What do penguins have to do with it?

This is a guest post from one of our co-workers, Jeff Krawitz. He is referring in this post to the Who/What/How marketing/sales framework used by us in our work with clients. Who refers to Who is buying, What refers to What are they buying, and How refers to How do they want to buy it. Levels 1, 2 and 3 of the framework drills you down into more specifics for each to “force” the user to find answers that help the company achieve its goals and create more loyal, profitable customers. If you want to know more you can download a free white paper.

I have always found How #3, the Value Delivery System (VDS), to be the most difficult to get across in our workshops. I explain it and try hard to define it, but often with more limited success than I would like. An example I sometimes use is to suggest that when they communicate with a customer in a routine way (an invoice for example), do something to allow the recipient to derive some positive value from it.

I recently did a half-day Customer-Centric Marketing workshop at a top financial services company in Iowa. I went through each of the nine boxes of the Who/What/How matrix giving examples and definitions. For What #2, I suggested that instead of sending clients monthly reports filled with numbers, find out what each client is saving for and show them a picture of that item filled in enough to indicate how close they are to achieving their goal. In other words, show them their progress in their terms, not strict financial numbers. I told them that one of my goals was to visit Antarctica and touch a penguin, and that the first financial management company that could help me get to that in my terms would win my account. (I also suggested that they should send me a map of Antarctica filled in proportionately to my financial chances of getting there).

When I got the How #3, the VDS, I just didn’t feel I was getting the concept across as well as I would have liked, and I felt that all my examples were falling flat. At least I thought so.

When I got home the following Monday, I received a simple “thank you” note from Michele, the person who had sponsored by workshop with the company. However, along with the note was a book. A large “coffee table book called, Planet Earth. In it were a few sticky bookmarks with Post-Its from her. One note was attached to a picture of penguins in Antarctica saying “I hope I get to meet you when you retire!”

I guess she did get it and then added something to a routine event that makes it valuable and special. That’s a Value Delivery System.

Jeff

Thinking like a customer is in fashion again

The be great at marketing, you must learn to think like a customer. Great companies excel at this skill. One of the examples I have used in my books and papers is the Proctor and Gamble of old. Proctor and Gamble themselves were great marketers and innovators because they could and would think like a customer. Unfortunately, some of their more recent successors either never learned the importance of the skill or felt they could short-circuit the process with enough “market data.”

 

I am thrilled to see that in A.G. Lafley’s (the CEO of P&G) new book, Game Changer, he cites as one of his principles the need to “keep the customer at the center of all our decisions.” You may remember that A.G.’s promotion to CEO of P&G was met with skepticism … to say the least. (The stock price plummeted on the announcement that he was going be CEO). You may also note that his tenure as CEO has seen a turn-around in P&G’s fortunes and an increase in their stock price.

 

To insure that his people re-learned to think like a customer he has instituted several programs that require R&D and marketing people to spend time out with customers rather than conducting focus groups or other artificial research environments.

 

Isn’t amazing what the simple act of great marketing can do for a company. If you can remember to think like the customer rather than hope the customer thinks like you, your company, product line or division will go far.

 

Mitch

Is It Safe To Fly?

Since I fly a lot, people have asked me a bunch of questions about the current American Airlines maintenance debacle. Questions have ranged from “do you feel safe flying” to “how can they do this to their customers.” As you might expect, I have lots of thoughts on these topics.

 

First, yes I do feel safe flying. The airline industry has an impeccable and improving safety record. In addition, pilots have a self-preservation motive to make sure the planes they fly on are safe too.

 

However, the customer issue is a whole different thing. American Airlines instituted a policy last year that no longer allows customers to talk to them about ANYTHING that is not current flight related. If you have a question, feedback, complaint or issue you have to email it to them. And their email response is no where close to prompt in my experience.

 

However this policy has probably done one thing for them. They have found an effective way to reduce customer complaints.

 

Regarding the current debacle, who knows. I have found that most airlines operate as if passengers are an inconvenience to the efficient movement of airplanes. And, since most of the airlines benchmark their performance against each other, the bar is not very high.

 

The better airlines, like Southwest (who was also caught cutting maintenance corners) are usually full and a full airplane is less comfortable than a ½-full airplane. So, flying on the other airlines can have its advantages when they are not full.

 

However, now that the “majors’ (not that Southwest is not a major, but Jet Blue certainly isn’t) are reducing flights, their flights are full too, so their benefit over Southwest has been reduced. And with Southwest if you buy a business fare or if you fly them a lot, you can guarantee yourself an aisle or window as you prefer no matter when you book.

