I recently interviewed a top marketing executive who summed up her journey to becoming a digital-era marketer by saying, “If you feel comfortable, you’re not transforming.” It might sound cliche, but today's most successful marketers are wholeheartedly embracing the "no pain, no gain" mentality.
Unfortunately, the story for most marketers goes more like "all pain, no gain." Over the past six months, I’ve listened to countless marketing executives explain that despite all of the heartache they are enduring, they don’t feel like they are making much progress. In fact, in a recent study by Accenture Interactive, only 4% of marketing leaders feel that they are very prepared to exploit digital marketing opportunities.
So, what’s the problem? In short, marketers are stuck in a world between the old rules and the new rules. To deal with the new rules of changing media, technology, and consumer behavior, many marketers delegate emerging marketing solutions to a handful of external partners or internal "experts." In doing so, they have enabled the rest of the organization to behave much like it did 10 years ago, clinging to the old rules. And until marketers reconcile their internal organizations, they will be fighting a long, painful battle to survive.
To Avoid Extinction, Marketers Must Replace The Bad Habits Of Traditional Marketing With The Habits Of Adaptive Marketing
After interviewing more than 20 of the most successful marketing executives and thought leaders from around the world, Forrester has learned what marketers must do in order to evolve as a species and avoid extinction. We call it Adaptive Marketing — “a flexible approach in which marketers respond quickly to their environment to align consumer and brand goals and maximize return on brand equity.”
Time to get my hands a bit dirty. Last week I posted an eBook forecast with a brief explanation of why the book business may complete its digital revolution more quickly than other media businesses have. Turns out this assertion was more difficult to hear than I anticipated and I got some very insistent (and worth reading) comments. The discussion that ensued both on the blog and outside of it was very complex, this is not a simple matter. However, there are parts of it that are very simple that I have to clarify, even though it means rolling up my sleeves a bit. Allow me to draw into this discussion John Thompson of Cambridge University who gave a very worthwhile interview to the Brooklyn Rail this month to discuss his recently published analysis of the book industry, Merchants of Culture. I will refer to just one of his specific comments:
"There are many people who just love books and they love the ideas that are expressed in books; they love the stories that are told through books and all of it. They’re very attached to it.... They cherish the book. And they believe that this is an artifact that they want in their lives. And some of the technological commentators in this industry just completely miss this point."
Netflix announced its Q3 2010 earnings a few weeks back and the numbers were every bit as positive as people have expected. The company added nearly 2 million subscribers in the quarter, almost four times as many subs as they added the same quarter last year. Yeah, four times as many. While Comcast and Time Warner announced net subscriber losses. At the same time, the cost for Netflix to acquire a customer has fallen 26% in the past year. Funny how when you digitize the customer relationship and the product at the same time, all your costs go down.
The number I always wait for from Netflix is the percent of subscribers that used Netflix Watch Instantly in the quarter. It rose to 66% this quarter, up from 64% last quarter. And remember, this was while adding 2 million new subscribers, which means that new subscribers are adopting Watch Instantly at a rapid rate instead of waiting to get used to Netflix; in fact, they're probably joining Netflix just to watch instantly. This is, of course, why Netflix will likely offer a digital-only plan that subscribers can pay for if they don't even want to pretend to put DVDs in their queue.
Why is this important today? Because it was just now that I finally dug through the summary financial results to find this gem of a quote, something that was briefly reported when Netflix announced it results, but was not fully understood in most of the reports I read. I want to resurface it because this is a big deal:
The two subjects I have on my mind will be a little more accessible: direct-to-consumer sales and the innovation of marketing. They are both included in Forrester's current marketing leader panel survey. If you're a senior marketer, I'd appreciate it if you'd take the time to answer here.
What to expect when you click on that link?
For the direct-to-consumer section: I'm trying to get a read on motivations for selling directly to consumers and the role of marketers in that decision to close the loop. Many brands have recently taken advantage of technology to sell directly to their end consumers; some of you have been selling '"forever" through branded stores. Why? To get higher margins, to closely orchestrate the brand experience, to act as a counterweight to other channels, to learn? You tell me. I look forward to your responses.
