Know Your Enemies

Creating differentiation: how much do you know about your competition? 

“You don’t have to be the best, you just have to be better than your competitor.”*

Successful marketing executives know a lot. That's how they create differentiated value propositions.

But first, please don’t tell me you think competitive intelligence (CI) is espionage. I’m not naive – there have been far too many cases to pretend industrial espionage doesn't exist and some major countries are well known to engage in spying for their companies.

Ethical competitive intelligence has a long history, going back centuries. The first published mention dates from 1876, in an Institute of Civil Engineers discussion of carriage design. It gained popularity in the 1980s following the publication of Michael Porter’s Competitive Strategy,** now in its 60th printing. Today, most major corporations have a CI function and there is even a professional organization of Strategic and Competitive Intelligence Professionals (SCIP).

I actually got my start at 18, as a mobile ice cream salesman. Ice cream sales is a winner-take-all business – if you get to a swimming pool full of kids on a hot summer day 10 minutes after your competitor, you sell nothing. A long-standing competitor straddled the routes of a friend who was selling for the same company I did. At the end of each day, we plotted his route until we knew exactly where he was when (this was before cell phones...). Once we had the intelligence, our sales skyrocketed, while his dropped to near zero. He abandoned the route within weeks and we had free rein for the rest of the summer. I didn't know I was doing CI. It was purely a matter of financial survival.

In my first corporate job, marketing aircraft tires, I could predict within 1% the price our competitors would offer, through a thorough analysis of bid performance. My technical team was able to assess the performance characteristics of each tire in our competitor’s line, which enabled us to arm the sales force with the information they needed to increase sales. We gained share every year.

Perhaps surprisingly, the first thing you need to do is learn as much as you possibly can about your own business, before you try to understand the competitor’s. You’re only as good as your ability to impact your business – you can be the greatest analyst in the world, but if you don’t understand your own business well enough to know what intelligence is needed to impact a decision, you’ll fail. And, as you deepen your knowledge of your business, you’ll gain incredible insights into the competition. Faye Brill, who was CI chief of Ryder Systems, Inc., ‘believes that 80% of what you need to know about your competitors is right inside your company.’***

You’ll find this easier than you might think. Consumers and “clients are often happy to provide feedback to soften the blow of losing a contract”**** or selecting another product.

As Chinese philosopher Sun Tzu wrote: “If you know your enemies and know yourself, you will not be imperiled in a hundred battles.”

Next: What do You Need to Know About Competition?


*Elix, Doug, SVP, IBM, conversation with the author
**Porter, Michael, Competitive Strategy, The Free Press, 1980
***DeWitt, Michelle, Competitive Intelligence, Competitive Advantage. Grand Rapids, MI, Abacus, 1997
****“Get something from losing,” One Minute Articles (link no longer active).

Hammering a Nail with a Screwdriver

Awareness Building

Marketing, in many respects, is about building awareness. After all, if customers aren't aware of your offering, they won’t buy it.

Unfortunately, awareness building is perhaps one of the most misunderstood aspects of marketing, by both non-marketers and inexperienced marketers alike.

In your marketing career, you've probably received an ad-hoc request to run an ad, post a press release or write a brochure. Each of these has a place in the marketer’s toolkit, but far too often someone reaches for the tool before adequately assessing the situation. It’s like trying to hammer a nail with a screwdriver because that’s what you have – it might work, but the odds are against it.

Successful marketing communications requires discipline. While there are occasions when you need to run, say, a spot ad as part of an existing initiative, you’ll be better off if you've done the heavy lifting of developing your marketing strategy and plan. Every single communication should be thought through and evaluated against the selected target markets and customer sets and the value proposition, whether it is an individual Tweet or a comprehensive thought leadership campaign. As a marketing executive you can’t, of course, micro-manage every detail, but that’s where the awareness-building plan, with associated tasks and responsibilities comes into play. Everyone should know his or her role, expectations, accountabilities and how he or she will be evaluated.

Start with the value proposition

A value proposition is a clear statement of the promise of value (expressed as a benefit or business result) you will deliver in answer to a customer need or problem. It answers the question “why should a customer buy from us?” Writing a great value proposition is neither easy nor quick, but here are some steps that will help.

1. Clearly and precisely identify the target segment you wish to communicate to. You may have multiple segments which, of course, means you’ll need multiple value propositions.
2. Prioritize the customer’s needs or problems identified in your insights work. 
3. Then list the primary benefit your offering provides for the expressed problem. For businesses, these often focus revenue generation or cost reduction; consumers might see more benefits in terms of status, ease-of-use or service and support. A useful exercise, once you've developed the initial benefits list is to look at businesses as consumers and vice versa. 
4. Compare this to competitive offerings and list the key points of differentiation.

