The future of marketing

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Betsy Holden, Senior Advisor at McKinsey, spoke with Bill Boulding, Dean of the J.B. Fuqua Professor of Business Administration, at the Forbes conference about what marketing needs to do to become a strategic growth driver.

What I talked about

The most important point I made during my time at the conference was that marketing in many people’s minds is little more than communications and advertising. It’s viewed as a tactical communications function rather than a strategic growth driver.

We have to re-position marketing as a strategic role that drives above-market growth based on a deep knowledge of the customer. To do that, I talked about five things that are the same for marketers even as the context has changed, and two things that are fundamentally different:

Five things that are the same (but the context is different):

  1. Understanding the customer: Today, this means understanding everything about your customers, including their decision and experience journeys.  Companies need to deliver at every touchpoint and build a trusting relationship so that customers advocate for their brand.
  2. Value proposition: Companies today need to build an innovation engine to continually improve the value proposition as the competitive environment changes. In particular, they need to broaden thinking on how to innovate the business model.
  3. Science: There’s always been an aspect of science in marketing, but it is moving into much more advanced realms with Big Data and neuromarketing.
  4. Art: The art of marketing is evolving to focus on bold platform ideas that work in any media and can be amplified by the customer
  5. Trust: Trust is foundational but in the digital era all business practices are transparent. Companies can’t just say they have values; they have to really live their values.

Two things that are different:

  1. Real time: Customers move in the moment, but corporate budgets and processes are quarterly and annually. That just won’t cut it. It requires not just fundamentally better systems but also different ways of working to react and move in real time with the customer.
  2. Personalized: The digitization of the customer decision journey has made it so much easier for people to research and buy different products. At the same time, that trend has unlocked an unprecedented degree of insight into what people really want. Creating those relevant communications, truly personal connections, and messages that clearly convey a brand’s value is what will differentiate excellence in marketing from the also-rans.

What was on people’s minds

There were many variations of the question: How do we get marketing a seat at the executive table. Well, you have to earn it by having real impact. And that comes from understanding the customer, designing differentiated offering that communicate a brand’s unique value,  and delivering above-market growth. In the consumer goods industry, marketing has in many cases become a strategic function. But in other industries, many companies are not focused on the customer yet to the degree that’s necessary. And without that customer focus, marketing has a difficult time taking more of a leadership role. In the B2B world, CMOs are frustrated when making their case because there often is not sufficient investment in and quality of data to prove the ROI of marketing.

One important way for CMOs and marketers to start building their influence as strategic partners and developing a more customer-centric organization is through internal customer councils. These councils bring people together from across the organization, and put customer issues squarely on the agenda. A critical exercise is defining the “value proposition” and what it means for every interaction with the customer, what every function needs to do, how they can do it, and what metrics need to be in place to see if they are making progress.

Another critical issue to address, in my opinion, is fear and its role in inhibiting innovation. Even the language we use needs to change. We need to stop talking about “rewarding failure”. Thinking about failure creates fear. We need to learn from entrepreneurs and scientists. They think about experimenting, iterating, and learning. That’s how they get to better solutions. That’s the language and approach companies need to take if they truly want to become innovative.

The most interesting thing I heard

I was struck by the interest  the ethics of social media. There were a number of questions and some skepticism about whether companies are identifying themselves when entering and shaping conversations. Identifying yourself needs to be part of any company’s digital code of conduct. In this time of transparency, it’s an absolute “must-do” and the companies that I work with have a strong digital code of conduct.