On marketing innovation: This is part of my ongoing research. You could call it an annual checkup on how innovative marketers think their organizations are, or are not. I'll also be asking how you fund marketing innovation and what types of pilots, in particular in the media space, you're testing or most considering.
We will, of course, give you a report as a thank you, and share the results with those of you who participate. As well, please consider the time spent answering the questions as an opportunity to stay inside, warm, and dry.
Consider it an inauguration of sorts, a celebration of the eBook industry becoming a member of the major media club just as digital music and online video have before them. When you influence a billion dollars, people have to take you seriously. In the book business, it means that traditional publishers can no longer live in deny-and-delay mode; meanwhile, digital publishers get invited to better parties and people in other media businesses like TV and magazines look over and wonder if they could cut a slice of this new pie just for them.
To honor the occasion, we have just published our five-year forecast for eBooks in the US for Forrester clients. The punchline is this: 2010 will end with $966 million in eBooks sold to consumers. By 2015, the industry will have nearly tripled to almost $3 billion, a point at which the industry will be forever altered.
Right now, the number to track – and the one that determines how many eBooks will sell – is the percent of a consumer’s books that are bought and consumed digitally. To get at this number, we have to understand how people get books today. Did you know that the two most common ways people get books today is borrowing them from a friend or getting them from the library? Evidently content – at least in the book business – is already quite free, even without the help of digital.
There’s no shortage of people saying that B2B sales and marketing teams need to operate as a well-oiled machine, and an endless supply of advice out there on how to achieve greater alignment between your teams. Most of it is theoretically sound and what you’ve heard many times before . . . things like “involve sales in marketing strategy discussions,” “align sales and marketing around the needs of the customer,” “build joint accountability and measurement,” and "send your marketing folks on sales calls." So why is it that every company I talk to is still struggling to get these teams to play nicely together?
I think there are deeper-seeded reasons for why this chasm is so hard to bridge. And it may not even be possible, or desirable, to have these groups operating like one integrated engine. I won't say any more about my hypothesis right now, because we're doing research aimed at uncovering the REAL obstacles to sales and marketing alignment and coming up with ways to break through these underlying obstacles so that the age-old best practices can start to have an impact.
If you're a sales or marketing leader, take the survey to give us your input, and get your counterpart on the other side of this equation to take it too.
Why are some CMOs better than others at adapting to the digital era? Last week, I provided some answers when I unveiled the five habits of highly adaptive marketers at the Forrester Consumer Forum in Chicago.
After spending the past three months with more than 20 of the most successful marketing executives and thought leaders from around the world, here is what it boils down to. Marketing leaders who are successfully evolving into adaptive digital-era marketers are willing to part ways with outdated practices. That doesn’t mean they have abandoned the fundamentals of traditional marketing. Rather, they have retained its best parts, while shedding its five bad habits:
Complacency. Marketers who are complacent leave their brand exposed and vulnerable to the competition. Blockbuster ignored the road signs pointing to consumers’ desires to bypass the video store in favor of more convenient formats. Meanwhile, Netflix and Redbox seized the opportunity to create new channels of distribution.
Conformity. Marketers who play follow-the-leader lose their ability to differentiate themselves. While major airlines like Delta, United, and American have flirted with bankruptcy by providing the lowest common denominator of service, others like Southwest, JetBlue, and Virgin America are having success by straying from the norm and offering more leg room, checking luggage without charging extra fees, and providing in-flight Wi-Fi.
The cold weather in New England is giving me the skiing itch . . . and making me think that if I get some new high-performance skis, I might finally get beyond the "advanced-intermediate" level I've been stuck at for 20 years. But the realist in me knows that the skis alone won't make me a better skier, I need to spend more time on the slopes working on my technique.
The same goes for how B2B marketers use automation. Investing in marketing automation doesn't automatically make your company better at marketing. In the research for my recent report on B2B marketing automation, I found that too many companies have invested in marketing automation platforms, only to use them as expensive email blasters. Despite the best intentions, B2B marketers fall into several traps along the way:
The process trap. They don't get buy-in and support from the sales organization, so they generate more leads without changes to how sales works those leads.
The content trap. They don't anticipate that effective, targeted lead nurturing greatly increases the content requirements.
The skills trap. They don't have people with the skill sets to define their customer buying cycles and information needs at each stage.