With this information, write out the value proposition. Here is a “starter” I've found helpful:

For [buyers in priority segments] who need [statement of customer's problem], we provide [statement of the solution / key customer benefits].

Unlike [primary competitors], our offering has / does [statement of major points of differentiation]. 

Then test the heck out of it, both internally (especially with product developers and sales personnel) and with a sampling of target buyers.

With a differentiated value proposition, your marcomms team has a tool to create a powerful awareness-building strategy through the available communications channels: traditional advertising, digital advertising, website, direct, social media, events, word-of-mouth and point-of-sale. Assuming they know their stuff, they'll do an outstanding job.

Next: Creating Meaningful Differentiation: How Much Do You Know About Your Competition?

Don't Talk About Marketing

Marketing Strategy and Planning

Many marketing plans look somewhat alike: executive summary, situation analysis, SWOT, objectives, marketing strategy, action plan and financials, with assorted appendices.

And most are equally ineffective.

The biggest deficiency is the lack of a business case: what business results will occur, and for what cost. This is not easy (see the post Meaningful Metrics), often because of the difficulty of proving, for example, the impact an awareness-building initiative had on sales. But building the business case is an absolute must.

It starts with the company objectives. Are you pursuing organic growth? If so, how? By expanding the customer base for current products, increasing sales to existing customers, or entering new markets? Then (yes, this is simplistic, my apologies), how will each marketing initiative support the objective?

Take increasing sales to existing customers. One organization, with two distinct offerings, wanted to increase cross-sales into accounts where one offering dominated. The challenge was that not only did the account executives not know enough about the other offering to create selling opportunities, they didn't know who in the organization to talk to. Marketing got sufficient funding by working with sales to agree on account penetration objectives and identify what programs and investments were needed to "open new doors" (offerings education, easy-to-use collateral and reference-selling coaching).

In another case, the "objective" was to increase sales, based on the assumption that was the only way to increase profits. The research marketing then unearthed a critical insight: consumers saw multiple benefits to the product that were not being communicated. This led to a new communications strategy that both increased unit profits as well as unit sales.

These plans succeeded - that is marketing got the budget it needed - because they focused on business results. The material that makes up many typical marketing plans was available during the strategy discussions, but not "presented" - when the rest of the business leadership team asked specific questions, the marketing team knew the answers.

As Andy Berndt, Head of Google's Creative Lab says, “my advice to marketers is don’t talk about marketing. Bring the CEO ideas that can make the business better or solve a problem.”*

*"What Do You Want From Me: How High-Performing CMOs Exceed Expectations," Spencer Stuart, November 2010

Winning Over Time

Market insight and analysis

Insight is where the game is won and lost: without superior insight, winning over time is simply not possible. Here’s what two leading CMOs have to say:

“The CMO role is getting the company to understand where the opportunities are, taking a very strong and upfront strategic approach so that the company invests where the opportunities lie and where the company has the capability to win,” said Joe Tripodi, chief marketing and commercial officer of The Coca-Cola Company. 

“Great CMOs understand the customer," says Maureen McGuire, Bloomberg CMO. "They can imagine the future and understand what the world might look like three to five years from now. If you believe the CMO should be the accumulator, aggregator and ‘understander’ of customer data and be the one to conduct market research, then yes, the CMO needs to incubate and imagine the future and the new products and services.”*

Creating differentiation

Success means creating differentiation. This requires capturing “change insight” before rivals. The real battle is which organization “sees” the underlying change more incisively than the competition. Often this means changing the shared mental model of the company leadership. Answering questions such as these will help the successful marketing executive become the chief “understander” of the evolving marketplace:

• What are the pain points? What keeps people up at night?
• Who’s responsible for solving this pain point on the client side?
• Who might influence their thinking and decisions?
• Who would they call today to solve their problem?
• How do we compare and contrast to the other choices in the minds of the problem owners?
• What is the conventional approach the problem-solving owner can expect our competitors to take?
• How is our approach to solving this problem different?
• What incremental value does this provide to the client?
• What must we do to enable our clients to stand out?
• Why should they believe us? Facts, statistics, customer references, thought leadership.

Next: Don't Talk About Marketing

*“What Do You Want From Me? How High-Performing CMOs Exceed Expectations,” SpencerStuart, 2010

Setting the Marketing Agenda

The marketing agenda is critical to your success. It lets others know what is important and creates a framework for evaluating resource allocation and hiring decisions. While developing the marketing agenda will require input from a variety of constituencies, controlling it will make or break the CMO.

