Marketing Productivity Blog

According to the CFO Magazine article here, Finance and Marketing don’t see eye to eye on measures of return.

That’s Breaking News, right?  Wonder if that has anything to do with the lack of focus on Customer Value as a metric.

Chart below from the CFO Magazine article:

Comments?  Have you tried to talk with Finance about Return on Marketing?  What happened?

According to AdWeek, CMOs with agency backgrounds (code for Brand-ing folks?  As opposed to real Brand Managers) are being replaced by those with a broader career experience across several disciplines.  Folks at the top want CMOs that can actually drive change down into the operational organization and quantify the results of their work.  That’s what a Product or Brand Manager, in the original meaning of these phrases, would do.

Sounds like a good idea to me.  The source for all this press commentary is here.

An article in Optimize Magazine points to a study by TowerGroup that claims:

Customer retention and satisfaction, as well as better competitive advantage among financial-services firms, are directly linked to use of business-process management practices. 

There’s even a neat little graph under a section called The ROI of BPM that shows how the value of chasing a BPM project changes over time and eventually creates competitive value.

This is all pretty intuitive - the less you screw up the better your customer retention should be, right?

Anybody seen the TowerGroup report?  How many cases did they study?  Ron?  This seems right up your alley…

Chief Branding Officers Take Note…

Most people who read this blog are probably not all that interested in mass media as a marketing vehicle.  But I think just about any Marketing person would benefit from reading this incredibly stark view of the future in the traditional agency / mass media complex in this article over at Ad Age.  Yikes!

I don’t doubt that the cost structure of the mass media complex will have to change, especially on the agency side.  I mean really, you have Google trying to facilitate the purchase of radio and print through a web interface, for crying out loud.  Agencies should really start to push deeper into the corporation and become business strategy consultants.  There are a ton of smart, creative people in the agencies.  Perhaps they could help out with this Deconstruction of Marketing thing.

But the mass media itself?  They will just have to figure out what their place is in the world, and adapt.  I suspect that means leaning more towards direct (drive people to web site or call center) and away from “branding” in the traditional sense.  This has already been happening among the smarter players.  Perhaps we need to lose a major network to “cable only” status in order to funnel more dollars to fewer avails and increase quality.  Just remember, radio was supposed to kill print, FM was supposed to kill AM, network TV was supposed to kill radio, and Cable was supposed to kill network TV.

Quote from article: When Chairman-CEO A.G. Lafley (Proctor & Gamble) says, “We need to reinvent the way we market to consumers,” he doesn’t mean, “We need to find a place to amass 30 million people at a time so we can tell them not to squeeze the Charmin.”

Rich, I tell ya.  Very well written and quite funny, at least sitting on this side of the equation… your thoughts?

SearchCRM (TechTarget) tells us in this article that satisfaction is falling because it is being measured more accurately.  Then they go on to say that most call centers use lousy, non-strategic metrics to measure performance.

I’m confused.  Perhaps call centers are being too nice to customers but can’t measure the negative effects?

Been a while since I’ve read an article deserving 5 stars, but this one by Dr. Michael Hammer through the Sloan School at MIT is a “must read” for those interested in the Analytical Culture issue.  Titled (warning, the article is a 10 page PDF) The 7 Deadly Sins of Performance Management [and How to Avoid Them], it is chock full of classic mis-measurement examples and the cultural reasons they happen, along with commentary from four managers who have been successful building the analytical culture at their companies.

The seven sins (links are to examples on this blog) are: Vanity, Provincialism, Narcissism, Laziness, Pettiness, Inanity, and Frivolity.  The author provides a four step solution to purging the corporation of these sins which sounds very much like the solution we’ve managed to create surrounding web analytics, and also addresses the Fear of Analytics question.

So here we have the analytical culture problem nicely outlined by a person with substantial credibility (as opposed to outlined by a raving blogger).  We still have the same problem though - actually doing something about it.  The four step solution provided sounds like the right “words”, but I’m still itchin’ for a bit more “How To” in the answer.

How, specifically, do I “create an organizational culture and value system that encourages the disciplined use of metrics for ongoing performance improvement rather than regard them as threats to be feared or opponents to be vanquished“?

I love it when you talk that way, Doc…

But seriously, of course you need leadership, you need to measure the right things in the right ways, and some reward for changing behavior and accomplishing goals would be nice, but I think it goes deeper than that.  For example, there are fundamental structures in place that conflict with the mission, particularly in Marketing.  Witness, the inherent conflict between Periodic and Customer Accounting.

If the entire company is marching to a quarter by quarter drum, and many people are rewarded based on the results of that march, how do you get these people to focus on the end customer-oriented metrics that really matter, and are probably not best measured in the periodic quarterly format? 

Isn’t this conflict with the quarterly financial reporting culture the same reason many companies go private?

Check out the article here.

