The Marketors’ Annual City Lecture 11th October 2018

Marketing in the 21st Century

Guest  Speaker Guy Daniels
Head of Corporate Marketing Europe, Cognizant

Transcript

Firstly, thank you to Richard & the Worshipful Company of Marketors for this opportunity to speak to you in this august setting.  This is a new group for me, so I look forward to getting to know some of you.

One of the benefits of being asked to give a lecture like this is that it gives you the chance to pause and think, “why am I doing this?……why AM I doing this for a living?”. This question is every more pressing as it is only a matter of time before my 4 year old daughter asks me “so what is your work dad?”  To answer with “my job is to establish a major technology company as a leading digital transformation partner for c-suite executives of large enterprises” is not going to keep her attention.  So perhaps this exercise with bring me the clarity I need.

Marketing doesn’t generally get a good press.  As a term, it is most commonly used to refer to something which is “superficial” or “trivial” or “lacking any substance or value”

  • Coke reported to be using cannabis in a new pain-killing drink is said to be “just marketing”
  • “Man Utd are no longer about football – all about “marketing”

Marketing in the services sector has additional problems, often either misunderstood (at best demand generation, at worst: events and brochures) or maligned (a budget we can do without)

So why do it?  Because it matters in spite of these issues

This evening, I try to address the Marketing discipline as a whole, but all of my experience is in technology industries with Sony, IBM, Fujitsu and now Cognizant and the majority has been concerned with services, i.e. how to promote people who solve problems and create solutions with technology.  So naturally this experience informs my thinking.

Summary

To re-state, I will argue that Marketing matters in the 21st Century, not in the same way as medical research or ameliorating the effects of climate change, but in so far as it is Marketing which enables an organization to be coherent & grounded.  Or more simply, Marketing is the one function which orientates organizations towards the purpose of attaining and retaining customers.

I also argue that Marketing Departments are often incoherent as they respond to irrational demands & short term pressures.  I believe that the best marketing is, by contrast, simple in conception & hard to execute.

I will further argue that new technologies have often marginalised Marketing or blown it off course.

Now I believe that Marketing faces its biggest challenge since the inception of the profession (if such it can be called) as a confluence of technologies threaten to disintermediate the role of Marketing

However, I also believe that Marketing can still thrive if we remember our primary function and keep in mind the best and simplest models for inspiration & stay focussed on connecting with customers.

Marketing Matters

The best Marketing orientates organizations towards their customers and the markets where they engage with them.  It provides coherence, & direction based on simple principles:

  • Know your customer
  • Create something they need or want
  • Make your offering clear and compelling
  • Deliver value for money
  • Be easy for them to find
  • Follow through to keep them loyal

There are often forgotten by marketers who focus on narrow specialisms be it portfolio marketing, advertising or promotional marketing,

I believe the template for great marketing is to be found in very simple models.  This is a Boulangerie in Lyon.  The owner knows everything they know need to  know about their customers & they provide the product & service required perfectly tailored every day without fail.

A bad example comes from one of the UK’s most successful companies: a major broadcaster.  I recently let them know that I was planning to move house wanted to transfer service to my new home.  I tried to call them two weeks before the move, only to be directed to their website.  Having retrieved an account Id, I never use, I was then directed to FaceBook Messenger.  As I made my enquiry I discovered that it took between 40 and 60 minutes to get a response.  The whole conversation took more than 24 hours to reach a resolution which was that the earliest they could install was four days after our move date.  So I contacted a different supplier who agreed to come within a day of the move.  My original supplier had the clearest signal possible that a valued customer of over 10 years was at risk.  Response “minimise the cost of this “customer touch-point & get him to use the app”.  Outcome?  Annoyed customer who goes somewhere else.

The issue is scale x complexity x speed of change.  Marketing as a discipline emerged from the need for enterprises to engage with customers & prospects remotely & to do so in vast numbers across the world’s most prosperous & advanced country the United States.  Along with scale comes complexity, with complexity comes specialization, with specialization comes silo thinking and the fine art of completely missing the point.  All this against a back-drop of intense and increasing competition & accelerating technology driven change.

Each generation of marketers is re-learning the fundamentals known by the French boulangerie.    And making huge mistakes along the way – abusing each new technology as it arises in the way that Sky is doing. It’s often said that the first users/abusers of any new technology are the porn & gambling industries.  It’s fair to say that Marketing is very close behind these sinners.  Think of the intrusions of direct mail, telemarketing & e-mail marketing, each one abusing a perfectly valid means of connecting people.  Now we are doing it with social media & mobile apps, each of which risk either being saturated with nonsense or being used to lower the cost of contact.