 

Anyway, as long as the employees of the airlines hate their management, and airline management operates as if customers don’t matter, nothing is going to change no matter what the lawmakers try to do. Safety is not really an issue in my opinion, and you can’t legislate good service. The market has to demand good service, and since the airlines appear to have banded together to remove that it makes it tough for the traveler in normal times, much less with the current debacle.

 

 Mitch

It’s not about the people, it’s about the process

As we teach in our Lean Marketing Workshops, lack of results is usually a failure of process not people. Deming reported that fact many years ago.

We have been reading Hard Facts, Dangerous Half-Truths, & Total Nonsense and found the authors have identified additional research that further supports this truth. One example they cite is the old General Motors plant in Fremont, CA.

That plant was closed in 1982 because it was one of the worst GM plants in the country as measured by defects per car built and cost per car built. The plant also suffered from wildcat strikes and “rampant drug and alcohol abuse.” The plant was re-opened in 1985 as a joint venture between GM and Toyota, but it instituted the Toyota Production System (called Lean Manufacturing or Lean Thinking outside of Toyota).

85% of the initial workforce consisted of rehired former GM employees. The first year the plant produced cars, its output was among the highest quality and lowest cost cars produced in any plant in the U.S. Same people, new process, better results.

And least our senior management readers get too smug, the authors also note that Toyota is the ONLY automobile company where changing the CEO has had NO impact on company performance. In other words, the processes the company uses are so robust, there is little noticeable effect on the company due to any single person change … even the CEO.

They just keep relentlessly moving to #1 in revenue and profit.

Mitch

Rearranging the deck chairs?

Advertising Age published an article recently entitled “Reorganization Doesn’t Do It for Marketers.” (I’d give you a link but Ad Age makes you pay for their articles, so you need a login.) The gist of the article is based on research done for the Association of National Advertisers (ANA) in October of 2007, which indicated that close to 60% of the marketing organizations surveyed had undergone a reorganization (significant) in the last two years.

Not surprising to us, these reoganizations did not improve marketing performance and in some cases made it worse. Is this just re-arranging the deck chairs on the Titanic?

Marketing organizations are under tremendous pressure to produce “results.” Chief Marketing Officers are being axed at an astounding rate, and their is even talk of eliminating the position as unnecessary. (One possible problem with that is there will be no C level executive to fire when you need one to sacrafice that really doesn’t do anything anyway. While that sentiment is not necessarily ours, it is the feelings of other pundits.) So, is all this reorganization just a hope that moving the organization around will get better results?

We see two problems with this thinking: First, there is likely to be a lack of agreement on “results” since the role of marketing in most companies is undefined to begin with. And, secondly, even if that is not the problem, Deming taught us many years ago that the problem with most organizations getting the results desired is not a result of the structure of the organization or the people in it, but rather the processes they are working to support.

Every process is perfectly constructed to get the results its getting. Trying to getter better results by changing the organization is truly rearranging the deck chairs. If you want better results, you have to examine the processes you are using. Redesigning your processes to get the results you want may also require a reorganization to facilitate their effective implementation. However, first comes the process redesign, then comes the organizational design to support it. Not the other way around. 

For an additional viewpoint on reorganizations, take a read of our partner, Bayard Bookman’s white paper “Let’s Reorganize, That Way We Won’t Really Have to Manage.”

Mitch

Marketing Pukes

In 1983 I met with the founding team at Sun Microsystems on several occasions to discuss an OEM contract for the original Sun Workstation. Negotiating with the team was tough as they had never put together an OEM deal. At one point in a conversation, I asked them when they were going to hire a VP of Marketing so that we could put a deal together. Scott McNealy looked me straight in the face and said that as long as he was with Sun, they weren’t going to waste their money on any “marketing pukes.” 

Recently I met a guy who had been a senior exec at Sun during its growth from $50M to $750M and he relayed a story to me that was quite amusing given Scott’s statement to me. In its earlier days, Sun, despite its growth and technical prowess didn’t get much publicity. However, there was a point in time during Sun’s heyday and Apple’s demise that a rumor was circulated that Sun was going to buy Apple. That rumor apparently generated a LOT of press for Sun including a mention on CNN.  

My friend tells me that Scott got the 3,000 marketing people that worked for Sun at that time (quite a lot of “marketing pukes” indeed) together and berated them for their failure to perform. He noted that he was going to fire all of them since one little rumor had created more press attention than the 3,000 of them had accomplished and he could save a lot of money by simply spreading a rumor once a year. 

