TEAMFLYEnterpriseMarketingManagement

EnterpriseMarketingManagement
The New Science of Marketing

Dave Sutton and Tom Klein

John Wiley & Sons, Inc.

Copyright © 2003 by Dave Sutton and Tom Klein. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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10 9 8 7 6 5 4 3 2 1

For Whitney, Wheeler, and Maggie—D.S.
For my scientist grandfather, Admiral John T. Hayward,
and for my salesman father, George.—T.K.

CONTENTS

Foreword Sergio Zyman xi
Introduction: Enterprise Marketing Management xiii

RUN BRANDS AS BUSINESSES, NOT AS CAMPAIGNS 1
1. Marketing Is Not an Art—It Is a Science 3
2. Architect Your Brand 16
3. Plug Marketing Into the Enterprise 43

PART IMANAGE YOUR BRAND, NOT YOUR CUSTOMER 61
4. Take Ownership of the Brand Experience 63
5. Plug Marketing Into CRM 95
6. Cross-Market to Cross-Sell 114
7. Use New Media for Brand Activation 125

PART IIREINVENT YOUR BUSINESS, NOT JUST COMMUNICATIONS 147
8. Restructure Based on Brand Experience 149
9. Measure Investment Performance 171
10. Optimize Marketing Investments to Drive
Profitable Sales 191
PART III

Conclusion: A New Day for Marketing 211
Index 219

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ACKNOWLEDGMENTS

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his book is the result of relentless hard work on the part ofmany talented people. While conducting research for thebook and developing content, we had the pleasure of meeting and working with many marketers and hearing their stories—
many of which became the foundations for case studies in this book:
Lisa Gregg at American Express, Tim Riesterer at Ventaso, andDavid Perry at Aspen Skiing Company.
We would like to thank everyone at Zyman Marketing Groupfor their dedication to bringing Enterprise Marketing Management tolife with our clients across the globe. We would like to especiallythank those colleagues that dedicated their personal time, of which
there’s never enough, to the book. They’ve added content, been
there to think through new ideas, advanced their own theories, andhelped us to bring it all together. Thanks to Ric Alvarez, Art Ash,David Cross, Leanne Fesenmeyer, Linda Michaels, Michael Sinclair,
Dave Singleton, and Jon Stewart for their energy, ideas, and generalpassion for great marketing. And, thanks to Denise Cowden and
Veda Sammy for their creativity and patience in helping to develop
and organize both the written and graphical content. Even thoughmarketing is a science, they’ve helped us apply art where it’s necessary to help us communicate more clearly. And finally, even booksix

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about marketing need to be marketed. A special thanks to Chris
Baradel and Linda Rondinelli for their help in applying all of theprinciples held within in order to get this book into your hands.
Thanks to our agent, Jim Levine, for getting the project moving
and helping along the way with his insights. Also, thanks to our editor at Wiley, Airié Stuart, for working with us to refine the manuscript and for keeping the project on track.
A special thanks to Jay Busbee for both his creativity and hispatience in learning our business, and Marie Pechet and Jonathan
Baskin for working closely with us to refine our ideas and content.
We owe both an apology and a debt of gratitude to numerous
friends and family members who read our work, gave us honest
feedback and, most important, put up with us during the longnights and weekends we committed to getting this book completed
amid our already hectic work schedules.
And, of course, a very special thanks to Sergio Zyman for giving
us the inspiration to put our perspective into print. His spirited guidance and infectious passion for marketing have been and continue tobe invaluable.

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FOREWORD
Sergio Zyman

S

ince I wrote The End of Marketing as We Know It a few years ago,
I have grown more convinced than ever that all of the principles it contains are true and continue to be true. Companies
and organizations alike are adopting a scientific, disciplined
approach to marketing. It’s either because they realize that theyneed to in order to grow their business or because they are forced to
do so by their customers or consumers who are not buying as muchof their products as they used to. One of the most powerful distinctions that I revealed in that book was the fact that marketing is not
an art—it is a science. Of course, there are artistic elements insome of the things that marketers do, but marketing itself is not anart, and it’s not mysterious. It’s about as mysterious as finance. You
need to start with strategy and execute with discipline.
The first book was all about helping business leaders come tothis realization and then develop strategies to help them get towhere they want to go. Over the past few years we rapidly built ourmarketing strategy consulting business, Zyman Marketing Group,
to help business leaders at some of the largest companies in theworld understand my principles, develop a strategy, and get into
action in the market. And, you know? It works.

