The Move Towards Transparency

I have talked about this countless times before, but it is clear consumers across all categories are expecting increased transparency from their financial services providers. Whether it is clarity regarding the cost structure or increased transparency in terms of banks external reporting, transparency is going to be a key trend for 2010. However, in light of recent events, this will be a qualifier – not a differentiator.

Reconnecting With Key Stakeholders

In terms of branding and advertising, 2009 was dead – and 2010 will see the phoenix rise again. By year end, I am certain we will have seen a massive increase in advertising, PR and targeted stakeholder communications. With markets picking up and balance sheets looking increasingly attractive, banks will invest heavily in reconnecting with those that are key to their future growth.

From Developing To Emerging (Or Vice Versa)

The widening gap between developing and emerging markets in terms of economic growth, performance and payoff is only expected to widen for 2010 and the years beyond. Following the automotive industry, one can wonder how long it will be before one of the emerging markets financial services giants performs a major takeover of a high street bank. As recently as a few years, emerging markets were seen as a major growth engine for banks looking to avoid getting stuck in their saturated home turf. Have the tables now turned ?

From Status To Discovery

Specifically for those offering services at the top end of the financial services industry, we are likely to see a trend that runs parallel to the luxury industry – from buying status to experiencing discovery. High end customers want more than just heritage, instead looking for an overall customer experience that stands out. 2010 will see some interesting opportunities in co-branding, social media and mobile marketing.

Old = New (Again)

(Only) seemingly contradictory to the previous trend, longevity and tradition is fashionable again – but in order for it to work, it has to continue to reinvent itself. Luxury watchmakers, sports car manufacturers and retailers are coupling tradition with innovation, working towards an integrated customer experience in which our “multiple selves” are satisfied.

2010 is likely to be a year of significant change – for the better. As the economy continues to come out of hibernation, leading brands will reinvent themselves in order to reconnect with consumers and gain a captive audience moving forward.

Most professionals that specialize in a particular area, whether it is HR, marketing or communications spend a disproportionate amount of their time interacting with their peers, navel staring or “thinking about the future of the profession”. This leads to precisely the type of internally focused thinking that the CommScrum team talks about in their latest blogpost.

Kudos to them for coming out and saying what a lot of us have been thinking for a long time now.

From my own personal experience, functional disciplines often suffer from a lack of  confidence – they all want to be “seated at the business table”, but fail to deliver when they get there. Surprisingly, most communications professionals sin against one of their own cardinal rules: adapt your core message in line with your target audience.

Business executives do not want to hear about communications, marketing or HR-related issues, they want to hear about business issues. How much did this campaign contribute to the bottom line ? How much has our increase in brand value contributed to our market capitalization (and how does this facilitate our access to external funding) ? What increase in sales have we seen as a result of our latest (social media) campaign ? And, yes, they do want to see numbers – but think EBITDA, not CPM.

I agree wholeheartedly with Dan Gray’s analysis of the situation:

“Getting incrementally better at what you already do is becoming an irrelevance. The true value of communication lies in making sense of complexity and revealing the simple meaning beneath – a creative, synthetic process that distils a compelling core idea and handful of supporting messages that people can actually relate to, and which actually adds value to the business.For that, you need to be able to see beyond functional fiefdoms and start joining thing up. Failure to cross the “T” will forever condemn communicators to a life of downstream tactical execution.”

So here are five things that can help all of us get out of our “functional rut”:

1) Spend more time talking to people outside of your department – finance, accounting or audit are often a good place to start. For brownie points, think business managers or – gulp – the CEO

2) Do NOT talk about communications-related issues, but talk about the business instead – what is on the CEO agenda ?

3) Read more books, but not the ones you normally read; instead, brush up on business strategy, history or global politics

4) Spend more time thinking outside of the box – how can you apply what other disciplines are developing to your domain ? How can you learn from nature, the arts or science ?

5) Focus on the why, not the what – ultimately, your job is to help the company perform, not to get to 5M followers on Twitter

Some of the smartest and best-performing people in the marketing and communications area that I have have known, actually came out of “the business”. By maintaining their focus on business issues, they succeeded in getting their newly adopted disciplines a seat at the table – and more often than not, the ear of the CEO.

Historically, marketing and sales have been considered to be two sides of the same coin. Classic marketing theory states that marketing supports sales by creating an environment in which demand for products is enhanced through the (clever) use of the marketing mix.

Where this was no doubt true up until around the 1950s, things have moved on since then. Commonly referred to as “the 4Ps”, marketing was long equated to the strategic management of Product, Placement, Price and Promotion.

At some point, someone started adding another P (People) in an effort to expand the model, but no matter how many Ps we add, we cannot continue to avoid the facts: the classic marketing model is broken.

Like many corporate disciplines, marketing has increasingly become embedded in the organization, and interacts with a wide variety of aspects. Like the “Hydra” coming out of Greek mythology, marketing has given birth to a variety of sub-disciplines that are all more or less related – and often used interchangeably. Whereas organizations often insist on making clear distinctions between the different disciplines, in the real world, nobody cares.

