11 hard lessons from 40 years of building and implementing successful marketing plans

11 hard lessons from 40 years of building and implementing successful marketing plans

 

The key word in that headline is ‘Implementing’. A plan is of little value unless it is implemented,  the lessons from the success and failures of that implementation incorporated into the next iteration.

This is not another post about the 55 things to do to have a great marketing plan, this is about the things most forget that are about the organisational and strategic elements that will hinder any successful implementation.

Marketing planning should be a continuous, iterative, and a ‘live’ thing, not a once a year pain in the arse, necessary as a part of the corporate budget process.

To build a plan that serves the purpose of managing the implementation of strategy is a challenging and iterative process of identifying options, and making difficult choices across a host of domains.

Contrary to folk lore, it is a highly data intensive process, with a lot of experience, instinct and skill required that enables connections to be made between pieces of data that may not at first glance  have any real relationship. It is not the ‘smoke and mirrors’ some like to think, it is a tough, demanding but ultimately extremely rewarding process when done well.

You need a strategy

A marketing program operates as a part of an overall strategy, without which it is destined to be an expensive indulgence. Marketing is a key  part of the  delivery mechanism for the strategy. Strategy is all about making the always difficult long term choices, the sort that shape businesses over time, which need to be reflected in the resource allocation and activity decisions which enable implementation.

The importance of context

No enterprise exists in a vacuum. There are a range of factors that exert influence, but over which the individual enterprise has little if any control. The best they can do is accommodate the context into the planning processes, always being aware that factors over which they have no control can change with little or no notice, so retaining the agility to adjust in real time is a profoundly important capability. These factors range from the regulatory regimes, competitive activity, availability of critical capabilities, to long term trends  impacting on the economies in which you compete.

The importance of process

Process is simply the way things get done, from start to finish, in effect it is the plan for  the plan, the framework upon which the plan is built. A marketing plan is a part of a larger business planning process, Strategic, Capital, Operational, Financial, all have a cause and effect role in overall business planning, and a sensible, achievable marketing program cannot be written in isolation from the other functional planning activities, and that of the overall enterprise. There is a natural flow to all these plans, of both timing and necessary cause and effect impacts. For example, there is no point in a marketing plan setting out to launch a product that requires capital to be spent in the factory unless the item is also included in the capital and operational plans. Equally, there is no point spending capital in the absence of a marketing plan to leverage the benefits of the expenditure.

Iteration, experimentation and learning

We are dealing largely with what might work in the future, and courses with credibility in ‘future- telling’ are few and far between. Therefore it pays to have as many options open as possible. This is  not to say we should allow a scatter gun approach to prevail, we should remain focused, but within the parameters of a robust well thought out and understood set of strategic  priorities. It is a balancing act, one that is hard to get right, indeed, we only can judge our efforts accurately with the benefit of hindsight. Management of your ‘experimental portfolio’ should be a key task of the senior marketing person, the one who has the power to allocate the resources and hold them accountable, and certainly not left to the junior just to record activities.

Be specific about what you learnt, which forces clarity, and how you know, which forces objectivity in the place of fluffy subjectivity.  An intensive After Action Review process should be a core part of any marketing implementation.

Critical thinking

Marketing has always suffered from the tendency to be seen as fluffy, unscientific, and subject to leaping from an inadequately defined problem to a convenient solution. It has lacked credibility in the boardroom, where the big decisions are made. Often in the past that has been a fair characterisation, but there is no longer an excuse.

Most board discussions are based on objective data of one sort or another, which usually means it comes from the past. By contrast, marketing is about the future. It relies on assumption, speculation, and ‘mental models‘ as drivers, so carries less credibility than purely objective data.  We now have tools that can deliver some reliability in the cause and effect chains we seek to influence, so long as the hard intellectual graft is done.

If you are to have resources allocated to marketing over the long term that it usually requires to be effective, rather than tied to a changing annual budget cycle, with some artificial calculation tied to sales forecasts, you need credibility. This is where the critical thinking becomes (sorry) Critical! Use of marketing jargon, buzzwords, clichés and opinion may go well in a razzamatazz sales meeting, but where it really counts, at the point where long term resource commitments are made, they are counter-productive. Data and critical analysis is what counts.