At its best, Marketing counterbalances other groups driven by internal agendas, from design through production & sales.  We provide perspectives on where the market is going and we represent the customer pov. 

We provide this orientation through intelligence, insight & implementation into product, price promotion place and any of the “ps” which have been added in recent times.

  • Sales Directors will always claim special insight into the customers.  CFOs will claim that they see the fundamentals of profit and loss.  CIOs will claim that they can see the risks & opportunities offered by technology which is integral to any business today.   All of these claims are true. But only Marketing maintains a focus on reaching and satisfying customers
  • In large technology companies, the value of the marketing discipline is often missed & the strategic function of marketing performed (to varying levels of effectiveness) by other functions.
  • To off-set this, as a Marketing leader you have to be credible & believe in your pov .  You also have to live with scepticism from people who are more highly valued by the business.  This means that the best Marketers often need to have clarity & sense of purpose of a Jesuit in 18th century Japan.

In my experience there are three of CMO archetypes:

  1. The Show-person whose primary motivation is to put on a big show for their company
  2. The Sales-person manqué whose credibility comes from their understanding of the sales process.
  3. The Strategist whose magic comes from their big picture thinking

I believe all senior marketers have a bias to one of these archetypes, but the best are able to achieve a blend and lean towards the right one at the right time.

Marketing often incoherent

Marketers often fail to see the big picture & get lost in their specialism

  • Portfolio marketing which produces person years of Powerpoint which has no impact on what gets taken to market
  • Brand campaigns which have no connection to the offer a customer sees

In recent years, in large enterprises, Marketing has often been subordinated to CRM systems deployed primarily to reduce the cost of customer interaction and manage pipeline. 

  • CRM, sometimes better named as Customer Relationship Minimization, has often been used primarily to reduce the cost of sale (not a bad objective) and for opportunity management (again – healthy).  What it often fails to do is to provide deeper insights into a customer to enable new opportunities to be identified.
     
  • In fact, quite the opposite, as the motivation of any account manager is to convert leads into wins with maximum efficiency & minimum interference. Consequently, the incentive to look for new leads is low and disincentive to add them to a system where they will be reviewed weekly for pipeline progression for the next 18 months is high.
     
  • In addition, Marketing in technology services is often its own worst enemy – I think because complexity blinds to purpose.  I recall a major technology event where I asked the product and service marketing managers to complete a simple form outlining what they planned to show case on their stand and why a visitor would be interested.  With a couple of exceptions what came back was completely incoherent as it had been treated as a form filling exercise rather than the biggest chance of the year to promote their offering. 
     
  • Philip Oliver, whom I was lucky enough to work for at Fujitsu, used to say that to get to “simplicity” requires a lot of hard work and he was absolutely right.  It also requires vision & a clear sense of purpose.
     
  • In my area of brand and marketing communications, simple questions need to be asked but are often most difficult to answer.  Best frame them in plain English (avoid jargon such as “value propositions” “message platforms” “positioning” “content marketing” because it locks you into you own echo chamber:
    • Who are we trying to talk to?
    • What is concerning them?
    • What have we go to say that will interest them?
      • Is it compelling?
      • Is it differentiated from what others are saying?
      • Can we be credible?
      • How do we evidence it?
    • What incentive is there for them to respond?

Much B2B Marketing communications fail because most these questions have never been asked, or if they have, only some have been addressed.  As Marketers, we also have to fight against deep tendencies in our organizations to resist these questions and push internal agendas.

Against this, I would like to share what I think is a great example of old school marketing: direct mail, most of which goes straight to re-cycling.  This was also at the least propitious time, in 2008 just as the crash had happened.   This edition of “Hard Times” arrived in the mail.  A careful look shows my name on the cover “Hard Times for Guy Daniels” – too right it was.   Curiosity piqued, I looked inside to read the following “Talk of recession was growing louder, Mr Daniels was all too aware of the challenges facing him….His situation was not hopeless….”.  It then goes on to introduce Underdog Creative offering a “more prudent use of advertising budgets, … an agency with the talent but without the costs”

Going back to my criteria, this meets each of them. In a nutshell it got my attention at a time I wasn’t even thinking of new agencies by demonstrating their excellence.  Underdog got a face to face meeting and only Fujitsu’s restrictive procurement policy prevented me from using them.