This article from CRM Magazine both makes fun of the current “Customer Experience” bandwagon and provides a solid suggestion (I think) about how to properly use an online community.  Though it’s not spelled out in detail, I’d assume creating a “democratic online forum where between 300 and 500 customers get to know each other” implies you first understand your customers from a segment or profile perspective, and then intentionally select a representative group or an intentionally skewed group to join the community.  Reason?  When you know who you have making suggestions and comments, you can put these comments in context, try to take action, and measure the results, which I think is something Ron is looking for in the Customer Experience Management debate.   This as opposed to simply hanging a “community” off the side of your web site and taking comments and suggestions from all comers. 

If you can’t put the comments in context (how long have they been a customer, what products do they use, what customer service experiences have they had, etc.) all the comments are barely worth a scan.  I mean really, what if you took an action based on the comments of unprofitable customers that destroyed the value of your business to your most profitable customers?  That would not be a very prudent use of “Community”, would it?  Don’t laugh, I have seen it happen - both online and offline.

Check out the article here.

I’ve written pretty frequently about the Marketing / IT interface.  This article from CIO Magazine provides a firm roadmap on how to integrate and manage a development team consisting of IT and non-IT people.  The really interesting thing going on with this IT / medical team is some of the clinical folks ending up learning so much about IT processes and techniques they crossed the border and became IT folks!  That is some career move, and testimony to the successful management of the development team.  Check out the article here.

Article with the title above, published here, is apparently creating quite a stir in the advertising media community, particularly among the “brand” folks.  One of the core points is that all media will become measurable and thus “accountable” in terms of the effect ads placed in the media have.  While I’m not sure that’s going to happen in my lifetime, the initial thrust is that online media better get their crap together in the measurement area and define some standards, because the new “Agency of Record” is going to be an analytics shop that measures, in a centralized way, the effectiveness of all advertising a client is running.  The unspoken implication here is this agency would essentially have the power to fill or kill any campaign based on performance.  Neat idea.  Two comments:

1.  I was selling cable television ads in the mid 80’s when Nielsen, despite intense pressure from the broadcast networks, started metering cable homes “in the box” (wired into the set top controller).  When the first hard numbers came out, they absolutely blew away all the estimates of the cable viewing audience.  Turns out a lot of cable viewing was not captured in the paper diaries, and the meters picked it up.  Go figure.  You mean what people report to you in a survey doesn’t reflect their actual behavior?  C’mon, that can’t be true (being sarcastic for those who don’t know me).  Anyway, network cable advertising absolutely exploded after this, and all this money fueled better programming.  That’s when “Big 3″ share really started to tank.

In other words, we have seen this movie before.  Money follows accuracy.  Instead of resisting this idea, these brand folks ought to embrace it and hang on - it’s going to be a wild ride.

2.  The idea of a central agency being the “Master Record Keeper” is an absolute must, since if each agency runs it’s own success metrics, each agency will claim success that really belongs to another agency.  You need to have a source of the “one truth”.  I have argued this same point many times with companies that have analysts spread out into each of the silos.  While it is possible this could work, you would need an iron fist to enforce consistency and remove the tendency of an analyst to paint a better picture of the silo his boss runs. 

Just trying to make sure every silo is being honest would take a huge amount of work - why not just centralize it in the first place, and do the work once?  If all the analysts report to a CAO who basically is a 3rd party with no axe to grind, then the CEO is going to get the straight picture - including all the cross-silo effects, which is usually where all the ROI is hiding.  For example, you are not going to get an analysis that includes the “true cost” of a marketing campaign that causes all kinds of problems in customer service from an analyst in the marketing department, it’s just not going to happen.  You need a 3rd party view to get to the Root Cause and start fixing broken processes that affect the customer experience and waste a ton of money.  There are very positive benefits to having a group of analysts who each are experts on a single piece of the company under one roof, interacting and discussing business issues.  That’s how you get breakthrough thinking, how you fix the broken cross-silo processes that drive customers crazy.

It’s great that we are all becoming more accountable, but let’s get down to the meat of the matter and kick analytics up to the C level and out of the silos.  How long will it take before the CEO finds out the silo analysts are “torturing the numbers”?  Do you want to be there when it happens?  It’s not pretty, let me tell ya.  I’ve seen it.

In case this doesn’t make any sense to you, here is an example.  How many customers does your company have?  Ask 5 people, you will get at least 3 different answers (if you get any answers at all) and they are all probably wrong.  The proper answer is “that depends on how you define a customer”.  Now, picture each silo with their own set of KPI’s, many based on the “number of customers” in some way and you start to understand what I am talking about.

Like I said, not pretty.  A full-on, CEO’s beating forehead vein kind of thing, a “We’ve been telling Wall Street we’re running this company based on analytics and now you tell me that we can’t even agree on how many customers we have?” kind of meltdown.

Maybe you should start thinking about centralizing your analysts now?  Or at least talking about it?

Article here, from MultiChannel Merchant. 

Interesting theory on why the internal organization of multi-channel merchants differs (based on their roots) and some good discussion of reporting chains.  Personally, when it is all said and done, I think you end up with customer service reporting to Marketing - how else could a company possibly become customer centric?  I mean really, do you want success measured by talk time (Finance / Ops) or increased value of the customer base (Marketing)?

This depends, of course, on finding Marketing folks willing to step up to the table.  I know where you can find such Marketing folks - in the catalog industry.