Marketing Madness : Steps to recover

Recovery in a world gone mad

For the last 40 years, B2B marketing professionals have created program rules intended to cause results. From steps-to-the-sale programs, to dealer-loader initiatives, to programs aimed at directing the behavior of the parts counter guy, to frequency programs: the list is seemingly endless. "Incentives" have brought a kind of destructive madness to marketing. Rather than creating a holistic solution, these programs - in the language of systems - have "shifted-the-burden", become "fixes-that-fail", and highlighted why our channel partners should be thought of as "the commons" in the "tragedy of the commons" archetype. it is time to create sustainability in our marketing programs. that will require a kind of recovery for marketers.

“Recovery programs”, in the form of the multitude of 12-step programs that have proliferated since Bill W. and Dr. Bob, made profound contributions to living and the wisdom literature of the 20th century, is a radical paradigm shift in attitude and in living. Its two primary drivers — powerlessness and acceptance — are characteristic thoughts counterintuitive to the marketing imagination.

The reality of marketing today is that we must acknowledge our need for recovery. Over the past decade we have watched the power shift 180-degrees into the hands of our customers. We must all realize and embrace our powerlessness, and understand that accepting this brings greater power. In marketing, as in life, we need to become focused outside of ourselves and allow that others —our customers — hold the power and the key.

The power in the marketplace is held by our customers. No one can doubt this in the twitter-age of social media. Many of us erroneously believe that we own this power. Many of our dealers believe they own it. The truth, however, is that the customers have redefined value and the ways they want to buy our products, and, as such, hold the power over us. Moreover, through the power of social media, our customers now “hold sway” over our reputations and the success of our customer experience management initiatives. To not accept this power and to ignore what our customers tell us is to guarantee that we will be out of business in the near future.

One of the most powerful and pervasive movements of the 20th century has been the movement to heal the individual. Wherever we turn we are confronted with healing the inner child, dysfunction, codependency, etc. In the business arena, we’re being told to listen to our customers, to empower our employees and to develop a sense of community in the workplace, and this whole process is a journey.

Suppose we were to take the wisdom of self-knowledge, responsibility, acceptance, doing things one day at a time, easy does it, etc. and apply them to our marketing lives. Where would these musings take us? Perhaps it will lead to a paradigm of healing to make up for the marketing damage we have done. Let’s call it “12 Steps for Marketing Recovery.”

The Twelve Steps for Marketing Recovery

Step 1. We admitted that we were powerless over people, places, things, and situations, and that our sales and marketing lives were unmanageable.

Step 2. We came to believe that a power greater than ourselves could restore our focus and us to sanity.

Step 3. We made a decision to turn our wills and our lives over to the care of a power greater than ourselves: to our customers.

Step 4. We made a searching and fearless moral inventory of our sales and marketing selves.

Step 5. We admitted to our customers, and to ourselves, the exact nature of our wrongs.

Step 6. We were entirely ready to remove all our defects of sales, marketing, and customer experience.

Step 7. We humbly asked our customers to guide us as we remove our shortcomings.

Step 8. We made a list of all those we had harmed and became willing to make amends with them all.

Step 9. We made direct changes to our treatment of customers and to our processes wherever possible.

Step 10. We continued to take an inventory of our sales and marketing practices and when we were wrong we promptly admitted it.

Step 11. We sought through a quest for continuous process improvement and purging of our database to improve our conscious contact with our customers, seeking only to assimilate, to cultivate, and to retain them.

Step 12. Having had a spiritual awakening as a result of these steps, we tried to carry this message to others and to practice these principles in all our affairs.

Twelve-step programs hold many points of enlightenment for us as business people since their principles define behavior, communications and ethics in a world driven by openness, honesty, willingness and responsibility. The opposite behavior in

the language of “recovery” is codependency.

In agribusiness, codependency takes the form of entitlement programs, programs which rob our businesses of integrity, strength and self-reliance. Entitlements and the incumbent expectations of payments from manufacturer to their channel partners ultimately serve to destroy the marketplace and the covenants/relationships between manufacturer, dealer and grower. Entitlements hurt business because they cause loss. Loss of credibility, loss of price stability, loss of support, and loss of profit for all.

