"Aligning your organization, operations, and culture around your brand values brings the promise to life." Interbrand

Pretty much every company has an organizational structure. Usually, people are organized around a functional area—whether it be Administration, Finance, Operations, or Marketing—and their job responsibilities are derived from the function they support. Chains of command, titles, and reporting streams may differ from company to company, but the basic functional unit is a standard at virtually all companies.

The tendency for people stationed within a functional unit is to concentrate only on the responsibilities relevant to the function. Operations doesn't worry about accounts payable, that's Finance's job. Finance doesn't worry about the skill set of the IT manager, that's HR's job. HR doesn't worry about the capacity of the server, that's IT's job. And, naturally, neither Operations, Finance, HR, or IT concern themselves with marketing activities—that's Marketing's job.

Everyone works within their respective functional silos, communicating and collaborating with each other—at least one would hope—as needed, but each with a single-minded focus on their domain of responsibility and check-list of things to do. There's one problem with this tidy organizational system—consideration for the customer is stuck in Marketing. This is a particularly serious problem with business-to-business organizations.

Marketing is more than creating ads, picking media, sending out direct mail, answering customer question, or any one of the typical responsibilities commonly thought of as "Marketing's job." It's about figuring out how to get buyers to purchase your brands, products, and services in the first place and how to keep them buying from you, and only you, in the future. In that sense, Marketing is more than just a functional area—it's a way of thinking about the purpose and direction of the business. It's much more than a group of people running ads.

Though the marketing department might handle direct communication with customers, all departments share responsibility for orienting their activities around the customer.

Companies that have taken marketing out of the silo and into the organization have met with great success. As Aramark, a uniform and food services firm, approached the task of merging three separate business units into one organization, the company's chairman and CEO Joe Neubauer decided to bring together the three parts around the singular focus on delivering greater value to customers. All functional areas and their operations supported the "managed services, managed better" brand positioning in a variety of capacities. Thanks to making marketing the organization's, as opposed to a singular unit's, responsibility, topline growth doubled and sales from existing clients grew by 50%.

We've heard talk recently of some companies—Hewlett Packard's name, for example, has come up—considering eliminating the word "marketing" altogether from job titles to emphasize that marketing is the responsibility of the whole organization. Obviously it'll take a lot more than hitting the delete key to permeate a marketing mentality throughout an organization, but the sentiment behind the discussion is certainly encouraging and a good sign of things to come.

Ever since investigators first linked anthrax and the U.S. postal service back in October, many companies have taken a second look at e-mail marketing campaigns. Already acknowledged as more cost-effective and faster to implement than direct mail campaigns, e-mail marketing figures much more prominently in marketing plans today, particularly during what is typically one of the heaviest direct mail times of year—the holidays.

The technology prognosticators at Jupiter Media Metrix have predicted that by the year 2006, more than 140 million Americans will "actively" use e-mail, up from 87 million this year. A report from Forrester Research adds that more than half of all Americans use e-mail, for an average of half-hour each day. These higher usage numbers coupled with greater bandwidth, better design applications, and more extensive mailing lists have certainly helped build the legitimacy of e-mail as a marketing communications tool. No longer limited to static, text-only messages, e-mail campaigns today often feature striking visuals, videos, and sound.

Even before safety concerns about snail mail, declining response rates and increasing costs of developing materials that would rise to the top of the 572 pieces of junk mail the average person receives each year, had direct mail on the ropes at several businesses, both large and small. E-mail looked all the more attractive as a lower cost alternative.

This renewed attention to e-mail as a direct marketing medium means e-mail marketing is getting its second wind. We hope e-mail marketers channel their energy boost towards developing better message testing standards, applying database and mailing list segmentation technologies, and focusing on the actual message they are sending through the medium, rather than just the creative execution itself. This more scientific approach to campaign planning has, for the most part, been missing from e-mail marketing and just look what's happening to response rates.

Though some e-mail campaigns can still generate response rates of 10 percent, which is a considerable return in comparison to off-line direct marketing where a 2 percent rate is considered terrific, the novelty of e-mail promotions has already diminished as in-boxes have become overloaded and consumers are showing signs of immunity. Over the past year, the average click through rate on an e-mail ad has dropped by half, to around 5 percent, according to eMarketer analyst Jonathan Jackson, and the latest Iconocast statistics show click-through rates for brokered e-mail lists have fallen to 2.5 percent.

"Click-through" itself is becoming an outdated metric. When it comes to measurements of success, the rate of converting clickers into buyers needs to become the standard by which all e-mail campaigns are judged. Efficiency and effectiveness of e-mail marketing campaigns will improve if greater attention is paid to getting the right message to the right people at the right time.