Technologies threaten to disintermediate the role of Marketing

Technology has always been fundamental to Marketing, specifically as a mediator with customers and markets.  Marketing is transformed by each technological advance in communications because we are all about creating connections with people.  My Dad was a Marketing executive at Rowntree Mackintosh in the 70s & 80s.  In that time, one TV advertising channel and a limited number of print titles where indispensable means to reach an audience.  An explosion of print and TV channels changed the game.  The internet transformed it again, then social media again.  Each time marketing adapts and evolves new methodologies. 

Technology has always transformed markets throughout my lifetime.   The old PEST models always allowed you to consider the impact it might have.  However, technologies are encroaching to the point where in some cases they are becoming the marketplace itself with the FANG companies.  This time it really is different.

This really is Different!

FMCG companies have always used vast data to anticipate behaviours.   For many years, Mars have been able calibrate the revenue & profit impact of different packaging when they cut down the size of a Mars bar.  Supermarkets have established premium location for toothpaste on their aisles. 

What is new is the shift from predictions though correlation to prediction based on precise behaviours.   This means a targeting you in a segment of one based on your own personal behaviour.  Over 10 years ago, Last FM told me it knew what music I would like because it knew the listening habits of thousands of people who listened to exactly the music I liked.  I was partially convinced.  Now each week, Apple Music introduces me to music I love  based on the habits of millions with similar preference & algorithms which are place me in to a self-created segment of one (although curiously the passion diminishes when the pursuit goes, more on this later)

It's commonly known now that Amazon can predict your tastes in literature better than your partner.  Who knows what Google & FaceBook knows about us but we can be sure that it’s in many respects a whole lot me than we do ourselves.  And we have given this insight away, in most cases unknowingly .

Currently, these companies have powers of intrusion undreamt of by the most advanced states.    As Peter Parker’s uncle says to Spiderman “with great power comes great responsibility

So what does this mean for Marketing?

Digital technologies including Big Data, Analytics, AI, IOT are facilitating a paradigm shift in insight and intelligence about customers (and enabling customers to understand organizations in return). 

Every enterprise is becoming in one respect a “data company”.  This means they will need to provide data services alongside their traditional product or service, whether it is a car or insurance policy.  These services will be traded and in many cases transform the service altogether. It is now imperative to integrate, mine & exploit data which can enable them to develop new services or even new business models

AI is being applied to automate decisions and choices we would otherwise make with our finite mental capacities.  The better a system knows us, the better choices it can make on our behalf.  However, the ethical implications are only beginning to be understood.

These ethical dilemma’s need to be anticipated up-front & embedded in algorithms.  This requires bringing very different disciplines together (philosophers lawyers, software designers)

In some respects, traditional enterprises are better equipped for these challenges than digital natives because they have evolved a richer sense of corporate purpose more effective governance although this will not be easy.

On the one hand, writers like Yuval Noah Haraari (Homo Deus) and Max Tegmark (Life 3.0) predict that AI will allow organizations to hack into our preconscious minds to undermine freewill itself.  On the other hand, the Sky example shows that  there is still huge headroom for Marketing to help enterprises talk sense to their customers. 

For several years, solutions from SalesForce, Abobe & Oracle/Siebel etc have successfully offered a degree automation for enterprises to interact with their customer, but typically addressing only one channel at a time (call centre, website, e-mail etc). 

As stated earlier, until now, sales functions in business to business enterprises have ignored any lead until it became a sales qualified lead with a predicted close date. This is because sales teams are expensive and they need to deliver high conversion rates – typically 1 in two

We can now use Marketing automation software to detect interest at individual level.  As attention to marketing messages increases, individual scores go up and sales teams can be handed a profile of people in a strategically critical department what is likely to trigger their interest.  Naturally these are usually ignored, but in time, this type data driven intelligent & personalized marketing will direct the sales organization to points of maximum potential value.   

In this scenario, Marketing becomes a searchlight for the business, dealing no longer in BANT qualified leads, but directing a sales function in terms of: who to talk to, when to do so and what to talk about based on the client’s interests.

It is now possible to integrate and automate across all channels & to do so at enterprise scale.  Platforms can now be created which establish coherence and consistency across channels & touch-points and ensures that common customer intelligence is shared across them.  This makes customer retention more profitable & customer acquisition more efficient.   Cognizant is doing just this for a major car manufacturer in a way which may prepare them to offer mobility services direct to consumers.

Where Next?

A unique characteristic of this wave of digital transformation is the fact that it is now impossible to conceive a robust strategy which is not as founded on digital.  Whether you are retailer, bank, manufacturer or logistics company, digital is core not only to what you offer but to your business model. 