And if that was all he wanted his 3,000 marketing people to do, he was indeed over-spending on that function. I trust after 20+ years that Scott has learned the true role of Marketing in a business. However, I haven’t talked to him in many years, and given the limited understanding of the comprehensive role of Marketing by many CEOs, maybe not.

Mitch

Missed Opportunities

I finally bought a new car. After 11 years of driving my pick-up truck, it was finally time to admit it was time. I had decided on a Pontiac Solstice but had delayed purchase since all the dealers in my area wanted $5K over sticker price for the car, and I just didn’t want it that badly.

 

Fortunately, I met a terrific Pontiac dealer in Detroit during one of my presentations and he told me that selling cars over sticker price just pissed people off, so he did not do that. He also told me he could order the car for me and have it delivered to my local dealer for pick up. 

Sounded great and the local dealer agreed to a usual and customary courtesy delivery fee for their part in the prep and delivery of the vehicle and the opportunity to create a new service department customer. The Detroit dealer did a wonderful job for me and the paperwork process was a pleasure. They stayed in touch with me to let me know when the car would be finished at the factory and on its way. They also coordinated everything with my local dealer for me. 

When I picked the car up, the process was quick and easy and most of the time was spent by the sales manager telling me that I did not need to buy the car from a dealer in Detroit that they would have sold it to me without the $5K mark-up over sticker too. I pointed out that they chose not to do that several months ago, which was how I ended up ordering from the Detroit dealer to begin with. He grudgingly acknowledged that a few months ago, that might have been true. 

Anyway, he removed the window sticker and gave me the keys. I asked him to remove another sticker in the window which he did and posted the operating permit in the front window. I signed the Motor Vehicle Department paperwork and was on my way.  

As I was driving the car home, I noticed that it was a bit difficult to see through the dirty front window and the car did not have the typical new car shine because it was covered with a film of dust. 

No worries, my son is happy to earn some money washing my new car and I now know this dealer is not about quality service, so I will go elsewhere with my service business. 

They did get their modest delivery fee, but they not only did not earn a new customer, they created what JD Powers calls an Assassin. As you can see by this blog post.

Mitch

Ed Zander steps down at Motorola due to failed Marketing

But how can that be true you say, the Razr ads are cool. The brand is well known. How did failed Marketing cause Mr. Zander’s (don’t know him, so Ed seems a little presumptuous) need to step down? 

If you have been reading this blog for a while, or if you have read our book, Value Acceleration, you know that Ralph and I (and all of the members of Customer Manufacturing Group), believe that the marketing tactics most people see and believe to be the primary role of Marketing, are simply the back-end of Marketing. And while important, it’s the front-end of Marketing that will kill you if you don’t get it right. All the money in the world spent on the promotion of products and services nobody wants is a losing proposition. 

With all of this in mind, I was amused (I’m sure Mr. Zander was not) that Business Week, in their December 17, 2007 issue noted that Ed Zander “… hung up his job…” because he failed “… to intuit what the market wanted next ….” 

In a company Motorola’s size, it’s hard to believe that Ed Zander should be personally responsible for “intuiting what the market wants next,” but he should have had people working in Marketing that could do that. However, given that Mr. Zander spent time with Scott McNealy at Sun who once told me that Sun was “… not going to waste money on marketing pukes” maybe Mr. Zander missed the critical role of Marketing in a company’s success.

Mitch

Listen to our radio interview … free

Ralph and Mitch were recently interviewed on a business radio program on their views of the current trends and pressures on marketing and sales people and processes. You can listen to this mp3 file by using this link:

http://audioam.blogtalkradio.com/show_116650.mp3

A bit more on CMO turnover

The business week article that Ralph mentioned in the previous post also noted a “fatal” flaw in the role of marketing in most companies. If you read the article (can’t find it on the BW website to link to, sorry), you’ll notice that the apparent definition of marketing (which is vague in all cases, as Ralph noted in his post) is limited to the “back-end” of marketing. That is, the so-called promotion and sales support aspects.

 If marketing is not also responsible for strategy, product/service offering identification, market targeting, etc., then the job of promoting poorly selected and defined products and services is bound to end up as a “scape goat” position. Until and unless marketing is viewed as a true business process that is tasked with the alignment of the company’s capabilities with customer needs, wants, and demands, the CMO will have a short tenure … or position elimination.

Mitch