Differentiate Or Be Fired
Jack Trout, President & Founder Trout & Partners Ltd.
posted by Hasan Fadlallah, Managing Director Brand Lounge
Chief marketing officers (CMOs) have a shorter tenure than NFL coaches. In fact, as you can see by the chart, they barely get beyond two years before they move on.
Average number of months at a position
CEO 44
CFO 39
CIO 36
CMO 26
"The job is radioactive," according to a recent article in BusinessWeek. The problem, it said, is that 70% of companies don't know what they're looking for when they recruit a CMO.
The chief marketer at Gap (nyse: GPS - news - people ) for two years, Jeff Jones, reported that he discussed 22 CMO positions over a five-month period. Not one, he says, spelled out coherently what he or she would be accountable for.
It's gotten so bad that Advertising Age editorialized: "Perhaps we should just call for the end of the CMO position." They went on, "Put the job out of its misery. It isn't really working anyway, is it?"
All this caught my attention, so I've decided to take a closer look at the problem and figure out what's going on. I'm starting with a quotation from legendary management consultant Peter Drucker that's worth repeating: "Because the purpose of business is to create a customer, the business enterprise has two--and only these two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
So there it is. The father of business consulting pointed out that the CMO has one of the most important jobs in a company. And he even went on to describe its function, which is to develop "the distinguishing, unique function of the business." In other words, what is it that makes the company or product unique and different? That's the CMO's assignment. So, in simple language, marketing's role is to turn the one idea that differentiates your brand or product from all competitors into a full-scale program. The idea is the nail. The program is the hammer that drives it into the mind of the prospect. What could be simpler? Why all the fuzziness? In fact, my book on this subject, Differentiate or Die, lays out how to do all this in great detail.
Then, one day, I opened the Nov. 26 issue of Advertising Age and came across an interesting set of data culled from senior marketers. Anderson Analytics surveyed 1,657 senior marketing executives. Six hundred replied. Wow, I thought, that should tell me what's going on. And sure enough, it did.
The researchers asked respondents to rank the marketing concepts to which they devote time in their working day. The following list shows where they spend the most time:
Top 10 Percentage
Customer satisfaction 88%
Customer retention 86%
Segmentation 83%
Competitive Intelligence 82%
Brand loyalty 82%
Search engine optimization 81%
Marketing ROI 80%
Quality 79%
Data mining 78%
Personalization (one-to-one marketing) 79%
There, in graph form, is why CMOs are being fired left and right. "Differentiation" doesn't even make it onto the chart. While they are worrying about customers or segmentation or return on investment (ROI) or search-engine optimization, their brands are sinking into a sea of commoditization. Drucker told them what to do, and they ignored him.
Forget all about data-mining or number slicing or niche segmenting. Why should a customer buy your company's product instead of the 10 or so other competitive choices? That's the question you should be answering. Build a program around that answer.
But be careful. Don't expect the advertising agency to come up with this answer. Chances are, they will try to sell emotion, or entertainment, or something that doesn't supply that critical reason to buy. I saw another study by a well-known research company that analyzed 340 commercials shown in prime time and identified a differentiating brand message in only 7% of those ads. Ugh. (If you look at much television, I'm sure you'll agree with that observation.)
Figuring out the right positioning strategy is only the beginning. Next, a CMO will have to convince the CEO and chief financial officer that building or even maintaining a brand is a long-term process that requires patience and incremental change. They will have to avoid line extensions that just undermine what the brand stands for in the mind. And Wall Street's emphasis on quarterly and monthly results is a problem that you will have to tackle. I never said it would be easy.
All you can do to fight off the financial sharks is to point out that without that point of difference--what Drucker calls "distinguishing and unique"--you'd better charge very low prices. There's nothing in the middle. And low prices mean very low profits.
Following Drucker's advice is how CMOs can move from "radioactive" to influential. That's a far better place to be.
With more than 40 years of experience in advertising and marketing, Jack Trout is the author of many marketing classics, including Positioning: The Battle For Your Mind; Marketing Warfare; The 22 Immutable Laws of Marketing; Differentiate or Die; Big Brands, Big Trouble; and his latest, Trout on Strategy. He is president of marketing consultancy Trout & Partners and has consulted for such companies as AT&T, IBM, Southwest Airlines, Merck, Procter & Gamble and others. Recognized as one of the world's foremost marketing strategists, Trout is the originator of "positioning" and other concepts in marketing strategy.