Reversing the codependency of entitlements is just one way the 12 Steps for Marketing Recovery can offer a road to marketing recovery. The solution requires detachment and tough love, but the end result is healthier, more profitable business relationships.

The Integrated model - the essence of best practices CRM

The Integrated Model is a Gold Mine: it’s the essence of successful CRM.

In business-to-business marketing, the integrated direct marketing model is a gold mine for the marketing group that wants to build sustainable relationships with the right customers. The Integrated Direct model is the foundation of best practices Customer Relationship Management and Customer Experience Management. The economics of the Integrated Direct model come from two primary facts:

1. Marketers have come to realize that they cannot afford to invest in all customers and prospects equally. In fact, acquisition efforts should be segregated out from cultivation, retention, and “win-back” efforts. Integrated Direct Marketing – that is the integration of your “market coverage efforts (sales, marketing and service) - allows us to do that. This delivers the promise of CRM.

2. More expensive contact types, such as face-to-face or special events, can be leveraged with tremendous effectiveness by lower contact types, such as the Internet, social media, E-mail, print, snail-mail, and phone.

Here’s what the integrated direct marketing process can do for you:

1. Reduce the expense to revenue ratio by at least 15%

2. Increase the number and frequency of value-based contacts to the right prospect or customer

3. Increase the perceived service level at the point of contact

4. Increase product penetration

5. Increase customer loyalty

Additionally, in support of particular product lines, Integrated Direct Marketing ensures:

1. Faster Introduction

2. Higher amplitude of sales

3. Segmented and sustained market position

4. More control when migrating customers to newer models, products and services.

Quoting Bob Stone, long the venerable guru of American direct marketing, a definition of direct marketing must include three phrases: “interactive system,” “using one or more contact media,” and as must all direct marketing “effect a measurable response or transaction.”

Integrated Direct Marketing is not direct mail; it is not telemarketing; it is not transaction focused. The integrated direct marketing model is data-based and loyalty focused. Integrated Direct Marketing is highly targeted marketing that uses an integrated, organized, planned system of contacts by which we make offers to individuals using a variety of media. This system of building sustainable loyalty with our customers and prospects creates an on-going civil dialogue. It is accomplished by integrating communication across all contact media - print, the Internet, E-mail, mail, phone, field events and face-to-face visits from the field force. It’s defining characteristic is the delivery of relevant value. The value is defined for us by our customers and prospects. It provides for the delivery of relevant value-based information at the right time, in the desired delivery system, to the right individual that ensures interdependent relationships built over time.

This “Market Coverage” model makes use of the marketing database as the repository of corporate memory, storing the results of all interactions with customers and prospects.

In addition to simple facts such as demographics and product usage, today’s sophisticated marketers are building database systems that capture the complexity of buyers’ needs and purchasing behavior along with relevant complaint and/or satisfaction issues. The information then is available for product design groups, marketing, sales, research and other corporate functions. The database becomes the springboard for the organization’s need to be responsive, flexible, and dedicated to learning. Through the technology of our database, we are able to store response data by individual contact within an account. Moreover, we are able to measure our effectiveness relative to cost and to results. The measurability tracks profits, investments, expenses, account penetration (or, “share of wallet”), problems, issues, complaints and satisfaction.

Integrated Direct Marketing is a systematic method of getting close to our customers. Using this tool we can integrate our channel contacts and media efforts through a common database, which is focused on our target universe. Through testing we can validate results and expand our program and processes with great certainty.

The marketing database is mind of the IDM organization. It is serviced by a proactive outbound call center (or telemarketing unit), which becomes both a listening post to customers and the dealer channel as well as a way to leverage the field organization in building relationships and selling products. In the Integrated model the marketing database is shared with the field organization, your channel partners, and all internal departments.

The essence of a successful Integrated process is the ability to capture, centrally, information about our customers and prospects at all points of contact – and then to transform that information in actionable knowledge that is shared across and between those functional areas inside your firm that touch the customer or your channel partners. The key to success then is how well the marketer can segment within a given target audience. It is critical in the B2B arena to segment on similar sets of unfulfilled needs and purchasing behavior. This allows us to understand our customers’ need and how they buy and then to market our products and services to these identified niches.

