Stop and think: Have we lost sight of marketing strategy in the digital age?
For this blog, I collaborated with two of the UK’s leading experts on marketing strategy: Moira Clark, Professor of Strategic Marketing and Director of the Henley Centre for Customer Management, at Henley Business School, University of Reading and Hugh Wilson, Professor of Strategic Marketing and Director of the Cranfield Customer Management Forum at Cranfield School of Management. I worked with Hugh and Moira when they co-supervised my Doctorate from Cranfield School of Management and am indebted to them for their wisdom and insight.
In our fast-paced digital world, “think” is becoming a dirty word.
And “marketing strategy” seems to be going the way of the dinosaur.
How did this happen? For marketers, it’s easy to use the need for speed as an excuse not to plan and learn. And it’s tempting to skimp on strategy in an effort to meet the demands of sales teams who want everything done yesterday. However, the opportunities opened up to us by big data and analytics make marketing strategy more important than ever before.
So how do we balance the good-old-fashioned need for method, analysis, and thinking things through with the real-world demand for action and agility? And how can marketing deliver the strategic muscle that’s needed to drive long-term competitive advantage?
Marketers must think fast and slow.
As Daniel Kahneman, author of the best-selling book “Thinking Fast and Slow” has said: “Thinking is to humans as swimming is to cats; they can do it but they’d prefer not to.” But, when we force ourselves to do it, all sorts of good things happen. Kahneman’s research shows that thinking more slowly, deliberately, and logically, leads us to make better decisions. When it comes to marketing, taking the time to think moves us beyond one-off campaigns and yields a strategic plan that identifies our target customers, articulates why they should buy from us and not someone else, and maps out how our marketing efforts will achieve the financial objectives we want.
What if we don’t have time for that?
You don’t need to look very far to find examples where the lack of a sound marketing strategy had dire consequences. Take Nokia. Once the darling of the mobile phone industry, the company is no longer in the business. Nokia was both agile and innovative but, without a clear marketing strategy, they got clobbered by Apple and Samsung. Or consider grocery giant Tesco. Although the company pioneered the loyalty card and has mastered big data analytics, they have suffered because they no longer have a clear value proposition for their customers. Waitrose – once a distant competitor – is now eating their lunch. And Aldi and Lidl are having them for breakfast.
Striking the balance between thinking and acting.
Clearly, for companies to survive and thrive in the digital age, they need fluid marketing tactics driven by a solid marketing strategy. To illustrate this point, we’ve developed a Marketing Success Matrix:
- The x-axis represents Agility – the need for speed and action as well as the ability to quickly adapt to changing market dynamics.
- The y-axis represents Cognitive Ability – the need for strategic thinking and long-range planning as well as the ability to analyse market forces.
When we apply the matrix to marketing, most companies fall into one of four quadrants:
- Tacticians are highly agile, but lack critical planning skills – which means they may be too consumed with the day-to-day to see where the market is going.
- Followers have low agility combined with low cognitive energy – they may be able to follow the market for a while but they certainly won’t be able to shape where it’s headed.
- Theorists expend high cognitive energy but have low agility – and that may prevent them from getting to market on time or outpacing the competition.
- Adaptive Strategic Marketers exhibit high levels of agility and cognitive energy – giving them the one-two punch they need to be effective in the short and long term.
How can we become Adaptive Strategic Marketers?
While there’s no one-size-fits-all solution, there are steps that marketers can take to reach the ultimate quadrant:
1. Think, but do it a bit more quickly.
Remember when a new executive came on board and he or she had a grace period of ninety days to get up to speed? Those days are gone. Thinking is valuable, but it must happen in compressed timeframes. In fact, in her book, “The Code for New Leaders,” Henry Rose Lee says that leaders must hit the ground running in days, not months or even weeks.
2. Implement a more agile planning process
Thinking should happen more quickly but it should also be done more frequently. In many companies, “strategic planning” is done once per year – and while they measure quarterly results, they may never revise the strategy until it’s time to plan for the following year. We must implement less laborious strategic planning processes so they can be done more frequently. Think quarterly instead of annually.
3. Assign ownership for marketing strategy
In many organisations, the CMO or Marketing Director “owns” the marketing strategy. And that makes sense. However, the CMO or Director needs a right-hand man or woman who owns the strategy process. This “strategy sidekick” understands marketing analytics as well as market research and can advise the CMO on the marketing strategy. He or she also discusses the marketing strategy with the people who have a strategy and planning function in other lines of business – including finance, sales, and operations. Most important, he or she is able to facilitate this cross-functional strategic group to ensure that all line-of-business strategies tree up to a master business strategy for the organisation.
4. Inform your strategy with the right data
Although we’re awash with data, we often don’t have the key data we need to formulate sound marketing strategies. We’re not talking about the data that can be captured through a digital footprint, but the wisdom that comes from tried-and-true qualitative and quantitative research. If you want to know what your customers’ goals are and whether they’re being met – why don’t you ask them? Or take a page from Apple’s book. Although Steve Jobs famously shunned market research, Apple actually spends a ton of time watching how people use their devices and gains deep customer insight by simply observing them.
5. Incorporate more strategic metrics
Be sure to measure what matters. For example, here at Cisco marketing, we have traditionally focused on individual metrics at different stages of the funnel. Now we’ve joined up measures of Reach, Response and Revenue in what we call “Connected Performance”, so that we’re measuring customer engagement from the initial impression all the way through to a sale.
Savvy marketers are also looking at new metrics like LOI (Learning on Investment) to measure their ability to adapt on the fly. They’re doing A/B testing constantly, adjusting campaigns accordingly, and codifying the lessons learned into their strategies.
But perhaps the ultimate strategic measure is Customer Perceived Value (CPV) – a measure of what customers get back from the time, effort, and money that they expend with a company. Measuring CPV looks not at the value a company gets from a customer but rather the value a customer gets from a company. Marketers who measure CPV have access to incredibly powerful insight that can inform their marketing strategies and give them a competitive boost.
So what’s the bottom line?
When marketers think and move too fast, mistakes, missed opportunities, and mis-selling occur.
Paradoxically, sound marketing strategies help companies become more responsive and agile. By keeping everyone “singing from the same hymn sheet,” marketing teams are able to reduce duplication of effort, increase time to market, and respond to customer insight.
So the next time your sales team asks you to run an event or execute a tactic, ask them this: What are you trying to achieve – and how does that align to the marketing strategy? That will give them something to think about.