Successful agendas focus on business objectives which, for the CMO, generally fall into one or more of the following categories:

• Acquiring new customers and growing market share
• Retaining high value customers
• Increasing brand awareness
• Leading the charge into new areas

Whatever the objective, effective CMOs focus on five distinct processes:

• Market insight and analysis
• Marketing strategy and planning
• Awareness building
• Sales readiness
• Support

Upcoming posts will take each of these in turn.

Next: Winning Over Time

What Have You Done for Me Lately?

The third year.

By now, you've gone through two annual performance reviews (good ones, if you've done everything right), and you’re really in the groove. You know the markets, the competition, the product, the organization and you've learned what levers to pull to get things done.

This is your most dangerous time. But within the danger, there is also opportunity, if you recognize and seize it.

Now’s the time to “get out there, try something and learn from it – you’ll make mistakes, but you must learn from each one. The metrics available today allow learning in a real-time manner that was never possible before,” says Sandra Zoratti, Global VP Marketing, Ricoh. “Avoid paralysis and fear about trying a new way.”

The risk is complacency on your part and boredom on the part of the rest of the organization: your team, your peers, and your boss. Let’s take them one at a time.

1. Your team. You've done everything right, weeding out the chaff, selecting new talent and providing everyone with challenging opportunities. But they've now been doing the same thing for two years, and are starting to get restless. The stars (like you) are thinking about their next move and the good performers are falling into a routine. If you’re not careful, you’ll find a team that is quietly becoming dysfunctional.

2. Your peers.  What was once unique is now mundane. The good news is that they've now learned what marketing really is, are asking better questions and starting to develop a marketing mindset to everything they do. But they’re also starting to ask “what have you done for me lately?”

3. Your boss. Your most difficult – or easiest – challenge. His or her world has changed in the last two years – the success you've helped create has both positives and negatives. Of course, your boss is delighted with the results, because that helps with the board. But the board is starting to ask what next? and wondering if s/he can take the company to the next level. S/he is, in turn, wondering the same about you.

Never forget, says Eric Fletcher, CMO, McGlinchey Stafford, that “relationships trump everything – science, metric frameworks – it about connecting relationships and leveraging them. Make sure you have regular, frequent in-depth dialog with the CEO, COO, CFO, the rest of the c-suite and the governing board. Most marketers get into trouble because they are operating out of an island.”

Next: Setting the Agenda

Day 91

The next nine months.

Phew.

Day 90 has arrived, and you've successfully managed the transition. Take a break, have a nice relaxing dinner and don’t think about what’s next.

Until day 91.

Now is the time to consolidate and build on the successes you've created in the whirlwind. You've got your team in place, you've begun building coalitions and know what has to be done. What you do next will ensure your success through the next two years.

Says Karen Masullo, EVP Social Media, Firestorm, now’s the time to “work really, really hard. There’s no room for laziness in marketing. If I don’t drive actionable items to the sales team, I’m not doing my job. Never get too complacent. You have to take a stand. Stick to your guns – you’re working with senior leadership, and you must give them your best insights and recommendations. Finally, your responsibility is to unify senior teams, especially technical teams. You need to know everything about the company.”

Visa Global Chief Marketing, Strategy and Corporate Development Officer Antonio Lucio, who has beat the average, says the secret to longer CMO tenure is simple: “You have to be effective and deliver strong business impact.” He’s been able to stay in his role by delivering against three parameters: business results, brand results and broader organizational impact. CMOs who last, he says, have an impact as leaders that has “probably been felt more broadly than in just the marketing agenda."*

Pete Krainik, Founder and CEO, The CMO Club, who’s held a variety of CMO and senior marketing positions at M&M/Mars, Avaya and DoubleClick says “Focus all your energies in things that help build relationships with customers – everything else is just noise. It is easy to get caught up in all the other stuff.” And never forget that “execution determines success. Great ideas without execution don’t matter.”

“Listen,” says Gary Slack, Chairman, Slack and Company. “Go see customers, after you've spent time with the rest of the company. Get to know your staff. Work hard on relationships with peers. Talk to prospects and to defectors. Develop a deep understanding of customer awareness, attitudes and perceptions.”

Next: What Have You Done for Me Lately?

*Rooney, Jennifer, “Average CMO Tenure Hits 43 Months,” Forbes, CMO Network, June 14, 2012.

Where Do You Start?

The first 90 days.