Once the segments have been identified (keeping in mind that the entire target universe may emerge as one large segment), the next step to take is to grade accounts within segments to ensure that the investment made is the least amount of money to strengthen the relationship with the particular account.

The grading model is a valuation model. In the Business-to-Business world, the grading model no longer should be the simplistic A-B-C model. Instead, it should allow enough granularity to understand the profitability and penetration potential of each cohort or segment. I suggest 5 grades, although in certain cases, I believe 7 to be the optimal number of grades.

Grading (or, “valuation”) is the economic modeling of the Integrated Direct effort based upon an investment decision, which takes into, account the historical (actual) revenue and potential revenue from a particular segment of accounts. In other words, grading serves the marketer as an economic and analytical tool, which requires that we invest in the major segments we have created proportional to their economic history and potential.

Integrated direct marketing works both as a stealth defensive weapon, as well as a highly leverageable marketing tool. The competitive advantage it affords the skilled executioner is proprietary and affords increasing , not decreasing, economic returns. The fundamental concepts we use in loyalty-focused customer relationship management include:

1. Market to individuals … not to corporations

2. Address the unique set of needs of that buyer group (or application)

3. Individuals are clustered (i.e., segmented) around common sets of needs which define a market niche

4. All contacts with an individual, whether a customer or a prospect, must be of value as defined by them

5. The technology we use is transparent

6. Planning is critical

7. Testing is mandatory

8. Integration is the process used to ensure that the higher cost contacts are leveraged

9. Properly executed the integrated model creates a continuous improvement process that profitably drives business strategy by creating a sustainable atmosphere of cooperation and coordination across, and between, your company’s various functional areas.

10. The investment made is proportional to the level of commitment to us, to the expected return from this customer.

it IS what you hear

Saturday note:

It IS what you hear. I'm not trying to beat a dead horse or plug someone's book, but this simple concept, one we all forget, truly is a lesson to be held close each day. We see examples of how language "works" in our daily public lives . Just consider the raucous behavior and emotional manipulation connected with such publicly debated topics as Health Care Reform; sending more troops to (or, the withdrawal of all troops from) Afghanistan; or the effect that cap and trade legislation will have on farming or our everyday lives. Language works in our lives: it gets things done; it produces results; it exerts an influence.

Whether it is my awkward attempt to talk to my 13 year old daughter about boys or acne or ?; or your time with a counterman at the dealership; or, your conversation with your spouse, remember this simple fact: it's not what you say it's what they hear.

Put yourself in their shoes. Seek first to understand. Stop and think. Be civil, respectful, and honest. Be open. Use language designed to build conversations and relationships.

Or, put this advice into your own words and add your own "rule".

What do you want your customers to hear? Given who they are, however, how do they hear, and translate, the words that you say?

Try this exercise in a "safe environment" (say with your "bride"). Ask your listener to "play back" to you what they heard. Were you understood? What affect did your words have?

Finding words that work, however, isn't the entire story. Listening, asking for clarificaton, seeking to understand: these are additional, critical elements of conversation. Conversation is what we want between ourselves and those who matter in our daily lives, as well as between ourselves and our customers.

For those of us deeply concerned about the customer experience, loyalty and customer relationship management, distracted by the pressures of business or life, we often can overlook how language shapes our results and the relationships we have with our listeners, our customers, friends, family.

If you want to analyze the underlying issues, go ahead. It could be the result of the Fall of the Tower of Babel or the speed of change in our world or careless use of "the Mother tongue". Let me know what you think. Thanks.

it's what people hear

"Nostalgia", that longing for something out of the past. I keep thinking that with the speed of change and the increased complexity of technology and life, we have given up more than we realize. This can be true especially in our selling efforts and our relationship management initiatives.

When I look to where the world has sped these last 10 years, I long for a return. It could be my age. It could be what my advisor was trying to reveal when we read Ibsen's, "The Master-Builder" in grad school. Whatever the cause, I often wonder what we may have lost on the human side of our CRM efforts, given the speed of our world and the increasing complexity of our business models.

