Welcome to our newsletter for November 06 - January 07

This issue focuses on internal brand measurement and empowering the marketing function.

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Dianne Davis
Principal and Managing Director

www.davismarketing.com.au

Michael Dunn (CEO of leading US brand consultancy, Prophet) and David A.Aaker (the eminent brand academic and commentator) have written recently about the "Empowered CMO" and the key qualities-attributes integral to such empowerment.

The key points from Dunn's article are:

• The empowered Chief Marketing Officer sees himself / herself as a 'thought leader' with expertise in customer strategies and a view of marketing from a broad business perspective.
• Essential to the success of the 'empowered' CMO is the 'empowerer' - "a CEO who gets (marketing) and is a public proponent of an expansive, influential and results-driven marketing organisation".
• Principal attributes of the 'empowered CMO', include:
  
  
  • The ability and knowledge to access all the levers that can influence the customer experience (easier said than done). Prophet's 2005 study on marketing's role in driving business growth, for example, found that while many senior marketers rated "customer service & delivery" and "customer experience" as critical growth drivers (31%), the majority did not in fact have control/influence over many of the levers closest to the customer - such as customer experience (only 18%), customer service (around 33%), pricing (close to 43%) and sales force strength (at 45%).
  • The confidence to take risks and to make decisions that may appear to run counter to what market research indicates.
  • The ability to work across multiple disciplines. The "empowered CMO uses their knowledge to ensure that products and services offer the right features and increase productivity, while meeting customer needs and expectations of the brand".
  • A focus on marketing accountability. Knowing what metrics to track and how to report them, can shift the perception of marketing from a cost centre-support function to a profit centre.

Further on key qualities, Aaker sees three as being absolutely critical to the empowered CMO:

1. Gaining genuine customer insights into the customer experience, unmet customer needs and underlying motivations. This requires a working knowledge of ("if not facility with") market research methods.

   Customer insights enable CMOs to negotiate organisational obstacles and "provide the credibility to get things done".

2. Strategic flair - "the ability to think strategically instead of (or in addition to) operating at a highly tactical level". Major market challenges and opportunities need to be conceptualised and addressed strategically.
3. The ability to develop a collaborative culture within the marketing function and the wider organisation.

A new report from Forrester Research provides some guidance on what is required to become a "truly customer-centric marketing organisation".

In the report, "Reinventing the Marketing Organisation", a customer-centric marketing organisation is defined as:

"A marketing structure in which customer alignment is the primary organising structure, with other groups such as IT, channel and product heads, supporting the cause".

This definition embraces the notion that all employees are essentially marketers.

"It certainly involves the entire organisation becoming more customer-centric, from the receptionist to the CEO... Marketing's job is to drive that and evangelise it throughout the company."

For the report, Forrester surveyed 104 marketing executives, discovering that across the total marketing mix, 85% exercise real control/influence over just one area - marketing communications-promotions.

As also underscored by the Prophet 2005 research, 76% of respondents do not exert any real influence over their organisation's customer service function. Such findings serve to demonstrate the widening gap between marketing and customers.

According to Forrester, two key strategic elements are fundamental to building and sustaining the customer-centric organisation:

1. Create a consolidated customer experience at the customer cohort level.

   This involves providing services (and business operations) for specific customer groups. Each customer management group retains direct responsibility for business strategy, brand, creative execution and data analysis, across all customer channels and products.

   "In essence, it's finding the right products and services for specific customers, instead of the other way around".

2. Ensure the infrastructure supports customer delivery.

   Organisational processes and systems must be in place to allow customer experience teams to interact effectively with specific customer groups. This includes CRM and customer analytics systems.

   Forrester further argue that it must also involve:

   • P&s;Ls being managed by customer groups
   • Shared expenses allocated on the basis of actual usage
   • Customer-based metrics shaping desired internal behaviours
   • Customer insights being shared with all parts of the organisation.

   And marketing investment moving away from mass media towards programs that invite customer involvement and engagement.

   "The customer relationship will change as companies bring customers into the organisation""

   This means that:

   "Customer feedback, interaction and co-creation of products and services will help companies better understand the relationship and keep customers part of the process."

   Forrester cites such organisations as Best Buy, British Telecom and P & G, as progressing down the customer-centric path with some success.

In building and monitoring the internal brand (i.e. how employees understand and "live" the brand), it is essential to formally and regularly undertake tracking and evaluation.

There are up to six key metrics (we recommend tracking a maximum of four) you can use to track internal brand perceptions and the impact/effectiveness of internal brand-building:

Key Metrics

Brand Understanding (can employees describe the key attributes and differentiated elements of our brand)

Brand Influence (can employees describe how they directly / indirectly impact the customer experience)

Brand Trust (the level of trust employees have in the organisation's leadership to do the right thing relative to the brands' values)

Brand Credibility (do employees believe the organisation is capable of delivering on its promises to customers, stakeholders and employees)

Brand Delivery (do employees believe the organisation fulfils its promises to customers & employees)

Brand Preference & Advocacy (do employees prefer to work for your organisation rather than a competitor, and the degree to which they are comfortable referring colleagues, friends, family).

Internal Brand Objectives & Relevance of Metrics

The table below, summarises common internal brand objectives and the relevance of the six brand metrics.

Key:

A = Brand Understanding
B = Brand Influence
C = Brand Trust
D = Brand Credibility
E = Brand Delivery
F = Brand Preference & Advocacy.

Linking the Internal & External Brand

To evaluate the vital interplay between the internal and external brand, there are three key metrics you should track regularly in order to gain a picture of internal brand perceptions and attitudes and their impact on customer / prospect perceptions and expectations. These are:

• Brand Understanding (i.e. as an employee, the better I understand what my organisation's brand stands for and what differentiates it, the better I can communicate and reinforce this to customers / prospects)
• Brand Credibility (belief in the organisation's capability to deliver on the brand promise, means I can trust the organisation and my fellow employees to consistently support me in my interactions with customers/prospects)
• Brand Delivery (belief in the organisation's commitment to fulfilling the brand promise, means I can trust and have pride in an organisation that respects and looks after its customers).