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After all, throughout history, companies of all shapes and sizes have relied on M&As to gain share, scale, or scope faster and maybe less expensively—at least in theory—than they would on their own. Indeed, over the years M&As have become a management favorite—right up there with "rightsizing" and reengineering—for "growing" the business. Over 300 companies, or a startling 61 percent, of the largest 500 companies in Fortune's listings from 1981 and 1999 had disappeared by 1999 as a result of mergers, acquisitions, or takeovers.

Somehow, M&As have managed to sustain their popularity in spite of questionable reliability. Studies into the success of M&As demonstrate a miserable track record in achieving corporate objectives. Booz-Allen & Hamilton, for example, found that over 70 percent of merger objectives go unmet. CFO Magazine found a 50 percent overall drop-off in productivity in the four to eight months following a deal and not even 25 percent earn their cost of capital. M&As, as the Hewletts and Packards have emphasized in their battle to prevent the HP-Compaq union, are distracting undertakings, consuming not just dollars, but time and energy as two companies integrate often starkly different systems, structures, cultures, and brands.

"But wait!" An M&A proponent might exclaim, "Just take a look at the bottom-line impact." Obviously, when companies add the sales and profits of another corporation to their own, they report the consolidated numbers and show growth. Or, if the companies are similar enough, costs can be cut as redundancies are eliminated and efficiencies realized, and the bottom-line grows. After Citibank merged with Travelers to create the world's biggest financial-services firm, for instance, the two companies saved a lot of dough because they could both cut costs as their systems merged, and profits soared.

True, M&As may prop-up the bottom-line at least in the short-term. But these increases are more deceptive than real. With Citigroup, profit growth came from reduced costs, not sales of their enhanced line of financial services. Great they could save money, but profits from lower costs is not exactly sustainable or what would generally be considered "real" growth.

The fact is M&A does not equal growth strategy; it's a tool to use in pursuit of a strategy, but just a tool. Just as buying an expensive CRM system doesn't automatically bring better customer relationships, neither does a merger or acquisition automatically improve performance.

We offer a different take on the decision to M&A or not. As the only business function directly involved in getting and keeping customers, marketing is the only source of real growth. So when it comes to an merger or acquisition, the real question to ask is to what extent does a merger or acquisition fit the marketing strategy? Do the combined assets offer greater marketing capabilities such as stronger brands, better and more diverse products or services, better distribution, or better service delivery? If the answer is yes, dig deeper to make sure it's not just superficial appearances. Beginning due diligence with a marketing audit, rather than a financial one, will tell you if a merger or acquisition even offers the potential for long-term, honest-to-goodness, organic growth if, the all important caveat, handled meticulously.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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We can't think of a better gift to give at the holidays than a book. There's plenty of suggestions out there on which business books are must-reads and certainly plenty of marketing and branding books to choose from. But sometimes we find the best source of inspiration and knowledge comes right from the horse's mouth, so to speak. So we offer our short list of biographies of people who have battled through adversity and tried to affect change.

American Heroine
by Allen F. Davis (Ivan R. Dee, 2000)
Recounts the life and work of Jane Addams, a social reformer and activist who did much to further the cause of immigrants and women in the U.S. and around the world.

John Adams
by David McCullough (Simon and Schuster, 2001)
We're still making our way through this tome, but find John Adams character and his devotion to nation building a country truly amazing.

Thurgood Marshall: American Revolutionary
by Juan Williams (Times Books, 2000)
Fascinating account of the legal and political battles waged by Thurgood Marshall by one of our favorite authors and commentators.

With Malice Toward None: A Life of Abraham Lincoln
by Stephen B. Oates (Harperperennial 1994)
A man from humble beginnings with early career disappointments who went on to lead the nation through one of the darkest chapters in U.S. history.

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In 2000, pharmaceutical companies spent $2.5 billion on all forms of direct-to-consumer (DTC) prescription drug ads in 2000 with 85 percent spent on the 50 most heavily promoted drugs. Industry experts expect it to increase to $7 billion by 2005 and the general consensus among pharmaceutical companies is that DTC advertising is working.

Our own thoughts about the effectiveness of DTC advertising aside, the Kaiser Family Foundation recently released an exciting study that took a look at consumer reactions to drug advertisements. You can watch a webcast of the briefing on the study at:

www.kaisernetwork.org/healthcast/kff/29nov2001.

A transcript of the briefing is also available on the site.

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