Some thoughts on what makes good marketing good

As I mentioned in a previous post, I recently took a new job as CMO at Lenovo. It has been a few years since I have had a CMO role, and the job transition has me thinking about marketing – and particularly, about what makes good marketing good. Over the years, I have developed a number of principles that help guide the marketing decisions that I make. In truth, I’m a pragmatic thinker, so I have generally made decisions based first on judgment, and then looking back on those decisions, deduced the principles from them. Regardless of how I came to them, I have found that these thirteen “truths” guide me as I lead marketing teams and campaigns. I thought I’d share them here, and I welcome your feedback.

1. The Product is the Brand, and the Brand is the Product. I think this statement becomes more true every year. Today’s consumers are increasingly savvy. Just because you say something is true on a billboard, web ad, or TV-spot doesn’t mean they will believe it is true. Yes, advertising does influence people, more then they acknowledge. But I believe that consumers’ most important perceptions of brands are build from their experience with products, and their interactions with others. A surprising, innovative, emotionally-charged product can do more to enhance the brand it comes from than most any advertisement. Some companies call this the “Halo” strategy. A break-through product can serve as a “Halo” on the brand. But I think the strategy works best when innovative features are woven into the fabric of a brand’s products, vs. reserved for one high-end, expensive model. Years ago, Audi built a powerful brand built on Quattro, which they claimed was a superior way to deliver power to all four wheels of a car. They put it in nearly every part of their line-up. That feature said a lot to consumers about the company, and the brand.

2. Speak When you Have Something to Say. This is a good principle in life, and an even better one in marketing. If you don’t have a persuasive promise for your offerings, your business is in trouble. And you can’t market your way out if it. If your message isn’t distinctive and persuasive, marketing is (usually) a complete waste of money. Note: I said message, not product. You can certainly create a unique point of view, a unique way of connecting with customers, even if your product is less differentiated than you’d like. I call this a “customer intimacy” strategy as opposed to a “product differentiation” strategy (a good topic to discuss in more detail in another post). If I really believe that I don’t have a story that will resonate with, and motivate customers, I’ll cut marketing to near-zero until I do. But be warned, cutting away marketing is a temporary fix. Without a differentiated message, almost all companies are destined for near-zero margins and return on capital.

3. Efficiency is Important, but Effectiveness is MORE Important. Marketing is a leveraged expense item, because its impact is on the top-line. Given the choice, I’ll always invest more time and energy in making the marketing work well, than in making the marketing less costly. Here’s an example. When you have one agency supporting your company, it is undoubtedly more cost-effective, for a number of reasons. Certain functions don’t have to be duplicated, and you get billed for those functions. But in my experience, having only one agency doesn’t usually lead to the most powerful creative. Getting great creative requires a number of factors (including good behavior at the client), but one of those factors is whether the agency puts their best creative talent on the account. When the business is at stake, I’ve found that there is more urgency at the agency, and usually, more effective marketing follows.

4. Marketing is about Results, and Marketing Decisions Should be Made by People Accountable for Results. It seems there are as many ways to organize marketing as there are companies. It would take an entire post to debate the merits of the two or three most predominant models. But when I weigh in on questions of organization, I usually bring this simple principle to bear: I want the people who decide the day-to-day customer-acquisition marketing budgets, plans, tactics, and creative to be closely aligned with the profit centers in the company. In many companies this means decentralizing marketing, since P&L’s in many companies are decentralized. Certainly stewardship for the brand and some other responsibilities should be managed centrally regardless of how the company is managed. But, marketing is mainly about results, and the best tactics emerge when the people managing it can see the outcomes and make rapid adjustments, supported by “best-practices” known across the company.

5. Some Marketers Like to Spend Money, but the Best ones Like to MAKE Money. Whenever I hear a marketing person saying that they are “fighting for budget”, I squirm a little. When marketing people are more interested in spending money than making money, something is wrong with the org structure or decision-making approach. I want the marketing people and the business-people to be the same people, or at least, aligned to the same outcomes. The whole process works best when marketing budgets flow from units accountable for business-results. When this is the case, then the tension of marketing people wanting money, and business people withholding it, usually eases. Smart business people (who are sometimes one-and-the-same with marketing people), will willingly fund marketing when the marketing is delivering revenue and profit results. Surprisingly, few companies, especially tech companies, are set up this way.

6. Marketing is about All Five P’s. Technology is a very marketing-fueled industry, which is why I find it so surprising how few tech companies really understand the definition of marketing. Marketing is NOT the “Marcom” function. We aren’t the guys who make the collateral material and “brand ads” at the end of the development cycle. This is important work, but it is only part of the job. When companies run this way, limiting the definition of marketing, then consumer insight isn’t infused into the product process from beginning to end, and the chance of a differentiated product and message that really motivates customers is very low. Price competition and low profits follow. Even with incredible consumerist examples like Apple computer, most tech companies just keep doing stuff the old way, without tight integration between product strategy, pricing strategy, distribution strategy, and communications. Oh – what is that “fifth P?”. The five are Product, Promotion, Place, Price, and Performance. That fifth one is my own. Remember, marketing is about results (see above).