Thursday, May 28, 2009
Tuesday, May 26, 2009
Tales From The Marketing Wars
Fixing The Ad Industry
Jack Trout, President & Founder Trout & Partners Ltd.
posted by Hasan Fadlallah, Managing Director Brand Lounge
The press is abuzz with stories about big companies moving dollars out of traditional advertising media and into product placements and other newer marketing methods. One expert after another is predicting that the ad industry as we know it has lost its way and is in decline. Stories about TiVo, buzz and the Internet are all the rage. But before everyone packs up their resumes and jumps ship, I think it's time for a more reasoned view of things--or at least one that gets us away from all of the negative hype and the doom and gloom. Let's start with what should be the role of the advertising agency.
Traditionally, the agency's role is to be the objective "outsider." The agency counsels the client on how to best sell their products or services to their marketplace, how to position the brand vis-a-vis the competition, and how to verbalize their message with that "reason to buy." Candor and honesty were always the hallmarks of a good agency/client relationship, as agencies played a major role in developing strategy for their clients.
A true story is in order here: Many years ago, a senior account supervisor was reminiscing to me about the old days in the business. He recounted a meeting in a hotel where the CEO of the client and the head of the agency were lying in bed together discussing strategy. The account supervisor said to me, "Jack, the industry problem is that we're not in bed with the CEOs anymore."
He was right. As the years have rolled by, I've seen less and less of that kind of relationship. Agencies have backed off on pushing strategy, as clients became more assertive in this regard. Instead, agencies retreated to creativity, emotion or humor as their contributions to the brand. The net result: Today, a lot of advertising lacks that reason to buy. Too many people looked at the advertisement and said, "What are they trying to sell? It's no wonder clients are beginning to question traditional advertising's usefulness. As Pogo would say about the ad business, "We have met the enemy and he is us."
Step One: Get Back To Strategy
Forget about emotion, bonding, borrowed interest or show business, agencies have to rebuild their reputations around being able to help top management figure out the right competitive strategy for a brand. In simple terms, they have to be able to help establish the point of difference for a brand. Forty years ago, it was called a "Unique Selling Proposition." In more recent years, it has been called a "Position." In all cases, it's why a customer should prefer your product over the many other choices out there.
This difference is your ultimate weapon against all of this talk about who needs advertising when you have "buzz" and "product placement." Unfortunately, most of these new marketing tools that are getting all of the attention don't enable you to deliver that message. All they are good for is getting a name out there with no story attached.
Consider the famous Oprah giveaway of 200 Pontiac G-6s. (It won a Cannes Media Lion.) The result was great press but lousy sales, which are 30% below expectations. What was missing was the story about why I should buy one if I didn't get one for free. On the other hand, strategy gives you a guide for all of these newfangled activities. This differentiating idea can be carefully introduced into these non-advertising vehicles. In other words, your carefully developed strategy is the cornerstone for your multi-media plans. They can extend your selling message beyond advertising.
Step Two: Dramatize The Strategy
Creative people tend to resist a strategic approach to advertising. To them, it restricts their creativity. They sometimes view advertising as an art form. To me, the role of a good creative person is to take the strategy and dramatize it in a way that better involves the prospects. In a way, you are dramatizing that reason to buy. It could be a product demonstration or a dramatic solution to a perceived problem. Whatever it is, it captures people's attention while you deliver your sales message.
Consider BMW as a model client. More than 20 years and many agencies ago, they launched an attack on Mercedes-Benz with the dramatic concept of "The ultimate sitting machine vs. the ultimate driving machine." Today, they are still driving with the same concept and are one of the world's most successful car companies. Great strategies never die. Nor do they fade away.
Step Three: Do Away With Awards
Do away with all those creativity-awards shows, such as Cannes and Clios. Nothing does more long-term damage to the industry than making creative folks think that they are making movies and not commercials. Consider the "Curse of the Clio;" it's widely known that a large number of Clio winners lost their accounts not too long after taking home their statuettes. All of this undermines the industry's perceptions of being strategic in its work. It would be like lawyers having awards for creativity in trials. Agencies are supposed to be professionals helping clients solve problems and sell products. Their award should be getting to keep the account.
Besides, clients are on to the fact that awards are there to help agencies get more accounts, not to help clients get more business. That is not a helpful perception for an industry under attack.
With over 40 years experience in advertising and marketing, Jack Trout is the acclaimed author of many marketing classics, including Positioning: The Battle for Your Mind, Marketing Warfare, The 22 Immutable Laws of Marketing, Differentiate or Die, Big Brands. Big Trouble, A Genie's Wisdom and his latest, Trout on Strategy. He is president of marketing consultancy Trout & Partners (represented as Brand Lounge in the Middle East & North Africa) and has consulted for such companies as AT&T, IBM, Southwest Airlines, Merck, Procter & Gamble and others. Recognized as one of the world's foremost marketing strategists, Trout is the originator of "Positioning" and other important concepts in marketing strategy.
