a Yahoo Finance website just for fun. He had no idea he might, uh, move the stock? And, seriously, doesn't he have something better (anything?!) to do with his life?

Uggh.

Which company would you invest in?
Which company would you select to work for?
Which company brings the leadership qualities that will leader to a sustainable advantage?

I know my vote. Do you?

Technorati Tags:
Leadership, Authentic, Whole Foods

There are typically 4 “C” Level positions at a company: CEO, CIO, CFO, and CMO. 3 of those have a high rate of influence in the board room and at the E*Team. One does not.

Perhaps this statistic will be revealing. The average Chief Marketing Officer (CMO) only lasts 23 months on the job (See June, 2006 Spencer Stuart study in Brandweek: Length of CMO Tenure Continues Decline). CMO job tenure has been moving in a downward spiral for several years. Think about that. 23 months is not even 2 years. Not enough time to influence more than 1 planning cycle, and certainly not enough time to influence a long-term direction. Which I would think a “C” level person should do.

In contrast to CMO turnover, the Spencer Stuart study revealed that CEOs average 44.4 months on the job; CFOs 39.4 months and CIOs last 36.4 months. So a CEO which has many interrelated functions to manage is given nearly twice the run way of a CMO.

This factoid is actually one piece of a much larger issue at hand. And it represents a crisis of enormous proportions.

The marketing discipline needs a revolution. And it’s coming at a dear cost. Pricing, perhaps the point at which value is either lost or gained is not maximized because value has not been (a) built due to lack of customer insights, (b) or, not communicated in meaningful terms, and thus useless, or (c) not credible given the company’s brand or position in the marketplace.

Rather than being a strategic thrust with clear charter, marketing within a company has become much like the children’s game of telephone. In this case, the knowledge and insights regarding customer needs are diluted and distorted on its way from idea to product or service. Organizations are not harnessing the power of their customers—and what knowledge they do have keeps leaking during the process. Decisions that drive fundamental profitability and competitiveness are distorted by this game. The inefficiencies in the traditional marketing process show up in many ways. One of the most insidious is that downstream groups don’t trust—or perhaps don’t understand or receive—the information and insights gathered by upstream groups. As a result, research is repeated and insights are lost. Companies incur higher costs from duplicated effort, and yet operate on fewer real insights.

We are not talking about hypotheticals here. Smaller firms are often able to out produce larger firms in terms of internal marketing efficiencies. Understanding and acting upon customer insights and avoiding leakage between concept and delivered product is what successful small firms do well. Small firms, however, often run into growth ceilings with regard to external efficiencies such as sales, distribution and the ability to generate buzz. Smaller firms have less leakage and distortion because they have fewer people involved in the process so they act as a more cohesive unit. The challenge is figuring out how to manage the marketing process in larger organizations so that they can compete against smaller competitors.

Jeff Hawkins and Palm are a great example. Jeff had an insight into what consumers really wanted. He did not offer the first PDA, but the original PalmPilot 1000 was different: it fit in a shirt pocket, it had handwriting recognition that worked, and it ran for weeks on two AAA batteries. It did not even try to be a “portable computer.” The product was well-designed, the functionality was limited, but focused appropriately, and the messaging was tight, realistic and believable. Jeff’s vision was clear and shared by Donna Dubinsky who ran marketing so it was executed throughout the marketing value chain, although they certainly did not call it that.

As Palm grew and generated more competitors, especially Microsoft’s PocketPC, Palm’s greatly expanded organization responded with bloated products that competed with long list of features. The battery life dropped, the messaging became less focused, and Palm lost its commanding market position.

What is going on?

There are 4 reasons why marketing has been distorted.
1. The charter of marketing is murky.
2. CMOs want high impact but pay a lot of attention to shiny objects.
3. Marketing is run as disparate functions with no clear owner.
4. The must-wins are unclear.

Lets explore each one of these, shall we?

1. Charter of marketing is murky.
While few people in most firms really understand the specifics of engineering and R&D, they all know what engineers do: they build stuff, invent stuff, improve processes, etc. By contrast, very few people can articulately explain what marketing does—and this includes most marketers and the CEO. In far too many people’s minds, Marketing is associated with t-shirts, PR, lame sales tools, brochures and the people who want to change the logo every couple of years. Great quote that captures what many of my clients would say:

“Marketing owns nothing but influences everything” is a phrase I’ve heard many times in my career”

And marketing people are viewed as doing “soft stuff” while the engineers, finance folks, IT and CEOs “lead the big stuff”. Alrighty then. These are fighting words. But then as I look at it, marketing really is not assigned one or two major objectives, is it? I checked around with CMOs I know and the issue is that they own “supporting” the major companies objectives but not directly owning anything.

As long as the question of what marketing owns is unclear, the role of marketing executives will never be successful in the long run. The marketing organization needs to have a few key metrics defined, then consideration needs to be put in place how long should it take to influence that objective.

