Modern Marketing

Highlights from 2006 CMO Council Summit

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I had the opportunity to attend this year’s CMO Council Summit in San Francisco, titled “The Power of Engagement: Gaining Customer Intimacy, Influence & Inspiration”. The sessions were heavily focused on consumer marketing and brand building, so this summary will be a little off my normal topic of best practices in B2B marketing. If consumer marketing and brand building don’t interest you, feel free to skip this post.

The Power of Engagement

Speakers: Christine Heckart, GM of Marketing for MicrosoftTV, and Martyn Enterington, VP of Marketing for Textronix.

  • The CMO Council Select and Connect study (of which I am on the Advisory Board) found that marketing is suffering crisis of relevancy. Marketers lack respect and relevance in the executive suite, and they feel disconnected with the realities that drive effective revenue. They let sales drive the conversations with customers, not marketing.
  • How can marketers become more relevant? The speakers argued that it begins by being relevant to customers, and that this requires a solid understanding of customer needs and the buying process.
  • More generally, marketers should ask themselves, “How can marketing be more relevant?” One way to think of this is to ask “What is the first thing my replacement would do?” And then, “What’s the one big thing I’d like to accomplish in the next year, and what will I stop doing to have the resources to get it done?”
  • Martyn argued that it is more important to measure “advocacy” than customer satisfaction. Advocacy is a behavior, not an attitude, and is tied closely to growth. It all comes down to the question, “would you recommend my product?” Companies should calculate their “advocacy score” as the percent of “advocates” minus the percent of “detractors”. For more, see “The Ultimate Question” by Fred Reichheld.
  • Measuring “engagement” will matter more than other brand measures.

Brand Transformation Keynote

Speaker: Deepak Advani, Senior Vice President & CMO, Lenovo Group Ltd.

Deepak went through the case study of how Lenovo built its brand after it bought IBM’s PC business.

  • At first, they had big branding challenges. People worried quality or innovation would go down and that service and support would suffer. How should Lenovo use the IBM brand and the ThinkPad sub-brand, while still building the Lenovo brand? (People also worried about the security implications of having a Chinese company making laptops – perhaps they would use them to spy on the American people. To that, Lenovo responded that “people are reading too much Tom Clancy not enough Tom Friedman”.)
  • Lenovo wanted to grow in emerging markets and small business, where IBM was not strong, while keeping the ThinkPad brand in the large business market.
  • They explored different branding strategies. Option 1 – “Master brand” strategy (i.e. Samsung or Nike), where all energy is invested in Lenovo. This was rejected since they wanted to keep the powerful ThinkPad brand. Option 2 – “Sub-brand” strategy (i.e. P&G), where energy is invested only in the individual brand (i.e. Tide, Crest). This was rejected it is too expensive and too diluting to focus on many brands at once. Option 3 – “Dual brand” strategy (i.e. Toyota/Lexus), where there are two distinct brand experiences. This was rejected since it can go bad if the consumer experience is not totally distinct, which limits their ability to reuse channels. So they chose Option 4 – “Synergy brand” strategy (i.e. Motorola Razr or Apple iPod), where the master brand is strong as a sub-brand in some case
  • They used a phased execution. Phase 1 – Play down Lenovo, convey message that “things haven’t changed”. Phase 2 – Now that people know Lenovo is not destroying ThinkPad, let people know they’re making it better. The motto was “ThinkPad unleashed”. Phase 3 – Introduce new Lenovo products, aimed at customers different from ThinkPad marketers. (For example, the Lenovo 3000 was launched to focus on small business with a message of “worry-free computing”. They called the product “3000” to focus on the master Lenovo brand.)
  • To define the Lenovo brand, they used three criteria. The brand needs to be distinctive (can’t occupy same space in people’s mind as a competitor). Needs to be relevant. And needs to be true. Lenovo chose to go for “world’s best engineered PCs” and “global flat-world company”.  To communicate “best engineered PCs”, Lenovo wanted a real Purple Cow idea that would stand out, so they released viral videos that appeared to be tapes smuggled out of the Lenovo innovation labs, showing “advanced” prototypes like flying laptops. This generated 3.5M downloads and got 800 blogs talking about  where the tapes were real or just clever marketing.

Building a Brand Franchise

Speakers: Joe Gillespie, EVP, CNET Division; Dean Harris, CMO, Kayak.com; Shawn Gold, SVP, Marketing & Content, MySpace.com; and Page Murray, VP Marketing, Palm.

In this session, I was most interested in how MySpace uses their community for marketing purposes.

  • MySpace has118M users, 55M uniques/month, and 2M registrants a week. Their brand is expression, creativity, individuality, and they continue to create cool tools that aid in expression. They think of their users as “ambassadors” of content.
  • Shawn said that you need to engage with community in the way they want to talk to you. Otherwise, they’ll ignore you since online they don’t have to talk to you. This means you need insight on what works on your community.
  • MySpace gives users lots of opportunities for celebrity. For example, anyone who registered as a friend of the movie “Clerks 2” got listed in the credits. As a result, most of those users will likely see the movie and buy the DVD – leading to additional revenue and buzz for the movie. This is a way to do movie marketing that’s never been done before, which is what marketing with MySpace is all about.
  • On the topic of how a marketer can design a community that allows participation without deviating from the brand, CNET likes the term “architected participation”. For example, they found that CNET users didn’t like reviews that just said “this product sucks” or “this product rocks”. So they implemented a plan that forced reviews to be >50 words.