Needless to say, much of today's CRM technology is "mind-blowing" and "awesome." The systems we have today really are amazing. The depth of data we now can plumb astounds me, especially when I stop to compare what could be recorded and excavated (data-wise) a brief 20 years ago. As the kids would say, "OMG!".

But as I look at what CRM has done for our relationships with clients, prospects, the various constituents, I wonder if in our race to keep up if we haven't lost the essence of building loyalty with our customers. Consider the driving metrics for our sales, service and marketing contacts with our customers. I wonder if we haven't lost something, perhaps a certain "civility" in customer interactions. Is one way back, a constructive look in the rear-view mirror, simply to ask ourselves: How well do we ascribe to Stephen Covey's adage, "Seek First to Understand".

Or, maybe it is to think hard on Dr. Frank Lunt's words: "it's not what you say; it's what people hear." How well do we incorporate that simple advice into our daily customer interactions?

The Story of Babel.

All too often we, myself included, fail to realize the power of language in our daily personal interactions. Seemingly, if we stop to think about it at all, we tend to reserve a different style for certain situations versus others. The motives are varied: perhaps we believe that certain occasions, settings, circumstances require more conscious, formal and deliberate language, while others don’t need the precision or effort or . True enough I suppose.

Yet if you stop to listen to conversations, even our own, often words no longer mean what they once did: denotations, connotations, and the satellite of associated images no longer are as rich nor as nuanced. The end-game for casual substitution of one word for another with completely different sense would be a re-enactment of the myth of Babel.

With the fall of Babel, god left confusion: confusion that carries over in our marketing, sales and service language and CRM efforts. In the words of Willis Barnstone , “…God dispersed the word, gave us tongues and the solitude of difference, and also the impossible but pleasurable duty to repair our separation.” Translation necessarily must be a key component of our relationships and conversations. Translation is an important tool with which we can rebuild a new tower of Babel. Barnstone believes “it is an impossible task”; and, I believe it is one that clearly haunts our customer relationship efforts.

The challenge is when one word is substituted for another or mistranslated in the mind of either the speaker or listener. The slippery slope here would results with words in casual conversation having lost their precision; they no longer would retain the power of their meaning; and, eventually one word could be substituted for any other with impunity. The crime of being careless and imprecise eventually could bring about the demise of language. In all words would become the same.

Communication, as Lakoff & Johnson point out[1], “is based upon the same conceptual system that we use in thinking and acting.” When trying to build a loyalty relationship with your targeted and best, core customers, what metaphors does your organization use in its conversations with others: customer, business partners, suppliers, employees, investors, etc.? Two metaphorically structured concepts to think about are:

ARGUMENT IS WAR (think about that next time your group talks about its “campaign”).

Or,

THEORIES (AND ARGUMENTS) ARE BUILDINGS

Such mental frameworks do color our efforts to build customer relationship management and loyalty. There are a myriad of other examples about how language shapes our reality and relationship, such as: “orientational metaphors” such the special concepts “virtue is up; depravity is down” or Rational is up; Emotional is down”

In truth however, language is one of our most powerful tool in building relationships. We live according to the metaphors of our daily exchanges. The simple fact is “our ordinary conceptual system, in terms of which we both think and act, is fundamentally metaphorical in nature.”[2] Are we overlooking the power and value of crafting consciously the metaphors that shape our attitudes, demeanor and behavior? Our assumption is that looking at these questions squarely in the face might do more for our relationship and loyalty efforts than we previously have given credit.

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[1] Cf. Metaphors We Live By, Lakoff & Johnson.

[2] Ibid.

Reputation and Brand Image: using Voice of the Customer in your CRM

"Risk" is all over the news. In business Risk and Crisis Management are critical skills. Process-wise, nowhere in your business model is more suited to support risk and crisis management than "voice of the customer work." In today's world, when often the first thing people do is "to google" a subject, what does the world see about you? when the subject of that google search is The Company, what first impression does the web present; and, what problems are made evident that call into a "shadowy realm" either your Brand or your Reputation? Actually, there is, in all likelihood, a wealth of opportunity in that evidence. Evidence to be mined and tested and acted upon in your customer relationship management communications efforts.