Increasingly, marketing harnesses the power of branding to create strong trademarks that project desirable characteristics in order to help consumers make purchasing decisions based on emotional rather than cognitive criteria. In a world where consumer choice is increasingly leading to “information overload”, a strong brand acts as a lighthouse – guiding consumers to the safety of what is known – and sometimes deeply loved.

What is often overlooked is that the power of the brand goes well beyond merely external advertising campaigns, but extends deeply into the enterprise itself. Concepts which often remain difficult to  communicate like vision, mission and values can be woven into the brand, thus creating a strong beacon to rally around, providing purpose and meaning. If used appropriately, the brand then becomes a lens through which the organization looks at itself, and finds meaning and purpose.

Truly engaging brands go well beyond this, and strive to build strong emotional ties with their audiences, whether they are internal or external. In that sense, brands are as much about engaging employees as they are about connecting with clients. A strong brand helps attract and retain the right kind of talent, and helps people understand what exactly is expected of them.

A strong brand resonates with people, and unites them in their quest for a common goal. A strong brand is iconic, purposeful and inspiring. According to lovemarks.com, “Lovemarks transcend brands. They deliver beyond your expectations of great performance. Like great brands, they sit on top of high levels of respect – but there the similarities end. Lovemarks reach your heart as well as your mind, creating an intimate, emotional connection that you just can’t live without. Ever.”

As consumers are increasingly oblivious to the deafening roar of advertising and “tune out”, leading brands instinctively understand the need to adapt in order to survive. In a world characterized by rapid change, uncertainty and the erosion of trust, things like authenticity, purpose, unity and community are needed – now more than ever.

Sure, sure – social media can be a valuable complement to your brand, but let’s not get ahead of ourselves: last time I checked, the vast majority of business was still conducted offline.

When comparing “Black Friday” with “Cyber Monday” Bloomberg commented that “online purchases rose 14 percent as of 3 a.m. New York time compared with last year. Forecasts called for growth of as little as 5 percent. While e-commerce orders are growing, they represent about 6 percent of total spending, according to Forrester Research Inc. That mutes the impact of Cyber Monday — the first Monday after the kickoff of the holiday season.”

So, even though e-commerce is on the up, there is still a convincing case for keeping your focus on “business as usual”. The majority of sales still occur in stores, stalls and offices around the globe. Hence, so does brand building, and the people representing your company continue to have a disproportionately large impact on the perception consumers have of your brand.

In spite of the fact that social media seem to be very much at the forefront of the CMO agenda, they are not a cure-all. Like any other form of marketing, social media requires a clearly defined strategy and a willingness to open up that goes well beyond more traditional forms of media. Used wisely, social media can have an impact that goes well beyond merely the adoption of a few tools, but can be a catalyst for change or a strong signal to the external world.

Even though I have at times made a case for the inclusion of social media as a valuable marketing tool (see here and here), it is important to remember it is only a part of the solution. Customer service, branding, PR and marketing are (some of) the other parts.

Leading professional services firm Gartner has been known for years for their “hype cycle”, a graphic representation of the maturity, adoption and business application of specific technologies. In their “2009 Hype Cycle Special Report“, they map various technologies in different parts of the cycle – putting Twitter right before the “trough of disillusionment”.

Just because it spends money, doesn’t mean it is a “cost centre”

Too many CEOs and CFOs continue to think of marketing as a cost centre. Not only is this counterproductive, but it also reflects an organisation that is lacking maturity in terms of marketing, which is likely to have a negative impact on how marketing ultimately contributes to the bottom line.

In a typical “chicken and the egg” style approach, organisations refuse to align marketing with the business strategy, and then proceed to treat it as a cost centre – virtually ensuring a self-fulfilling prophecy where marketing is seen as a big spending machine that makes no measurable contribution to the bottom line.

Smart organisations understand one thing: indirect cost pools are not “murky waters”, but need to contribute to the bottom line in a measurable and clear way. Only by putting in place a clear cost (and profit) measurement process can executives identify the value of marketing within the organisation

Measuring Bottom-Line Marketing

Clearly identifying marketing’s role in growing business profitability means one thing: putting in place clear goals and objectives, with a measurement framework that helps identify who does what, when and how (much).

• Define marketing goals and link them directly to the organisational  goals (mission, vision, strategy)
• Set clear objectives, and put in place appropriate measurement criteria
• Introduce accountability for marketing spending – especially outside the marketing department
• Track marketing expenditure across previously defined criteria and measure the net marketing contribution
• At the end of the period, revise goals and finetune metrics – then, “lather, rinse, repeat”

In the recently released “2009 Marketing ROI & Measurements Study“, The Lenskold Group/MarketSphere concluded that “companies that indicated their marketing was highly effective and efficient (9% of the total) showed much greater strengths in having data, facts, and insight to better guide marketing spending decisions (75% vs. 33% of all other firms), using good measurements (69% vs. 30%), using customer analytics (65% vs. 31%), and having marketing operations processes to improve the business of marketing (64% vs. 29%).”

This article is part of a series, entitled “The 10 Biggest Myths In Marketing”, which will be published as a whitepaper on this site. Check back for more information, or get in touch in case you would like to pre-reserve a copy.