Reinventing (not just reorganizing!) Marketing

Earlier this year, I published a Forrester "Big Idea" called Reinventing The Marketing Organization.  That report will be the basis for a session I'm leading at Forrester's Consumer Marketing Forum EMEA called "Integrating Social Media In The Marketing Mix."

Why does marketing need to be reinvented?  Because technology has fundamentally changed the way consumers connect with companies and with each other.  Reorganization alone isn't the answer; many companies reorganize frequently, with little to show for the effort (see the image at left). 

Marketers don't need to reorganize - they need to reinvent their organizations.  This requires more than a slick internal communications campaign - it means that marketing needs to take a leadership role to help the organization become customer-centric in structure, culture, technology and partnerships.

However, few companies thoroughly practice customer-centricity.  Some companies that have moved in this direction include Best Buy, Starwood Hotels, and Procter & Gamble.

So does this mean true customer-centricity is a pipe dream?  Or will someone unlock the code and create long-term, sustainable competitive advantage?

Your thoughts appreciated...

Comments

I'm really wondering about why it took so long for campanies to realize that they should actually deliver what consumers want instead of just pushing into the market whatever THEY thought to be good for their profit.
I imagine that the answer lies in the power shift that social media made possible. In the past, if I thought that product X stinks, I could tell 2-4 friends and that was it. Now I can tell it to the world, and the world actually listenes. I find others that agree with me and therefore strengthen my voice. So much that now even companies can hear us.

It's the same as with politics - only that here we can make our voices heard during elections. Politicians are slowly learning that they are there to help the people (at least in democracies...). The same really applies to companies.
So far, we only had an indirect influence on companies (by buying their products - or not). Now that the power is with us, we can tell them right up front: If you don't produce what we want, we'll go to someone who will.

In the long run, companies can only survive if they are smart enough to listen to their consumers - apart from the fact that they might even charge premium prices for products that are exactly tailored to peoples' needs. Now which company would not want to give up power in return for higher long-term profits?

[Peter Kim]

Great points - I think we're still just in the beginning stages of social computing. Individual voices are going to get more powerful, but we will see more spam-like schemes emerge as well. E.g. first there was PayPerPost, now there's ReviewMe.

As the saying goes, "money is the root of all evil." So I wonder if consumers will turn to the "dark side."

On the other hand, marketers faced with quarterly pressure to show results - at least those in publicly traded companies - will find it difficult to give up power, opting instead of short-term profit.

I wonder if capital markets will be able to take the long view to allow companies to successfully make the shift...?

You're absolutely right. On my friend's blog there are individuals that leave comments and trackbacks leading to those well-known pages offering university diplomas, viagra, and Becky's stock tips.
And there's no stop to that unless some PC and Net newbies stop clicking on those links and/or campaigns like "Make love, not spam" ( http://mlns.starring.se/ ) drive spammers out of business. With security mechanisms like CAPTCHA (tests that helps validate that commenters are a person and not a machine), blogs should be a lot more secure though.

Concerning the companies - don't you agree that companies don't really have a choice regarding the power shift? They have to do this transfer sooner or later. And the ones that do it sooner will also benefit from it sooner (see e.g. Lego). But for those who are reluctant to this change - what alternative is there?

[David Armano]

Peter,

Your report was fantastic. I think that while large companies like P&G have overcome some of the corporate issues that hinder true innovation and customer-centricity—marketing firms have the unique challenge of managing clients added to the mix. A buffer between marketing firms and the customers we try to connect with.

While companies like P&G may have struggled with sheer size, complacency and an inward-focus, marketing firms will struggle with managing client expectations along with their customer wants, needs and desiires. Not to mention the peer-driven award culture that is present in fields such as advertising.

We will face some unique challenges. No doubt about it. :)

[Kate Trgovac]

Peter .. I don't think true customer-centricity is a pipe dream, though it is going to require some hard work.

1. a sublimation of ego (a point that David alludes to in his comment about peer-driven award culture).

2. a reduced reliance on "newness" ... how many product extensions do our customers *need*? I'm someone who is perpetually fascinated by the new! And its hard for me as a marketer to remember that sometimes our customers just want it to *work* or be *reliable*, not NEW!

3. a tempering of the general culture of consumption. Marketing relies on consumption .. in the face of growing eco-awareness and movements to reduce consumerism, how will marketing re-invent itself? The natural progression would be, for me, as a broker of customer needs & wants.

Great post, Peter! Cheers .. Kate