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“The birth of long-term marketing as a discipline” / John Drummond, Corporate Culture

by on January 3, 2013 in Apps, Apps & Software, FaceBook, featured item, Google, iPhone, Lead story, LinkedIn, Metrics, Mobile, Mobile Marketing, Pinterest, Retail, Small Business, Startups, Twitter

The birth of long-term marketing

This year’s Chartered Institute of Marketing conference revolved around the issue of “marketing creating the future”.

That’s a far cry from The Apprentice’s apparent viewpoint that marketing’s sole goal is to make a quick buck. It’s the world of sales I was trained in as a salesman with IBM in the 1980s.

But within a few years of joining, IBM was struggling for survival. This was down to an approach to marketing based on shifting products that ended up putting the company’s survival at stake.

John Drummond, chairman, Corporate Culture

IBM learned a number of lessons from hitting this iceberg. It engaged employees in refreshing their values; moved from selling hardware to understanding customers; and refocused on long-term marketing. Today IBM makes big bucks by focusing on tomorrow – helping their customers to anticipate future risks and opportunities.

There are important lessons about the future of marketing in that past example. And as far as I can see there are three steps to creating a long-term marketing plan:

Firstly, conduct a risk review. This is the world in which you define the probable future. It is the world Jeff Immelt, the CEO of General Electric, defines when he says: “The most important thing I’ve learned is context. It’s how your company fits in  with the world and how you respond to it.” It is a world of growing population, increasing urbanisation and resource shortages.

Secondly, carry out an opportunity review. It turns risk on its head and begins to imagine and then create new markets for a new world. This is the world of PepsiCo reframing its product portfolio around healthy products, and Carlos Ghosn – chairman and CEO of Nissan – who is committed enough to new markets to have invested E4bn in the electric car.

Thirdly, create and continually review long-term marketing plans. This is a world of hundreds of work packages and thousands of smaller steps that bring future markets to life. It often leads to market innovation. For example, new hotel brand EVEN has been opened by InterContinental Hotels with a focus on travellers committed to wellness. Meanwhile, British Gas’ focus not on selling but on saving energy has already become a significant new revenue stream.

The reality is that the new world of marketing is a bit like wearing bifocals. New world marketers need long-distance glasses. They also need a pair of specs for the detail that is closer in space and time.

The great news is that the data and the tools are available to bring the long- and short-term focus together in full technicolour. According to IBM, 2.5 quintillion bytes of new data are being created daily. That’s a tsunami of data, and more of it than ever is being created to serve marketing departments. In fact, by 2017, Chief Marketing Officers will have more IT budget than CIOs, according to Gartner.

However, as the IBM 2012 CEO Survey concluded: “Engaging customers as individuals involves far more than responding in a singular fashion; it is about knowing a customer as a whole human being – with interests, attitudes and life circumstances that colour preferences and needs.”

The review of 1,700 CEOs is clear: “Such knowledge can radically improve how organisations respond to customers, but can also lead to entirely new products and services… but to remain relevant, organisations have to go much further. They must piece together a more holistic view of the customer based on how he or she engages the rest of the world, not just their organisations.”

That connection between people creates patterns. Identifying the patterns is what then can help create new markets. This is where IBM’s focus on the long-term uses customer insight in the present (analytics) to create new commercially viable ideas. For example, Memphis Police Department precinct commanders now start their day with data. In practice, a predictive analytics system looks for patterns in criminal activity that helps the department see emergent trends in their communities in time to make a difference. As a result, the department claims a 30% reduction in serious crime and a 15% decrease in violent crime.

In his new book Marketing 3.0, marketing guru Philip Kotler says that “the new generation of consumers is much more attuned to social issues and concerns”. It is possible, he concludes, to be a human-centric company and still be profitable. He and his fellow authors believe that the new generation will market not just products and services, but the company’s vision, mission and values in a way that has a deep understanding of consumers’ humanity.

We are at the beginning of a new paradigm. It’s the birth of long-term marketing as a discipline. But there’s a long way yet before it dominates corporate and marketing agendas. In the meantime, The Apprentice probably has a few more series left in it.

John Drummond, chairman, Corporate Culture

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