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FOREWORD

We learn with every client, with every project, and we pass on
our knowledge to our new clients.
Enterprise Marketing Management: The New Science of Marketing,which has been written by two of the senior members of Zyman
Marketing Group, Dave Sutton and Tom Klein, demystifies marketing into a scientific discipline at the next level of detail. The
book builds on the principles and practices that I outlined in The
End of Marketing as We Know It, but it goes on to answer the difficult
questions associated with implementing these principles and scientific practices within a business—revealing the implications foryour business processes, information technologies, performancemeasures, jobs, skills, organization, and even culture. This bookanswers the questions that many people asked after they read The
End of Marketing as We Know It. Yeah, that makes a lot of sense, but
how do I get it done?
This is truly the ideal companion book to The End of Marketing as
We Know It. It is the playbook that allows business leaders to begin
transforming their marketing function and accelerating to realize
business results by applying my principles in a systematic and logical way. This systematic and logical way has a new name: enterprisemarketing management.

INTRODUCTION:ENTERPRISE
MARKETING MANAGEMENT

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housands of books have been written to try to explain how to
go about the business of marketing. Most of them describe
in a very basic way how to use tools like advertising or promotions or trade shows to drive your business.
This isn’t one of those books.
What has been left out of the dialogue is that most marketers
have been off on their own island for years, while the rest of thecompany (and the economy) has been transformed by the information revolution.
We have been active participants in the creative destruction
this information revolution has wrought through our client workover the past decade. It has transformed nearly every business discipline.
We worked with the originators of reengineering, Michael Hammer and Jim Champy, to “fundamentally rethink and radicallyredesign business processes to achieve dramatic improvement”(Reengineering the Corporation, Harper Business, 1993). These efforts
were a precursor to the implementation of enterprise resource planning (ERP) systems that completely changed the traditional functions of finance, operations, logistics, and human resources (HR).

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INTRODUCTION

Next we worked with one of the earliest implementers ofSiebel’s customer relationship management (CRM) software,
which radically redefined and brought a high level of discipline tosales and customer service.
Now we have the opportunity to work with one of the world’s
top marketers, Sergio Zyman, to create and implement brandstrategies for the biggest, most famous brands on the planet.
Given our experience across all business disciplines, we’ve
noticed that marketing has, to date, avoided the sea changebrought about by the information revolution. Indeed, over andover again, we see that it’s this gap between marketing and therest of the enterprise that is at fault for stagnating sales, high customer attrition, poor return on CRM and marketing investments,and overall poor financial results. While marketing is supposed to
be charting the strategic course of the company, it’s become theLuddite laggard when it comes to putting information to work tosell more.
The way to address this gap is enterprise marketing management(EMM).
Enterprise because this approach to marketing is simply too
important to be left only to marketing. What could be more important to your company’s success than understanding how to use
every resource, not just the traditional levers of the marketing mix,
to drive your company’s sales and profits higher?
Marketing because, after all, this approach is still focused onunderstanding and developing a market and applying those traditional big levers of marketing, segmentation, and differentiation.
Management because this pragmatic, data-driven approachrequires marketing to take more responsibility and interact much
more extensively with the rest of the company. The notion of whatmakes up the brand simply can’t be locked up between the ears of afew people in a little department called marketing. It has to beunleashed and managed across every person who interacts on thebrand’s behalf with any customer.
From the smallest local business to sprawling global enterprises, it’s the end of the art of marketing and the beginning of the
new science of marketing. Gone are the esoteric theories of marketingas a creatively driven endeavor. Now is the time for an analyticalmethod that focuses on selling, plain and simple. Marketing isn’t

