Market Smarter

Helping Businesses Market Smarter and Create a Culture of Execution

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The Chief Marketing Officer (CMO) Council conducts a yearly survey among its members who lead marketing across a broad variety of industries around the world. The CMO Outlook Report describes the biggest challenges and concerns of senior marketers and other executives in the organization. This report and several others published by the CMO Council (www.cmocouncil.orghttp://www.cmocouncil.org/) are an excellent barometer of the changing business climate and how marketing professionals are shifting budgets and resources to respond.

The report states that top executives continue to demand that marketers grow market share while improving operational efficiency. In response to this request, marketers say they are focused on strategic cost cutting (not budget slashing) by improving operational efficiency, increasing customer experience and insight, and working with sales to drive revenue growth. This response is positive, however it appears there is still a disconnect between what executives want and where marketing chooses to invest time and resources. Marketers are not investing enough in marketing process improvements and operational systems that provide increased collaboration and marketing automation tools. 

With so many evolving media choices, where should businesses invest their marketing budgets? What are the key trends that you need to know about that influence consumers and buyer behavior? These are only some of the questions that need to be answered.

Let’s take a look at several trends and issues that influence decisions of marketing and sales executives, as well as a few highlights that reveal where they are choosing to invest. These figures have been combined with additional industry facts to help you make decisions on a broad number of sales and marketing issues.

Key Trends Driving Marketing

• 60 percent of marketers say they will fund increases in the company’s interactive marketing budget by shifting money away from traditional marketing.

• Search marketing, online display advertising, email marketing, social media, and mobile marketing collectively will grow to nearly $55 billion by 2014.

• CMOs will focus on training and development for their existing staff to sharpen skills in digital media. Sixty-three percent say they will retrain staff versus hiring new talent or outsourcing.

• Salespeople spend approximately 40 percent of their time preparing customer-facing deliverables while leveraging less than 50 percent of the materials created by marketing.

• Marketers say they want to improve operations and analytics; however, only 9 percent of marketers say that they plan to create a deeper relationship with their IT department.

• Customer experience and customer loyalty are critical to business success, yet only 17 percent of marketers oversee customer service and support responsibility.

• Around the world, marketers estimate that 55 percent of their entire marketing expenditures failed to deliver results.

If you would like to participate in the current CMO Council survey, qualifying members can access it on the CMO Council website at www.cmocouncil.org.

The information age we are in is characterized by multiple communications media working parallel with one another. This means that the news broadcast on television may also be read in the newspaper, heard on the radio, and seen on different outlets on the Internet. With more media options to consider, it is essential to  integrate marketing communications using multiple media channels to reach your customers.

Integrated marketing communications (IMC) is the application of multiple integrated communications media to reach customers. Marketing tactics like direct marketing, Internet marketing, social media, telemarketing, and sales promotions are optimized when they are aligned to create a seamless progression of marketing communication and touch points to customers. Consumers don’t think about a brand as a marketing program or campaign. Ongoing, integrated marketing creates consistent branding, positioning, and messaging across all marketing communication and media to produce more impact and recall. But the burning question is, “Where will you reach potential buyers?”

In the past, it was much easier to select marketing channels and predict consumer behavior than it is today. Here are just a few of the issues that make marketing much more difficult than is was in recent years:

•     Consumer trust and confidence in organizations and institutions has declined significantly. Consumers turn to each other—sometimes even complete strangers—for advice and recommendations when making a purchase.

•     Digital experiences and customer engagement are the biggest factors influencing consumer purchases and recommendations to others.

•     The numbers of digital media choices grow and change every day, making it very difficult for marketers to learn while executing. Marketers must respond by retooling skills and ROI measures.

•     Consumers of news and entertainment like the personalization and immediacy of digital media. A whopping 84 percent of consumers now say they rely on the Internet for news or information, 73 percent visit social networking sites on a regular basis, and 76 percent regularly watch video sites like Hulu and YouTube.

This presents a huge challenge to marketers. One of the biggest concerns is making good decisions about where to invest marketing funds. The growing use of digital media is driving marketers to invest in communication tactics that are more targeted and measureable. Advertising must reach consumers where they spend the most time, and it is increasingly away from television, newspapers, and other traditional media channels that were relied on for many years to reach the masses.

 

 

Marketers are not hesitating to invest in social media. Over 73 percent of chief marketing officers say they will increase budgets for social media solutions. Forrester predicts social media will have the steepest growth over any other media channel. Investments will grow at 34 percent CAGR over the next five years and are estimated to reach $3 billion by 2014.

What do businesses hope to gain from social media investments? According to the “Social Media Marketing Industry Report,” the number-one benefit of social media is generating exposure for a business. The top three benefits for social media ranked in priority are 1) increasing exposure for my business (81 percent); 2) increasing traffic/subscribers (61 percent); and 3) building new business partnerships (56 percent).

This was followed closely by an increase in search engine rankings (52 percent) and generating qualified leads (48 percent). The all important question of “Did it help you close business?” was cited as a benefit by 35 percent of respondents.

It’s interesting to note there appears to be a direct relationship between the amount of time spent weekly on social media and the amount of experience a person has with it. Ten percent of experienced marketers average a whopping 20 hours or more per week, and this same group also claims to close more business than light users. If you can’t devote that kind of time to social media, you will be relieved to know that marketers spending six or more hours per week claim “exceptionally positive results.”