We believe that the best CRM initiatives help to monitor in near-real-time that treasure of opportunity and use their customer insight work to connect back to the marketplace so as to manage the language of the marketplace and ensure that the company's values align with their targeted audience and customers to demonstrate evidence.

Companies must use their customer insight and "voice of the customer"and other market research activities as a vital, living, actionable and connected part of their CRM initiatives. In today's world, "the winners" will use their CRM projects to ensure that "voice of the customer" work is fed back into the knowledge management and activities of day to day business. These same companies will go the extra mile to ensure that their corporate values are aligned with the values of their key stakeholders. These companies will be able to align the softer elements of business: values - culture - brand- reputation- and customer experience. Coordination and cooperation across all functional areas will grow more critical.

For more than one pundit has concluded that "companies that do the best aligning their corporate values with key stakeholder values will rule the marketplace."

What's happening in distribution?

I talked with 2 friends today.One has been in animal health distribution for “all his life”; the second teaches at “The B-School”. The subject with both was the role of distribution and the inevitable tension that exists across the channel, sometimes “exploding” into what is best termed “channel conflict.”

Our conversations were peppered with words such as “trust”, “consolidation”, “role”, “going direct”, “distrust”, etc. All signs of various levels of nervousness or fear; mistrust and apprehension: the realization that the world is much different today than when I was a kid 50 years ago. I was a B2B distributor early in my career. I “get it.” Emotions are roiling; it’s time for a change: it’s time to establish a new covenant among and across agribusiness partners – a customer-based, value-focused covenant. The battle is over familiar topics: who “owns” the customer? Who is “our customer”? What role will our channel partners play going forward? And so on. Sounds all too familiar, doesn’t it?

“The Channel” has played a pivotal role in agribusiness over the last century. Sadly and with the excitement of great potential, the role of the channel is changing dramatically.

Changes not withstanding, distribution has played, and has the opportunity to continue to play, a unique role in the United States. The channels’ processes and the roles of the players, off-shore, don’t “look” the same nor provide the same services nor do they offer the-potential-to-add-significant value, which our channel partners can play in North American agribusiness. Distributors, retailers, dealers, vets, agents and advisors all play critical roles.

Roles bring with them responsibilities and the concomitant obligation to give back and add value moving down the channel to the end-user. Each of the players in this distribution game understands their position and the reality of the changing world of agribusiness. Hence the growing distrust and channel conflict – all over customer knowledge and who owns the customer, it would seem.

A good Dealer or Distributor partner is invaluable: in the past, they were guaranteed the financial success they sought[1]. North American “Distribution Systems”, my academic friend reminded me, traditionally “owned” certain responsibilities:

a. Sales,

b. “Demand fulfillment,”

c. Physical distribution,

d. “Product modification and after-sale service, “ and,

e. “Risk assumption.”

In everyday language, the agribusiness “OEM”’s rely on their channel partners to be just that: “partners”.

Distribution is asked to generate demand, to sell their manufacturers’ products and to negotiate pricing; we ask them to run a business, stocking their shelves with inventory from our “plants” and at the same time to train their people to support us (and, we want them to support only us, knowing full-well they are, in most cases, multi-line outlets); we ask them to move product around the system and to customize it in the fields or barns; we ask them take on some major risks: inventory carrying, customer credit, investments in their own place to support the specific distribution and support of our products. We ask a lot. Good distribution partners give a lot – in some cases even more than we might have dared to imagine.

Those comfortable halcyon days of agribusiness have been disappearing ever since the mid-90’s. Information, transgenics, the power of the internet and the flattening of the world seem to be among “the root-causes.” There has been a blurring of roles, a continuing shrinkage in number of outlets there is also the threat – real or perceived - of manufacturers cutting out the middle guys, and a growing need to transform producer and grower data into actionable knowledge used sensitively to create a competitive advantage and noticeable point of differentiation.

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[1] I recognize that there are different naming conventions by industry: if we’re talking about the distribution value chain for seeds, crop chemicals, pharmaceuticals, etc. For ease, I’ve opted to use neutral words that work across multiple scenarios.