Making the most of your marketing DNA has been saved
Limited functionality available
Most marketing organizations execute the same basic activities. But not all great marketing organizations make identical choices. Both the great brand-builder and the great product innovators can be great marketers, but the underlying capabilities and choices that allow each to succeed are different and not necessarily interchangeable. Knowing this can influence how a company invests its incremental marketing dollars.
Exactly how many users, did you say?
Seven hundred thirty eight million people live in Europe, 590 million live in Latin America and the Caribbean region, 345 million live in North America, and 37 million live in Oceania.1
When it comes to counting heads, however, social media site Facebook trumps five of the world’s seven continents with more than 800 million users,2 spanning 70 languages and as many as 500 million active users in a single day. And more than 350 million of these users access Facebook through a mobile device each month.3 Facebook’s user count is up from 500 million a year ago and 300 million two years ago.4
Meanwhile, in our world of almost 7 billion inhabitants, there are now over 5 billion mobile subscribers.5 Worldwide 3G subscribers grew 35 percent between 2009 and 2010 to 726 million,6 while 4G lurks on the horizon. Global consumers downloaded 300 million mobile apps in 2009, increasing by more than 16 times to 5 billion in 2010.7
From a marketing perspective, the time to ask whether social media and mobile matters is long past. Although companies now allocate only 7.1 percent of their marketing budgets to social media spending, pundits expect that number to increase to 17.5 percent over the next five years.8 Worldwide mobile advertising revenue is forecasted to reach $3.3 billion in 2011, more than double the $1.6 billion in 2010, and grow to $20.6 billion by 2015.9 According to Gartner’s Stephanie Baghdassarian, “mobile advertising is now recognized as an opportunity for brands, advertisers and publishers to engage consumers in a targeted and contextual manner, improving returns.”10
But with the vast marketing reach and potential of social media and mobile, the question of how to invest is more relevant than ever. Is it better to invest in social or mobile? Is there a higher return on developing a mobile app to enable customers to shop on-the-go, or building and marketing an online community to crowdsource innovative product ideas? Or is it more effective to synchronize an organization’s various social and mobile programs to facilitate a seamless and integrated customer experience?
How can marketers make better choices around the richer-than-ever set of marketing investment options, particularly when it comes to social media and mobile?
We use the term “Marketing DNA” to help organizations understand how they can take a more systematic and structured approach to choosing among available marketing options.
DNA contains the genetic instructions for how organisms develop and function. At one level, human beings are remarkably similar. Just look at similarities in our skeletal structure, key organs and physiology. Nevertheless, the seemingly small variations in our DNA manifest themselves in significant differences, ranging from our physical features to our intellectual abilities and athletic prowess.
Consider, for example, the sport of running. While virtually all humans have the muscles necessary to run, those with a high percentage of particularly slow twitch muscle fibers excel at endurance sports, while those with a high percentage of notably fast twitch fibers can produce short bursts of power more appropriate for sprinting. According to Scott Trappe, from Ball State University’s human performance laboratory, most humans have 1–2 percent fast twitch muscle mass. By comparison, three time Olympic gold medalist sprinter Usain Bolt may have as much as 25 percent superfast twitch muscle mass.11
The Olympic sprinter and the Olympic marathoner may both be great runners, but neither would be likely to medal in the other’s sport of choice. But Olympic-level performance in either event doesn’t happen naturally. It’s more than just having the right DNA. Both the Olympian sprinter and marathoner undertake intensive training regimens, including strength conditioning, careful attention to nutrition and extensive time on the track. However, one would certainly expect to see the marathoner focus far more on endurance training than the sprinter and the sprinter to focus far more on speed work.
Like the human genome, the genome of marketing organizations is more alike than dissimilar, reflecting common legacies and development paths. Most marketing organizations execute the same basic set of marketing activities, ranging from building their brands to creating compelling experiences for their customers to enabling sales of their products and services. But not all great marketing organizations make identical choices or operate identically. Similar to the great sprinter and the great marathoner, the great brand builder and the great product innovator can both be great marketers, but the underlying capabilities and choices that allow each to succeed are different and not necessarily interchangeable. One marketing organization may not have the equivalent of superfast twitch muscle mass when it comes to branding, but it may have more than its fair share of product innovation muscle mass. Knowing this can significantly influence how it invests its incremental marketing dollars.
So what are the marketing equivalents of the sprint vs. the marathon?
We have identified five ways that differences in Marketing DNA manifest themselves:
Few marketing organizations can succeed without a minimum of capabilities and proficiency in each of these five areas. It’s hard to imagine a successful marketing organization that doesn’t exhibit at least basic capabilities when it comes to branding (or sales alignment, or product innovation management, or customer experience delivery, or customer insight development).
