Sunday, February 27, 2005

Addiction to Blogging
Take a Look at MarcomBlog

The deadlines are coming fast and furious at work lately so I have self-imposed a break from posting to this blog. But I couldn’t help myself. For me (and apparently for a lot of others out there in the blogosphere), blogging is addictive. Yes, it is work to write but it is also a release. My other hobby is painting which is like breathing in color. Blogging is like breathing in words.

So let’s end the self-imposed silence.

Last week, I had the pleasure of meeting a fellow blog contributor to MarcomBlog – David Forstrom. We were both attending the American Marketing Association’s blogging conference in Chicago. David currently heads up the DC office of Connect Public Relations. Together, we participate with 7 other marketing professionals who give counsel to students at Auburn University via MarcomBlog.

The blog is the brainchild of Robert French, technology instructor at Auburn. What better way to teach technology than to use it? So he has his PR and marcom students blogging their hearts out. Along the way, MarcomBlog has been getting traffic from a far wider circle than just his students. It is published now in three languages and features postings from David Forstrom, Bill French, Guillaume du Gardier, Josh Hallett, Neville Hobson, Dee Rambeau, Octavio Rojas, Tara Smith, and myself (Dale Wolf).

The postings at MarcomBlog cover a wide range of marketing and PR thoughts and I guarantee it is worth visiting and bookmarking.

With that, I will return to my silence for a few more days as I tend to my day job. Just like the Terminator, however, "I will be back" to post on my professional passion -- contextual marketing. I hope you find my musings helpful.

Sunday, February 13, 2005

Will You Be Outsourced to India or China?
Turn Ourselves into a Competitive Advantage

The business engine (including marketing) behind Western Civilization’s great leap forward in the last 50 years is on some sort of brink. More and more manufacturing is moving to places in the Far East – China and India, in particular.

I cannot blame the business managers who outsource to get lower prices. As consumers, we all demand lower prices. Walmart is just our mouthpiece.

The danger lurking, as we all know, is how much is too much.

Where is the tipping point? And, what can be done about it?

Wringing hands? Nope! Blaming unions? Nope! Giving in? Certainly not! What then?

It might sound simplistic, but there may be a clue in how my employer looks at the purpose of its business. Cincom states that “it provides software to simplify the management of complex business processes so as to improve productivity and add value at low cost, rapid return and low risk.”

Good motto. But one Cincomers actually work toward every day. The result: three years of back-to-back-to-back profitability in a market that has struggled to survive.

So, I got to thinking recently … what if all of us in marketing took such a credo to heart? Can we simplify the management of complex marketing processes and give our companies a competitive edge, one that collectively would give Western companies the ability to compete more effectively with the Far East and win back jobs … even win back manufacturing?

I like a good challenge. Of course, I think contextual principles are at the heart of good marketing. While context is not easy to master, it is a concept that can lead to simplified management methodologies that then lead to easier-to-manage execution.

Ponder this one with me, will you?

What can we as bright, innovative, caring marketers do to simplify the management of marketing processes that are so incredibly complex. How can we use simplification as a tool to drive effectiveness and efficiency?

Any takers?

Danger Zone for CEOs with No Ears

Out of the mouths of students ...
Comments on corporate listening


Allison, a student at Auburn University asked: “If she (Carly Fiorina) is such a revered business woman, then what made her stop listening? That is something that no one but she can answer, but it makes my mind wonder what really was going with her.”

Listening when the input runs counter to what you want to do is reallllllly hard to do.

“Search, Lord, my heart and know my ways.” The Biblical phrase is loaded with wisdom.

Leaders must follow their hearts and pursue a vision that often the rest of us cannot see, but when they are driving forward for the wrong reasons … reasons they might not be able to admit to themselves … the results can be disasterous.

For example: “I want to make HP big because it serves my ego” or “I want to make HP big because it needs size to defeat IBM” are quite different but could be quite easily confused in the mind. One reason serves the CEO’s personal and inner needs while the other serves the needs of employees and shareholders.

Carly was apparently warned by shareholders, her management team and her Board to go cautiously on the acquisition of Compaq. She would hear none of it and now they have problems as a company that they did not have before.

