It’s Time for CMOs to adopt the 7S Framework“While it’s critical to consolidate cost, you can’t consolidate creativity.” By Dean Crutchfield Associates
Marketing faces its first real existential crisis today, especially aspressure on CMOs to achieve what many are referring to as “the sameimpact for 60% of the dollars” builds. That’s why now’s the time forCMOs to adopt and apply to marketing operations the 7-S Framework:An analytical tool that’s been successfully used by hundreds of firms. Dean Crutchfield Associates
The 7S Framework Developed by McKinsey consultants in the early 1980s for organizations, the framework represented a new way of thinking about organizational effectiveness, focused not on structure but on coordination. A simple concept: change one of seven interrelated levers, and you must change them all. CMOs today have remarkable opportunities to engage consumers in a two-way relationship. To do so requires recalibrating their entire marketing operation, from departments to brands through to agency partners. Leveraging the principles of the 7-S Framework can help CMOs standardize the success and efficiency of the process. Dean Crutchfield Associates
Here’s an overview of the seven Today’s consumer admires brandslevers and the ways in which CMOs that enable them to participate.should apply the framework to CMOs must adopt narrative-basedoptimize their own operations: brand and marketing strategies that can engage consumers:1. Shared values. creating brands that are more magnanimous, malleable andThe interconnecting center of functional.McKinsey’s model, this is wherethe other six levers come together. Product (RED)’s unique approach reinvented the business of philanthropy by creating reciprocity with the customer while simultaneously demonstrating that its partner brands promote the cause and concomitantly make money by doing good. That takes coordination of all seven levers. Dean Crutchfield Associates
2. StrategyCMOs are seeking new ways to get That doesn’t mean TV advertising isand keep customers. According to dead, far from it, it just the “traditionalVerse Group and Jupiter research, part”. Today we have affordable andmore than 60% of CMOs surveyed reliable technology and orchestrated media to tap into the consumer, it’ssaid that traditional advertising opened what we can see, hear, taste,and brand positioning are not as touch and smell all sorts of tools foreffective for attracting customers. pre-event anticipation, preparation,So CMOs are looking to improve and experience; the actual shopping,CPM, e.g., Reckitt-Benckiser’s interactions, and flow; as well as post-decision to boost TV advertising purchase memories and rewardseffectiveness by ramping up onlinevideo spend with the likes ofHulu.com. According to eMarketer,online advertising is expected togenerate $39.5 billion in sales thisyear — a 23.3% increase from 2011— compared to a sum of $33.8billion on print. By 2013 that figureis estimated to be closer to $43 Dean Crutchfield Associatesbillion.
3. StructureFor the CMO, what matters is the where one agency is responsible forstructure of agency relationships. all the other partners, includingConsolidation is king, as evidenced by payments, budgets and hires.a number of flawed big brand On the other hand, you have movesattempts, e.g., Dell attempt to being made by industry leaders suchconsolidate 800 agencies into Enfatico. as Coca-Cola and Unilever who areWhile it’s critical to consolidate cost, both looking under their belt to findyou can’t consolidate creativity. The efficiencies that they can add back intofix? P&G’s “Brand Agency Leader” their media spend. Coke is planning tovalue-based compensation model, find over $500M! The 7 variables are crucial for this model to succeed.
4. SystemROI is the system the CMO needs to perfect. To enhance the CFO’s view ofmarketing’s value, CMOs are leading the charge for change, as demonstratedby Coca-Cola Co.’s recent initiative to push for the adoption of value-basedcompensation models. The idea isn’t new, but the need has gained momentumas CMOs hasten to cut costs and complain that current ROI tools areinadequate. Management consultancies are piling in to help. Look out! Dean Crutchfield Associates
5. Staffing The CMO is the key to a successful staffing strategy as he or she decides how to build the brand across multiple channels and the people required. Understanding the variables of the 7-S Framework is essential as pressure mounts to reduce headcount, but retain the best people for the task in hand. “The Vitality Curve” is one of the best tools for doing so: It prioritizes the top 20% for special treatment, 70% for training and the bottom 10% for firing.Dean Crutchfield Associates
6. Style/CultureFor the CMO, it’s the style of It used to be the 4Ps (price,marketing communication that product, place, promotion); nowcan optimize the changing it’s the 4Cs: content, community,relationship between brand and commerce and consumers. To tapconsumer. Today marketers can these, the full force of marketing ishold entirely different awesomely powerful, but there areconversations with the consumer caveats if you neglect certainby shaping brands that enable levers. PepsiCo Americas CEOpeople to participate. . Massimo d’Amore’s vainglorious attempt to revitalize seven brands simultaneously to save costs, consolidate agency partners and bring a cohesive approach to the brands backfired, costing millions. While big results require big ambitions, appetites need to be separated from requirements (7 of them). Dean Crutchfield Associates
7. SkillFor marketers it’s about how to P&G’s “Build From Within”generate more “earned media” program tracks thefrom budgets and how brand performance of its starnarratives, non-traditional performers, known asmedia and innovation will play a Proctoids, via monthly andcentral role, but there’s a skill annual talent reviews. Evidentlygap between need and it’s been successful in so far,capability. but issues are afoot for P&G as customers switch to lowerUltimately, with a shift in the value brands.world of brands and marketing,new skills are required as evermore complex programs aredesigned that integratetraditional and non-traditionalmedia. Dean Crutchfield Associates
The success of contrarian marketing strategies requires CMOs totable prevailing marketing theories and embrace experimentation. There are very few things in business that pay off by waiting. Now’s the time for the CMO to leverage the 7-S Framework.
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