Facing the new challenges of marketing

HBR spotlights in its last issue the new challenges of Marketing in the digital age. They address this subject from three different perspectives:

The latest (and the best) in marketing

In other words: what strategies, structures and capabilities should marketers adopt to excel? The Marketing2020 Study surveyed more than 10.000 marketing executives about their organizations’ data analytics capabilities, brand strategy, cross-functional and global interactions, employee engagement, and other factors. High performers excelled in their ability to leverage customer insight, communicate a societal purpose and deliver a rich customer experience. They also demonstrated superior cross-functional collaboration, strategic focus, organizational agility and training through fluid organizational structures where Marketing is a core facilitator.

Here’s how the best meet the challenges of the digital age:

• they use data and analytics to improve marketing effectiveness
• they are clearly connected to the corporate strategy
• their employees are fully engaged with the brand purpose
• they focus on the right metrics
• their training programs are tailored to the specific needs of their business

Marketing collaboration

Marketing organizations must collaborate with other functions more than ever before but structural constraints and communication glitches often isolate them from the information and resources they need. The marketing pioneers are revamping the decision processes at the boundaries between functions, focusing on planning and strategy, execution and operations and infrastructure. It is at the seams between Marketing and the other functions that communication most often breaks down and processes stall. Just to put an example: in many occasions marketers and product developers believe that they have the final say on which features to include in a new product.

Some companies like Nordstrom have improved collaboration between marketing and other functions with simple tools that streamline decision making by establishing clear roles, explicit decision criteria and well-defined processes.

For that reason it is imperative to decide how to decide, assigning roles for key decisions.

Aditya Joshi and Eduardo Giménez suggest that as marketing works jointly with other functions at its boundaries, it must answer questions like:

• Business strategy: Where should we double down on marketing spend? Where should we pull back?

• Sales: How should we align performance metrics to ensure that marketing and sales focus on the same opportunities?

• IT: Should we build, buy or outsource the marketing technologies we need?

• Analytics: What criteria should we use to allocate scarce analytical resources to marketing rather than other functions?

• Pricing: How should we determine the optimal price incentive to prompt desired customer behaviour?

• Finance: How should we set financial expectations for tried-and-true marketing investments versus unproven but promising ones?

Truly understand your consumers

Many companies don’t really understand how many different kinds of relationships customers can have with brands, nor do they know how to reinforce or change those connections. These companies need to get better at capturing data that tell which relationship types their customers are looking for. They must shift customers toward relationships that advance the firm’s strategic goals. That requires understanding the unspoken rules of each type of connection and in many occasions means reorganizing marketing around relationships.

The authors of “Unlock the mysteries of your customer relationships” explain that each type of customer relationship is governed by its own rules. For example:

Basic exchange. The customer enters the relationship to obtain a good product at a fair price and doesn’t want to have to think or do too much.

Business partner. The customer wants to work with the company as a valued and reliable partner to solve problems over the long term.

Fling. The customer wants to experiment with a new identity. He expects the company to provide excitement and not encourage reflection or rational thinking about purchases.

Best friends. The customer is looking for intimacy and emotional support with a two way flow of honest communication and expects that the company won’t disclose personal information or take advantage of his vulnerability.

Buddies. The customer is looking for sustained interaction but doesn’t want a close relationship. He expects that the brand will not make demands or limit his freedom to associate with others.

Master-slave. The customer enters this relationship to intensify feelings of self-worth. He demands that the brand listen, anticipate his every need, satisfy every demand and not ask any question.

An excellent example of understanding this is Harley-Davidson. A team of employees spent time on the road with customers to develop the kind of intimacy that could cement Harley’s status as a best friend.

Related posts:

The Marketing Plan: the unresolved matter for SMEs

Social Media Marketing for B2B SMEs

The big challenges of B2B SMEs