Big decisions demand listening … then heart and courage and wisdom. If decisions are driven by pride, arrogance or greed, I suspect the decision-maker cannot hear advice because it threatens self-image.

DBM, a global human resource consulting firm, analyzed data from 481 public and private businesses worldwide for 2000-2001 and found the average CEO tenure to be only three years, a slight decrease from two years before. Only 28 percent of CEOs lasted five years, compared with 37 percent in the 1998-1999 survey.

Makes you wonder if CEOs have ears at all.

Saturday, February 12, 2005

Carly! Are You Listening?

Carly Fiorina, one of the most powerful and celebrated women in business, was fired by her board of directors at HP.

Whoa!

My read of the news reports covering her axing is that she was in total denial. She got advice from almost everyone around her that she was taking HP in the wrong direction.

This whole trauma could have been avoided.

Even when we are certain we are right, if everyone around is challenging critical decisions it is time to reflect. It is not the time to put your hands over your ears!

LEADERSHIP is as contextual a skill as is Contextual Marketing.

We need to keep our leadership actions inside a context that goes beyond the one we see so clearly before our eyes. Absolute power is not a trivial thing to exploit, because few of us are in a position to plunge forward without due regard to those around us ... the essence of context.

Ego-driven authoritarian decision making cannot long survive. There's always someone else who is really in charge. Today, it is the customer, the shareholder, the stakeholder, the blogosphere. Leaders who go up against this constituency without adding value to overcome naysayers, walk on thin ice. Some like Ms. Fiorina fall through.

Better to live a model of servant leadership. When we serve our customers, employees and other vital communities, we become stronger leaders. Pride, arrogance and fear must be uprooted and replaced with love and concern. This does not mean replacing with weakness, ambivalence and indecision. If we listen real sharply to what people around us are saying (not what we want to hear them saying), then we can get good advice upon which to make great decisions.

Just because we are in positions of power does not excuse us from the need to listen. In fact, it makes listening even more essential.

Listening - all day long - is the most important skill we can use to build successful careers.

Friday, February 11, 2005

Wendy Yee and the Cincom Web Team
More Heroes in My Book

She’s not on Fast Company magazine’s list of “Fast 50” people, yet. But she’s a dynamo nonetheless. I’m talking about Wendy Yee, our Project Director from Human Factors International. She’s working with us to optimize the customer usability of the global website for Cincom Systems. Wendy sports a BS from MIT and a Ph.D. in neuroscience from Johns Hopkins School of Medicine.

Okay, so she’s smart.

But there are a lot of smart people who just don’t get it. Wendy gets it. But when she makes a presentation, you have to listen fast. If you let your mind wander for a few seconds while she’s presenting recommendations, you will wake up 10 slides into the story. And you will have missed some incredibly clever thinking on how to tune a website so that it achieves company goals while meeting customer needs.

Wendy and the HFI team have been great to work with … step-by-logical-step, the new site navigation has taken shape and all of us working on the project have great confidence that we have nailed our objectives for a very complex project that in the end will be in English (the Queen’s version and the President’s version), German, French, Spanish, Italian, Australian (another foreign language), Chinese and Japanese.

The other half of our website project team is the Cincom staff. Over 75 people have been involved in one way or the other as we totally rebuild a website that no longer communicates how Cincom delivers exceptional value to its customers. The core team is Tim O’Toole, Dorothy Foley, Devin Meister, Michael Fecher.

When you look around inside Cincom you see a lot of strong, talented and caring people. I wrote about Steve Kayser earlier. The web core team, and the product and global region marketing managers all fashion intensity, care and deep involvement in working together to do big things. The result has been three consecutive years of record profit in the enterprise software industry where few others have performed so well. It happens because our first focus is on the customer. That’s what makes Cincom such a great place to practice contextual marketing principles every day … and to see them outperform the competition.

Thanks, Wendy. Thanks, Team.

This is fun stuff.

