The Omni Consumer
According to a report recently published by IBM's Institute of Business Value, 2007 was the year of the "omni consumer". The report is a result of research Big Blue conducted with more than 16,900 consumers throughout the year (as well as some in-the-mall video research to bring it all to life).
Pretty ho-hum stuff overall: consumers use the internet to help make buying decisions, they care about the environment and they demand greater transparency and control. IBM didn't need to poll 16,900 people to get to any of this.
But amid the bland findings lies this gem:
"Two-thirds of U.S. banking customers don't feel valued by their banks and are unwilling to commit to a deeper relationship."
Wowza. Banks are classic paper tiger brands. People do business with them sheerly out of habit. The brands are established and supported through retail presence and advertising. Service levels and innovation (e.g. real value) are so rare in consumer banking that most people have been trained to expect very little. Banks will need to work quickly if they want to reverse these really terrible numbers.
Hey IBM: how about some other industry-specific findings?
CMO Dog Years 2
There are a number of surprises in the report.
- Something less than 15% of CMOs ranked "technology-saviness" as being important to their success. I would argue that a lack of technical saviness is a debilitating weakness for any marketer in today's world. Very surprised so many CMOs are missing this.
- A lot of coverage of importance of being "customer-centric" but not much detail on how this plays out in product innovation strategy and what role of CMO should be. Also, interesting (per the technology blindspot) that social media and community technologies were not more highly rated considering their power in driving "customer-centricity".
- Somewhat less surprising is the lack of value placed on marketing conferences. Yet it seems like CMOs are struggling to find alternative avenues for their professional development. A big opportunity here for someone (Forrester? Heidrick? 1066?)
CMOs will not be able to succeed until they can define the role of marketing for their organizations. Rather than "aligning to the business — without waiting for the business to align to marketing" as the report concludes, I would say the marketers market themselves by setting a well-articulated and focused agenda for marketing (including what it is not). And then amazing everyone by delivering real value in a short period of time, leveraging technology.
HTC, Brand of the Year 2008
We live in an era of phenomenal brand volatility. No brand is beyond these accelerated brand value cycles. The upward swings can be tremendous as can the death spirals. Epic Cinderella stories like Apple's never fail to amaze and smaller, more nuanced dramas are being played out daily.
In this context there is always a brand that is ready for a breakout. A brand that because of a combination of factors seems uniquely positioned to redefine a market in its own image.
In 2008 this brand will be HTC.
HTC has quietly been making some of the best smartphones and PDAs in the market for the last 10 years. Most notably, they have been the leading manufacturer of Windows Mobile phones and Cingular/ATT's line of branded smartphones.
Recently HTC has been bringing its marketing into line with its standards of product excellence. They cleaned up their brand and are doing a good job of making sure it had a place on all of the devices they create. They even put a toe in the murky waters of advertising. Work is needed on the approach to product naming (which is a bit of a mess) but HTC will figure this out.
Of course, the brand drivers that will propel HTC to breakout in 2008 will not be found in its media plan. HTC understands that every great value proposition is built around real value. The company has led the handset industry in a number of arenas:
- Partners -Google, Microsoft, AT&T. Enough said. Look for HTC to extend its brand partnership competency to a range of product brands a la what LG and Samsung have done with Prada and Armani.
- Product Design - The company consistently puts out the broadest range of innovative handsets, hands down. And its not just about hardware; the interface work that they have done with TouchFLO is world class. HTC's ability to integrate the design of software and hardware puts them in a market-leading position.
- Goodwill - HTC's branding story is most impressive because it has not been built using traditional marketing techniques. Instead HTC has consistently provided value to partners, developers and customers and this consistency has created an enormous amount of goodwill with influential industry watchers such as Engadget and the Boy Genius.
Dead Brand Walking
Last weekend I was walking through Washington's Union Station when I saw the Palm Store and decided to pop in for a visit. It's hard today to remember just how innovative Palm was during its mid-90s heyday. Also difficult to reconcile the tepid offering on display at the Palm Store with the, revolutionary spirit of the original Palm Pilots. Just after Apple failed with its Newton handhelds, Palm brought a device to market that was simple to use, elegantly designed and, most import of all, unlike anything else.
These days, Palm can't get a break. Earlier this year it squashed its Foleo product before ever bringing it to market. The stock price has fallen by 2/3 since that announcement. On Friday, the company announced that it would miss earnings expectations because of certification delays with a new product (likely the "yawn-worthy" Treo 755p for Verizon Wireless). As is the way with these things, even the good news is bad news; Palm's budget-minded Centro has been selling well, but its slimmer margins have further hurt the financial picture.
Trying to think about what I would do with Palm is a challenging thought experiment. The company is surrounded by a mean gang of competitors, both for business customers and consumers. It's clear that in order to survive, Palm needs to make some quick decisions on what its going to be...the company no longer has the luxury or the scope to be a broad-ranging player.