In a past corporate life, leading a large marketing function, I insisted on sales forecasts for an initiative of any sort that was going to consume a significant chunk of a marketing budget to be done from several perspectives, and using differing sets of assumptions. The assumptions and perspectives were the subject of the interrogations, rather than just looking at a convenient  extrapolation. While we never got a forecast right, the outcomes were generally in the realms of  reasonable error, we did better the next time, and most importantly, we had the confidence of the board.

Compass Vs Roadmap

Dwight Eisenhower said ‘In preparing for battle, I have always found plans to be useless, but planning is indispensable’.  This is simply a variation on the adage that no plan survives the first contact with the enemy, but adds that the planning is essential. When applied to marketing planning, the same rules apply. To be effective they must drill down to and articulate the drivers and measures of success, provide a framework within which the activity needs to happen, but without dictating the details of the activity. Those facing the situation need to be able to respond to it within the frameworks of the overall strategy and objectives, in real time.

It is the achievement of the objective that is important, not necessarily the means by which it is achieved.

Activities are not outcomes

Too often activities completed are used as performance measures. It may be good to know that an agreed activity has been completed, but of way more importance is the understanding of what happened as a result of the activity.

The better KPI is the behaviour that is the driver of outcomes, rather than some assumption that an activity will deliver an outcome, or some simplistic extrapolation of the past. Results are the outcome of activities that are implemented after consideration of those things both in and out of your control, and will never be as forecast.

Cross Functional

Organisations build a structure to suit their internal processes, it makes the scaling of activity easier. However, customers do not care about your structure, they care about the level of service, quality, timeliness, and all the rest of the factors that add value to them, all of which are all cross functional concerns. Why would you not organise yourself in a manner that reflects what it is that customers are looking for?

Ensuring there is engagement of all functional areas in the development of the marketing plan is essential. They will all play a vital role in the delivery of the plan, and the CMO never has the functional responsibility for them all, so they must be led.

Clear Accountability 

Unambiguous accountability tends to focus the mind on the outcomes, which generally leads to better performance. Accountability also however comes with the requirement that the resources are made available to get the job done, properly, which is code for being accountable for the outcomes. The power to allocate resources is a key part of real accountability, rather than just its sibling, ‘responsibility’ which implies completing a specified activity.

In recent times, we have moved from individual accountability to team accountability, which has significantly complicated the management and leadership game, while offering the potential for huge gains in outcome. Holding an individual accountable can be done with just ‘management’, but effectively holding a team accountable for an outcome requires true leadership.

Plans should tell stories

Any plan, to be effective, must tell a story about the journey, the anticipated problems, alternatives considered, and the value of the outcome.

Marketing and importantly, brand building, are all about the stories we tell ourselves, and others, that illustrate how something has given us ‘value’ in some way.  Without a simple, illustrative story, all the rest just boils down to price on the day. All the great marketing we see tells a story of some sort that evokes a positive emotion towards the product. Apple tells a story, as did Meadow Lea (they stopped 20 years ago, but the effect lingers) Nike, Coca Cola, so tell yours in the plan.

My kids first dog, ‘Tamba’ was a great friend to them all. She/it played with them for as long as they wanted, protected them, and gave unconditional love, seeking nothing more than a pat behind the ears and a bit of ‘doggy-love’.  One day Tamba was a bit subdued, obviously with some version of doggy flu. Off to the vet who gave us some pills to administer, along with instructions. At home I shoved the pill to the back of Tamba’s throat, and held  her mouth shut for a while. As I let go, to her obvious relief, thinking the pill would be swallowed, up it came, back into my hand, a mess of dissolved pill and dog saliva. My neighbour, a ‘dog whisperer’ recommended I hide the pill in a spoonful of Vegemite on a square of toast, and offer it to Tamba. Whoof… gone! No pill.

I am constantly reminded of this story as I talk to clients, and watch marketing activity designed to generate a response. It is all facts, data, dry boring old stuff that has no emotion. It is like trying to get Tamba to take the pill, impossible until it was wrapped in something she loved.

