Tuesday, May 31, 2005

Forget the Myth.
Boomers are Online in Big Numbers

We recently consulted with a large healthcare system in NYC. They were convinced the myth was true. Truth is that we all need to wake up to the power of older consumers online, as the oldest baby boomers prepare to turn 60 in 2006.

eMarketer estimates that in 2005 there are 33.2 million people online in the US between the ages of 50 and 64, triple the number of 65+ online users. And unlike today's seniors, boomers are dedicated Internet users and broadband fans. As boomers approach the next phase of their lives, companies will be challenged to keep up with their ever-demanding ways, both online and off.

Marketing is Leaderless in Nearly Half of All Companies

Okay, count me as stunned at a recent report from Forrester Research that could account for the struggle of marketing to assert itself in the corporate ladder. Forrester identified that just more than half of b-to-b companies with revenues of more than $1 billion have a CMO.

In companies without CMOs, the marketing function is often highly decentralized, with various marketing functions reporting to different organizations-such as sales or product lines-throughout the enterprise.

For such leaderless organizations, the biggest challenge is deepening the relationship and value of existing customers. Companies that do have a CMO, on the other hand, struggle to build an effective relationship with sales.

What is clear is that the silo approach, whether it favors a centralized or decentralized marketing function, won't work.

Is the Answer to Healthcare
Locked Inside the System?

Most of us in or from the agency consulting world have long found frustration in our efforts to market for healthcare providers. No more worthy a calling than to help those in great need. The frustration comes not from our work in helping the sick find the right care. It comes from the complexity and immovability of the system.

Now, a new source of hope. According to a report released by the National Coalition on Health Care (a non-partisan alliance of more than 90 organizations), contends that a series of changes to the nation's health care system could provide health care coverage to the 45 million Americans who do not now have it while trimming billions off the nation's health care bill. The group found that system-wide savings would begin soon after the changes were phased in and by the tenth year would save $125 billion annually.

Such systemic change seems necessary. It would bring great heart to all of us who work as healthcare marketers.

New Contextual Promotion is Perfecto!

Adrants uncovered a smart contextual promotion from just up the road from me in Dayton, Ohio. Coated and carbonless paper maker MeadWestvaco is changing its name to Newpage, and has launched "The True You" promotion -- a portfolio collection site where designers can submit work, glean advice from other professionals and enter contests.

From the Adrants newsletter: "Professional advice comes from industry leaders as Linda Cooper Bowen, author of Marketing and the True You, Hank Richardson, who tackles The Ubiquitous Portfolio, and Olivia Fox Cabane, who discusses Networking Basics. Cooper Bowen also offers a Q&A session where graphic designers can ask a question on any marketing issue.

Who knew paper could be so contextual?

It is a smart move from boring product features to customer-centric information that should bring graphic designers back often to see what other designers are doing. And while they are there, they will learn more ways to use coated and carbonless paper in their future projects.


Monday, May 30, 2005

The Great Customer Disconnect

Look at the financial services industry for an illustration of how far companies and customers can be from one another.

In a study conducted by First Manhattan Consulting Group, 54 percent of financial-services respondents reported that "a lack of understanding of customer needs" was keeping them from finding a profitable Internet strategy.

At a Bank Administration Institute conference on retail delivery, bankers were asked to answer a series of questions posed earlier to consumers. Interestingly, with few exceptions, the bankers were out of synch with customers in a number of areas. For instance, when asked what service most financial consumers would pay for, 48 percent of bankers said advice and planning. In reality, only 20 percent of consumers said they'd pay for those services. When asked whether consumers would agree with the phrase "My life is different because of the Internet," 80 percent of bankers said yes, while only 33 percent of consumers did in fact agree.

Financial-services firms have to work hard to get into the minds of their customers. Most firms, when asked to list customer needs, mention “CDs” or 'investments' rather than 'long-term savings' or “aggressive portfolio growth.”

One of the direct benefits of detailed profiles is the ability to home in on customer needs and find ways to meet those needs. Firms moving into this realm recognize this as a critical component of their personalization strategies.

Unfortunately, shifting from thinking about products to thinking about customers can be a challenge. Most firms are organized around products, and even those that have shifted still focus more on product sales than customer needs

The Biggest Problems We Face
Have One Foundation -- Complexity

We conducted one-hour, open discussion interviews with senior managers in the United States and Europe to identify executive priorities that most impact the organization’s strategy and operations. We focused narrowly on areas in which the executives felt a solution had not yet been found or where existing solutions were encumbered with serious limitations. Based on our research, it was apparent that underlying their various concerns was the difficulty in managing increasingly complex business propositions.

At the top of the list was an inability to gain efficiency in frontline distribution channel management that, in turn, limits the organization’s capacity for organic growth. Other concerns included the inability to transform the business to meet new conditions, understanding the changing needs of customers and to identifying emerging customer opportunities, the ability to manage internal processes to produce value more efficiently and the ability to leverage existing technology investments. These are the concerns that most worry CEOs. The reason – CEOs know that these areas have become so complex that they limit their ability to manage the business successfully.

Save Fast Company! Please!

Took a little longer to recover than I thought it would ...

While I was recuping, my favorite print magazine, Fast Company, seems to have hit an unexpected (at least by me) bump in the road. John Byrne, editor of the pub posted a letter that the parent company Gruner & Jahr USA has put Fast Company up for sale. That would not happen unless the business side was not producing the results. And that could be bad news for a whole lot more business magazines. If the best is having trouble, the followers are doomed.

The fault cannot be with the editorial team. They produce the most creative, most readable and most inspiring magazine in America. My hat's off to Byrne & Team, and for each of them, I hope the buyer will not tamper with the product ... just get the business part of the machine working as well as the editorial side.

For the rest of you Fast Company fans, let's save Fast Company!

Saturday, May 14, 2005

Will Be Back Soon ... Recuperating Fast

I had to take some time out for a surgical intervention. Healing up fast and will be back to blogging next week. Ciao.

Tuesday, May 03, 2005

Miss the Context, Kill the Value Prop

Fellow marketing blogger Dave Lakhani has a sad tale of woe on Bold Approach, retelling his recent experience with Cingular. This case illustrates how far from customer context a company can stray, and along the way destroy all the value built up with millions of dollars in advertising ... all gone in a poof of smoke.

Dave gives us all some excellent tips on how to keep our companies from joining the ranks of companies that claim to be customer-centric and act otherwise.

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