Friday, March 19, 2010

Rethinking Marketing - Because companies can now interact directly with customers, they must radically reorganize

and to put cultivating relationships ahead of building brands.

  • Companies have powerful technologies for understanding and interacting with customers, yet most still depend on mass media marketing to drive impersonal transactions.
  • To compete companies must shift from pushing individual products to buying long-term customer relationships.
  • In this aggressively interactive environment, companies must shift their focus from driving transactions to maximizing customer lifetime value.
  • This may mean changing strategy and structure across the organization--and reinventing the marketing department altogether.
  • The marketing department must be reinvented as a ‘customer department’ that replaces the CMO with a chief customer officer, makes product and brand managers subservient to customer managers and oversees customer focused functions including R&D, customer service, market research & CRM.
  • These changes shift the firm’s focus from product profitability to customer profitability as measured by metrics such as customer lifetime value and customer equity
  • It means that product managers must stop focusing on maximizing their products' or brands' profits and become responsible for helping customer and segment managers maximize theirs.
  • Once companies make the shift from marketing products to cultivating customers, they will need new metrics to gauge the strategy's effectiveness
  • The shift from marketing products to cultivating customers demands a shift in metrics as well.
  • This organizational transformation will uproot entrenched interests and so must be driven from the top.

Think Ahead While Cutting Back: Marketing Priorities in a Recession

  • No company can succeed by cutting expenses alone. But the practical necessity of today's world is cut, cut, and cut some more.
  • Yes, we all should have been smart enough to build sufficiently robust measurement capabilities before the dramatic assault on our budgets began. Yes, we should have put some water in that bucket before the fire consumed so much of the house that marketing built.
  • But we didn't. So where do we turn once all the "fat" has long since been trimmed and all that's left is muscle and bone? And how do we break the downward spiral of cut, cut, and cut some more?
  • Take a step back and define the objectives for making smart cuts:
      • Achieve the target reductions the CEO is asking for (most people stop right here).
      • Support the company strategy for competing successfully.
      • Conduct a thorough and unbiased analysis of all options.
      • Preserve your credibility. Live to fight again another day.
      • If you're not balancing all of these objectives, you'll suffer death by 1,000 cuts yourself.
  • Have you sufficiently reinforced your relationships with profitable customers? Now may be the time to invest in retention, as acquisition gets put on the back burner. Acquisition costs often require a period of time to recapture, and you may not have that luxury.
  • Your customers and their needs are probably changing in response to the economy as well. Is your research effectively capturing their evolving wants, needs, and value-calculus? If not, you may need to spend a bit more on this issue before you can cut back.
  • Finally, present your findings with passion, but not bias. The mantra of the moment is "having run many options by the good people in Finance and Sales, we all feel that the smartest course of action is..."
  • Now is exactly the time to begin building that measurement capability you really wish you'd had over the past few months.

Leadership Lessons from Abraham Lincoln -

  • Abraham Lincoln’s genius was to manage the ambitions and egos of his rivals to form a team that could confront the challenges of civil war
  • His ability to create a team was rooted in an extraordinary level of emotional intelligence. He learned from his mistakes, he shared responsibility for the mistakes of others, and he did not hold grudges.
  • Lincoln’s experience, like that of other presidents in times of emergency, gives hope that the United States and other democracies will weather the current crisis.
  • If the new U.S. president can learn from Abraham Lincoln so too can business leaders who are grappling now with similar questions of how to lead in turbulent times.
  • Lincoln came to power when the nation was in peril, and he had the intelligence, and the self-confidence, to know that he needed the best people by his side, people who were leaders in their own right and who were very aware of their own strengths. That's an important insight whether you're the leader of a country or the CEO of a company.
  • Those were the days of no television. Leaders weren't worried about cable news or their BlackBerrys. They weren't multitasking; they had time to reflect. It's a luxury many leaders just don't have today, and that's a real loss

Tuesday, March 02, 2010

You Need a Vacation
by Michael Dalton Johnson
You deserve a vacation....but not just any vacation. You need one that will restore your spirit, enthusiasm and energy.

Spend your time far away from cell phones, computers, newspapers, radio and television. These are electronic leashes which bind you to a complicated and stressful world. Simply leave them all at home. It's easier to do than you may think.

Get close to nature. Take walks. Enjoy sunsets. Sleep in. Read a good book. Nap. Laugh. Have a long soak. Go for a drive in the countryside with no destination in mind. Have a slice of pie. Smile. Breathe. Unwind.

Forget deadlines and obligations. Forget the clock. Eat only when you're hungry. Go to bed only when you're tired.

Don't stand in line. Steer clear of casinos, amusement parks and big cities.

People who have disconnected for a week or two describe the experience as heaven.

Dropping out of your workaday life is not only good for you, it's also good for business. When you return to your work rejuvenated, you will enjoy new energy, enthusiasm, creativity and far better productivity.

At first, Type A personalities (like myself) have difficulty understanding and accepting this advice. Anxiety rises in them just thinking about disconnecting. However, when they get past the anxiety and think a bit further down the road, they see a big business benefit. When they consider the possibility of perhaps doubling their productivity, it all starts making sense.