Centro's positioning as an entry-level smartphone is not a bad one considering the space. However, it will need to do more than simply be a Junior Treo if it is to compete with the Sidekicks, Helio Oceans and next gen iPhones.
One difficult decision (that should have been made two years ago) is the OS. Consumers are not willing to make handset decisions and operating system decisions separately, nor should they be. Job one: figure out which operating system to go with (Win Mobile, Palm Garnet or Linux) and stick with that decision.
All hope is not lost. The Palm brand still has some gasps of life in it and in today's short-memory marketplace, product innovations trump all else. The company's record of waffling and making really stupid decisions doesn't give a lot of hope, but perhaps the smart folks at Elevation Partners can bring in some tough love. Palm needs it.
Marketing Implications of an Open Verizon
Today's poorly reported USA Today article on AT&T "flinging open" its network (effective immediately) is a sign of the wireless times. The article/announcement/PR coup follows recent news from Verizon Wireless that it would both open its wireless network to "any app, any device" and that it would embrace Google's Android platform.
Google couldn't have hoped for more frenzied carrier responses to Android and the Open Handset Alliance.
Whatever the validity of AT&T's claims in USA Today, the Verizon announcement remains the more interesting and potentially transformative of the two. While the pundits are right to be cynical --predicting that this is either a ploy to conjure some goodwill before next month's 700 MHz auction, to gain an edge for the lonely CDMA standard or to simply dupe the market--Verizon's announcement is on record. They will have to do something to demonstrably change the way they do buisness and open the gates to their prized network.
From a marketer's perspective, there are 3 major implications and opportunities:
1. Verizon will need to become an endorser brand.
No more "Can you hear me now?" advertising, Verizon will need to extend its "network excellence" positioning as a driver market innovation. The challenge for Verizon will be to use its brand to endorse these innovations rather than trying to create them from scratch and own them outright.
VCAST's MTV/Rhapsody deal, while a little late, will be the shape of things to come. Like any good idea, timing is they major success factor. Verizon should bring back the MVNO model but with a stronger role for its brand in endorsing private label products and services. Some potential cost-savings here as Verizon can rely on partners to shoulder more of the marketing costs.
2. Fix (or kill) retail.
Verizon's retail experience is broken. Until now, this has not mattered because all the carriers have terrible retail experiences. However, if Verizon is going to send a clear signal to the market that they are offering something better nothing will be more important than retail. At the very least, they will need to devise a strategy for including a wider range of partners in their retail stores; effectively turning them into malls of products and services. If this is too much to pull off, Verizon should re-think its channel strategy entirely and enlist new channel partners who can do what is needed.
3. Let the market define itself.
Marketers all share a nervous tick: the need to constantly do enough research to draw an accurate picture of the market. If Verizon's marketers attempt to do this, they will drive themselves mad. Unlike the days of the 7 o'clock news, today's market is only what it says it is. Part of being open is being willing to give over control. This is as true for marketing as it is for anything else. Give people as much (or as little) choice as they want and let them create their own value props.
Additionally Verizon will need to address both its pricing model and its relationship with handset manufacturers. In the case pricing, things are going to have to become a lot simpler and more transparent (and cheaper too). In the second, Verizon will need to have its own line of private label (or semi-private label) devices based on innovative handsets. To do so it should look to build strong relationships with manufacturers a la AT&T's relationship with HTC. Seems like LG would make the most sense here.
CMO Dog Years
This week's BusinessWeek reprises a question that it covered in a couple of articles (here, here) this summer: why are CMOs consistently getting voted off the corporate island sooner and more frequently than their C-friends?
The short tenure of CMOs is a symptom of a real problem with the discipline of marketing; most marketing organizations are ill-prepared to deal with the new realities of the markets in which they operate. As the BW article implies, most marketing organizations are really advertising and communications departments. This is totally out-of-whack with both the opportunities and imperatives of the new world of marketing.
Marketers are fighting with outdated, if familiar, tools. In order to hang on to gaudy budgets, marketers continue turning to the only partners who can spend tens or hundreds of millions without a thought: the major advertising conglomerates.The failure of CMOs is largely a failure of these advertising partners.
But as the article also points out, CMOs are being relegated to this role by organizations that simply don't understand the value, purpose or importance of marketing. The neat organizational boundaries separating marketing from the rest of the company no longer make sense. The distinction between product innovation and marketing is irrelevant in a world where the product is the message.
For CMOs this should mean a role in product innovation, but few are given any role in setting the course for product innovation.
Is the only person with the authority and reach necessary to do the CMOs job the CEO?
FYI - my previous post, Mutual of Omaha's Wild Media, was picked up as commentary on Online Media Daily (Media Post Publication - free registration required).