The document provides guidance on developing an effective marketing strategy in three phases: 1) Market research to understand customer needs and how the company can best meet those needs. 2) Aligning the organization behind the marketing vision through changes to products, services, and operations. 3) Launching and executing marketing programs while continuously measuring results. It emphasizes the importance of the CMO understanding business fundamentals and driving alignment across departments to spur growth. An effective CMO leads market research, translates strategy into an action plan, and ensures marketing is measured and contributes to profitability.

1. Finding the Right Marketing StrategyAnd the Person to Lead It…

3. Chief Outsiders (Austin team)Kirk Brand Coburn4M Scorecard

4. ObjectivesProvide you with additional skills to aid the TEAM in making optimal business decisionsProvide you with a fundamental knowledge base of Marketing Strategy 101Help you determine the ROLE your CMO should playHelp you evaluate the effectiveness of your CMO

5. What do you want to Learn?

6. Out of Alignment"We're 50% short."“We're halfway there.”“Only 13% of C-Level believe their vision is aligned with the CMO’s.”Source: Peppers and Rogers Group

7. Without Alignment, Progress Can Be DangerousWhen marketing is properly aligned with finance and operations, there is a powerful combination to spur growth and profitability.But if they are not aligned, disaster could be looming…are you experiencing?Sales Issues = Churn/No Sales (Wrong Target)

8. Ops Issues = Shipping Delays (Bad Planning)

9. Finance Issues = Less Profit (Wrong Products)

10. Cust Svc Issues = Complaints (Different KPI’s)= MARKETING ISSUE

11. PART II: The Role of the Marketing Lead

12. What are the Marketing Lead’s responsibilities? Marketing shares the responsibility for the creation, maintenance, and growth of the value of the companyMarketing should position the company strategically in the market and in customers’ mindsMarketing should deliver a marketing strategy that makes customers believe the company is different and better than the competitionWhen this works, companies prosper.Top 100 Marketing Focused Companies vs. MSCI World Index and S&P 500 Performance InterbrandSource and Copyright: Interbrand Corporation 2008

13. What exactly does a good Marketer do?Marketing is more than Fancy Creative:A good marketer:Serves as the market-focused voice to the CEO

14. Understands the market from the viewpoint of the customer Translates the CEO's vision/value proposition into actionable, measurable plan Understands the operational and financial implications of marketing and growth programs Understands “the business” and knows what drives profitability Aligns the company around the value proposition

15. Leads the dialogue that keeps the organization focused and working together

16. Strategic Marketing in Three PhasesHow much budget for each phase?How much time spent on each phase?Long before a creative campaign or marketing program is developed, a foundation in market research and business planning must be laid.III.Launch & Execution The activities that execute and implement the planPricing and Promotion

17. Channel Partnerships

18. Communication

19. Measurement and Analysis

20. Key Leading IndicatorsI.Market Research The activities needed to decide if the value is truly valuable, worth pursuing.Financial Modeling and AnalysisMarket AnalysisIndustry & Market TrendsCompetitive AnalysisResearch II.Business Planning The activities to take the value from good idea to real creation. Integrating the market focus with the operational and financial strategies of the companyProduct/Service definitionSupporting system and structureDevelopment of Alliances and Channel PartnersStep 1: Continual Refinement Step 2: Measure & AlignmentStep 3: Function of Steps 1 & 2 Understand the company

21. Understand the customer

22. Understand the competition

23. Align the organization

24. Prepare the company for implementation Budgeting

25. Go-To-Market

26. Communication

27. MeasurePhase I: Find Your Inner HedgehogMarketing strategy is simple:PHASE I - ResearchFind your hedgehogWhat drives your economic engine?What is the Company passionate about?What is the Company the best at doing? Identify your target customerIdentify your customer's needs (not wants)Can your management team identify:Your most profitable products, segments, channels and customers?Activities or situations would have the biggest positive and negative impact on profitability? The thing your company does better than anyone in the industry?The things your company needs to become really good at in order to be seen as different by your customers?What customers value most about the way your company interacts with them?