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about awards; it’s about results—and this book will help you getthem.
A constant flow of relevant information is more important than
any campaign. It’s the only thing a marketer has to guarantee thatevery marketing asset and employee communicates the optimal
messages and delivers the optimal benefits to drive sales and profits higher. You can’t simply hand off this role to your ad agency.
If you’re ready to step up to the plate to integrate real marketing discipline across your enterprise, you’ve got the right book inyour hands. Ready to admit that your company needs to go to marketing boot camp to learn how to develop a disciplined, scientificapproach to driving your sales and profits higher with every
resource—your brands, your people, your stores, your trucks, youranything? Keep reading.
From a financial perspective, this enterprise marketing management isn’t another method of spending more money than you’rebringing in. Marketing’s longstanding tradition of freewheeling,feel-good spending comes to an end with enterprise marketing
management. From here on out, marketing will make investments,
not gambles, and will make every effort to determine the return on
those investments.
By pulling marketing out of its dark ages and committing to amore scientific approach, you will have the opportunity to put yourcompany ahead of the pack, not just by spending your money wisely,
but also by embracing all of the elements of an information-driven
company. You can be at the vanguard of nothing short of a businessrevolution. And without a doubt, you’ll be selling more—because at
the end of the day, that’s exactly what every marketer wants.
This book is organized in such a way that you can start at the
beginning and read it straight through, or you can focus on the individual chapters appropriate to your situation. You may notice that
we had to make up a few hypothetical cases along the way todemonstrate the marketer’s scientific method. If you think about it,
this should come as no surprise. Not many enterprises think about
their marketing in this way, so there aren’t a lot of great examples
out there. The good news: You’ve still got time to change, embrace
the new science of marketing, and assume a leadership position in
the markets where you compete. (You may become a case for the
next edition!)

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INTRODUCTION

The www.MarketingScientists.com web site can serve as aresource for you to continue your journey toward putting enterprisemarketing management in place once you’ve finished this book. On
the site you will find the following:~ Contact information (access to marketing scientists)~ New presentations/speeches (the science is always
evolving)~ Marketers’ scientific methods~ Newsletter sign-up
Each chapter includes at least one case study of the theories
introduced. The companies outlined herein represent all sorts ofindustries, large and small, new and old. And they’re not all positive
case examples—sometimes it can be just as helpful to see what
you’re not supposed to do. Finally, at the end of each chapter are key
approaches to try in your own company.
Enterprise marketing management is empowered by yourdesire to do whatever is necessary to drive profits higher. The desire
alone won’t suffice, though. You have to rethink how marketingshould work in the information age. So, let’s get going.

PART IRun Brands as Businesses,
Not as Campaigns

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MARKETING IS NOT AN ART—IT IS A SCIENCE

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arketing is all about creativity, right? Mining idea spacefor inspiration that will connect with customers? Seeking
that perfect message that will resonate so deeply with customers that they’ll rush right out and buy your product?
Guess again. As Sergio Zyman pointed out in his first book, The
End of Marketing As We Know It? (Harper Business, 1999) marketingis a science, not an art. And if you spend your time thinking of marketing as nothing but a creatively based endeavor, you’re going tohave a lot of ideas—but not a lot of customers.
This isn’t the science of your old chemistry lab in high school.
Many marketers chose marketing precisely because it involves
interaction with some of the most creative people in our society—copywriters, advertising creatives, graphic artists. Marketers dotend to have an eye for how things should look, an ear for language,a deep and penetrating understanding, and zest for their cultural
metaphor. There’s absolutely nothing wrong with that.
However, every yin deserves a yang. The marketer’s role simply
can’t consist of fawning or mindless meddling in the creative enterprise du jour. First and foremost, a marketer is a businessperson.
It’s indeed the responsibility of the marketer to bring a healthy portion of intellectual and process discipline to these investments in3

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what are often creative exercises. It’s this discipline that is at theheart of enterprise marketing management (EMM) and the newscience of marketing.
To begin, a quick review of some of the terminology of science,starting with the dictionary definition:

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sci⭈ence n.
1. The observation, identification, description, experimental investigation, and theoretical explanation of phenomena.
a. Such activities restricted to a class of natural phenomena.
b. Such activities applied to an object of inquiry or study.
2. Methodological activity, discipline, or study: He’s got
mowing the lawn down to a science.
3. An activity that appears to require study and method:
the science of purchasing.
4. Knowledge, especially that gained through experience.
Now, the real-world definition: science refers to the way we explain
the world around us, whether it’s what’s happening right now, what’s
happened up to this point, or what will happen if we take (or fail totake) certain actions. Centuries ago, science explained that the earth
revolves around the sun, and not vice versa—correctly, accurately,
and in the face of prevailing belief.
It’s this facet of science—the ability to peer beyond the everyday,
to ask questions and keep asking—that applies to marketing. Whattheories do you use to explain why things are the way they are? Why
isn’t your company selling more, more profitably, and more rapidly
turning out new products? Why can’t you get your stock price any
higher? The theories—or, perhaps, rationalizations—that answer
these questions constitute your understanding of your market andthe actions of your business within that market.
Chances are, you already possess a significant degree of scientific knowledge about your current business, and you may even havea few theories of your own. The trouble is, too many theories are like
old wives’ tales—stories repeated so often, and with such conviction,that they take on the aura (and influence) of fact. Your company
might have numerous theories about why things are the way they
are, but few companies have taken the steps necessary to validate

