Shortly after I got up this morning, I strolled over to Marketing Over Coffee for a quick shot before heading off to work and found this great article, entitled How to restore the faded luster to marketing by Rich Guha.  In my opinion, it’s a “must read” for anyone looking to build a business or aiming to build a career in marketing.

It’s about the big picture

Referencing management heroes such as Peter Drucker and Ted Leavitt, the article discusses what companies have lost as marketing becomes more specialized. Guha advises marketers that wish to add significant value to the business to:

• Step back from tactics and understand the “theory of the business.”
• Understand what are the ways to measure performance which drive market value.
• Understand which levers in the business will increase market value.
• Regard tactics as components that can only be used with an understanding of the entire business plan.
• Understand the customer and end user intimately.
• Focus on Product, how it is priced, presented, and where it is available to customers.

It takes intimacy and integration to hit the mark

In short, he emphasizes the importance to successful businesses of a) understanding customers’ needs across the spectrum (yes, back to the 6 Ps*) and b) understanding which levers in the business will increase market value.  Without these important capabilities, front and center, companies often end up missing the mark and spending way too much on “marketing”.

Guha quotes Drucker as saying, “If Marketing were to do its job perfectly, Sales would not be needed.”  In other words, if you really understand all aspects of a prospects’ needs , products would sell themselves.

This is not the same as “build it and they will come”.  The needs to which Guha and Drucker are referring, go way beyond the product features and benefits.

Upfront investments in market intelligence save money

Nevertheless, Marketing can’t do the job perfectly.  That would require mind reading.   Still, an upfront investment in marketing research can save a lot of money down the road–if either the product, or its promotion and distribution, will cost a lot to accomplish.

There  are many ways to gather prospect  information from surveys to customer shadowing to watching click streams.  The key is knowing what you’re looking for, and how to use the information you get.

Else, you’re likely to miss the market window.  Or, if you’re “lucky” spend a lot of money on  rework until you get it right.

Start with deep customer insights

Therefore, a lot of companies are investing in developing buyer and user personae before making the much larger investments in product development and content. They capture the “voice of the customer” and then create archetypes for the three to five most important roles at the companies in their target market.

To bring these archetypes to life, many companies give them names.  These examples help multidisciplinary teams discuss and figure out “What Jane would do” or how “Mike would like to receive information”.

Test, iterate, refine

The most successful companies do this in an iterative fashion.  They gather information, form hypotheses, test their hypotheses, and then refine their hypotheses until they hit the measures they’ve set as goals.

Use high-fidelity prototypes

In the development world, see Eric Ries and Cindy Alvarez’ work on lean start-ups (although there is broad applicability for other product development groups).  In the usability world, see Jared Spool’s and Carolyn Snyder’s work on high-fidelity prototyping.

Watch customer behavior

As for communications, hypothesis testing is now the province of analysts that study click streams.  There, however, companies are still working out the timing .

Since digital communications are relatively inexpensive to produce and deliver,  many companies delay testing until after they launch.  It’s too early to have definitive data on how early missteps affect branding, or the extent to which upfront research could have prevented extensive rework.

Marketing never stops, always changes

Nevertheless, it’s not a perfect world.  You can’t anticipate all customer needs upfront.

Things are always in flux.  Economic conditions improve. Regulators introduce new rules.

Technology innovations make the improbable possible. Competitors’ actions cause priorities to shift.  For these reasons and others, it’s essential to gather information on an ongoing basis.

Assess which actions will have the greatest impact

As mentioned above, however, it’s equally important to know how to use the information you gather–or as Guha notes know which levers will increase business value.  This is especially important in a tight economy where companies can only afford to take the most effective actions.

Too often, companies focus too much on one of the “P’s”, to the detriment of the overall marketing effort.  Engineering firms will sometimes focus all their efforts on fine tuning the product, while “marketing organizations” expend too much on a particular type of promotion, relative to the return they’ll get on that investment.

Embrace diversity

This is where true marketers, who work with multidisciplinary teams, add their greatest value.  By understanding the whole customer, his/her environment, and impending change, he/she can help the company optimize the resources it takes to unite customer and solution.

Wondering where to start?  Test your preparedness by drawing on your market knowledge to create a compelling value proposition.  Or, learn more about the value creation process, first.

*Product, positioning, packaging, pricing, promotion, placement (sales channels or distribution)

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Thanks to Dave Cobosco for the following post.

Winners never lose sight of whom they serve.

For those of you not familiar with what happened in Massachusetts on January 19, there was a special election to fill the US Senatorial seat vacated by the death of Ted Kennedy.  Kennedy had been in office for the past 46 years.

Since Kennedy was a Democrat, initially most people felt another Democrat would fill the seat.  The Democratic Party must have felt the same way.  They ran a campaign full of endorsements from high-powered Democrats, while the Republican candidate drove his pick-up truck from one end of the state to the other meeting with the people who he would represent if elected.

The Republican won.  This not only surprised Democrats in Massachusetts, but sent shockwaves to Democrats in Washington DC.

The Corporate Challenge

Any CEO knows his/her company must stay in touch with its customers and the market.  In these economic times, however, many companies are not seeing top line growth; so CEOs focus on what they can control which are costs.

From my experience this means:

• Freezing and/or reducing headcount results in more work for employees.
• Reducing operating expenses, especially travel, ends up decreasing face-to-face customer interaction.
• Assigning key contributors to task forces chartered with improving operational efficiency–thus reducing time available to perform their functional jobs.

While all of these initiatives are important to running a profitable company, in my experience they can lead companies, especially the product organizations, to focus too much attention internally and therefore lose touch with the customers and market.

So what can companies do?

Plenty.  Product organizations should:

• Notice when, and understand why, people are posting unfavorable comments about its products/company on online forums.  Besides time, this requires some phone calls.
• Understand why the company both won and lost recent deals.  Again, besides time, this requires some phone calls.
• Engage customers as design partners in new product development.  The cost is minimal if a local customer is willing.  The cost will ultimately depend on the type of product and the location of the customer relative to the development organization.

I’m sure none of the above are new to you, but how many of you can honestly say your companies are doing them?  If you are, congratulations.  If not, the risk is another company could be focused on understanding your customers better than you are. And, as the U.S. Senatorial race in Massachusetts showed, the people served determine the winner.

If you run a company you should expect your product organization to be doing what’s listed above, but from my experience, however, very few product organizations have operationalized these critical activities in their organizations.  If your company lacks this product marketing discipline, I can provide it.

Dave Cobosco (dcobosco@yahoo.com) specializes in applying product marketing best practices to enable companies to expand the market penetration of its products.   Dave has applied these best practices as an individual contributor and in leadership roles where he built highly respected and effective product marketing teams focused on driving the business and is looking for his next opportunity to do so again.

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