But great marketing organizations seem to have oriented their activities and investments around a core element, which becomes the pivot point for other activities. For a great marketer, finding and cultivating that core element is analogous to a runner, early in his or her athletic career, understanding whether he or she is better off choosing to train for the sprint or the marathon.
The concept of Marketing DNA can help organizations structure the choice process and provide a more systematic way to understand the actions that organizations can take to allow their Marketing DNA to express itself. An organization’s Marketing DNA both shapes the options available and identifies the unique raw materials that can be activated to enable marketing success.
Looking across a wide range of marketing organizations, we’ve identified five marketing archetypes, or prototypical models, that exemplify the investment choices and trade-offs that effective marketing organizations make.
An archetype, according to Merriam-Webster, is “the original pattern or model of which all things of the same type are representations or copies.” Similarly, a marketing archetype is a prototypical model that defines the unique combination of capabilities and characteristics that define a great marketing company. We believe there are five primary models: Sales Driven, Product and Service Innovator, Winning Customer Experience, Customer-Insight Driven and Iconic Brand Builder.
While each model has a dominant element (as indicated by the titles), it is the prioritization and alignment of all elements that defines an archetype. That is, great marketers understand which element is primary, which are secondary and which are tertiary and ensure investments and activities are aligned accordingly. For example, a Product and Service Innovator’s DNA is aligned around product and service innovation. However, highly successful Product and Service Innovators also configure other elements—particularly the capabilities to generate deep customer insights and the sales capabilities to effectively bring new products to market—to support a differentiated positioning.
Let’s look at examples of companies that represent each marketing archetype and have focused their investments and capability development efforts accordingly:
Sales Driven: What differentiates a sales driven organization from one with a successful sales force? Best Buy sales associates encourage customers to tag on Geek Squad Black Tie Protection while purchasing products. Best Buy also blends multiple channels for a shopping and service experience designed to make it easier for customers to interact. Customers can shop online and pick up products at the store or order services online and have technicians call back. Text alerts send special offers and upcoming events specific to subscribers’ preferred stores that were preselected online.
Product and Service Innovator: What differentiates a product innovator from a good product developer? Nearly all of P&G’s organic sales growth since 2000 has been attributed to new brands or improved products, and at least one report suggests that it has outpaced its competitors with regard to innovation.12
Three investments illustrate the company’s emphasis on product innovation:
Winning Customer Experience: What differentiates a winning customer experience from attentive representatives? Nordstrom is recognized for its focus on providing personalized experiences. Its front-line personnel keep “personal books” on each customer and system-generated profiles track purchase behavior.
In contrast to defining store space by brand, Nordstrom breaks up the store space by so-called lifestyle sections, defined by a group of brands that target the same customer group, to allow shoppers to put together outfits easier. Additionally, Nordstrom has a unique compensation draw system in place. Salespeople get whichever is higher, base salary or commission, cultivating a competitive yet collaborative sales environment. Salespeople also tend to remain loyal to Nordstrom, moving to positions with increasing responsibility.14
|Product and Service Innovator||
|Winning Customer Experience||
|Iconic Brand Builder||
Customer-Insight Driven: What distinguishes a customer-insight driven organization from one that knows its customers? Progressive Insurance has a history of innovation driven by its analytical capabilities and customer insights. Initially, the company focused on underserved, higher-risk segments of the market, targeting customers typically shunned by insurers.
Progressive made a breakthrough in its customer analytics in 1996 when it became the first company to use customers’ credit reports in their insurance underwriting.15 This customer insight led to more precise risk measurement and more competitively priced insurance plans.16 Progressive has continued to find new ways to collect and use customer data to improve its underwriting and pricing, most recently with the rollout of a new insurance plan based on driving data collected from a device installed in the customer’s automobile.17
Iconic Brand Builder: What distinguishes an iconic brand builder from an organization with a compelling brand promise? Harley-Davidson has formed a deep emotional connection with its consumers that was reinforced through the creation of the Harley Owners Group in 1983. H.O.G. encouraged riders to become more actively involved in the sport, and now the term “hog” is synonymous with motorcycle. As Willie G. Davidson, VP of Styling and grandson of founder William Davidson, says, “We’re riders … The best way for us to perpetuate the adventure is by living it and sharing it.”18
|Potential mobile technology and social investments|
|Predominant marketing DNA||Mobile||Social|
|Sales||Retail store’s GPS enabled smartphone app increases sales opportunities by sending coupons to customers who are near a store||Sporting goods company emails shareable discount codes to bloggers who have written about recent purchases to boost repeat and referral business|
|Product and Service Innovation||Telecom network provides mobile phone-based transactional financial services in the developing world to offer more competitive loan rates due to reduced costs of dealing with cash and branches||Consumer packaged goods company’s social media platform enables crowdsourcing of new products and package design|
|Customer Experience||Automaker connects its electric vehicle’s system with the owner’s mobile phone to allow vehicle usage and battery state monitoring, as well as performance comparison with other drivers||Retailer uses location-based responses to social media messages (e.g., salesperson from local store contacts customer) to anticipate customer’s needs and questions|
|Customer Insight||A study of competitors’ location-based check-ins informs decisions about a possible new store opening in that neighborhood||Product recommendations based on purchases by others in the customer’s social network with similar profiles|
|Brand||GPS enabled mobile app allows motorcycle riders to record and share their favorite routes to enhance the camaraderie and loyalty of the riding community||Consumer packaged goods company uses an online contest in which users help to choose ideas to fund to enhance their brand as a supporter of the communities it operates in|
Let’s revisit the potential choices associated with social media and mobile marketing. As described previously, it’s about how to invest in these rich platforms, not whether to invest. Our discussion of Marketing DNA suggests an organization’s investment in a mobile ‘app’ or social media program may look radically different depending upon its predominant orientation (See inset “Bringing Marketing DNA to Life” on page 100).