Even the best plan does not implement itself

Planning is only the first step, one that without implementation is pointless. As my old dad used to say, 1/10 for the plan son, the other 9 points are reserved for implementation.

 

 

Mad Men have morphed into Math Men

Mad Men have morphed into Math Men

Don Draper would be really pissed, his world has changed. His brand of advertising is as dated as the Model T.

Instead of having hundreds of creatively driven ad agencies, all competing aggressively for your business, which involved selling you on a creative product then cashing in from media placement commissions, we have a few global corporate agencies driven by accountants, chucking money at Google and Facebook who between them   have the GDP of France.

So much for media diversity and creativity.

Marketers have since time began tried to moderate risk and increase the productivity of their investments, by better targeting their ideal customer.

Facebook, Google, and Amazon have an immense data bank to use to target customers. Every time someone likes a Facebook post, tags a photo, expresses an opinion, shares an Instagram photo, or sends a WhatsApp message, Facebook adds it to the dossier they have on you. Google does the same thing, and better yet, Amazon actually knows not just what you looked at, liked, and shared, but what you bought, when, for how much, and where it was delivered.

All this is data, mountains of it, ready to be mined for profit, and to hell with privacy.

We have given our privacy away to the global wholesalers of eyeballs. It makes such a farce of the current ‘debate’ about the privacy of health records happening in Australia. Who cares if your doctor can log into a (relatively) secure database to check if you have an allergy, herpes, or are pregnant, she/he can probably find out by checking in on Facebook!

When I was a kid, we used second hand, historical data to try and target demographic groups of potential customers. Now you can track who they are, where they live, what they browse and buy, what interests them, and what they ignore, and how they engage with others, by mining the data.

The change has happened at breakneck speed, and has a long way to go yet, but it is clear that the data scientists rule, and are consolidating their hold on power.

Question is, do we really want these data nerds, exemplified by the ‘Zuk’ to rule the world?

It certainly has taken some of the fun out of marketing.

 

 

 

 

 

Mary Meeker 2018 KPC&B Internet trends report

Mary Meeker 2018 KPC&B Internet trends report

 

The 2018 KPC&B report is now out, and gathering views on Slideshare like a runaway train.  The amount and speed of the attention given to this now annual report is evidence that it has become the benchmark for analysis of the digital communication trends that we live with every day, but do not necessarily see.

The report has become one of the most influential pieces of content published, and it is a monster!

While I have no intention of trying to summarise, a few  things just jump out.

  • While growth of the net may be slowing, at a reach now above 50% of the worlds population, what would you expect. Within that total reach, US platforms remain the global giants, but being hunted by the Chinese who are spreading out of home base where they utterly dominate to the rest of the world.
  • Buying via the net, so called ‘e-commerce’ is now so deeply entrenched, that it is now just another part of ‘commerce’. Amazon outside China dominates, and is also dominating in R&D spend, translating into an avalanch of innovation. Inside China, it is a very different picture. The Chinese platforms are all there is, and are in the early stages of going after an international presence. It seems that the Chinese have jumped the hard asset stage in the development of communication and payment systems, going straight to mobile.  No legacy questions of any type to be negotiated, which can only accelerate the potential rate of growth.
  • Ad spending on mobile is now more than half digital ad spending. The implication of this is the degree to which the ads will evolve rapidly towards highly personalised messages, when combined with AI and geo location.
  • Of particular interest to Australian FMCG retail, is slide 108 which shows the price and market share changes in the top 20 US grocery retailers. We have the top two gorillas here still retaining above 70% market share, not the 20% that Walmart holds in the US as the gorilla brand. If the US experience is mirrored here, and I see no reason why it will not, the message would be a ‘sell’ on Coles and Woolies shares. Not a happy thought for either as they must be contemplating large investments just to remain in the game, let alone retain their current position.
  • The nature of work continues to evolve way faster than our capacity to absorb the changes. I suspect the social dislocation that will result in this country are only just beginning to be felt.
  • There is plenty of data coming at us that tells us video is the new big guy in town. This report confirms it, again.

This report is required reading and deep consideration, for anyone thinking about digital, and the shape of the world we will be living in, and isn’t that all of us?

 

How ‘Systems Thinking’ should be applied to marketing and governance.