28. Phase II: Align the OrganizationOnce a direction has been set, the organization needs to align behind the vision.Every department needs to understand its role in the market-based go-to-market strategyOperational, systems or procedural changes can be the biggest part of a marketing strategyOften the best marketing strategies are based on changing how products, services, or information are delivered to a customerIf 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.

29. Case Study: VanguardAligning an organization behind customer insightsVanguard learned customer service is not a one-size-fits-all proposition. (Phase I)Vanguard aligned the way it did business with the market learning. (Phase II)Vanguard's market segmentation approach drives customer loyalty, a key driver of future revenues.Working media and advertising (Phase III) were a small part of this marketing effort.

30. Case Study: McDonald’sMcDonald’s turnaround was based on: Understanding changes in customer’s needs (Phase I)

31. Changing product and store operations (Phase II)

32. Telling consumers about the changes (Phase III)Copyright/Trademark McDonald'sMarket CapitalizationFrom 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. (Source: BusinessWeek)In 2004 McDonald's began revitalizing the brand by modernizing its image and adding salads, fruit slices, and grilled chicken to the menu.The change at McDonald’s was marketing led, starting with changing the product, then the message.

33. Case Study: Dell Retail (New Channel)Moving into Phase III without understanding Phase I & II can be dangerousDell did understand that the Retail Channel attracted New Customer Type (Phase I) BUT

34. They did NOT adequately align the internal team and plan around the new channel (Phase II)

35. The Retail Decision still remains to be seen as to whether it is accretive … (Phase III)Dell Retail was out of alignmentTarget growth unattainable with current marketing planNew retail channels reduced profit margin percentagesNew channel products created internal and external confusionNo systems in place to track results, sales, or customersTier 3Non-computer savvy, technology-averseTier 2Need to touch-and-feel before purchaseTier 1Computer savvy, middle-aged, high disposable incomeDell Core Market

36. Phase III: Marketing MinefieldsMeasuring the effect of short-term decisions on long-term objectives.Net effect of advertising budget cutsDiminished customer experienceLower grade materialsProduct pipeline cutsHere is where things can get “touchy feely” or hard to measure.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.

37. Intangible Doesn’t Mean ImmeasurableWhile elements of the marketing “spend” may be immeasurable, the results they are intended to drive should be measureable.Leading IndicatorsCritical business drivers that are:MeasurableManipulableCustomer Centric (at least 2)Lagging IndicatorsRevenuesProfitsEconomic Value (Add 4 score)Net Promoter Score

38. Sample DashboardDriving Analysis Around Marketing Activities to Ensure Accountability and Transparency

39. Comprehensive Approach – Investment StrategyEach marketing activity is intended to drive toward a specific result. Look for ways to measure results at multiple levels. Awareness Consideration Decision Support Refer Upgrade Search EngineOptimizationWeb Refresh New Booth? Social Marketing/BLOGSMajor EventsCollateralOnline & Print AdvertisingCooperativePartner MktgReseller RelationshipsProduct 3.0 LaunchGiveawaysProduct Satisfaction SurveyCase Studies/TestimonialsPress/AnalystrelationsReseller Event?Video Demos(Web & Syndication)

40. Case Study – Harrah’s Casino: Target Practice, Marketing StyleMarketing helps identify the most profitable customers, then aligns the organization to develop and execute strategies to win them over.Phase I: ResearchHarrah's Casinos identified customers that werePassionate aboutGood at servingCould distinguish themselves from the competition withPhase II: Business PlanningHarrah's targeted:Gamblers (not spa-goers or show-seekers)Gamblers who spent >$100/day but <$500 per dayHarrah's created:Rewards program to track behaviors and measure key indicatorsOperations and IT SystemsNew financial reportingPlan to align entire company around new focusPhase III: Launch and ExecutionHarrah's tracked:Share of walletLoyalty program upgradesResult: Leading indicatorThe number of customers visiting cross-properties predicted future revenues