Now, let’s take a look at how leading marketing companies have actually focused their investments in social media and mobile to express and reinforce their Marketing DNA:
Compared to the industry average of two retail banking products per household, Wells Fargo leads at nearly six, thanks to its core strategy of cross-selling.19 The bank sees its technology infrastructure as a key differentiator, aligning the organization’s functions and channels in reaching customers and selling based on needs.20
Wells Fargo boasts 5.5 million active mobile customers as of Q1 2011, its fastest-growing delivery channel.21 According to a recent survey, Wells Fargo leads the industry in providing mobile banking in text, mobile website and app forms.22 It was the first major bank to offer text banking to connect to non-online customers who are otherwise unreachable.23 The bank is also among the first institutions to offer mobile banking to corporate and small business customers, capturing business from small business owners such as doctors who do not always have access to a PC. Providing convenient and easy-to-adopt mobile technology is a key initiative for Wells Fargo to stay connected with its customers, retain them and thereby introduce more targeted products and services to them.
Wells Fargo is also an early adopter of social media, engaging customers with social technologies since 2006. In April 2011, it staged a flash mob in the middle of Times Square to announce its return to New York City and its new status as a coast-to-coast bank. Performers danced to “One Singular Sensation,” changing from Wachovia’s green and blue to Wells Fargo red to hint at the rebranding. The bank later sponsored the video on YouTube to expand its influence, and reached 1 million viewers in a month and 2 million to date.24 These marketing investments and activities reinforce Wells Fargo as a sales-driven bank.
Zipcar entered the market in 2000 with its innovative by-hour or by-day car sharing service. Since then, it has rapidly expanded to major urban areas in North America and the UK, in addition to 250 college campuses.25 Its Zipcard locks and unlocks before and after a reservation and doubles as a credit card for gas. Rates include rental, insurance and gas, creating a hassle-free car sharing service for “Zipsters” who often want to avoid the costs associated with car ownership and parking.
Eyeing Zipcar’s rapid growth, competitors moved quickly. Hertz On Demand was launched in December 2008 and offers free membership, compared to Zipcar’s $60 annual membership fee. However, Zipcar differentiates with its technology infrastructure and continues to command 75 percent market share.26 Its innovative mobile application was recognized as one of Wired’s “Five Commuter iPhone Apps You’ve Gotta Try” and TIME magazine’s 50 best iPhone apps for 2011.27 The app features location-based reservation, remote honking to locate a reserved Zipcar, tap-to-contact for help while on the road, a feature to lock and unlock the assigned car and more. Zipcar also texts Zipsters near the end of a reservation to remind them to return the car and allows them to text back to extend the reservation if no one else is in line.
Zipcar’s word-of-mouth marketing approach is designed to keep costs low for budget-conscious consumers. As a result, the company focuses marketing dollars on low-cost, high-impact tactics such as social media—and has gone a step further to turn social media into innovative customer service. Members rave about how the company helped find a lost GPS after spotting a tweet, or located an available vehicle after a blogger complained about vehicle shortages. Although no frills, these social and mobile investments effectively strengthen Zipcar’s up-to-date service innovator positioning.
The Discovery Channel, whose diehard fans follow quirky nonfiction series such as Storm Chasers and the annual Shark Week, has been a leader in using social media to enrich its fans’ experience. Discovery Channel’s most notable campaign involves their flagship programming event Shark Week. This year, Discovery launched a mobile app that lets users participate in social conversations on their computers, iPhones and iPads while watching Shark Week programming. Additional content was created specifically for the app to enhance the viewing experience and increase the social conversation around Shark Week.
Discovery has developed other innovative social media campaigns to promote other programs. To make the second season of The Colony relevant for a younger, socially connected market segment, the station launched a Facebook campaign to illustrate how a virulent disease could affect the viewer’s personal social network. The simulation used a Facebook-like interface unique for each person with a fake newsfeed featuring friends’ names and images alongside status updates, links and other content.28 Discovery Channel has adeptly used social media to transform the viewer experience for its fans.
