September 4th, 2013
Companies are spending big dollars on big data. Approximately 5.5% of marketing budgets currently are spent on marketing analytics and this is expected to increase to 8.7% in the next three years as reported in The CMO Survey. Expectations are running high and many companies are trying to figure out how to crack the code to generate good strategic insight from the data.
I’m in favor of the trend to capture and use data to drive decisions. However, that is where the problem lies. As the stash of data grows, companies are using a smaller percentage of it. I first asked the question, “In what percent of projects does your company use available or requested marketing analytics before a decision made” in February 2012 and the result was 37%, which I thought was the bottom. However, when asked that same question in August 2013, the percentage dropped to 29%. Figure 1 shows the continuous decline over the last 18 months.
Figure 1. Percent of Projects Using Requested or Available Marketing Analytics
This finding is not completely unexpected, however. Reviewing the thirty-year history of research on this topic, usage rates have always been low for many types of marketing information—marketing research, advertising research, and, now, social media research. This marketing analytics utilization gap is a challenge to big data’s contribution to the bottom line.
June 4th, 2013
Marketing needs sales and sales needs marketing. Unfortunately, “need” does not equate to a “successful partnership” between the two groups. Conflict and distrust are more common. Such a dynamic can hurt the bottom line, especially in companies that use sales groups to interface with their customers. The CMO Survey® asked top marketers to describe how their companies structure the marketing-sales relationship. 7% stated that sales is within marketing (marketing has the power), 10.3% noted that marketing is within sales (sales has the power) and 72% indicated that marketing and sales work together on an equal basis. These data from the February 2013 issue of The CMO Survey have not changed much over the last five years. Bottom line: As equal partners, marketing and sales must find a way to work together.
It is easy to blame stereotypes of these two powerhouse functions as the reason for the well-documented sales-marketing turf war. Marketing is analytical and sales is interpersonal. Sales has a short-term focus and marketing has a long-term focus. Marketing is more strategic and sales is more tactical. Marketing is pull and sales is push. However, these stereotypes obscure the truth. In reality, the roles that sales and marketing play and their subsequent relationship depend on how the company chooses to manage and structure these two functions. (more…)
August 30th, 2012
The August 2012 CMO Survey finds that company growth strategies will take on more risk in the coming year. Looking at Table 1, we can see that there two types of risk familiar to marketers—targeting new markets and offering new products or services. Combining these two, there are four general types of strategies that range from market penetration, which is the lowest risk because the company targets current markets with current offerings, to diversification, which is the highest risk because the company targets new markets with new offerings.
Table 1. Types of Growth Strategies
Similar to past CMO Surveys, growth spending over the past twelve months reflects a dominant focus on market penetration with an average of 51.7% of spending focused on this strategy. This is followed by product/service development (22.8%), market development (15.7%), and diversification (9.7%). However, as shown in Table 2, these figures are expected to shift significantly in the next twelve months. Growth spending on market penetration is expected to drop by 11.6% to 45.7% while all three of the other strategies are expected to increase by nearly 10% or more! These changes are consistent with a longer-term trend The CMO Survey has observed during this post-recessionary period.
July 13th, 2012
Apple was voted the overall winner of the 2012 CMO Survey Award for Marketing Excellence… yet again. Apple has been selected as the winner or co-winner for five consecutive years by the sample of top marketers. So why is Apple a great marketer?
When Apple, Inc. (then Apple Computer, Inc.) incorporated in January 1977, its investor/advisor, Mike Markkula, assembled a 3-point marketing philosophy. Amazingly, thirty-five years later, this philosophy remains at the core of what makes Apple so effective at creating and profiting from loyal customers. This, in my view, is the definition of a strong marketing capability. Here are Apple’s original three points:
- Empathy – We will truly understand their [customer] needs better than any other company.
- Focus – In order to do a good job of the things we decide to do, we must eliminate all of the unimportant opportunities.
- Impute – People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software, etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative, professional manner, we will impute the desired qualities.
Apple has used these principles to become the world’s most valuable company (measured by market capitalization) and one of world’s most valuable brands. Here are ten strategies Apple has used to become one of the world’s greatest marketers:
March 20th, 2012
While going through my students’ resumes before class, I read one that listed “stair climbing” as a competitive sport. I had never heard of this, so I looked it up and found a well-established world-wide network of races. You can, for example, climb the Empire State Building and Gran Hotel Bali. Doing well requires strength, sprint, and endurance. If you are really good and perform well in the 100+ races around the world, you could win the Towerrunning World Cup.
All this talk of climbing made me think it would be interesting to plot the economic recovery using data from The CMO Survey. I plotted several key financial metrics as reported by The CMO Survey between August 2009 and February 2012 in Figure 1. What a beautiful sight! Steady and significant improvement over the course of 2.5 years to where we are today. These numbers are in response to the question, “Rate your firm’s performance during the last 12 months.”
December 13th, 2011
The CMO Survey asks marketers to share their actual performance and future goals for each administration of the survey across a range of metrics: market share, sales revenue, profits, marketing ROI, customer acquisition, customer retention, and brand value. I took a look at what is happening with these metrics during this rough economic period. (more…)