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MARKETING IS NOT AN ART—IT IS A SCIENCE

5these theories. The need for validation will come into play later inthis book, focusing on the use of your own customers (or target customers) to develop the value proposition for your brand. The question you need to answer is: How do you determine what benefits
actually drive your customers to buy?
Start with a hypothesis about what you hope and expect toachieve with your marketing. For marketers, the usual hypothesisruns along these lines: Will this campaign/activity/initiative help us
sell more? Within that overall framework are dozens of smaller,
more focused questions, including these:~ How do I increase share without cutting prices?
~ How do I get products to market faster?
~ How do I beat a competitor that’s 10 times my size?
~ How do I close deals faster?
~ How do I reposition my brands against my competition?
~ How do I develop new products that win?
~ How do I segment my markets to sell more?
~ How do I differentiate what I sell when I’m in a commodity market?
Each one of these questions leads up to the big one: Does this action
actually help me sell more of what I have to more customers at
higher margins? Before you get to that point, however, you have toprove a number of hypotheses along the way, which will help you
gain a greater understanding of your market. In other words, thebetter your overall understanding of your market, the more likely
you are to sell more with your marketing programs.
Think back to your elementary school science classes, and you’ll
remember a technique called the scientific method, a means toprove or disprove hypotheses by following these steps:
1. Observe some aspect of the universe.
2. Invent a theory that is consistent with what you haveobserved.
3. Use the theory to make predictions.
4. Test those predictions by experiments or further observations.
5. Modify the theory in the light of your results.
6. Return to step 3, and continue as needed.

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Easy enough . . . if you’re testing, say, the boiling point of water. But
how does this relate to marketing? Consider the opportunities that
open up when applying the scientific method to a tangible marketing possibility:
1. Observe some aspect of the universe—that is, yourmarket. For example: The average age of the population is increasing.
2. Invent a theory that is consistent with what you haveobserved. The average age of my buyer is increasing.
3. Use the theory to make predictions. Older buyers
are more health oriented and would respond to marketing programs and products that address health concerns.
4. Test those predictions by experiments—in thiscase, marketing programs—or further observations. Launch health-oriented products and marketing programs.
5. Modify the theory in the light of your results. Get
results and learn!
6. Go to step 3, and repeat until you’ve mastered thisability to repeat successful experiments to achieve
your desired results.
Are you addressing issues this way? Are you applying the scientific method to your marketing?
Everyone applies this method at a certain level, even if it’s as
simple as determining another way to get to work when the traffic’s
heavy. But marketers traditionally must figure out how the scientific method applies to their work while suffering with one handtied behind their back. And sometimes they’ve done poorly with thehand they have left to them.
Marketing tends to function in an information vacuum—or an
information disconnect. Think of it like gambling. When the dotcoms spent millions on Super Bowl advertising—the corporate
equivalent of living in a trailer and gambling one’s life savings—isthat really a better investment than placing all that money on red
and spinning the roulette wheel?
Gambling away dollars like this means your marketing isn’t
based on any particular aspect of the market. Gambling away dollars doesn’t proceed logically from a measured observation of theuniverse around you. And reverse-engineering science to fit theMARKETING IS NOT AN ART—IT IS A SCIENCE

7

results doesn’t excuse the haphazard strategy of shotgun-stylemarketing.
If you’re not applying the scientific method, what you’re really
doing is just gambling, nothing more. This isn’t to say you won’t hit
a few winners along the way—chances are that you’ll come up aces
once in a while. But the odds are always against you: Play longenough, and you’ll be flat out of chips.
PUT TING S CIENCE IN PLAY