Amazon has long been recognized for implementing consumer insights-based features that have become market standards. One click checkout, a recommendation algorithm, and ratings and reviews help consumers find the products they seek.
Amazon has translated its insights-based approach to mobile usage. In most mobile app stores, any developer can sell an app at a self-designated price. However, rather than let developers set the apps’ price, Amazon will retain full pricing control based on its determination of a market price, and will pay the developers a percent of sales.29 Because of Amazon’s insights, consumers are viewing a curated list of apps, Amazon is earning an optimized price and developers may earn more than they would with a self-priced application.
Amazon has also turned to social media to expand its use of customer insights, integrating Facebook Connect in 2010. As a result, customers who opted in on Amazon’s site would see personalized gift recommendations based on their Facebook friends’ profiles (favorite music, etc.). The combination of social intelligence with Amazon’s proprietary recommendation capabilities reinforces Amazon’s insight-driven positioning.
Consumers recognize Hallmark as an iconic brand, dubbing obligatory card giving occasions “Hallmark holidays.” By 2010, the company’s marketing team recognized that Hallmark’s iconic status was contingent on remaining relevant to consumers whose social connections were becoming more casual and moving online.30
Sacrificing television advertising dollars, the company increased its allocation of funding to digital from 2 percent in 2009 to 5 percent in 2010 and 10 percent in 2011.31 Early innovations recreated Hallmark moments online. On Facebook, users can personalize cards with messages and photographs. Hallmark then prints, stamps and mails paper versions of the cards to recipients. While the Facebook card store drove traffic away from Hallmark.com’s e-cards website, it promoted the brand’s association with “social connecting and emotional wellbeing,” according to Camille Lauer, director of Social Innovation at Hallmark.32
Hallmark’s new “Life is a Special Occasion” branding was launched in early 2011 to promote the brand’s relevance beyond holidays. Offline, the brand promoted social connections during bedtime and mealtimes. Hallmark turned to bloggers to promote the message online, partnering with popular blog networks such as BlogHer and Momversation. With a Skype station at one conference and a video mashup of bloggers’ perfectly imperfect moments at another, the brand allowed its influencers to reinforce the brand’s status as a social connector both at the conferences and in their recap blog posts.
Great marketers understand their organization’s genetic foundation and align investment decisions and execution activities accordingly. One of the CMO’s most important strategic roles, therefore, is to find and unleash the “inner runner” within the organization.
Around the year 2000, a high school cricket coach in Jamaica noticed a player’s rare gift for speed and encouraged the athlete to join the track and field team. The student thrived as a runner, improving under the tutelage of two former Olympic coaches who originally bemoaned their protégé’s lack of dedication and penchant for practical jokes.
Less than a decade later, the student—Usain Bolt—attained multiple short distance world records and Olympic gold medals, earning himself the title of the “World’s Fastest Man.”
Although Usain Bolt apparently had the genetic makeup of a world-class sprinter, he might never have realized his potential without the mentorship of a series of willing and able coaches and intensive training. Had he pursued a sport that was not as well-aligned with his genetic makeup, had he not had tremendous coaching or had he not trained intensively, his level of success might have been limited. Eliminate any one of these three ingredients and results might have been very different.
Now, consider the case of another world-class athlete, Michael Jordan, one of the greatest basketball players in the history of the game. At the beginning of the 1993–1994 National Basketball Association season, Jordan abruptly retired from the Bulls to pursue a career in baseball. As a baseball player, Jordan played for the Birmingham Barons and the Scottsdale Scorpions, never batting above .252. A .252 batting average in the minor leagues is hardly the performance of a world-class baseball player. DNA, coaching or training? We may never know. However, a year after announcing his return to basketball with a two-word press release, “I’m back,” Jordan led his team to the first of what turned out to be a second “three-peat” for the Chicago Bulls.
Just as the cricket coach saw Bolt’s potential and provided the direction and tools to activate it, and just as Jordan gave up baseball to return to basketball, great marketers understand their organization’s genetic foundation and align investment decisions and execution activities accordingly. One of the CMO’s most important strategic roles, therefore, is to find and unleash the “inner runner” within the organization.
How can a CMO and other marketing leaders “coach” his or her organization to improve its potential? There is no definitive recipe, but there are several steps that marketing leaders can act on to get the journey underway:
As marketing budgets face increasing scrutiny, marketers and finance teams should make better choices about where and how to spend each marketing dollar. An understanding of Marketing DNA and marketing archetypes can provide a compelling way to frame marketing choices and trade-offs, focus investments, reinforce a differentiated market positioning and help focus the organization on the attributes and capabilities that matter most.
Or, put another way, don’t waste your time training for a sprint when your best event may be the marathon.