And then here’s the final rub. Marketing is caught between product management / engineering who makes the stuff and sales who sells the stuff. When sales isn’t getting what they need from “corporate”, they turn to their marketing teams and when things are missing, they blame marketing. A situation in the last year I’ve had a chance to witness is when sales didn’t have the things they needed for a SMB market place push, and they blamed marketing. The reality is that that marketing didn’t have the content to create what sales needed, but it came across as a pointing the finger thing. On the other side, BU heads and folks who run Engineering think that marketing is adding little to no value as they focus discussions on budget – and so they focus on the amount of variable budget the marketing team has to spend.

And as a result, regardless of the goodness and talent of many CMOS, a great many are going to end up on the chopping block. I would argue until the category of CMOs get together and reform their role, no CMO is going to be successful.

2. We want high impact but we respond to shiny objects and silliness
CMOs are chartered with many things. Many, many things.

“Despite the importance of the marketing function, it isn’t uncommon to find, when you move to a new company, that some of the key executives won’t truly understand the role of marketing and, as a result, expectations between the marketer and those executives aren’t aligned,” explains Carter Cast, CMO of Walmart.com. “For example, the marketer may want to better understand the customer purchase experience by digging into customer service issues, only to find that other executives might question why he or she is doing that. To some executives, marketing might just be defined as advertising or marketing communications.”

The very word “Marketing” can mean anything from “product requirements” to “sales tools”. While few people in most firms really understand the specifics of engineering and R&D, they all know what engineers do: they build stuff, invent stuff, QA product, and make the stuff that ultimately leads to revenue, etc. By contrast, very few people can articulately explain what marketing does – and this includes most marketers and CEOs. In far too many people’s minds, Marketing is the stuff of logos and advertisements. Advertising, while costly and visible, is one tool of a many varied toolkit.

So while any CEO I know wants “high impact”, the actual thing they hold the CMO accountable for is something short of that.

As Ben Kline, the new CMO for Leo Burnett, explains, “many companies are asking the CMO to be the ultimate change agent, yet most aren’t prepared to give the new marketer enough time to be truly effective. The best situations are when the companies’ senior most leadership paves the way for the innovative thinking of the new CMO. In order to be successful, an entire cultural shift needs to be unveiled in unison with the newly appointed executive.”

A dinner with a colleague who is running a part of HPs branding has recently “been told” by the GM of the division that their team needs to have an “ad campaign like the PC group does”. And there were no metrics of revenue attached to this task but a need to ‘keep up with the coolness factor” of the PC dvision. And then they wonder why marketing gets chasticed for being “tactical”.

3. Functionally, marketing is run as disparate functions unlike any other parts of the business.
Most CEOs are not ignorant of marketing, but rather they have little knowledge or appreciation of how the individual marketing functions interact and function together. Thus, when something is going wrong, they cannot participate in its resolution. Lastly, we need a complete transformation of the way the organizations are lined up. Marketing has a “matrixed” or complex reporting relationship. When asked whether they have the resources to do what they are tasked with reporting to them, most laugh. Marketers are expected to “influence” the other parts of the organization for alignment. Does engineering need to do this to make their objectives? No! So of course the deck is stacked against CMOs.

First off, in many firms, no one person owns the entire marketing organization. Sure, there is almost always a “VP of Marketing,” but this person frequently does not have responsibility for all four marketing functions. In some organizations, Product Management reports to Engineering or Product Development. In other organizations, Field Marketing may report to Sales, or Brand Management may report to “Corporate Marketing,” a function that is generally run and populated by PR types rather than marketers. In organizations where the marketing functions are split, they may not come together until a Senior VP with lots of other responsibilities, the President, or even the CEO. I can guarantee that very, very few of these senior executives are looking at and managing marketing as a single value chain of inter-related functions.

Another factor in the fragmentation of marketing is that all of the functional areas do not share a common vocabulary and the communication between functions is often problematic. Imagine playing the game of telephone, but where they players are using job-specific jargon.

4. The must wins are unclear.
Finally, the lack of coordination means that marketing wide “must wins” are not clearly understood. Activities like pricing which are incredibly important are treated as a black art or simply as impenetrably complex. Downstream groups either don’t get—or don’t trust—information and insights from upstream groups, so costly and time-consuming research is repeated and knowledge gaps are not well understood. The result is that customer wins are easy to measure, but the more informative customer losses and risks to the business are not studied, much less measured.

What is the underlying root cause?
There is no ownership of the full value chain. A CMO at any company doesn’t own all marketing. They don’t even own the vision for the market. They own parts of the pie that are partly owned or eaten by other parts of the organization.