It’s also useful to look at what hinders adoption of social media. Company culture influences a company’s social media usage. Most large companies govern communications with a very tight leash, and this extends to social media. Some marketers participate in social media under the radar and others follow protocol which tends to get caught up in corporate governance and legal teams. Risk tolerance and fear are a few of the key issues slowing adoption of social media.

If people are to be given a choice between using social media and the local newspaper to reach the masses, for many businesses the choice is social networking. There can be many reasons for this decision, but foremost are ease of use and the means to share what you post to hundreds if not thousands of people at the same time.

Unlike traditional media, digital media such as online social networks give control to the publisher without being limited by cost, space, or distribution, among other factors. By means of social media, people can exercise freedom of speech in a way that gives new meaning to the First Amendment. Anything positive you say online about a product can be used by a company to boost brand popularity at the expense of the competitor’s product. On the other hand, anything negative you say about a brand can also be used by the competing company to boost its image.

Consumer opinion and sharing activities online can make or break a product. When the sleeping Comcast technician video was shared socially on the Internet, Comcast suddenly had an image problem to fix. Comcast had no control of the spread of the video and it punctuated the power of social media online. People generally don’t care about whether a brand sinks or not. They just care about sharing; letting their friends know about something they found out online. With so many digital media sites and services on the Internet like YouTube, Digg, StumbleUpon, and Blogger, consumers now have the power to produce, distribute, and share their own media content and no wonder marketers are now following suit, having seen the power of social media in shifting the tide in favor of or against a brand.

What drives the popularity of consumer-generated media? At the most basic level is the emotional need to be heard. People that feel “wronged” want to be heard as much as they want to evangelize what they love. The Internet and social media is so accessible and easy to use, it provides a platform for those that want to connect, communicate, and drive change.

Social media and social networking is also referred to as social influence marketing (SIM), which describes the business benefits of social media. It is not only a channel through which people can experience and interact with your products, services, and company, it expands the reach and multiplies the influence consumers have. This creates momentum around how brands are interpreted and have meaning.

Communication on social media platforms is transparent and perceived as much more authentic than traditional advertising and marketing. When consumers embrace a brand, they turn into its greatest promoters, bringing a level of legitimacy and authenticity to your brand that you couldn’t possibly buy.

Businesses must get comfortable with releasing control and step into the role of leading and guiding the brand. Smart marketers are tapping into the real power of digital media by engaging in conversations with customers, guiding their experiences with the brand, and giving them the tools to help raise awareness and market their brand.

Encourage interactive dialogue with customers and prospects by posting a blog on your Web site. You will actually have more control than you would if customers had to go elsewhere to blog when they have something to say about your company. It also gives you the opportunity to respond to ideas, inquiries, and complaints much faster than traditional methods.

For example, when Dell was presenting at a national conference and the PC literally burst into flames, word quickly spread on Twitter. Dell could have chosen to issue a press release and suffer through days of agonizing backlash. Instead, the company quickly communicated on Twitter to explain the situation and the buzz was quickly dispelled. Not only was a PR nightmare averted, but you could argue that it helped their image because they were so responsive and transparent about the incident.

The speed and sheer reach of digital media spreads news and events like wildfire. It has catapulted people like Susan Boyle into instant stardom, and it has garnered some commercials with the same status as Super Bowl ads. When the People for the Ethical Treatment of Animals (PETA) advertisement for the Super Bowl was declined by the networks because it was too provocative, the ad was distributed online and may have been seen by even more people because it was shared across social media networks. Dozens of online media and news channels featured the story on their home pages. Millions of people saw the commercials and forwarded the message to friends, family, communities, and organizations using social media—and all this was free. Sure beats a million-dollar Super Bowl commercial.

Marketers embrace social media because it can help them accomplish many goals. It can increase their understanding of how customers use and value their brand, monitor customer satisfaction, improve customer experience, and launch marketing programs and campaigns. It also helps in the area of product development. Customers are the best source for innovative new ideas, and social media gives them a channel to share suggestions to improve products and business processes.

Marketers are increasingly taking a lead role in product development by connecting with customers to engage them in ways not possible with traditional media. If they mingle with their consumers online using interactive tools, they can have real-time conversations that result in designing products around customer needs while also building better customer relationships.

All of these benefits explain the real value of social media. It’s not trying to figure out how to “sell more” by leveraging advertising campaigns into social media, or trying to assess ROI using traditional marketing measures. The evolution of social media will no doubt create opportunities for monetization. My point is that the opportunity and benefits social media provide are much more than that.

If your goal is to position your brand expertise, it won’t happen overnight in the social media space. Just as face-to-face networking is relational and takes time and effort to foster, so does social networking. But imagine the difference over time. If you attend an event with 100 people in the room, you’ll be lucky to connect with five people in a meaningful way. If you spend the same amount of time in an evening on social networking platforms, you may connect with ten times as many people.

Keep in mind that social media requires practice, patience, and persistence to build a network and awareness. What works for one company does not work for another. There are differences in business markets and in consumer markets, as well as in industry and company size. It takes time to build, and the payoff is a better brand image and a reputation that is built by consumers.

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