Making most of your marketing DNA
Small variations make big differences
Most marketing organizations execute the same basic activities. But not all great marketing organizations make identical choices. Both the great brand-builder and the great product innovators can be great marketers but the underlying capabilities and choices that allow each to succeed are different and not necessarily interchangeable. Knowing this can influence how a company invests its incremental marketing dollars. ― Published on Jan. 1, 2012 by Simon McLain and Jonathan Copulsky
Exactly how many users, did you say?
Seven hundred thirty eight million people live in Europe, 590 million live in Latin America and the Caribbean region, 345 million live in North America, and 37 million live in Oceania.
When it comes to counting heads, however, social media site Facebook trumps five of the world’s seven continents with more than 800 million users, spanning 70 languages and as many as 500 million active users in a single day.
Meanwhile, in our world of almost 7 billion inhabitants, there are now over 5 billion mobile subscribers. Worldwide 3G subscribers grew 35 percent between 2009 and 2010 to 726 million,
From a marketing perspective, the time to ask whether social media and mobiles matter is long past. Although companies now allocate only 7.1 percent of their marketing budgets to social media spending, pundits expect that number to increase to 17.5 percent over the next five years.
But with the vast marketing reach and potential of social media and mobile, the question of how to invest is more relevant than ever. How can marketers make better choices around the richer-than-ever set of marketing investment options, particularly when it comes to social media and mobile?
Sprinter or marathoner?
We use the term “marketing DNA” to help organizations understand how they can take a more systematic and structured approach to choosing among available marketing options.
Consider, for example, the sport of running. While virtually all humans have the muscles necessary to run, those with a high percentage of particularly slow twitch muscle fibers excel at endurance sports, while those with a high percentage of notably fast twitch fibers can produce short bursts of power more appropriate for sprinting. By comparison, three time Olympic gold medalist sprinter Usain Bolt may have as much as 25 percent superfast twitch muscle mass.
Like the human genome, the genome of marketing organizations is more alike than dissimilar, reflecting common legacies and development paths. Most marketing organizations execute the same basic set of marketing activities, ranging from building their brands to creating compelling experiences for their customers to enabling sales of their products and services.
But not all great marketing organizations make identical choices or operate identically. Similar to the great sprinter and the great marathoner, the great brand builder and the great product innovator can both be great marketers, but the underlying capabilities and choices that allow each to succeed are different and not necessarily interchangeable.
Knowing this can significantly influence how it invests its incremental marketing dollars.
Small variations, big differences
So what are the marketing equivalents of the sprint vs. the marathon? We have identified five ways that differences in marketing DNA manifest themselves.
Sales: alignment between marketing and sales and service channels, including partners and third parties
Product and service innovation: creation and management of the pipeline of customer-centric innovative products and services
Customer experience: integration and management of key customer touch points and delivery of “moments of truth”
Customer insights: development of deep customer insights to get the right offering, through the right channels, to the right customer segment
Brand: creation and propagation of a compelling brand promise
Few marketing organizations can succeed without a minimum of capabilities and proficiency in each of these five areas. It’s hard to imagine a successful marketing organization that doesn’t exhibit at least basic capabilities when it comes to branding (or sales alignment, or product innovation management, or customer experience delivery, or customer insight development).
Getting Social, Going Mobile
Let’s revisit the potential choices associated with social media and mobile marketing. As described previously, it’s about how to invest in these rich platforms, not whether to invest.
Now, let’s take a look at how leading marketing companies have actually focused their investments in social media and mobiles to express and reinforce their marketing DNA:
Sales driven: Reaching out to customers via mobile banking and educational blogs to enable cross-selling
Compared to the industry average of two retail banking products per household, Wells Fargo leads at nearly six, thanks to its core strategy of cross-selling The bank sees its technology infrastructure as a key differentiator, aligning the organization’s functions and channels in reaching customers and selling based on needs
Wells Fargo boasts 5.5 million active mobile customers as of the first quarter of 2011, its fastest-growing delivery channel. According to a recent survey, Wells Fargo leads the industry in providing mobile banking in text, mobile websites and app forms.
Wells Fargo is also an early adopter of social media, engaging customers with social technologies since 2006. In April 2011, it staged a flash mob in the middle of Times Square to announce its return to New York City and its new status as a coast-to-coast bank.
Product and service innovator: enhancing car sharing through an innovative mobile app and social media monitoring
Zipcar entered the market in 2000 with its innovative by-hour or by-day car sharing service. Since then, it has rapidly expanded to major urban areas in North America and the United Kingdom, in addition to 250 college campuses.
Eyeing Zipcar’s rapid growth, competitors moved quickly. Hertz On Demand was launched in December 2008 and offers free membership, compared to Zipcar’s $60 annual membership fee.
However, Zipcar differentiates with its technology infrastructure and continues to command a market share of 75 percent. Its innovative mobile application was recognized as one of Wired’s “Five Commuter iPhone Apps You’ve Gotta Try” and TIME magazine’s 50 best iPhone apps for 2011. The app features location-based reservations, remote honking to locate a reserved Zipcar, tap-to-contact for help while on the road, a feature to lock and unlock the assigned car and more.
Zipcar’s word-of-mouth marketing approach is designed to keep costs low for budget-conscious consumers. As a result, the company focuses marketing dollars on low-cost, high-impact tactics such as social media ― and has gone a step further to turn social media into innovative customer service.
Making most of your marketing DNA
How can a CMO and other marketing leaders “coach” his or her organization to improve its potential? There are several steps that marketing leaders can act on to get the process underway:
Map your DNA: an organization must first define the combination of characteristics and capabilities that make it different. This begins with an assessment of each of the five primary elements of marketing DNA and how they are embedded in an organization’s history, capabilities, talent and the like.
Know your environment: although DNA defines a species, natural selection dictates its success over time. Similarly, an organization’s marketing DNA should be viewed in the context of the broader competitive and market environment to determine whether an organization has, or can carve out, a positioning that is differentiated and sustainable.
Define your pivot point: as demonstrated by organizations such as Harley-Davidson and P&G, some companies’ dominant DNA is obvious, even though it likely took investments over an extended period for it to manifest itself so clearly. For others, however, the evolutionary path is less clear. Therefore, marketing leaders should identify the marketing archetype that exemplifies their organization and establish this as the primary pivot point for key organizational activities.
Cultivate DNA: relatively minor changes in foundational marketing activities can be expressed with wildly different consequences. Evaluate marketing investments, including social and mobile, in the context of the organization’s marketing DNA, and orient investments around activities and capabilities that directly inform, align with and reinforce the company’s marketing archetype.
Evolve and learn: species evolve, and the environment in which they live changes. So while social media and mobile investments are currently critical aspects of most CMOs’ agendas, the levers CMOs can pull to express their specific genetic code will undoubtedly change over time. While the marketing archetypes are concrete, the tactical investment decisions marketers face are more fluid. So it is incumbent upon CMOs and marketing leaders to help their organizations adapt as new trends, competitors and technologies unfold and to use marketing DNA to guide the journey.
As marketing budgets face increasing scrutiny, marketers and finance teams should make better choices about where and how to spend each marketing dollar. Or, put another way, don’t waste your time training for a sprint when your best event may be the marathon.
This article was contribute by Deloitte.