CIM conference focuses on marketing adaptability

The Chartered Institute of Marketing (CIM) has released a report on its recent annual national conference, which focused on the theme of 'Marketing Adaptability - Survival of the Fittest'.

The event was held at the Grand St Paul's Hotel in London on 29 September 2009.

Sir Paul Judge, president of the CIM, opened the conference with a reminder of the importance of professional marketing standards.

He said: 'In today's competitive job market the qualified person is in a better position.

Jean-Claude Larreche, professor of marketing at Insead, then began the programme of keynote talks.

He said: 'Marketers need to adapt.

'Marketing has an image problem.

'People believe it is about selling a product people do not need.

'Marketers are seen as big spenders and fashion victims by chief executive officers and financial directors, taking all the blame for the bad and little credit for the good.

To tackle this poor perception, Larreche said the industry needs to move away from 'promotional' marketing towards 'transformational' marketing, which requires a vision of sustainable, efficient performance.

He added: 'We need to move from compensatory to momentum marketing.

This involves exploring new ways of using products, presenting them to customers in such as way that, while volume sales might be lower, returns are higher, so marketing spend is a smaller proportion of sales - an 'efficient' approach.

Examples of this kind of marketing Larreche gave included an aluminium company's idea for drinks-can 'fridge packs', which stop cans being forgotten at the back of fridges, thereby boosting sales; a sporty presentation of a three-door car that helped make the product desirable, achieving a higher price-point and better marketing-spend-to-sales ratio; and a baby-food brand that, basing its marketing on a message of trust, diversified into children's college trust funds.

Emeritus professor Malcolm McDonald then lent weight to Larreche's view that marketers should avoid compensatory (or discounted) price positioning, arguing that the volume sales required to support discounted prices were often unachievable.

Rather, he said, marketers need to be clear about their target market and differentiators, and added: 'You had better know what they want, and that they are going to buy it from you rather than someone else.

Shareholder value, he said, should be marketers' goal, and the measures for that should be customer retention, product quality and success rates in specific market segments.

David Armory, marketing director at Land Instruments, followed with a case study of how his company had achieved higher profit targets using a segmentation model based on face-to-face interviews with customers.

He said: 'We had begun to compete on price, focusing on products, and had forgotten the customer.

'Our new model was organised around markets instead of products and we now outperform similar businesses in the market - we identified growth opportunities, even in the recession.

The advantages of segmentation and customer relationship management (CRM) were then explored further by Prof Merlin Stone, research director at WCL, who said: 'Why does CIM research show that marketers believe CRM delivers the best return on investment?
'Because it includes all channels and because it is now more measurable and cheaper.

Mobile phone companies, banks and insurers have shown that the integration of customer insight with market research leads to profit, he added.

But in order for CRM to work, 'call-centre staff should know their customer segments, and segments should be re-calibrated as data is fed back into the system'.

He said: 'The contribution of each individual in a call centre to customer retention should be measured.

Stone also highlighted the importance of CRM in helping marketers to get rid of customers who cost their companies money.

He added: 'If you have to bribe people to join, you'll have to bribe them to stay - most companies only want to keep 25 per cent of the customers who leave.

Mark Andersen, customer marketing director at BsKyB, then provided a case study of BskyB's move from a product-centric to a customer-centric marketing approach using CRM, explaining that the company had taken Stone's advice in sifting valuable customers from the dispensable.

He said: 'We looked at how we could understand the long-term value of each individual.

'To do this we had to break a cycle of gathering late, and therefore inactionable, insight.

But Andersen warned against getting sucked in by too much data.

He added: 'Real-time marketing is potentially an expensive blind alley', pointing to the fact that customers who have called about one issue want to have that dealt with, so that cross-selling is more effective at a later date anyway.

Marketing consultant PR Smith called marketers' attention to technology.

He said: 'In the rush to comply with the new digital space we are forgetting the basics, the fundamentals of marketing.

Marketers have grown sloppy in their digital efforts, he argued, failing to carry out basic website usability testing.

They need to work harder at customer engagement in the digital arena, he suggested.

"This is a time of accelerated change and accelerated brand creation.

Where once, it took a generation to build a brand, it can now happen in a year.

A case study from Matthew Critchley, brand communications director at Wickes, then described how Wickes had built awareness of its DIY store brand with a television campaign, a loyalty scheme, a transactional site and a catalogue.

He said: 'We identified three target audiences and we defined the purpose in reaching them of each of our channels.

Critchley emphasised the importance in effecting this change of speaking to the Wickes board in its own language, and said: 'Talk about sales, don't talk about brand awareness.

The need to win the support of a wider audience for your brand was discussed further by Juanita Cockton, managing director of the Marketing Studio.

She said: 'We are often guilty of bad stakeholder management because of the multitude of demands on our time - when we are under pressure, it gets neglected.

Stakeholder management encompasses CRM, PR and all aspects of brand reputation, she argued, and added: 'Marketers too often ask themselves when dealing with stakeholders "What do I have to do to you?" rather than "What can I do for you?".

'And if you're having trouble persuading the board of the importance of your stakeholder management strategy, make the consequences of not doing all this as scary as possible.

Venetia Howes, former head of brand strategy implementation at Shell, reiterated the importance of taking a wider approach to marketing to stakeholders.

She said: 'If you don't manage your stakeholders, others will seize the agenda.

'All organisations are coming under increasing scrutiny.

'Lord Turner has said we must ask ourselves if our company is useful to society - that's a trend to watch.

Howes described Shell's apparently conflicting goals of doubling energy production by 2050 and halving carbon emissions in the same period, which had inspired the company's 'Say no to no' campaign.

Shell has courted open debate of difficult environmental issues and taken care to share the stage with holders of opposing views, Howes said, although she stressed that not everyone can be persuaded.

She added: 'Decide who you are going to win over, focus on the persuadable.

'Don't waste time worrying about the people you can't persuade.

Martha Rogers, founding partner of Peppers and Rogers Group, supported this view, suggesting marketers should measure 'return on customer', and that those customers who don't deliver on this measure should be 'lovingly helped into your competitors' arms'.

She suggested that marketers should think of the difficult economic environment as a bear that will eat the slowest-moving organisation, and added: 'I don't need to outrun the bear - I just need to outrun my competitor.

Offering another metaphor for marketers, she explained that, in the digital age, marketers should think of their organisation as a flower that may attract bees (customers) but will only get them to tell the hive (their internet community) if you have the best nectar.

She said: 'Customers are the only limiting factor for your business,' and explained that in limited supply, customers are marketers' most valuable resource.

Rogers added: 'A budget is an artificial scarcity of cash; a market is an actual scarcity of customers.

Playing fair with customers is therefore the most profitable approach marketers can adopt, she said.

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