We're getting pretty darned tired of hearing senior marketers pass the buck on declining marketing effectiveness. A high-level marketer at McDonald's Corporation repeated what has become an all-too familiar refrain at the recent American Association of Advertising Agencies' Management Conference: "What is particularly troublesome for you and me as marketers is that our only boss, the American consumer, is becoming more and more difficult to excite, persuade, and reach….The traditional methods of marketing are losing their power to change customer behavior….We need new, innovative ways to reach consumers." In other word, it's not that our marketing strategies and plans were flawed; our products wanting and our facilities dirty; it's that customers are just more complex and communications channels too cluttered.

Have customers changed? Absolutely. Their problems, needs, and wants have evolved over time as technology has advanced, demands on time have increased, etc. Have traditional channels of communication with customers become more cluttered? Absolutely. Traditional channels have become quite congested. But are customers and traditional channels the root cause of the declines in marketing performance? Absolutely NOT! If customers are buying less from once booming brands, it's because marketers have not given them a reason to tune in, pay attention, and make a purchase.

As we've said before, tweaking the marketing medium will not improve performance in the long run. It's not as fun or "sexy" as exploring new ways to get products placed on popular TV shows or developing "advertaintment" programs (the most recent manifestations of "new, innovative ways to reach consumers"), but starting with the good ol' basics of marketing strategy—targeting and positioning—and using the myriad of marketing science tools to guide decisions is the only way to reverse declining effectiveness. We can only hope more marketers dump the buck-passing song and dance and start humming this tune soon.

The war may be over in Iraq and early signs seem to indicate consumer confidence is bouncing back, but these are still uncertain times for business. Marketing budgets, particularly marketing communications—advertising, PR, direct, promotions, web, etc.—still remain vulnerable to attack. Already under fire from top management in search of greater accountability, marcom professionals have had to scramble in recent weeks to adjust campaigns and plans to meet budget restrictions and the mood of consumer and business buyers. Most companies seem to be keeping marketing communications in a state of limbo as they wait for some sign to indicate that marketing communications programs might represent a good investment.

In part II of our series on what companies can and should be doing now to keep their businesses moving forward even in the face of uncertainty about the economy, we spoke with Lois Kelly, principal of Kelly-Lugbauer, a management consulting firm that specializes in helping companies significantly increase the operating effectiveness of their marketing communications and public relations operations, to get her thoughts on the state of marketing communications. Here's what she had to say:

Copernicus Mzine: Marketing communications programs seem particularly vulnerable to budget cuts these days. Is there anything marcom professionals can do about it or do they just have to wait it out until times improve?

Lois Kelly: This is the time for marcom managers to act like other functional executives and cut costs in the right places, figure out how they can do more with existing resources, and build in better accountability standards into their operations. Studies show that most marcom organizations are operating at 60-70% efficiency. If a company with a $5 million marcom budget increased efficiency by 10%—which is not all that hard to do—it could save $500,000. A new study reports that 41% of communications managers view increasing productivity as a primary goal this year, but, sadly, few have ideas on how to do so.

Copernicus Mzine: What are some of the most common problems particularly with B-to-B marcom strategies and programs that you have come across recently?

Lois Kelly: The biggest problem is that goals are vague, unrealistic, not accurately aligned with corporate strategy, or all of the above. Marcom managers are setting themselves up to fail with goals like "raise brand awareness" or "increase customer retention." You can't develop a cost-effective, measurable program around such vagueness.

Let me give you an example. I just saw an RFP from a large, well-known company that is looking to hire a new public relations firm. The RFP states the goal and measure of success is to generate 1,500 media "clips" a month. A few agencies pushed back and said that this wasn't a very strategic approach to supporting the business. After all, you could generate 1,500 clips with negative messages—or publicize an unprofitable product line. "Volume of clips is our goal. You can either meet it, or drop out of the bid," said the public relations director. The budget is $850,000, which, no doubt, will be a wasted $850,000.

Another rampant problem in B-to-B is using competitors as a benchmark for marcom programs, and being ruled by what the field sales force demands. A marketing director of a multi-billion company recently called and explained, "We've got a mess on our hands. The field sales reps want more collateral. Every product line manager wants several brochures. We operate in 50 countries so everything needs to be translated. And we've got who knows how many people and agencies all over the world producing materials. This is such a mess."

"How many brochures actually exist? Do they really help shorten the sales process? Do customers find them helpful?" I asked.

"Who knows," she replied. "Our strategy is to make sure ours are as good as our competitors and that our sales people are happy. "

"What makes you think your competitors are any smarter? Why not find out what your customers really need from you in order to make their decisions? Maybe you could scrap all your brochures, which would save several million dollars a year."

"Nice thought," said the marketing manager, "but sales reps are king here. If they want brochures, management says give them brochures. Just make sure our brochures as good as or better than our competitors."

One last observation: despite acknowledgment of the financial benefits of retaining customers and creating brand value, most marcom organizations are still focusing the majority of their budgets on finding new customers and promoting product features and benefits.

Copernicus Mzine: We've found marcom pros often have great difficulty demonstrating the impact of their programs on sales and profitability. Are there tools they can use to demonstrate the critical strategy role marcom programs play in achieving business goals?

Lois Kelly: A pragmatic way to demonstrate value is to annually assess how well marcom teams and agencies are doing against what company executives view as most important to success—and against marcom and agency best practices. This takes the guesswork out of managing internal and external resources, builds in performance benchmarks, and gets all the internal and external marcom resources on the same page while still leaving room for creativity and autonomy.