7. Ninety Percent of Market Research is a Complete Waste of Money. But the Best 10% can Literally Save the Company. In most of the companies I have worked for, market research is used for Powerpoints, not real decision-making. People want facts to put in their presentations, to support the decisions they have already made. What a waste. It is amazing how little it affects the performance of a company when you slash most of the market research, because in most companies, it isn’t being used well in the first place. But those who use it well have a powerful advantage. To me, the most powerful research is concept research. A concept is a one-page description of a product or marketing idea, with a photo, brief explanation, and usually, pricing information. By studying the appeal of concepts, you can understand what is really important to the customer, in advance of making product and marketing decisions. It is amazing to me how little good concept research is done in tech companies in particular. The PC business, for example, is a single-digit margin business. Companies in this market simply CAN’T AFFORD to introduce a product that’s not a hit. And yet amazingly, we sit around in conference rooms and debate features and design-points without the right kind of concept research to truly understand what will motivate customer purchase. Done right, a company can built a database of concepts over time, correlating concept results with market results. What it enables is smart risk-taking. And smart risk-taking is what leads to margins and growth.

8. Your Target Audience is Simple: It’s the People who Like your Product. We have a lot of debates in tech companies about who is the target audience for each of our products. But we use some pretty blunt tools for the discussion. It usually devolves into a discussion of how large the customer is, in terms of employees, and the price-bands of the products offered. Neither of these are particularly relevant factors of customer targeting, in my experience. Customers should be segmented according to what they value when they make their purchases. As such, the “target audience” for your product is all of the customers who want what you are selling. It may sound backwards, but it’s not. The trick is to develop a suite of products that have distinct value propositions which address the real purchase motivations of the profitable customers in a category. And of course, once you understand the mind-set of your customers, and have products that will motivate them, you have to figure out how to target them with marketing tactics. So in the end, you need to know how big their company is, or how premium a product they typically buy, and plenty of other target-able factors. But don’t start there. Start with what they want, and what they value when making purchase decisions. That’s how you segment a marketplace.

9. Good Marketing Doesn’t Trade-off “Demand Generation” and “Brand-Building”. It Does Both. Let’s stop the debate, happening in companies everywhere, over whether the priority should be on “brand-building” or “demand generation”. It is a false trade-off. Good marketing does both. Good marketing is about persuading customers, helping them understand that you have what they want to buy. Brands play a huge role in this, because they help consumers simplify a complex world. But let’s be clear – every time you engage in marketing, the objective is to motivate a customer toward a purchase. You can’t start-over the conversation with the customer every time. Brands help you have an ongoing dialogue and relationship with the customer, moving them toward purchase or repeat purchase. That’s why building the brand is required. As such, every marketing campaign, and every demand-generation tactic must do its part to build the brand. If it doesn’t, the conversation is between strangers.

10. Customers Make two Separate Decisions – to Consider your Product and to Buy it. Consideration and Purchase Decision are the two “moments of truth” in customer-acquisition marketing. It is important to understand the occasions, the context, and the influences that are in play for your target audience at each of these two steps. Really understanding how they make these decisions, when and where they make them, and what influences them, is the only way to build effective marketing. And, the same marketing tactics might not work for both steps. So for each piece of the campaign, it’s important to understand the objective and not get them confused. I don’t think there is quite enough discussion about all of this among marketing teams during the planning of campaigns.

11. The Best Marketing tells People what they Already Know. Or more precisely, it tells them what they already know but may not have really thought about, or thought about lately. One of the most important things that a marketer can do is to understand the needs and motivations of the customer, and then speak to those things. This makes the customer feel understood, and builds affinity. In the end, this sense of shared understanding is what motivates consumers more than anything else. Beverages are a good category to illustrate this. Think about the differences between Budweiser, Coors, and Samuel Adams beers in the U.S. They represent different value systems, different world views, different customer mind-sets -- even more than they represent different formulations of beverage. This principle illustrates the importance of brands. Coca-Cola is a refreshing drink that brings people together. People know and understand this. How effective would it be if their marketing suddenly began to tout health benefits of Coke and the fact that it is fat-free? That would be a big change in the world view of Coke, and as consumers, we wouldn’t know how to process the information. The best marketing speaks to the real motivations of the customer, and stays close to the identity of the brand, building on the power of the brand at each step.

12. The Best Marketing gets People Involved – Talks “With” People and not “At” Them. This one has always been true, but the methods to get customers involved with our marketing are changing rapidly. Traditionally, this has been a question about the nature of advertising. Does it intrigue? Does it make the customer think? Does it connect with their beliefs, as discussed above? Still today, when I look at advertising, I challenge my teams to make sure it talks “With” and not “At” the customer. But in the 21st century, consumers are more cynical of all mass media. It is much harder to draw people in. The Internet has taught us that we can be PART of the story, that we can CONTRIBUTE to it. It’s not as simple as doing a viral video and expecting everyone to pass it along for free, as many CEO’s are challenging their marketing teams to do. “Go viral, because I’ve cut your budget!”. “Going Viral” is incredibly hard, and it doesn’t work for every product category. There is a measure of art and luck involved. But if you can find a way to get the most involved consumers even more involved, and then find a mechanism to give their contributions real reach and frequency with the mass consumer, it can be very powerful.

13. The most Profitable Products are “Famous For” Something that Customers Value. I have noticed that in the tech industry, we often default to a very imprecise marketing practice. Rather than figuring out the most important benefit of our offer, and then aligning the communications to support that one benefit, we come up with a list of three (and strangely, it is almost always three?!) pillars to support any offer. This is very specific to tech, and I have noticed the trend at several different companies. This just isn’t how good marketing is done. So I ask marketing people this question: If you had just one sentence fragment to express it, what would you want your product to be Famous For? Figure out the essence of what makes your product special, express it as one simple benefit, and then align the rest of the communications for that product to support and augment that promise. BMW is famous for being a driver’s car – “the Ultimate Driving Machine”. Las Vegas is famous for unlocking your sinful side – “What happens in Vegas...” Don’t commit the “sin” of imprecise marketing, or your product will surely be famous for nothing.