“The first thing you should do is read, or re-read, the book The First 90 Days*,” says Nigel Dessau, CMO of Stratus Technology and ex-CMO of both AMD and StorageTek.  “In the first 30 days of any new job I've taken, I gather data, qualitative and quantitative. I’m not choosy, at first. I meet with as many people as I can, and then review every night for what I've learned. From that I come up with six focus areas, two of which are most likely going to be people and budget. Then I sit with the leadership team and discuss. And then I discuss with my marketing team, to get alignment. What ensues becomes my plan for the next several years, which is the average tenure of a CMO."

Let’s go to the source: “The actions you take during your first three months in a new job will largely determine whether you succeed or fail, ” writes Harvard’s Michael Watkins, author of The First 90 Days. “The stakes are obviously high. Failure in a new assignment can spell the end of a promising career.”

Sobering.

Luckily for us, Watkins has researched the success and failure of new executives and offers a checklist of things you need to do :

1. Promote yourself. No, don’t hire a publicist. Mentally accept that you've been promoted into a new position that will require different skills than what’s made you successful in the past.
2. Accelerate your learning. Go into learning overdrive – spend as much time as you can reading about markets, product, technologies, systems and structures, and especially the company culture and politics.
3. Match your strategy to the situation. Start-ups are quite different than product line turnarounds which are quite different from new market entry situations
4. Secure early wins. This may be the most important thing you can do: nothing succeeds like success. It builds personal credibility.
5. Negotiate success. Your new boss thinks you’re the right person for the job, but isn't totally sure yet. Schedule time, weekly, to go over your assessment of the situation, his or her expectations, reporting style and the resources you will have available.
6. Achieve alignment. With each promotion, you’ll find that you “do” less and have to “get more done.” The only way to achieve this is to align, or re-align, the structure with the strategy
7. Build your team. Evaluate the team early and, if necessary, make tough calls. You can’t afford to depend on non-performers.
8. Create coalitions. More important jobs increasingly depend on your ability to influence people who don’t report to you. Make them your allies, and you succeed. Make them your enemies, and you fail.
9. Keep your balance. You’ll be drinking from a fire hose – you’ll find that the demands on your time are more than there are hours in the day. Find ways to keep your perspective and don’t be rushed into making risky decisions.
10. Expedite everyone. Bosses, peers and especially direct reports – the quicker you can get everyone up to speed, the better your performance will be.

Even - or maybe especially - if you've been in your job for some time, this is sound advice. Take some time to mentally promote yourself into that next position and contemplate what it would take to succeed. Then, follow these steps as if you were already in the position.

You may get that promotion faster than you think.

Next: Day 91

*Watkins, Michael, The First 90 Days, Harvard Business School Press, 2003

You're Not an Island

Cultivating the best talent.

To accomplish your objectives, you’ll need to rely on your team, which requires a combination of recruiting, training and leadership. “Your team is what makes matters most,” says Kristin Hambleton, VP Marketing, Neolane Communications, now part of Adobe. "You’re not an island – you need collaboration and leadership.”

Successful marketing executives recruit the best people they can. 

Kimberly Clark CMO Tony Palmer says, “the smartest thing I did when I started was to go out and hire four or five of the best people I could find in the disciplines. They were people who had a lot of weight in terms of skill set and experience, and that helped enormously. I think that very early on, the organization saw them as a skill set that they didn't recognize, and they tended to therefore be invited in more.”*  Adds Tony Wells, CMO of ADT Security Services, “surround yourself with good people – hire people better than you.”

Then, they build their team’s capabilities. 

Most importantly, says Ted Rubin, Chief Social Marketing Officer of Collective Bias, “teach mid-level marketing execs to speak to the c-suite in a way they understand – learn to speak their language – talk to me about sales / conversion.” Says Wells, “always look to develop people – make it possible for them do the best work of their career.” And Bloomberg CMO Maureen McGuire says “development of people is a daily task…It’s about coaching people through the process, helping them to understand the business and what’s good or bad about the work that they've done at the moment.”**

Finally, leadership is critical. 

“Know yourself, your job, your people, their strengths and weaknesses, says Tony Wells, CMO ADT Security Services. There should always be something exciting going on. Create energy.” Unfortunately, says Karen Masullo, EVP Social Media of Firestorm, “many marketers who move into executive positions tell their teams what to do without soliciting their input – allow your team to help you. Avoid being dictatorial.”

The management consulting firm Hay Group suggests using a variety of leadership styles,*** noting that a poor leader uses a single style, effective leaders use at least four and superb leaders can use six, and know when to use them:

Insource or Outsource

First Things First discussed the first of five key things the CMO must do well*, getting the marketing mandate right. Allies, Agnostics and Antagonists focused on the second, building meaningful relationships with functional and business leaders. Meaningful Metrics addresses agreeing on how to measure success. 