Growing Customer Equity – Creating Converts and Champions

Speakers: John Ciacchella, Principal Tech., Media & Telcom, Deloitte Consulting; Alicia Dietsch, VP, Business Segment Marketing, AT&T; Jeff Hayzlett, CMO, Eastman Kodak; Chris Moloney, CMO, Scottrade.

  • In the complex sale, third party validation and customer referrals and references are critical. How can marketers build that advocacy? Relationship networks; affinity groups; customer councils, and advisory boards were suggested as options. (Note: I was surprised that nobody discussed other techniques, like social-networks and user-contributed content.)
  • Chris from Scotttrade explained how he tries to incent referral by offering free trades for referrals. They reward both parties – the referrer and the referee. Referrals tend to bring higher value customers than advertising. They also found that referrers become MORE valuable post referral, but don’t know why.

New Channels of Engagement – Growing the Fan Faithful (NHL)

Speaker: Karen Durkin, EVP, Communications and Brand Strategy, National Hockey League

Karen’s keynote discussed how they reinvigorated the NHL brand after last year’s lockout.

  • Fixed fundamental economics of sport by moving talent around to level the playing feel.
  • Changed the product by adjusting rules which sped up the game and allowed for my goals. This created more late game drama and more come back from behind wins – which led to fan excitement.
  • Re-launched the brand: “Warrior” commercials; my NHL; focus on fan appreciation (thank you sign on ice; open practice; cheaper concessions).
  • Tried to build the brand of specific players.
  • Results: Avid players returned; record attendance (92% capacity); merchandise sales up; better TV ratings and more “Center Ice” subscriptions; more NHL.com traffic.

Engaging Partners and Customers in Co-Innovation

Speakers: Diane Hessan, President & CEO, Communispace; Nam Vo, VP Marketing, Health Systems, Cardinal Health; Nancy Bhagat, VP Marketing, Intel; Philip Juliano, VP Global Brand Management & Corporate, Novell.

This session was intended to discuss how companies can engage with customers and partners to improve innovation. Most of the discussion focused on traditional methods for listening to customers, but I was interested in the following:

  • Novell argued that customers will give you passionate opinions, but it’s not their job to tell you how to innovate. It’s the marketer’s job to assimilate the information and turn it into something useful. Don’t just give people exactly what they say they want; marketing must make sense of all the inputs and figure out something innovative and compelling. “Sometimes if you try to make everyone happy you end up making nobody happy.” You need to listen to everybody, but ignore customers who are stuck in the past.

3Rs of Customer Return: Retention, Renewal, Reactivation

Speakers: Rebecca Lieb, Editor, ClickZ; Ann Marie Miller, SVP, Corporate Sales, CMP; Alan Scott, CMO, Factiva; Peter Karpas, SVP, CMO and Product Management Officer, Intuit; Liz Smith, SVP, VP Marketing & Communications, Visa.

  • “Retention is like the weather, everyone is talking about it but nobody is doing it that much.”
  • CMP: Given that the average tenure of a CMO is only 23 months, it is hard for marketers to focus on long-term trends like retention – CMOs need to show fast results.
  • Factiva is able to quantify the exact return on their marketing investment. He claims his $10M budget generates $29.325+ incremental revenue.
  • Visa provides lots of tools and services to their member banks to help them keep customers. For example, they did an analysis with United / Chase to analyze the health of their portfolio. This helps keep the banks loyal as well. Visa also pushes to build the category of payment cards in general.
  • Given Intuit’s reputation for top-notch Product Manager, I found it very interesting that their CMO also their head of Product Management.
  • Peter from Intuit argued there is no such thing as pure awareness – when people first hear from you, you are already starting down the path of them having some propensity to buy. So the marketer’s job is not just to get people to buy your product, you need to do it in a way that defines trust.
  • In order to listen to the customer, Intuit has a culture of talking to customers in person. The front-line employees know why people leave, so the executives do “skip levels” (talking directly to frontline employees) and use “listening posts” that feed into “Voice of the Customer” intelligence / query program.

Producing Predictable Customer Experiences

Julie Robertson, SVP, Marketing, Feld Entertainment, Inc. (Ringling Bros. and Barnum & Bailey, Disney On Ice and Disney Live)

  • The final keynote focused on how Feld Entertainment builds their brand in a world where the “circus” looks pretty old-school compared with video games, MySpace, etc., and where there is little to remind consumers about their product for most of the year when the circus is not in town.
  • They define their brand as: authentic, nostalgia/tradition, wholesome family fun, something different.  You want a consistent experience but also surprise and delight. Also, cheaper than Cirque – the Walmart of live entertainment.
  • They use PR and direct mail heavily to get their message to their target customer (moms).
  • Recently, they changed the show, adding a story-line and dropping the three rings. By billing it as the biggest change in 50 years, they were able to generate significant PR.

Secure the Trust of your Brand

At dinner the night before, Marlene Williamson, VP Americas Marketing, Symantec Corporation spoke about the new CMO Council research, Secure the Trust of Your Brand. Some of the key findings include:

  • Nearly 2/3 of marketers polled believe that security and IT integrity impact corporate and product brands, and 76% worry that security breaches negatively impact the brands of the companies that suffer such failures.
  • 60% believe that security and IT integrity provide an opportunity for brand differentiation.
  • However, marketers are not acting on these beliefs: most companies have not made security a bigger theme in their messaging, and only 29% of marketers have a pre-defined communications plan to act in the case of a security failure.