Finding the Right Marketing Strategy

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- Provide you with skills to aid your team in making business decisions
- Marketing Strategy 101
- Determine the role your CMO should play
- Evaluate the effectiveness of your CMO

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  • If the management team and/or key inner circle answers the questions from the last slide, would all of the answers be the same?
  • Do you think you have the right metrics? They're different for every business model and every industry. Here are ten that we think are the most overlooked, undervalued, and misunderstood metrics by mid-market CMOs:
  • On bullet #3 under ASK, do you have a THROW AWAY SCHEDULE? "...have the discipline to decide what you fully fund and what you don't fund at all."  The spirit of this is to be decisive.  Either believe in what you are doing and fully fund it or don't fund it at all, no middle ground.  Many CFO lean towards "trimming the fat."  Collins asserts, and I agree that 5 fully funded initiatives are worth 100 partially funded alliances.  If the company is going to have an interactive web community than fund it.  A weak program does more harm than good.
  • Finding the Right Marketing Strategy

    1. Finding the Right Marketing Strategy<br />And the Person to Lead It…<br />
    2. Chief Outsiders (Austin team)<br />Kirk Brand Coburn<br />Pete Hayes<br />Rex Bull<br />4M Scorecard<br />
    3. Objectives<br />Provide you with additional skills to aid <br /> the TEAM in making optimal business decisions<br />Provide you with a fundamental knowledge base of Marketing Strategy 101<br />Help you determine the ROLE your CMO should play<br />Help you evaluate the effectiveness of your CMO <br />
    4. What do you want to Learn?<br />
    5. Out of Alignment<br />"We're 50% short."<br />“We're halfway there.”<br />“Only 13% of C-Level <br />believe their vision is <br />aligned with the CMO’s.”<br />Source: Peppers and Rogers Group<br />
    6. Without Alignment, Progress Can Be Dangerous<br />When marketing is properly aligned with finance and operations, there is a powerful combination to spur growth and profitability.<br />But if they are not aligned, disaster could be looming…are you experiencing?<br /><ul><li>Sales Issues = Churn/No Sales (Wrong Target)
    7. Ops Issues = Shipping Delays (Bad Planning)
    8. Finance Issues = Less Profit (Wrong Products)
    9. Cust Svc Issues = Complaints (Different KPI’s)</li></ul>= MARKETING ISSUE<br />
    10. PART II: The Role of the Marketing Lead<br />
    11. What are the Marketing Lead’s responsibilities? <br />Marketing shares the responsibility for the creation, maintenance, and growth of the value of the company<br />Marketing should position the company strategically in the market and in customers’ minds<br />Marketing should deliver a marketing strategy that makes customers believe the company is different and better than the competition<br />When this works, companies prosper.<br />Top 100 Marketing Focused Companies vs. MSCI World Index and S&P 500 Performance Interbrand<br />Source and Copyright: Interbrand Corporation 2008<br />
    12. What exactly does a good Marketer do?<br />Marketing is more than Fancy Creative:<br />A good marketer:<br /><ul><li>Serves as the market-focused voice to the CEO
    13. Understands the market from the viewpoint of </li></ul> the customer<br /><ul><li> Translates the CEO's vision/value proposition into </li></ul> actionable, measurable plan<br /><ul><li> Understands the operational and financial </li></ul> implications of marketing and growth programs<br /><ul><li> Understands “the business” and knows what </li></ul> drives profitability<br /><ul><li> Aligns the company around the value proposition
    14. Leads the dialogue that keeps the organization </li></ul> focused and working together<br />
    15. Strategic Marketing in Three Phases<br />How much budget for each phase?<br />How much time spent on each phase?<br />Long before a creative campaign or marketing program is developed, a foundation in market research and business planning must be laid.<br />III.<br />Launch & Execution<br /> The activities that execute and implement the plan<br /><ul><li>Pricing and Promotion
    16. Channel Partnerships
    17. Communication