The fourth focuses on collaborating with external partners.

Once you've got measurable objectives in place, you need to determine how to accomplish these objectives. You’ll need to carefully evaluate the capabilities of your staff against those objectives and then determine whether to retrain, hire or seek outside assistance.

Luckily for you, marketing may be the most outsourced function in business. There are a plethora of advertising, brand, marketing communication, marketing strategy, public relations, demand generation, digital marketing, marketing research, print and social media agencies, all of whom provide specialized skills that few but the largest of marketing organizations can afford to keep on staff.

How you manage these firms can make or break your success.

First, determine exactly the type of help you need. For this, you need to be very, very clear on what needs to be done. There are subtle but important differences in the types of firms and the types of personnel they hire. Many of them, like your organization, look to expand their offerings to meet the needs of their clients. Some of these expansions make sense, but only if they deliver real results and, importantly, provide real experts. I, for example, am immediately skeptical of the branding firm that launches a PR or social media offering, which require different skill sets than their core business.

Therein lies the key. You’re not hiring an agency; you’re hiring people and a culture. 

Says Maureen McGuire, CMO of Bloomberg, “there may not be a major difference between what the different agencies do, but the team that is working on your business will be different. The chemistry that you build with that team and their ability to get fired up about what they’re trying to do and bring in new ideas is what counts.”*

*“What Do You Want From Me? How High-Performing CMOs Exceed Expectations,” SpencerStuart, 2010 

Next: You're Not an Island

Meaningful Metrics

First Things First discussed the first of five key things the CMO must do well*, getting the marketing mandate right. Allies, Agnostics and Antagonists focused on the second, building meaningful relationships with functional and business leaders. 

The third is agreeing on how to measure success.

Once you've agreed on the marketing mandate and started the process of building meaningful relationships, it is absolutely imperative that you agree on how success will be measured.

Joe Tripodi,  Executive Vice President and Chief Marketing & Commercial Officer of The Coca-Cola Company, advises CMOs to make the CFO a partner in their leadership teams as they develop marketing budgets and metrics. “Unless you have full transparency on everything going in your budget, you’re going to continue to have this marketing-as-a-black-box philosophy. Once you bring people into the tent and then say, ‘Listen, we have nothing to hide here,’ and jointly determine the metrics for measuring marketing effectiveness, you take marketing out of the little black box”

Says Maureen McGuire, CMO of Bloomberg, “every marketer has had this kind of experience: You want to run an advertising campaign to raise awareness and then everybody’s looking for leads and revenue and you say, well, the metric to measure this is whether or not we actually raised awareness. But people are saying, ‘How many leads did it drive and how come my phone wasn't ringing off the hook?’ One of the most difficult things to convince people of is that you should measure your marketing effort according to the objective you’re setting.”*

John Dragoon, CMO of Houghton Mifflin, says “we've rotated (maybe over-rotated) to marketing metrics – I’m fond of the term ‘the ROI of a handshake.’ No one’s written about the softer things – just because you can’t measure it doesn't mean it shouldn't be done.”

So, how do you set meaningful metrics?

Allies, Agnostics and Antagonists

First Things First discussed the first of five key things the CMO must do well*, getting the marketing mandate right. 

The second is building meaningful relationships with functional and business leaders.

After the CEO, the most important constituents for the CMO are his or her peers. Senior leaders look to the CMO to be a thought leader on the businesses’ critical issues. They want the CMO to learn how other functions and businesses work and what their challenges are and be willing to engage them early in the development of marketing plans.

“I want my CMO to be sincere about enabling cross-functional success; he’s in a position to tear down walls. Get out of the office and spend time with customers, at the factory, attend the national sales meeting. Take an interest in other functions,” said the president of US sales for a consumer products company.**

“As much as possible, try to understand where they’re coming from and make them the hero. Come in humbly and say, ‘You make great things. I can help you tell the world about them. Let’s figure out how our skills are complementary,’” said Andy Berndt, Head of Google’s Creative Lab.***

This is going to require all the political and networking skills you've acquired over the years. You’ll find allies, agnostics and antagonists:

First Things First

Congrats! You're a Marketing Exec - Now What??? listed the five things SpencerStuart* identified that CMOs must do well:

• Get the marketing mandate right
• Build meaningful relationships with functional and business leaders
• Agree on how to measure success
• Collaborate with external partners
• Cultivate the best talent 

Let's take these one at a time.