Hat's Off to Steve Kayser, One of
Fast Company Magazine's Fast 50 People

Today I am stepping back a tad from my crusade for contextual marketing to tell you all about a special person, my colleague Steve Kayser. The occasion is that Steve has just been nominated as one of Fast Company magazine’s “Fast 50” people – the magazine’s way of celebrating remarkable people who stand out from the crowd … their goal is to remind the world of all the good that’s created when passionate people with big ideas and strong convictions are determined to make a difference.

Central to his nomination is his innovation and editorial leadership of the eNewsletter for Cincom Systems. The publication is called Expert Access. The best way to describe EA is for you to see it yourself … subscribe here.

The important thing for all of us in marketing is to find role models like Steve who can bring courage, energy, innovation, integrity, passion ... all with a commitment to metrics.

Steve has rounded up a stunning collection of contributing writers for EA: Al Ries, Dave Stein, Skip Press, Seth Godin, Ken Sutherland, Dr. Paul Pearsall, Steven Van Yoder, John Tuft, Robert McKee, JoAnna Brandi, Renata J. Rafferty and (ahmm) me :-).

You'd be surprised about who some of the readers of Expert Access are … CEOs of major companies ... for example, Herb Kelleher, Founder and CEO of Southwest Airlines, and a person Peter Drucker referred to as perhaps one of the greatest CEOs of all time, and according to Fortune magazine, perhaps the best-ever CEO in America, reads EA and also contributed via an interview. Industry Analysts ... how about the fact that most of the major analyst organizations that cover the technology industry are subscribers? And wait until you see some of the major media types that will appear and contribute to Expert Access shortly.

Steve’s claim to fame might be his work on Expert Access. But those of us who work with him know something else. EA is like fifth or sixth on the list of important things he does for Cincom and all of them are done equally well. We also know something else. When you look for role models for “good men on earth” look no further than Steve. I am always struck at his compassion and caring for those less fortunate around him.

Monday, February 07, 2005

The Day After ... TiVo Turned on its Head

My last post covered how traditional marketing is dead because we're all using technology to isolate ourselves from marketing ... one of my examples was how we use TiVo to delete the commercials from our TV viewing. Now the day after the Superbowl, we witness a complete turnaround ... consumers were using TiVo to delete the football game so they can watch the commercials uninterrupted by the game.

Lifting the commercials to an emotionally touching level was the Anheuser-Busch thank-you for the troops returning from Iraq. This commercial hit spot on for all of us who appreciate so much the sacrifices these brave men and women are making every day they serve. I don't know about you, but this commercial got to me big time! Now, I can also imagine some viewers thinking AB was taking advantage of the troops by using them as the cast in a commercial, but they spent $2.4 million to say thanks for all of us. We should all switch to Bud to show our appreciation.

And, NO, I was not paid to write this blog!

Saturday, February 05, 2005

Traditional Marketing is Deader 'n a Door Nail

This morning got started as I traveled through some of my favorite marketing blogs. I dropped by the site collecting votes for the 2005 Business Blogging Awards. Having just told my wife the other night that there are too many award shows on TV these days … cause they’re beginning to push reality shows off the air … and yet I had to cast my vote for Seth Godin’s blog.

I then went to the blog by Ben McConnel and Jackie Huba where I came across a post that challenged some of my basic tenants of marketing. Jackie was encouraging visitors to tell owners of movie theater chains to stop pre-movie ads. I commented back, but then got to thinking that my comment didn’t quite convey my thoughts.

That action sent me to the blog for small business marketing by Michael Pollock where he was writing about how democracy and freedom of choice was an underlying driver in the death of traditional marketing.

Traditional marketing is dead.

It's dead because for the past decade it has not produced results that merit the expenditure. It must change. We cannot force messages down people’s throats when they are not willing to receive them. This is nothing new, but as Michael points out, it is only getting tougher because customers are acting aggressively to protect themselves from us marketers.

Michael wrote: “We've cut traditional marketing off at the knees. We fire up our Tivos, and skip the commercials, unless we choose to watch them. We filter our email, and read only the messages we choose to read. We not only propose laws that force theater owners to tell us how to avoid their advertisements, we demand they stop showing them altogether. To companies who seek to enter our purses and wallets via the telephone, we say don't call us, we'll call you.