    18. Measurement and Analysis
    19. Key Leading Indicators</li></ul>I.<br />Market Research<br /> The activities needed to <br /> decide if the value is truly <br /> valuable, worth pursuing.<br />Financial Modeling and Analysis<br />Market Analysis<br />Industry & Market Trends<br />Competitive Analysis<br />Research <br />II.<br />Business Planning<br /> The activities to take the value from good idea to real creation. <br />Integrating the market focus with the operational and financial strategies of the company<br />Product/Service definition<br />Supporting system and structure<br />Development of Alliances and Channel Partners<br />Step 1: Continual Refinement <br />Step 2: Measure & Alignment<br />Step 3: Function of Steps 1 & 2<br /><ul><li> Understand the company
    20. Understand the customer
    21. Understand the competition
    22. Align the organization
    23. Prepare the company for </li></ul> implementation <br /><ul><li> Budgeting
    24. Go-To-Market
    25. Communication
    26. Measure</li></li></ul><li>Phase I: Find Your Inner Hedgehog<br />Marketing strategy is simple:<br />PHASE I - Research<br />Find your hedgehog<br />What drives your economic engine?<br />What is the Company passionate about?<br />What is the Company the best at doing? <br />Identify your target customer<br />Identify your customer's needs (not wants)<br />Can your management team identify:<br />Your most profitable products, segments, channels and customers?<br />Activities or situations would have the biggest positive and negative impact on profitability? <br />The thing your company does better than anyone in the industry?<br />The things your company needs to become really good at in order to be seen as different by your customers?<br />What customers value most about the way your company interacts with them?<br />
    27. Phase II: Align the Organization<br />Once a direction has been set, the organization needs to align behind the vision.<br />Every department needs to understand its role in the market-based go-to-market strategy<br />Operational, systems or procedural changes can be the biggest part of a marketing strategy<br />Often the best marketing strategies are based on changing how products, services, or information are delivered to a customer<br />If Sales & Marketing charge off promising one thing to customers, and Operations is focused, measured, and bonused on something different, and if Finance is not a partner that helps to develop, measure and evaluate the profit impact, nobody wins.<br />
    28. Case Study: VanguardAligning an organization behind customer insights<br />Vanguard learned customer service is not a one-size-fits-all proposition. (Phase I)<br />Vanguard aligned the way it did business with the market learning. (Phase II)<br />Vanguard's market segmentation approach drives customer loyalty, a key driver of future revenues.<br />Working media and advertising (Phase III) were a small part of this marketing effort.<br />
    29. Case Study: McDonald’s<br />McDonald’s turnaround was based on: <br /><ul><li>Understanding changes in customer’s needs (Phase I)
    30. Changing product and store operations (Phase II)
    31. Telling consumers about the changes (Phase III)</li></ul>Copyright/Trademark McDonald's<br />Market Capitalization<br />From 1998 to 2003 as Ronald McDonald's image wore thin and fast food purveyors were being linked to obesity, McDonald's market capitalization fell $12.2 billion. <br /> (Source: BusinessWeek)<br />In 2004 McDonald's began revitalizing the brand by modernizing its image and adding salads, fruit slices, and grilled chicken to the menu.<br />The change at McDonald’s was marketing led, starting with changing the product, then the message.<br />
    32. Case Study: Dell Retail (New Channel)<br />Moving into Phase III without understanding Phase I & II can be dangerous<br /><ul><li>Dell did understand that the Retail Channel attracted New Customer Type (Phase I) BUT
    33. They did NOT adequately align the internal team and plan around the new channel (Phase II)