I especially like the fact that this analytical approach gives a manager information he or she can act on, not just report on. It shows what is and isn't working, what is most and least important to perceived success, where to allocate resources, what could be cut back, where to invest in professional development, etc. As importantly, this tool allows marcom to create its own "scorecard," rather than being forced to apply a more generic corporate scorecard, or worse, being the only function without a formalized scorecard or benchmarking system.

Copernicus Mzine: What should companies be doing internally now to make their marketing communications organizations smarter and stronger for the future?

Lois Kelly: Focus on where and how to improve your people, processes, and technology. Excelling in this "Marcom Trinity" is critical because the function's responsibilities have changed so much over the past 10 years. Today, what I call the "4i's" have to be built into the core of marcom operations: immediacy, information-richness, interactivity, and individualization. This applies to both B-to-C and B-to-B companies. This is the time to look at:

• Where can we streamline operations by automating low value activities? Are we using the right types of technology to be as productive as possible? Do we have systems in place that help us incorporate the "4i's" into our operations and programs? (Note: to evaluate how well your marcom group is using information and technology, you can find a free Information Technology Benchmarking Audit at www.ITBsurvey.com.)
• How do our people and processes compare to industry best practices? Do we have the right mix of people in our organization? For example, do we have people who can take statistics from Web logs, customer satisfaction studies, sales data, call center analyses, and enterprise BI reports—and turn them into meaningful strategies? Do we have a marketing technology manager?
• Do we have the right mix of agencies? What's the quality of our agency relationships, processes, and product? Do we have our agencies focused on the areas of greatest importance to us?

Copernicus Mzine: If you had the ear of every CEO in the world for five minutes, what would you say to them about marketing communications in these tough and uncertain times?

Lois Kelly: Communications is one of your most important business strategies. But what worked a decade ago doesn't necessarily work today. The Internet has created a new communications game. Customers and stakeholders demand much more, expect it much more quickly, and don't want it in "corporate speak." The metaphor for communications today is education—not promotion, advertising or spin.

If your company is playing by old rules, game plans, processes, agencies and people, you're at a disadvantage. This function is as important as finance or supply chain management or sales, and, like those operations, can benefit from new data-driven ways of operating.

Third, stay focused on those people, and groups of people, who have the most influence on your business. Ten percent have 90 percent of the influence.

You can reach Lois Kelly for questions and comments kelly@kellylugbauer.com.

Back to top.

For thirty years, academic researchers have published over 60 studies on the relationship between marital status and personal happiness. Their conclusion? Marriage works wonders. Since married people have been found to be happier than singles, the state of marriage must be a "causal agent" contributing to a couple's bliss.

But now a large-scale, 15-year longitudinal study involving more than 24,000 people challenged this long-held belief that married people are happier than unmarried people. This new study showed that most married people were happy and satisfied with their lives long before they actually got married. The results of this study, reported in the Journal of Personality and Social Psychology, flew in the face of the much less robust and in-depth research contained in the 60 previous studies, which were driven primarily by cross-sectional correlation analysis—essentially a look at a single point in time at marrieds versus singles.

In fact, the newer study found that the increase in happiness after marriage was minute—approximately one tenth of one point on an 11-point scale. Looking only at correlations led to the incorrect conclusion that marriage was more important to lifelong happiness than it actually was. Though this example is not drawn from the business world, it certainly sheds important light on a very big problem with derived importance—a major issue in marketing research today, particularly studies of customer satisfaction.

Too many researchers have been telling companies all customer satisfaction research requires is correlation analysis. To collect data, these researchers pull out a list of attributes and benefits and ask respondents about their satisfaction with each one. For a car, as an example, a researcher might ask how satisfied a respondent was with color selection, dealer experience, financing options, gas mileage, and performance during the first month (i.e., it didn't breakdown). They also ask about the likelihood of repurchase and/or overall preference for a particular brand to capture a measure of brand loyalty.

The next step is to run some correlations. Let's say respondents' satisfaction with color selection varied widely; satisfaction with performance during the first month was generally very high; satisfaction with dealer experience was generally very low; and loyalty measures ran the gamut. Correlation is a function of the variability of the data; if there' s a lot of variability the correlation will be higher (the sign of a close relationship) and if there's little variability, the correlation will be lower, in some cases non-existent.

Because of the variability in the data, color selection would, therefore, end up having the highest correlation, and the company would conclude that color selection was an important driver of loyalty. So the car company strengthens the brand on this dimension and nothing happens. As it turns out, color selection is not as important as other things such as performance during the first month and the experience with the dealer, but with this kind of analysis there's no way to evaluate the relative importance of each attribute or benefit. That's the trouble with derived importance—companies are wasting precious time and money fixing the wrong problem while ignoring the areas that will make a difference to the bottom-line.

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

Back to top.

A good synthesis of ideas from many of the leading thinkers in marketing today, The Guru Guide to Marketing is particularly relevant for managers looking to reenergize the practice of marketing at their firms. The book is unabashedly opinionated, but this makes for stimulating reading and really gets the mind thinking about new ways to approach business problems with marketing solutions. It's a reference book that every marketer should have on his or her bookshelf.

Back to top.

Our sister firm, Marketing Management Analytics (MMA) will tackle the question, "Which are the greatest media opportunities in a post-recession economy?" in a free, 45-minute webinar on June 4 at 11 am, EDT, and June 5 at 2 pm, EDT. Hosted by Barbara Johnson, senior vice president of MMA, the webinar will offer valuable lessons learned from past recessions and insights into winning media strategies for a post-recession economy.

As an added bonus, every attendee will also receive a free copy of MMA's latest white paper: "Marketing Analytics: Not Just For Packaged Goods Anymore."

Attendance is limited to 20 and you can register by visiting: http://reveries.com/reverb/webinars/post-recession.html

Back to top.