We expect business to respect us. Respect our privacy, respect our values and respect our humanity, rather than prey on our human vulnerabilities and our love of the bling. We expect you to stop marketing to us, and start connecting with us.
Purple cows wow us, and free prizes entice us, but we also want you to be real. Be human. We see you behind the curtain. You're no wizard. You're just one of us who wants the same things we do. Information flows more freely and more quickly today than ever before. And if you make the grade, we'll tell everyone we know. And even more who we don't know. If not, no need to pack a lunch. We won't keep you around long enough to eat it.”

Prospects have not changed.

They have never liked nor responded to intrusive marketing. While there are exceptions, most mass marketing has hovered in the 2% response rate for years and years, across all media – free standing inserts, direct mail, trade shows, TV and radio, banner ads. By any standard, a 2% return on investment is not a good deal. Our CEO’s would be better advised to invest the money in a long-term bond than to spend it on such programs.

We’ve just been unwilling to invest in new approaches that can be more successful and helpful to customers. We got real comfortable running a 24-page insertion campaign in the two leading trade magazines than in identifying our prospects by name and connecting with them on a more personal, helpful manner. The former is easy. The latter is hard work.

Our task as marketers is to communicate the value we offer. The best way is to be relevant to the customer. When we love the customer as we would have the customer love us (Biblical echo not accidental), then we will find ways to communicate that are appreciated by the people we want to buy our stuff.

While practicing customer love, we need to be sensitive to their needs, wants and expectations. We need to be less intrusive and to fit into their world. Our messages themselves should be seen as valuable to them, helpful to them, relevant to them.

Now back to the issue of running pre-movie ads

Some movie fans clearly seeing this as an intrusion on their evening at the movies. As consumers, the fact that we see such ads as intrusions indicates to me that the marketers behind the ads have failed. They placed an ad in front of an audience without establishing contextual relevance. If I am thinking about a restaurant after the show, then I am interested in messages about nearby restaurants before the show. Another way to help me as a consumer not to see these ads as intrusions is to make them as creative and entertaining as the movie I am about to watch. We love our Super Bowl ads … many tune in just to see the commercials and not the game. There are ways to preserve the movie theater as a viable medium for marketing.

More troubling to me is the issue of transparency. Pre-show advertising at movie theaters versus product placements neatly placed into the movie itself. At least the pre-show ads are transparent. We know they are ads. Not so with James Bond driving a BMW, or contestants on Survivor earning a snack of Budweiser and Fritos, or a promotion for a political point of view being slipped into the blogosphere as if it was written objectively by the author (who, instead, was paid to pitch the point of view). Which one is more honest and respectful to customers?

Marketers have important decisions to make. If we keep the interests of our customers as a priority, we will be more helpful and more successful.

Friday, February 04, 2005

Can We Face Reality?

Sherlock Holmes and Dr. Watson go on a camping trip, set up their tent, and fall asleep. Some hours later, Holmes wakes his faithful friend. "Watson, look up at the sky and tell me what you see."Watson replies, "I see millions of stars.""What does that tell you?"Watson ponders for a minute. "Astronomically speaking, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, it tells me that Saturn is in Leo. Time-wise, it appears to be approximately a quarter past three. Theologically, it's evident the Lord is all-powerful and we are small and insignificant. Meteorologically, it seems we will have a beautiful day tomorrow. What does it tell you?"Holmes is silent for a moment, and then speaks. "Watson, you idiot, someone has stolen our tent."

If Reality can fool Watson, it can fool us, too.

Assembly-line thinking has taken marketing as far as possible. Scale has been a powerful weapon that we used cleverly. But it has been overtaken by customer-demand for variety and relevance. Product options, channels, media and finely sliced segmentation have led to complexity that has given rise to Customer Relationship Marketing technologies to help us manage complexity.

Take one industry as an example. In 1980, there were 458 mutual funds for customers to compare. Ten years later, this grew to 3,081 funds and by 2003 we had 8,126. The Rule of Complexity states that the amount of information that must be compared is (N squared - N). If each fund has just 5 options, then there are a total of [(8,126 x 5) squared – 8,126] permutations to manage. You are confused. Your sales and service teams are confused. The consumer is confused.