Jack Trout, President & Founder Trout & Partners Ltd.
posted by Hasan Fadlallah, Managing Director Brand Lounge
The press is abuzz with stories about big companies moving dollars out of traditional advertising media and into product placements and other newer marketing methods. One expert after another is predicting that the ad industry as we know it has lost its way and is in decline. Stories about TiVo, buzz and the Internet are all the rage. But before everyone packs up their resumes and jumps ship, I think it's time for a more reasoned view of things--or at least one that gets us away from all of the negative hype and the doom and gloom. Let's start with what should be the role of the advertising agency.
Traditionally, the agency's role is to be the objective "outsider." The agency counsels the client on how to best sell their products or services to their marketplace, how to position the brand vis-a-vis the competition, and how to verbalize their message with that "reason to buy." Candor and honesty were always the hallmarks of a good agency/client relationship, as agencies played a major role in developing strategy for their clients.
A true story is in order here: Many years ago, a senior account supervisor was reminiscing to me about the old days in the business. He recounted a meeting in a hotel where the CEO of the client and the head of the agency were lying in bed together discussing strategy. The account supervisor said to me, "Jack, the industry problem is that we're not in bed with the CEOs anymore."
He was right. As the years have rolled by, I've seen less and less of that kind of relationship. Agencies have backed off on pushing strategy, as clients became more assertive in this regard. Instead, agencies retreated to creativity, emotion or humor as their contributions to the brand. The net result: Today, a lot of advertising lacks that reason to buy. Too many people looked at the advertisement and said, "What are they trying to sell? It's no wonder clients are beginning to question traditional advertising's usefulness. As Pogo would say about the ad business, "We have met the enemy and he is us."
Step One: Get Back To Strategy
Forget about emotion, bonding, borrowed interest or show business, agencies have to rebuild their reputations around being able to help top management figure out the right competitive strategy for a brand. In simple terms, they have to be able to help establish the point of difference for a brand. Forty years ago, it was called a "Unique Selling Proposition." In more recent years, it has been called a "Position." In all cases, it's why a customer should prefer your product over the many other choices out there.
This difference is your ultimate weapon against all of this talk about who needs advertising when you have "buzz" and "product placement." Unfortunately, most of these new marketing tools that are getting all of the attention don't enable you to deliver that message. All they are good for is getting a name out there with no story attached.
Consider the famous Oprah giveaway of 200 Pontiac G-6s. (It won a Cannes Media Lion.) The result was great press but lousy sales, which are 30% below expectations. What was missing was the story about why I should buy one if I didn't get one for free. On the other hand, strategy gives you a guide for all of these newfangled activities. This differentiating idea can be carefully introduced into these non-advertising vehicles. In other words, your carefully developed strategy is the cornerstone for your multi-media plans. They can extend your selling message beyond advertising.
Step Two: Dramatize The Strategy
Creative people tend to resist a strategic approach to advertising. To them, it restricts their creativity. They sometimes view advertising as an art form. To me, the role of a good creative person is to take the strategy and dramatize it in a way that better involves the prospects. In a way, you are dramatizing that reason to buy. It could be a product demonstration or a dramatic solution to a perceived problem. Whatever it is, it captures people's attention while you deliver your sales message.
Consider BMW as a model client. More than 20 years and many agencies ago, they launched an attack on Mercedes-Benz with the dramatic concept of "The ultimate sitting machine vs. the ultimate driving machine." Today, they are still driving with the same concept and are one of the world's most successful car companies. Great strategies never die. Nor do they fade away.
Step Three: Do Away With Awards
Do away with all those creativity-awards shows, such as Cannes and Clios. Nothing does more long-term damage to the industry than making creative folks think that they are making movies and not commercials. Consider the "Curse of the Clio;" it's widely known that a large number of Clio winners lost their accounts not too long after taking home their statuettes. All of this undermines the industry's perceptions of being strategic in its work. It would be like lawyers having awards for creativity in trials. Agencies are supposed to be professionals helping clients solve problems and sell products. Their award should be getting to keep the account.
Besides, clients are on to the fact that awards are there to help agencies get more accounts, not to help clients get more business. That is not a helpful perception for an industry under attack.
With over 40 years experience in advertising and marketing, Jack Trout is the acclaimed author of many marketing classics, including Positioning: The Battle for Your Mind, Marketing Warfare, The 22 Immutable Laws of Marketing, Differentiate or Die, Big Brands. Big Trouble, A Genie's Wisdom and his latest, Trout on Strategy. He is president of marketing consultancy Trout & Partners (represented as Brand Lounge in the Middle East & North Africa) and has consulted for such companies as AT&T, IBM, Southwest Airlines, Merck, Procter & Gamble and others. Recognized as one of the world's foremost marketing strategists, Trout is the originator of "Positioning" and other important concepts in marketing strategy.
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