January 9, 2009

Marketers: Back to basics (but what basics?)

MarketingCharts: “Marketing executives are going back to basics this year, putting renewed focus on satisfying and retaining customers and investing in research and insights, but they are “sick” of hearing about Web 2.0, according to a survey from Anderson Analytics conducted for the Marketing Executives Networking Group (MENG).”

It sounds too good to be true: “Shareholder Value”, “Outsourcing”, “Value for Money” (sometimes an euphemism for marketing cheap crap made in China), Tactics instead of Strategy and other mantras that have distorted the marketing thought and practice during the last 20 years seem to lose their glitter. Light at the end of the tunnel?

I am afraid not! Going back to “Basics” (like satisfying and retaining customers and investing in research and insights) is a tedious undertaking for most marketers today; the customer is not what it used to be, the market parameters and conditions have changed, the market power has migrated from the marketers to people and last but not least the image of marketing and peoples’ trust in Marketing has never been lower.

Marketing practitioners but also Marketing Academics have their share of blame for the marginalization of Marketing and its loss of focus. Professor Frederick E. Webster Jr. wrote in the Journal of Marketing (vol 62, October 2005): “ For the past two or three decades, the tactical dimension has dominated, with an emphasis on operational (i.e., input-level) marketing decision variables and short-term business performance results, especially sales volume and market share. Methodological rigor has been emphasized over problem importance … Data and Methodology have dominated academic research at the expense of both theory development and practical relevance, retarding the progress of the marketing discipline in a rapidly changing market environment”.

Back to the survey revealing the Top Five Trends for marketers. I can’t help to comment on the findings.
“#1. Insight and Innovation Key: Insight and innovation are seen as key to combat slumped economic and business cycles. Some 72% of respondents said innovation efforts would stay the same or increase, while 39% say their use of market research will increase this year. This is significant, given that most marketing experts agree it's imperative to innovate and mine insights during a recession”

While I fully agree that insight and innovation are vital I have a piece of advice for these marketers: Instead of getting sick of Web 2.0 (#4) they better try to find out what Web 2.0 really is. Social Media can be a low cost (handy in cases of “slumped economic and business cycles”) and very effective tool for tapping customer voice and creativity: the best basis of innovation! The Web (2.0) has already become the nr 2 news information channel and for most people is already the nr 1 marketing information channel.

“#2. Customers at Top of List: Basic customer satisfaction and retention remain the top two concepts of interest to marketers, followed by marketing ROI, brand loyalty and segmentation. Together, these represent a move back to the core principles of marketing”.

If “basic customer satisfaction” is really the top priority for marketers they have to sell the idea first to greedy shareholders! As to customer satisfaction and retention they must come up with some new ideas next to low cost. A piece of advice: they better realize that Web 2.0 is the place they have to be in order to find out if their customers are satisfied or what will make them satisfied.

“#3. Green Marketing, Global Warming Lose Importance: The topic of global warming showed the largest decrease in importance (dropping 14 places in the rankings), while green marketing showed a statistically significant 5% drop”.

If this is true I am afraid that marketers are once more out of touch with the new realities further marginalizing Marketing as a corporate function. You can’t blame marketers entirely though for such attitudes when the departing Bush administration has been the good example by consistently undermining these issues. Bad news for these marketers: A recent survey indicated that 85% of consumers having to chose between a product related to a cause and one not related to any cause would prefer the first one. Advice: read once more the new AMA definition of Marketing and ask yourself why it replaced the previous one in just 3 years!

“ #4. Marketers "Sick" of Web 2.0: Twice as many marketers are "sick" of hearing about Web 2.0 and related buzzwords such as "blogs" and "social networking," compared with last year's survey. However, marketers still admit they don’t know enough about it. This was evident in results from a November 2008 MENG social media study showing 67% of executive marketers consider themselves beginners when it comes to using social media for marketing purposes”.

This is my favorite: Marketers are sick of Web 2.0 but admit that they don’t know enough about it!! A statement that could come straight from Dilbert. No Comments.

“#5. Most Opportunity in China and among Boomers: China ranks as the #1 greatest area of opportunity (53%) for marketers with international responsibility, while India is a distant second, with votes from 17% of respondents. In terms of the best opportunity for customer targeting, execs still feel Boomers hold the most promise. But the perceived importance of Generation X and Generation Y grew significantly, compared with 2008 survey results”.

While I would agree about the Boomers and possibly about the X / Y generations I would be much more careful ranking China as #1 opportunity area. The effects of the financial crunch are already dramatic for China: sweetshops and all kinds of low labor cost outsourcing facilities (see #3 above) are closing. The low cost, export-based model seems unsustainable for developing the Chinese econoly in the long run. Western customers are cutting on spending and the reputation of Chinese products is deteriorating (see the latest milk scandal). Many draw a parallel between China today and Japan in the 70’s and 80’s but don’t forget that China is not Japan! I am afraid we have not seen the worst yet.

Conclusion: Marketing practitioners have realized that they drive in a dead-end road and try to turn back. They could better start the process of rehabilitation by first making some effort to understand the real world (and not to forget the Web) around them, keeping in mind that now the customer is the dominant party. Back to basics sounds good, only the basics have dramatically changed. The sooner they recognize this, the better the chances to survive in a world that is not any more what it used to be.