Marketing, sales and customer care responded by putting their work into assembly-line silos that further strangled management systems. Booz Allen Hamilton estimated that this complexity increased cost of operations by $1.5 million per $1.0 billion in assets. One bank measured the hidden personnel cost of complexity at 52% of its total processing labor cost.

Nothing but a fairy tale could make this reality sound simple to anyone. But the answer is not to return to 458 product options available in 1980. The answer is to find new ways of doing the work of marketing, sales and customer care.

We are shifting from mass markets with their economies of scale to personalized markets driven by customer demand. There is a huge gap between what we are still doing as marketers and what we must be learning to do. We must adapt new ways of thinking and new skills for execution. We must cause growth. We must do it efficiently. We must manage the unexpected. We must do it without exposing our companies to increased risk.

In traditional marketing, this would be the Situation Analysis that leads to the Marketing Strategy. This should be where we shine. We’re trained to analyze situations and come up with solutions. But if we’re so good, why do most marketing programs fail?

In part, I see us as victims of our own positive thinking. We believe in what we do. We believe we can save the world. But all too often, we see a vision that does not exist. We ignore the facts and believe what we want to believe and we convince others to follow us.

Senior executives will have to pay more attention to how their marketing strategies and tactics meet customer need. But it will not be the same marketing of the past. It will be one based in the new realities.

Keep in mind the facts. Most new products fail. Most direct response marketing programs fail – 98% failure rate. Whenever we launch something new, the odds are against our success. It is easy to get excited about a new product or promotion and be blinded to the facts. Flawed thinking or unsupported optimism at the strategy level is the single largest potential for wasting corporate resources.

"Facing reality sounds simple - but it isn't. Self-delusion can grip an entire organization and lead the people in it to ridiculous conclusions." -- Jack Welch, "Jack: Straight from the Gut"

Waste is the Enemy of Contextual Marketing.

Facing reality is not always easy or popular, but the only way to succeed is by coming to grips with reality. Programs fail for a reason and we have a responsibility to understand why they went wrong. Face reality, then act decisively. Don’t boil the ocean in one day. Fill the holes where things are not working until you emerge with a True North and a system for doing more effective and efficient Lean Marketing.

My experience counseling many Fortune 1000 companies tells me we still have a lot to learn about facing reality.

The Roadblocks to Seeing Reality

We don’t get the real facts. I once worked for a brilliant General Manager of a company that made built-in appliances for residential builders. We wanted to verify some of our conclusions by researching the target market. We knew he hated market research, but he begrudgingly allowed us to do the research – only after he wrote the answers to the survey down and put them in a sealed envelope in his drawer. We did the research and then he pulled out the envelope. He was mostly right, except that he totally missed the price point that homeowners would be willing to pay for the product. He missed the value.

That would be a remarkable example, except that in one variation or the other, I have seen this repeated more times than I can count.

Here’s another variation of the same theme – also repeated day after day by managers. We form our picture of the customer from sales call reports or by making joint calls with our sales reps. That’s a good source of input, but it should be balanced by input from more objective methods. During a sales call, two things are happening. You are trying to convince the prospect to buy and they are trying to fend you off. Both actions then distort the real truth. Failure to observe reality increases risk of marketing failure. And we are failing at too high a rate.

Excessive Enthusiasm.

J. M. Barrie wrote that “We don’t see things as they are, we see things as we are.” That’s part of the problem. But we also see things the way we want to see them. I watch new Brand Managers come on the scene with a big idea they feel will pave the way to personal success. Given that motive, they see only the reality that supports their solution. (Confession: I’ve done this myself.) Being good marketers, we can convince others that our version of reality is true.

But the result is the same. The program gets launched despite unrealistic odds of success and then comes up against reality where it dies a very public death.

When I get invited by clients to come back in and review the programs that went wrong, the first thing I typically see is a set of vague objectives that had no measurements and were not supported by any substance. If there are no measures, it is hard to see where the failure occurred.

When we fail to face reality, we let marketing programs go forward that have no chance success. Worse, we miss the opportunities that existed for even greater success.

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