    34. The Retail Decision still remains to be seen as to whether it is accretive … (Phase III)</li></ul>Dell Retail was out of alignment<br />Target growth unattainable with current marketing plan<br />New retail channels reduced profit margin percentages<br />New channel products created internal and external confusion<br />No systems in place to track results, sales, or customers<br />Tier 3<br />Non-computer savvy, technology-averse<br />Tier 2<br />Need to touch-and-feel before purchase<br />Tier 1<br />Computer savvy, middle-aged, high disposable income<br />Dell Core Market<br />
    35. Phase III: Marketing Minefields<br />Measuring the effect of short-term decisions <br />on long-term objectives.<br />Net effect of advertising budget cuts<br />Diminished customer experience<br />Lower grade materials<br />Product pipeline cuts<br />Here is where things can get “touchy feely” or hard to measure.<br />Rule of thumb – A well-qualified marketing lead who understands Phases I and II, and works with finance to develop and implement marketing strategy, can likely be trusted in Phase III as well.<br />
    36. Intangible Doesn’t Mean Immeasurable<br />While elements of the marketing “spend” may be immeasurable, the results they are intended to drive should be measureable.<br />Leading Indicators<br />Critical business drivers that are:<br />Measurable<br />Manipulable<br />Customer Centric (at least 2)<br />Lagging Indicators<br />Revenues<br />Profits<br />Economic Value (Add 4 score)<br />Net Promoter Score<br />
    37. Sample Dashboard<br />Driving Analysis Around Marketing Activities to Ensure Accountability and Transparency<br />
    38. Comprehensive Approach – Investment Strategy<br />Each marketing activity is intended to drive toward a specific result. Look for ways to measure results at multiple levels.<br /> Awareness Consideration Decision Support Refer Upgrade <br />Search Engine<br />Optimization<br />Web Refresh <br />New Booth?<br /> Social Marketing/BLOGS<br />Major Events<br />Collateral<br />Online & Print Advertising<br />Cooperative<br />Partner Mktg<br />Reseller <br />Relationships<br />Product 3.0 Launch<br />Giveaways<br />Product Satisfaction Survey<br />Case Studies/Testimonials<br />Press/Analyst<br />relations<br />Reseller Event?<br />Video Demos<br />(Web & Syndication)<br />
    39. Case Study – Harrah’s Casino: Target Practice, Marketing Style<br />Marketing helps identify the most profitable customers, then aligns the organization to develop and execute strategies to win them over.<br />Phase I: Research<br />Harrah's Casinos identified customers that were<br />Passionate about<br />Good at serving<br />Could distinguish themselves from the competition with<br />Phase II: Business Planning<br />Harrah's targeted:<br />Gamblers (not spa-goers or show-seekers)<br />Gamblers who spent >$100/day but <$500 per day<br />Harrah's created:<br />Rewards program to track behaviors and measure key indicators<br />Operations and IT Systems<br />New financial reporting<br />Plan to align entire company around new focus<br />Phase III: Launch and Execution<br />Harrah's tracked:<br />Share of wallet<br />Loyalty program upgrades<br />Result: Leading indicator<br />The number of customers visiting cross-properties predicted future revenues<br />
    40. PART III: Evaluating the Effectiveness of your CMO<br />
    41. Is Your Marketing Lead the Real Deal?<br />Business Planning<br /><ul><li>Align marketing strategy with financial and operational strategy
    42. Forecast net income with +/-10% margin
    43. Can lead the market focused portion of executive team discussions
    44. Track and measure leading and lagging indicators to determine success of marketing programs and objectives
    45. Ensure employees can clearly articulate the value proposition</li></ul>Research<br /><ul><li>Work with the CFO to understand profitability drivers, most profitable customers, and market segments
    46. Can logically discuss the customer’s business and business drivers
    47. Know the cost of customer acquisition
    48. Can clearly define the market size, market position and market share of the company
    49. Understanding how a large company can scale the value proposition to earn profits at higher volumes</li></ul>Launch & Execution<br /><ul><li>Ensure employees can clearly execute and deliver on the value proposition
    50. Treat budgets seriously
    51. Drive profitable growth via positioning and differentiation
    52. Trend leading and lagging indicators higher, year over year