How ‘Systems Thinking’ should be applied to marketing and governance.

We think about marketing reasonably often in business, not often enough, but reasonably often.

However, our thinking is usually muddled, and wrong.

Let me explain.

We think about marketing as if it was a discreet set of actions that can change the fortunes of a business.

The ‘marketing function’ sits alongside sales, production, finance, IT, and the other functional units in a business, that collectively build the success of the business.

Problem is we all see the whole as the sum of its parts, not as an interdependent and related system that is more than the sum of its parts.

Take an engine out of a car, and leave it on the ground. No matter how good the engine, it cannot move itself. It is utterly dependent on the interaction of the other parts of the car to be mobile.

Take the best bits of a range of cars, the BMW engine, Mercedes gearbox, Lotus suspension, Ferrari body shape, the best of the best, and put them together. Logically with all the best bits you will get a superior end result.

Rubbish.

The bits do not fit together in any coherent manner. Individually they may be the best of the best, but together they are little  more than a box of parts.

The whole system is what counts, designing the system from the outside in, not from the inside out.

For some years now I have been referring to the marketing and sales functions together as one function: ‘Revenue Generation’.

While this is better than  the artificial separation into sales and marketing, it is still way short of a system necessary to generate a profit, as that requires the processes that develop, produce and deliver the product to be a part of the system.

We all solve problems from within our own disciplines, that is the way we are trained. We are trained to see a situation from within the confines of the discipline, not from the outside from where we can touch, feel, and see the context.

Outsiders are always better able to see the size and shape of a building than those sitting inside it. Exactly the same as having a knowledgeable and constructively critical thought leader who sits outside your business, looking at the competitive, regulatory  and strategic context in which the business competes for a living.

This was supposed to be the function of a board, outside experts reflecting on the sum of the parts rather than the individual parts, developing strategy to build success for the long term, and seeking optimisation of the assets deployed. Often we seem to fail at that as well, as the outsiders get caught up in the complication and protection of the status quo, and their own position in it, forgetting why they are there in the first place. You only have to observe a little bit of the current Financial Services Royal Commission to see plenty of evidence of that.

 

Is the supermarket business model about to be retired?

Is the supermarket business model about to be retired?

 

The face of the supermarket in the 2030’s is emerging, and I suspect it is not a face most of us will warm to immediately. The combination of artificial intelligence and the capacity to automate just about everything will render much of the current supermarket  business model  obsolete.

The model of Amazon Go and Chinese Hema supermarkets will apply particularly to convenience stores, in high traffic high rent areas, like the inner city and business centres. Our grocery shopping will be done on line by voice, and delivered by some amalgam of autonomous vehicle,  Amazon, Ocado, or delivery services like FedEx, Uber and others that will spring up, which will hook up with the owners of the automated Pick ‘n Pack warehouses.

Amazon Alexa and other technology deploying voice ordering ensures a limitation of options, to those that favour the seller. With voice, we get the convenience of ordering from the couch, but in exchange we give up the visual cues of a store where we usually have several options, with differing characteristics and price points, and the resulting capacity of marketers to hang their hats on a point of differentiation to a group of consumers, a niche in the market. Voice removes all that, and will offer you only the one or two that the seller recommends, but their recommendations will be based on their commercial objectives, revenue, margin, and stock rotation, not yours, which are likely to be entirely different.

The recently announced deal between Ocado and Kroger adds a whole new dimension. Ocado is the first entirely e-commerce grocery business that I am aware of, to have leveraged themselves into a controlling position, and it took a while. Like all on line supermarkets, it struggled with fresh produce, and the higher customer acquisition costs that  are the result of having no physical shops. Ocado launched in 2000, went public in 2010, but did not turn a profit until  2014, a modest 7 million quid on a turnover of a billion. The logic appears to be developing and licencing their technology, but little happened  beyond the deal with the John Lewis owned Waitrose until Amazon bought Whole Foods in August 2017, which jump-started a rush into the technology to automate order receipt, pick, pack, and delivery.  Suddenly everyone was chasing them, and in November 2017 a deal was struck with Casino in France, and talks with others advanced quickly, culminating with the Kroger deal.