The vision for the market is not often owned by the CEO. Each piece reports into the different functional focus. And the must wins are unclear or not clearly understood across the organization. Activities like pricing which are incredibly important are treated as a black art of simply as impenetrable. Downstream groups either don’t get – or don’t trust – information and insights from upstream groups, so costly and time consuming research is repeated and knowledge gaps are not well understood. The result is that customer wins are easy to measure but the informative customer losses and risks to the business are not studied much less measured.

What must CMOs do? What must CEOs do?
So what can be done?
What must CEOs and CMOs do?

First, we need to acknowledge the role these interdependent groups have on each other and for the company. These roles comprise the key set of knowledge-based activities that connect the customer needs and desire back into the company, and are the biggest source of un-optimized activity in most firms. I propose we need to create a Marketing Value Chain much like supply chain management united tactical parts of a company into a strategic and cost-saving initiative. We need to addresses the knowledge efficiency of marketing: product management, product marketing, field marketing and brand management.

I would propose we have a Marketing Value Chain Management is the management of the entire Marketing chain, from product requirements to product marketing right through to sales and the final customer. The marketing roles comprise the key set of knowledge-based activities in most firms, and the biggest source of unoptimized activity. Just as Supply Chain Management addressed specific, measurable goals, the Marketing Value Chain Management would have three primary goals:
1. Increase competitiveness by increasing the relevancy of the solution
2. Increase sales by being better positioned and understood, and
3. Increase gross margins by lowering the amount spend on messaging

Technorati Tags:
Business, Product Management, Palm, CMO

It’s that tight grouping and bond a customer has with a company, a brand.
And every company — small or big — can create it, keep it, grow it or lose it.
Do you know what forms that bond for you and your company? Because that, baby, is the secret sauce of company growth and success.

5 things I think create customer affinity.

1. Quality. The components, and the final product. Does it do what it needs to do and thus create value. In the case of a Bottega handbag, it’s the use of vegetable dyes that causes leather to be incredibly soft, but in the case of the wall street journal it is the invisible resources of great writers and editors who take the time to develop an idea that needs developing.

2. Workmanship. The way stuff is produced ultimately matters.

3. Buying experience. What is it like to buy the product. Is it being sold by a surly teenager, a condescending matriarch or a joyous enthusiast of the product. Look at the Apple retail store vs. The best buy retail shop. Paying about the same, training actually about the same, and yet one experience is clearly screening in people who want to enable a great experience.

4. The post-buying experience. I make a point of saying this because to me it’s just as important as what happens before the credit card is swiped. If I decide I don’t like the color I picked or the whatever, I want the opportunity to come back. Not as a 2nd class citizen because I don’t have new dollars to spend but as a client who has already paid and already shown my commitment. Most of us treat prospects as better than our customers. Do you? I have a cue of what I’ll work on and I always work on current client work before I talk to new people.. And some would argue that that is the wrong priorities for someone who also needs to make rain. But I know that every time I satisfy (or not in case of the competitors), I give them a reason to refer me and a reason to buy us again. I don’t have to worry about replacing that customer. I just need to keep the ones that already love it.

5. How you use market power. Here’s the thing. A company once they really start making it sometimes try and figure out how to “profit optimize”. By hiring lower quality people, or by making things repeatable and losing the Zen of the sales process or some other thing that fundamentally “streamlines” out the special experience of what you have made. One company I know has raised their prices by 500% as soon as they gained category leadership. Whole I commend that at some level, it has to come in balance for affinity. I, for example, throw a thought leadership dinner. Major who’s who people come to it, but the first seats go to clients first. You know why? Because it’s my way of subtly saying thank you for believing in us, supporting us and co-creating with us the firm we’ve become. Without them, we’d not be here holding such market authority and sway. So after you’ve arrived, don’t’ dump the people who helped you along the way. Celebrate them.

But let me challenge that thinking.

If we knew more about our customers or even our prospects, we might change what we product in terms of experiences.

Let me suggest this.
When I google shoes, which I am apt to do, I often get served up sites that help me to buy shoes. But let me propose that this is too limited.

I may not be interested in purchase. I might be interested in a much broader list of things related to how I want to create my experience. I might want to make shoes, design shoes, support others making shoes, show off my shoes, review others' shoes, discover new artists, study the history of shoes and learn more about what is coming up in future seasons. In other words, my experience for anything isn't just about purchasing the direct thing.

And yet most websites, most experiences are focused on a linear path of what companies think I want, or rather what they want me to want.

So when you are considering what the customer experience is of your stuff, think about the potential range of customers' (existing or future) desires:

1. Design
2. Manufacture/ make
3. Discovery
4. Source parts for...
5. Being wished for
6. Selection
7. Purchase
8. Being shown off
9. Discussion / review
10 Resale

I'm not suggesting this is exhaustive. I'm suggesting that this is at least one "top 10" list for a way of thinking about our experience.

This would probably be a great list to think of when designing both products, experiences, and web sites.

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Consumer Marketing, Business, Product Management