Marketing only fulfils its strategic function when it is deeply connected to the strategy.  At Cognizant this means we need to think differently about the marketing plan.  Instead of thinking of programs to achieve KPIs, we need to plan for:

  • An application platform including content management & automation which is fit for purpose
  • A skills profile which supports our ambition.  Currently this includes the latest skills in Google to ensure our brand is easily found.  It is beginning to include analytics and in time may include anthropological and sociological skills.
  • Then dreaded word a “content” plan i.e being able to formulate relevant and compelling ideas to position our brand for the face to conversations our CPs need have. 
  • Performance indicators which connect much more precisely to sales cycle.

Where is this going?

If the first tenet of marketing is “know your customer”, we need to acknowledge some fundamental changes in the way we engage with each-other and understand ourselves if we are to do this effectively.

  • The internet is atomising us by (blind choice) into ghettos based on our preferences & prejudices
  • As more human beings interact through exponentially more connections every day, the world has become impossibly complex & impossible to predict
  • Books like “Thinking Fast & Slow” show us that our minds work to pre-conscious default settings which are being tricked & manipulated daily
  • There is increasing evidence that “reason”, previously thought of as the faculty which makes humans so special, is in fact, rationalization evolved for its social utility.  In this reading, we use reason not as a means of establishing what is objectively true, but to justify deeply held prejudices.
  • The scope for reasoned debate is now crowded out as internet & social media escalate emotions
  • Some think that adults are being infantilized as a consequence as we get swept up by trivia & our politicians are judged on their gestures rather than records of achievement in high office
  • AI is now able to intercede in the choices we make, disintermediating the slow processing of the conscious mind.  Most of us gave up directional sense to Google Maps a long time ago.  How many more conscious choices will we give up?
  • This is qualitatively different, as Marketing is being encoded into algorithms which bypass the rational mind never mind the marketing function.

All of this presents challenges at every level of society, legal, political, security, etc

The Marketing discipline might seem irrelevant, however, I believe that we have chance to make this all of this worse or find ways to make better connections

There is no question that Marketing has been a prime abuser already – just look at the way in which political candidates are marketed in the US & see how political culture has been debased.  Russian interference in the 2016 US election is arguably the most successful guerrilla marketing campaign in history

There is a need now more than ever for a Marketing based on human values.

As I have already said, Marketing provides orientation & it does so based on sound principles.  The greater the complexity, the more important these principles become:

  • Know your customer
  • Create something they need or want
  • Make your offering clear and compelling
  • Deliver value for money
  • Be easy for them to find
  • Follow through to keep them loyal

Clues to the Future?

Human connection is at the core of the first rule of marketing “know your customer”

Look to the Boulangerie for inspiration

There is still space for unique insights into what makes us tick & space for the inspiration of unique creative ideas.  Indeed, as machines intercede more and more, so the premium on human insight and inspiration will increase

Marketing can provide coherence for enterprises to keep focussed on their customers.  We must resist the temptations of abusing technology as we orientate organizations towards one of their prime purposes – satisfying their customers

AI is about enabling autonomous decision making which can adapt to context.   If our politics remains stable, consumer demand and regulation will ensure that consumers get to pick the decisions and the context & crucially we get to decide on what we share and why.

Indeed, the more that context and contingency come into play, the more limited AI becomes.  Japanese culture is said to be highly contextual, where meanings are often implicit and are given by the most subtle of clues.  The term “wabi-sabi” exemplifies this.  Ask any Japanese person to define this idea and in most cases you will get a puzzled expression.  It’s a feeling which relates to impermanence & transience.  One person will describe a tree which is slightly distorted, another will talk about a king reflecting on all he has lost – Lear-like.  The feeling comes through these ideas but there is no English word to capture it.  This human essence can never be processed into an algorithm.

We are meaning seeking creatures, we need purpose & fulfilment, we look for significance.  Therefore, I do not believe we can be satisfied or fulfilled by the outputs from algorithms. 

If Marketing retains its higher purpose to orientate organizations towards their customers, this will require really knowing our customers without intruding.  This means being respectful and empathetic.  Encouraging our enterprises to think of our customers as the human beings they are with all the desires, distractions and frustrations we all experience.  Finding ways to establish meaningful connections between the best your organization can offer & the real concerns of your customer

As a consequence, I am certain that the expectations which customers have for brands will increase, and that a suitably strategic Marketing function is best placed to help enterprises see to it that their expectations are met.

To achieve this, we need to aim high & engage deeply with our company strategy and have the strength of mind to keep things simple in the interests of the customers that we serve.

 

Guy Daniels

Head of Corporate Marketing Europe

Cognizant

 

11th October 2018