The vision thing in marketing

Scott Davis does not believe that marketers are fulfilling their strategic potential. In his recent book "The Shift" he outlines the five moves marketers must make to join their functional colleagues in steering top-line and bottom-line growth.

	Title:	The Shift
	Author:	Scott Davis
	Pages:	272pages
	Publisher:	Jossey-Bass
	Price:	$34.95

The premise of Scott Davis’s The Shift: The Transformation of Today’s Marketers into Tomorrow’s Growth Leaders is that marketing managers, and in particular chief marketing officers (CMOs), are too focused on tactics and not enough on strategy. They bog themselves down in the traditional functions of communication and advertising. In Davis’s vision, the CMO must ultimately becomes the CEO’s partner in strategic formulation or, as he puts it, a Visionary Marketer.

He distinguishes four types of marketing manager. At the lowest level, the Tactician limits herself to accomplishing a set of tactical, functional, but not strategic, tasks. One step up, the Facilitator facilitates best practice discourse and develops a common approach toward the brand. The Leader is focused on consumer insights to guard the brand and create strategic opportunities. At the top, the Visionary Marketer plays a central role in making strategic decisions, while collaborating at all the steps to enhance growth (as stipulated by the subtitle of the book). This path to the top has been marked by five five shifts.The five shifts, explained in greater detail below, amount to effecting top-line and bottom-line growth by focusing on the customer, leveraging one’s network, and innovating and experimenting constantly.

The first shift
The first shift moves marketers from creating marketing strategy to creating business impact. In Davis’s view, this entails three moves. The first is to deepen understanding of the customer. Marketing’s advantage over other business units is its proximity to the customer. Marketing managers need to see that this remains so enduringly.

The second move is to adopt a P&L mindset, to act from financial depth. The CMO does not need to own or have owned an income statement but she does need to be what one could call a “marginalist”. She must habitually pay attention to margins.

The P&L mindset ties in to the third move - earning organizational credibility. You can think of this as adding company breadth to financial depth. The goal here is understand the business from the standpoint of the other functions and to form alliances with and among those functional units. Understanding those people and their pursuits will build the credibility that Tactician marketers do not possess.

The second shift
The second shift means migrating from controlling to galvanizing the marketer’s network. Davis proposes that we have entered the third era of modern marketing which he calls the Network Era. The first era, up to the creation of the Internet, was characterized by one-way communication. Then Web 1.0 introduced two-way communication via basic input and feedback from customers. The Network Era is characterized by a greater number of customers participating in an increasing number of ways (blogs, forums, reviews etc…).

The move into the Network Era entails a number of changes. In the past, when media interaction and touch points were scant, marketers focused on control. They must now learn to abandon the ideal of control and adopt in its stead influence and facilitation. Second, marketers must shift from pushing their products/services to pulling them from their customers. Third, they need to think less in terms of passive communication and more in terms of engagement and participation. Marketing dollars are following this trend; less money is spent on advertising and more on facilitating customer engagement (forums, support centers) or merely talking with customers (blogs, forums).

The third shift
The third shift is defined as the move from incremental to permanent innovation. In Davis’s sense, permanent innovation is neither incremental nor limited to products and services. Rather than think incrementally, think quantumly; rather than just products, think business models.

Davis offers examples of companies that have moved toward permanent innovation. P & G has abandoned an R& D-centric model and, instead, makes customer insight the innovation driver. Google has developed a nine-point innovation strategy, with one of the points enjoining the same sort of customer-centric approach: “Get users and usage – the money will follow.” GE obliged its managers to come up with Imagination Breakthrough proposals. These might envision a new business geography or outline the quest for the special customer, say, one worth $100 million in the first few years of business relationship. Davis outlines three conditions that Model Innovators such as these meet to rise to the challenge (see box).

The fourth shift
The fourth shift means moving from managing marketing investments to inspiring market excellence or moving from what Davis calls “small m” marketing to big M Marketing. In this vision, it’s not just brand-awareness levels but company growth and profitability that demand the CMO’s consideration.

Marketing must learn to face and indeed to embrace the same accountability that other functions face. This means metrics and particularly return on investment calculations for comparison among divisions. These may not just rely on industry standards or conventional norms, or top-of-the funnel metrics, but tie in to the specific growth objectives of the company. Davis cites as an example Shira Goodman at Staples who owns a detailed site of customer analytics and thus stands well girded to enter the strategic fray.

Measurement goes hand in hand with experimentation. Experimentation must not be limited to testing a single element of the marketing mix (price, product, promotion, place) but must test several levels at the same time. Think of this as “experiment-your-way-to growth”. He cites the example of a theme park operator who created an advanced simulator aimed at optimizing investments in pricing moves, changes in guest experience and variations of marketing investments. Another example concerns a high-end fashion company which also created a simulator and from there a marketing playbook. Marketing playbooks provide details on the precise marketing mix needed to win with a specific target segment, given a unique set of market circumstances (for more on playbooks see box).

The fifth shift
The fifth shift consists in moving from an operational focus to a customer focus. This customer focus should lead to a removal of silo mentality within management. Such silo mentality must be overcome. It can hinder needed moves, such as an overhaul in the customer relationship management system, the creation of a new billing system, or a marketing training curriculum. Davis cites P & G’s Jim Stengel who insists that one major benefit of organizing around the customer is that the traditional functional lines tend to get blurred.

Davis presents the case of the trading firm DKSH (Diethelm, Keller and SiberHegner), formed in 2002 as the result of a merger. The merger served as the opportunity to move away from a business unit-centric and country-related approach to a customer-first approach. The CEO driving the change was a strong supporter of marketing. He made marketing responsible for the overall customer experience, for ensuring integrity of the brand and for selecting the touch points to implement strategy.

Most companies are organized around how the various functions can operate efficiently. They neglect to consider in depth how the customer wants to engage with their organization. The organization should try to adopt the viewpoint of the customer as she considers the organization. The soft goods retailer Zappos is an example of such a viewpoint. Customer service is treated as an investment not an expense. People are hired based on their perceived ability to deliver on Zappos’ customer-oriented strategy.

Another example is provided by Dennis Cary at United Airlines. He adopted a strategy which placed emphasis on high-margin business fliers. Since United already had close to 100% awareness, there was no need for additional advertising and Cary shifted marketing dollars to focus on his key customers in the form of international upgrades and exclusive programs for high fliers.

The first four shifts had the marketer become a top and bottom line watcher, a networker, an innovator, and an experimenter-measurer. With the final shift, the Chief Marketing Officer has morphed into a Chief Customer Officer. It is this Chief Customer Officer, along with the CEO, from whom the rest of the functions will take their cue in order to make their company a growth leader.

Published September 2009