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Customer Manufacturing Group
In This Issue
Measuring Marketing Accurately
Spending Time With Customers
Efficiency vs Effectiveness
Focus Matters
Navy Seals
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Measure Marketing

Tape measure

In today's world of marketing accountability, marketing performance management, marketing ROI and related catch-phrases, measuring marketing is an oft-discussed topic in board rooms and C-suites.

 

To measure marketing accurately requires that you define what you expect marketing to accomplish. What outcome are you looking to achieve from the effort?

 

As simple as that sounds, it is done too infrequently, which does not prevent measurement discussion, though it precludes its usefulness. 

 

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Customer Manufacturing Update
May 2012

Dear Mitchell,

 

Here is your May Customer Manufacturing Update. Measuring Marketing continues as a hot, and controversial topic. We weigh in with this month's paper Measuring Marketing ... Accurately.
Spending Time With Customers?
  

Many readers know we are BIG fans of encouraging CEOs to spend a bunch of their time out with customers. (We recommend 20-25%). While we cannot yet prove this improves the performance of your company (more on this further down in this article), we have a LOT of anecdotal evidence to suggest  a strong correlation and causality. Therefore when we find more evidence, we like to share it.  Samuel Palmisano

 

In a Fortune article on the World's Most Admired Companies in 2011, they note that Samuel Palmisano has taken IBM to new heights building on what Lou Gerstner rebuilt. Of course, we cite Gerstner's refocus on spending time with customers as a key to IBM's resurgence. And now we find that Palmisano spent up to 70% of his time with customers when he first became business unit leader of Global Services. He still speaks to at least one customer every day. He is quoted as saying, "You can read all the economic data, but you're not going to get a sense of your customers."

 

As author John Le Carre said, "A desk is a terrible place from which to watch the world." Get off your butt, quit making excuses and get out of the office and see what is really going on with your customers and in your market.

 

If you are a CEO and would consider being part of our study we would love to talk with you. We have designed the research to take almost no time from you to help us. To learn more email: mgooze@customermfg.com

Sacrificing Effectiveness in the Name of Efficiency Efficiency increase

 

In all downturns companies look for ways to become more efficient. Truth be told, they should always look for ways to become more efficient by removing waste from the process. However, just because you can spend less money doing it, does not mean you should.

 

Mitch was traveling recently seated next to a mid-level exec from a major Silicon Valley software company. They were going from Houston to SFO. Trouble was the exec had just come off a flight from Paris, which had been delayed so he had missed his original connection to SFO. He was stuck in the center seat for the substitute 4 hour flight from Houston to SFO. While both of them did not like that, he liked it even less than Mitch did. He spent the flight with his head on his tray table, clearly exhausted.

 

Mitch asked him if he knew there were non-stop flights from Paris to SFO. He said he did, but his corporate travel department had been able to save $200 by routing him through Houston. Their metric: saving travel dollars. Demolishing an employee: not recorded. Though this company claims to value their employees, their actions prove otherwise.

 

This situation and others which make air travel undesirable, and more costly, has led to a rise in the use of so-called telepresence meetings by larger companies. The leading suppliers of such systems, Cisco and Polycom to name two, are seeing record growth in these systems, which they tout as being virtually the same as being there. Not so fast.

 

An article in the February 28, 2011 issue of Forbes cites some interesting evidence that users or potential users of these systems should consider. John Medina from the University of Washington makes the clear statement that significant communication information is missed in a telepresence system. This was supported by other research from David Pizarro of Cornell.

 

This does not imply that telepresence systems don't have their place, just that you have to understand their appropriate use. Unfortunately it is easy to understand the efficiency gained, not so much the loss of effectiveness ... until you notice your sales close rate is dropping and all of your other excuses are not cutting it anymore. Way too late.

 

Lessons:

  1. Make sure you have ways to measure the outcomes of your activities, especially new ones
  2. Make sure you have intermediate measurements so you don't have to wait for the process to complete before you know how you are doing
  3. Remember that increasing efficiency may not be helpful if it harms effectiveness. Doing the wrong things well, doesn't help

Focus Matters 

 Steam company logo

We have written several articles about the power of focusing your business. Today's example is Valve the online game company. Started in 1996 by Gabe Newell and Mike Harrington, the company controls somewhere between 50% and 70% of the downloaded PC game market through their website Steam. Per person the company is more profitable than Google, which is pretty good since only the smartest people in the world work for Google.

 

With a dominant position in downloaded PC games, they purposefully did not go after mobile games, motion games (like Wii and Kinect) or Facebook games (like Zynga). Newell is quoted as saying that had they tried to "blaze new trails ... and ride the latest trends, we'd likely be bankrupt now." Thank goodness he has never taken $1 of investor money so he is not compelled to answer to that community's short-term focus.

 

Focus on a market that is big enough to achieve your goals and not so big you cannot matter in the market.

 Navy Seals and Adaptable Processes

 

When we talk about process for the first time to people tasked with improving marketing performance, their first thought is that this will somehow remove the "creative" part of marketing. Not true. Many Marketing processes need flexibility and adaptability and as such, fewer people can handle them well. The key is to keep process flexibility and adaptability to the minimum level required to achieve the desired outcomes. Then it is easier to staff with people who can be great.

 

Some processes are so variable and complex that only exceptional people can be used. The one year anniversary of the Seal Team's killing of Osama bin Laden provides an example. Anyway, these guys work in highly unpredictable environments with limited knowledge of the situation and a need to adapt to whatever happens, including failed aircraft. As such there are VERY few people who can be successful members of Special Forces. However, most military processes don't require that level of flexibility and adaptability so more people are capable of being great in the roles they fill in these other processes.

 

Great people are necessary where they are. The key to appropriate process design is to limit your need for truly exceptional skills so that most of your people can perform their roles exceptionally well.

 
 
 
Free Reading Guide

If you have a copy of our book Value Acceleration, you can download a free reading guide to help you and your team get the most from the book. (And btw, the book has been updated for 2012 and is also available in a Kindle edition.)


We appreciate your feedback to help improve these

Updates. If there are others you feel would benefit from this issue, use the Forward email link just below on the left.

 

Sincerely,

 

MGSig

Mitchell Gooz

 

Customer Manufacturing Group, Inc.

www.customermfg.com

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