    53. Only make promises the company can keep
    54. Convince customers you are easier and faster to do business each cycle and vs. competitors
    55. Demonstrate higher gross profit than the year before</li></li></ul><li>CMO = Chief Metrics Officer<br />Do you think you have the right metrics? <br />How many of your most profitable clients and products can you identify? <br />How much does it cost to acquire new clients? <br />How consistently can you define your value proposition? <br />What percentage of your management team is aligned toward the same goals, measurements, and key leading indicators? <br />How quickly can your leadership team respond to change? <br />How large can you scale your value proposition to earn profits at higher volumes? <br />How good are your financial forecasts (Hint: You should be aiming for +/-10% of net income) <br />How much of the capital you need to fund future growth do you have? <br />How much of your capital is invested effectively to maximize profits?<br />How complete is your plan to battle your greatest risk?<br />
    56. Here’s a sample marketing budget: How would you evaluate it?<br />EXPENDITURE SUCH AS BUDGETED<br />It can’t be done.<br />Nothing on this page helps you determine how good this marketing budget is.<br />Without a solid understanding of the market (Phase I) and a marketing strategy (Phase II) a marketing budget is useless.<br />Tradeshow booth, visitor center<br />Courses, Marketing Assoc fees<br />Tradeshows, Excellence Awards<br />Website, Graphic Design, Customer Profiling<br />Bacon's Monitoring Service, PR firm<br />Print, Internet<br />Global shipping<br />Pricing strategy<br />MDFDocumentation, Media, Getting Started Guides<br />APAC, EMEA, NAM, LAM<br />APAC, EMEA, NAM, LAM<br />CapEx <br />Headcount <br />Employee Education <br />Programs/Tradeshows <br />Market Research/Business Intelligence<br />Marketing Projects <br />Public Relations <br />Advertising <br />Other Shipping <br />Solutions Marketing <br />Partner Levarage <br />Product Packaging <br />Field Marketing <br />Sales Programs <br />TOTAL<br />250,000<br />565,000<br />100,000<br />225,000<br />75,000<br />182,000<br />93,000<br />340,000<br />101,000<br />42,000<br />(225,000)<br />65,000<br />300,000<br />355,000<br />2,468,000<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />$<br />
    57. When to Pull the Trigger or the Plug<br />Q: How can the MGT TEAM be sure new initiatives will be successful?<br />Q: How much information or research is enough?<br />Q: How can customer demands and volume forecasts be confirmed?<br />A: You will never know. Get over it and start asking yourself and your team the best questions you can ask.<br />
    58. The CMO’s Role in the Go/No-Go Decision<br />Ask probing questions so the management team can understand the justifications and the risks<br />Provide financial information to frame the investments, risks, and paybacks from the strategy<br />Provide insight into breakeven volumes<br /> Ask<br /><ul><li> What is the key driver that will determine if the </li></ul> program will drive profit or not<br /><ul><li> When will we know if the program is working or not
    59. What is the financial exposure at that time?
    60. How do breakeven volumes compare to </li></ul> marketing forecasts?<br /><ul><li> How big is the risk compared to the reward?
    61. What's the total investment required for this to </li></ul> succeed?<br /><ul><li> What financial commitments must be made, and </li></ul> when?<br /><ul><li> What portion of the investment is a total loss, what can </li></ul> be recouped if success is not achieved?<br />
    62. Measure, then Align for Success<br />Chief Outsiders Scorecard<br />
    63. Vragen?<br />Preguntas?<br />Fragen?<br />Vragen?<br />Questions?<br />Spørgsmål?<br />Kysymykset?<br />Frågor?<br />Kysymykset?<br />Spørgsmål?<br />Preguntas?<br />
    64. Thank You<br />For your FREE COPY of our CMO Scorecard, <br />email Kirk@ChiefOutsiders.com<br />Kirk Brand Coburn<br />Principal Chief Marketing Outsider<br />kirk@chiefoutsiders.com<br />Pete Hayes<br />Chief Marketing Outsider<br />pete@chiefoutsiders.com<br />Rex Bull <br />Chief Marketing Outsider<br />rex@chiefoutsiders.com<br />www.ChiefOutsiders.com<br />

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