41. PART III: Evaluating the Effectiveness of your CMO

42. Is Your Marketing Lead the Real Deal?Business PlanningAlign marketing strategy with financial and operational strategy

43. Forecast net income with +/-10% margin

44. Can lead the market focused portion of executive team discussions

45. Track and measure leading and lagging indicators to determine success of marketing programs and objectives

46. Ensure employees can clearly articulate the value propositionResearchWork with the CFO to understand profitability drivers, most profitable customers, and market segments

47. Can logically discuss the customer’s business and business drivers

48. Know the cost of customer acquisition

49. Can clearly define the market size, market position and market share of the company

50. Understanding how a large company can scale the value proposition to earn profits at higher volumesLaunch & ExecutionEnsure employees can clearly execute and deliver on the value proposition

51. Treat budgets seriously

52. Drive profitable growth via positioning and differentiation

53. Trend leading and lagging indicators higher, year over year

54. Only make promises the company can keep

55. Convince customers you are easier and faster to do business each cycle and vs. competitors

56. Demonstrate higher gross profit than the year beforeCMO = Chief Metrics OfficerDo you think you have the right metrics? How many of your most profitable clients and products can you identify? How much does it cost to acquire new clients? How consistently can you define your value proposition? What percentage of your management team is aligned toward the same goals, measurements, and key leading indicators? How quickly can your leadership team respond to change? How large can you scale your value proposition to earn profits at higher volumes? How good are your financial forecasts (Hint: You should be aiming for +/-10% of net income) How much of the capital you need to fund future growth do you have? How much of your capital is invested effectively to maximize profits?How complete is your plan to battle your greatest risk?

57. Here’s a sample marketing budget: How would you evaluate it?EXPENDITURE SUCH AS BUDGETEDIt can’t be done.Nothing on this page helps you determine how good this marketing budget is.Without a solid understanding of the market (Phase I) and a marketing strategy (Phase II) a marketing budget is useless.Tradeshow booth, visitor centerCourses, Marketing Assoc feesTradeshows, Excellence AwardsWebsite, Graphic Design, Customer ProfilingBacon's Monitoring Service, PR firmPrint, InternetGlobal shippingPricing strategyMDFDocumentation, Media, Getting Started GuidesAPAC, EMEA, NAM, LAMAPAC, EMEA, NAM, LAMCapEx Headcount Employee Education Programs/Tradeshows Market Research/Business IntelligenceMarketing Projects Public Relations Advertising Other Shipping Solutions Marketing Partner Levarage Product Packaging Field Marketing Sales Programs TOTAL250,000565,000100,000225,00075,000182,00093,000340,000101,00042,000(225,000)65,000300,000355,0002,468,000$$$$$$$$$$$$$$$

58. When to Pull the Trigger or the PlugQ: How can the MGT TEAM be sure new initiatives will be successful?Q: How much information or research is enough?Q: How can customer demands and volume forecasts be confirmed?A: You will never know. Get over it and start asking yourself and your team the best questions you can ask.

59. The CMO’s Role in the Go/No-Go DecisionAsk probing questions so the management team can understand the justifications and the risksProvide financial information to frame the investments, risks, and paybacks from the strategyProvide insight into breakeven volumes Ask What is the key driver that will determine if the program will drive profit or not When will we know if the program is working or not

60. What is the financial exposure at that time?

61. How do breakeven volumes compare to marketing forecasts? How big is the risk compared to the reward?

62. What's the total investment required for this to succeed? What financial commitments must be made, and when? What portion of the investment is a total loss, what can be recouped if success is not achieved?

63. Measure, then Align for SuccessChief Outsiders Scorecard

64. Vragen?Preguntas?Fragen?Vragen?Questions?Spørgsmål?Kysymykset?Frågor?Kysymykset?Spørgsmål?Preguntas?

65. Thank YouFor your FREE COPY of our CMO Scorecard, email Kirk@ChiefOutsiders.comKirk Brand CoburnPrincipal Chief Marketing Outsiderkirk@chiefoutsiders.comwww.ChiefOutsiders.com