Kroger is deeply threatened by the Whole foods purchase by Amazon, and while Wal-Mart dominates US grocery, Kroger is a strong second, but has not had a viable on line offering. The potential for Amazon to convert some or all of Whole Foods sites into local delivery warehouses seems pretty real to me, which would give the relatively low on line grocery share in the US (estimated at 1.5% Vs 7.5% in the UK) a real kick along, and potentially add Kroger to the conga line of US retailers heading for the liquidator.  From Ocado’s perspective, the deal offers access to the biggest grocery market in the world for their technology, and led to a share price jump that will be making patient investors reach for the bubbly.

If we think that here in Australia we are insulated from all this, we are in la la land. While the distances here add to the complication, it is a predictable number, and therefore manageable by algorithm. I predict that one or both of the gorillas will be on a plane to talk to Ocado very quickly, if they have not already, although Coles might be pre-occupied with moving out of home, and resetting up in their own digs. Wesfarmers have been badly burnt by the Bunnings foray into the UK, brought to an embarrassing end last week by the sale of the former Homebase business for 1 pound, and would I suspect be wary of supporting an investment of this type for a departing problem child. It might just be an ideal time for Woolies to get a jump on them?

Who will pay for tomorrow’s hospitals?

Who will pay for tomorrow’s hospitals?

I did not watch the royal wedding. That does not mean I am a republican, or anti-monarchist, it simply means I am not interested.

If they want to get married, let them get on with it, they do not need the approval of the masses. After all, they are both adults, both famous for being famous, and one has already been there and done that!

I am also not interested in going to church. That does not mean I have no moral compass, or personal code that has as a base what could loosely be termed the 10 commandments. They make sense irrespective of your brand of faith.

What I am interested in is the replacement of important questions and issues, such as how we live together, how we treat others, and who pays the piper, by this wild and to my mind absurd, emotional response to two thirty somethings getting married.

It seems to me that the things that got us were we are, no longer hold any sway.

We have a tax system that is broken, at a time when we voters appear to be demanding more and more. Those with the power, which really means those few individuals running multinational corporations, hold the power to, and are personally paid to ensure the institutions they run pay as little tax as possible, and they have the resources to find the cracks in the system through which they can wriggle.

Amazon is a prime example, along with their digital multinational friends. They are disrupting retail, and a host of other domains, while investing heavily in new services in the cloud. Great you say, they deserve to be successful, and they do, but Amazon is doing it by more than just being the smartest in the room, they are being subsidised by their competitors.

Amazon trades at what  is effectively break even, yet it will probably  become the most valuable company in the world very soon. It has grown by reinvesting their profits into becoming bigger and more powerful across their areas of operation, and as investment is a tax deduction, they pay no tax.

Their competitors do pay tax, they are largely those who were around before Amazon emerged, but will not be around much longer to pay for the schools and hospitals we all want.

Who will pay for them then?

Not Amazon or Apple, or Google, or Netflix, they are reinvesting in growth at the expense of their competitors, and in the process denying our kids a place to go to school.

Amazon has flipped the system.

Listed companies are usually judged by their profitability, usually on an absurdly short term basis.  Companies sweat the books and beat up their staff to deliver on optimistic forecasts of quarterly profitability. By contrast, Jeff Bezos makes no or negligible profits and has made vision and the long term the source of share value.

Amazing!

Any business that pays more tax than it is legally required to do is not acting in the best interests of shareholders, or so the mantra goes, as was so dramatically stated by the late Kerry Packer in 1991. Therefore  in this day of internationalised supply chains, and low tax regimes in fly blown little islands scattered around the place, they register as businesses, and engage in legal but morally bankrupt practises.

In Australia we have in addition the sight of personal greed, cronyism, and utter lack of personal and corporate integrity being brought into the light by Royal Commissioner Hayne and colleagues. I am sure that this level of malfeasance exists elsewhere, most probably in greater volumes, but that does not make the sight any more palatable. Most probably nobody will go to gaol, a few will be banned from being directors for a while, and there will be mutterings of regret forgotten almost before the words are out. Then we have the competing pollies promising handouts of money we do not have, a bill our kids will have to pay in one way or another.

Who will pick up the real bill for tomorrows hospitals?