Monthly Archives: January 2007

The Deconstruction of Marketing

Analytical Culture, Analytics Education, Marketing / Tech Interface

Seems to me these days “Marketing” is being deconstructed into a bunch of pieces.  When I was coming up through the ranks, Marketing included Customer Service plus all the stuff now called CRM, Customer Experience, and all the related ideas.  The person in charge of Marketing was in charge of all these things.  It made so much sense to manage a business this way, because to control your fate as a Marketer, you had to control or at least influence all the customer touchpoints.  So why are these responsibilities being split off into little sub-cultures today?

The answer is they’re not really; that’s just the way it looks to me, because every industry I worked in for 25 years was rich with customer data and we used that data to prove why it made so much sense for Marketing to be in charge of all these aspects of the company interface with the customer.  We proved time and time again that by exerting cross-silo influence where the customer was involved, Marketing could generate much improved profitability.  Every Marketing program worked even harder towards generating profits when Marketing got all the silos aligned.

So I guess it just looks to me (and some other data-driven Marketing folks) like these functions are being split out of Marketing.  The reality is that many companies never had any of these data-driven functions before, and when they start getting access to customer data, they created these areas as new entities.  The question: why not create them under Marketing?  This approach sure would have saved a lot of trouble in CRM, for example. 

And I suspect the answer is the Marketing folks took one look at this new data-driven world with the associated need to have a basic understanding of technology issues, and said, “No thanks, I’ll stick to Advertising and PR”.  And as Marketers let go of / failed to capture control of these key operational touchpoints with the customer, they essentially devolved Marketing from a strategic C-Level force into “MarCom”.

And that’s a real shame.  This splintering of Marketing Management by technological issues is a waste of time at best and a long term problem at worst.  Ultimately, after we go through all this CRM and Chief Experience Officer stuff and whatever else you want to call it (seems like a new name every day), people will realize that all of this belongs in Marketing.  And then we’ll just need some brave Marketing folks who think they can handle it to step up to the plate and really make it work.  If you’re a mid-level MarCom person and want to start preparing for this transition, start making some friends in Finance, Technology, and Customer Service.  Find out what it is that keeps them awake at night, and think about how Marketing could help solve their problems.

And to jump-start your brain towards making Marketing decisions based on customer data rather than using nameless, faceless GRP’s, try taking a look at the business side of web analytics.  You’ll be amazed at how much of it transfers directly to Data-based / CRM / Customer Experience Marketing.  Why?  Because the web analytics community has decided best practices require a cross-functional team approach with a focus on Customer Experience and a requirement to examine the Financial implications of actions taken.  Web analytics teams are a functioning microcosm of what Marketing used to be, and what it should be in the future.

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Lab Store: Managing Customer Experience

Analytical Culture, Lab Store, Marketing thru Operations

When Ron wrote this great post on Marketing’s responsibility for managing customer experience (more on process improvement from me here), I thought I would relate this simple example from the Lab Store.

We sell some exotic pet food that is meant to be a continuity item – the customer buys it every 3 months or so.  This product offering is, of course, designed to extend the Customer LifeCycle.  The food is a “staple” meaning it is generally kept in the cage at all times to supplement the fresh foods fed to the animal.  This food is not as appealing to the anlmal as say, fresh fruit, but it’s an important part of a well rounded diet for the animal.  The feeding instructions on the web site are extensive – portion size relative to fresh food, when to feed, amount to feed, etc.

So we start analyzing the repurchase rate of this staple food that is supposed to be our “back end” and it is dismal relative to expectations.  Why?  Have the customers switched to a different, cheaper source?  Are they not feeding the diet plan we suggest?  Is this even a “marketing problem”?  Well, in the Lab Store, anything related to customer behavior is a marketing problem.

So we grab a sample of the customers who passed the re-order point Tripwire of 3 months without ordering again and ask them, Why aren’t you ordering the staple food?  And the answer is “The critters don’t like it”.  Really?  That’s a surprise; we know the animals generally eat the food.  So we ask about portion size, are they following the diet plan?  And they say, “Not really, when they didn’t eat the staple food, we thought they would be hungry and so we gave them more fresh food.  They never ate any of the staple food”.

And there you have it.  We don’t need to ask any other questions.  The animal is not going to eat the boring staple food when they are being overfed the fresh food.  This is like asking a kid if they would rather have spinach or candy; one is good for them, the other tastes better.  And the customer isn’t going to buy staple food the animal will not eat.

The problem is, this “fresh food only” diet is unhealthy for the animal; they are not going to get critical nutrients they need from the staple food.  But, this exact feeding scenario is covered on the web site; we’re already communicating this issue to the customer.  So it’s not a marketing problem, right?

Wrong.  That is the marketing problem – the information is on the web site.  We started including a package insert with the staple food containing the very same info as on the web site, except now, of course, it was “contextual”; delivered in exactly the right place and at exactly the right time – when the customer opened the staple food package.  And magically, the repeat purchase rate on the staple food increased 32%.

The point is, if we had been off “marketing” and not paying attention to the Potential Value of the customer by setting up the Tripwire, we’d have never found this flaw in the process.  And by fixing it, we increase the return on all the acquisition marketing we do, because the LifeCycle of the customer has been extended.

Marketing Productivity, indeed.  More Lab Store tales to come.

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