So science explains what’s happening (in your markets, with yourcustomers), and the scientific method provides an approach to help
you understand how to expand your knowledge and increase yourcontrol of what’s happening. You’re a marketer with products andservices to sell. Your market represents your specific field of expertise, your historical business results, and information represents
the science of your company—that is, everything you’ve learned todate—and your day-to-day efforts involve constant experimentation to learn more. With all this in your corner, you’ve got the opportunity to use this collective knowledge to develop and implement
winning strategies.
Marketers have had decades of opportunity to do business thisway, but a few speed bumps have cropped up along the way:
~ A lack of timely, relevant customer insights to define abrand’s value proposition and drive brand decision making and investments~ An inability to translate this value proposition into specific actions, both in traditional media and companywide, to build an end-to-end brand experience withtargeted customers~ A lack of integration and accountability in action on relevant customer insights across key enterprise constituencies such as marketing, sales, service, manufacturing,finance, human resources (HR), information technology(IT), and so forth, to increase the profitability of the businessThis kind of fancy marketing-speak tends to make most people’s eyes glaze over—even those of experts in the field—but it
delineates a fairly logical process. Marketers don’t need fancy

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degrees, milewide skill sets, or reams of experience to succeed. All
that’s required is a simple focus on the best way to get your goodsin the hands of your customers—and their money in yours. Think of
it this way. Marketers often fail in three key categories: those with
(1) the inability to use their knowledge of their customers to position their brands; (2) the inability to put their brands to work beyond traditional media; and (3) the inability to build necessary
customer-facing processes with supporting organization, culture,and information for brand management.
RUN BRANDS A S BUSINESSES, NOT A S CAMPAIGNSEach one of these stumbling blocks requires further examination,and succeeding chapters will explain more about how to address
them. First you must recognize that your brands aren’t these things
that sit over in a corner and get talked about only by your marketers. Your brands are your business. If your company is guilty of
any of the following:~ Thinking of a brand as a cute logo, a spiffy tag line, ormaybe a whiz-bang package~ Going overboard and creating a new brand name foreverything, but not having anywhere near enough money
to actually make the brand name meaningful in theminds of your customers~ Continuing to organize and track the business (Howmuch did we sell? How much did we invest?) only on basic
product categories or, even worse, by person (Bill’s P&L,
Joan’s P&L) instead of by brands (brand-specific P&Ls)
Then you have plenty of work to do.
The first step on the road to enterprise marketing management
is to think of and run your brands as businesses. Brands are much morethan marketing campaigns, advertisements and logos. Don’t givethem any less respect than you would reserve for your divisions or
departments of today. If you don’t bring a brand-centric approach to
the way you think about and manage your business, you will neverget beyond square one.
Once you’ve decided to run your brands as businesses, the mostbasic problem that you will face is that your company probably has
not learned how to use knowledge of its customers to position its

MARKETING IS NOT AN ART—IT IS A SCIENCE

9brands. Certainly, there are shelves full of books on the subject, but
this idea of positioning brands for some reason remains elusive formany companies. If you need to know the specific nuts and bolts of
how to position brands to drive sales and profits, keep reading.
Companies seem almost defiant in their preference to stick with
their current guesswork instead of developing a deep understanding of the benefits that will really drive their customers to buy. In
other words, the communication of what specific benefits has acausal relationship with more sales? Can you answer this for yourbrands? These benefits should be organized into a brand architecturethat clearly fleshes out the value the company creates and the key
emotional and functional benefits it must communicate consistently to sell more products and services.
In many instances, through no fault of their own, companies just
don’t know what marketing is supposed to do or be. Because realmarketers are rare ducks who flock together in companies thatspend big bucks on advertising, most companies do not even havetrue marketers running the show. Scratch the surface of most marketers at nearly any large company, and you’ll often find refitted
salespeople, trained in a completely different discipline. There’s
absolutely nothing wrong with being a great salesperson or a great
engineer or a great information technologist. There is something
wrong with pretending that there’s no real science to marketing. You
wouldn’t expect your top salesperson to instantly know how to manage the logistics for your warehouses. Nevertheless, companies continue to put untrained marketers in positions where they’re supposed
to know something about how to put brands to work to drive sales andprofits higher. It’s no wonder marketing is in such a fragmented state.
Part of bringing a more scientific approach to marketing is making
sure you have real scientists running the laboratory—but that’s a
topic for later.
This inability to leverage customer insights extends beyond
using customer knowledge to create a compelling brand architecture. Enterprise marketing management has also been inhibitedfrom taking hold by the fact that marketing in general has remained
separate from the information flow of the rest of the company. The
information revolution has absolutely transformed the way businessis done around the world. However, in most cases, marketing has
experienced this revolution from the sidelines. That’s not exactly arevelation, but the fact that marketing still hasn’t made use of allavailable technology means the revolution’s not yet over.

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Nearly every company has pulled together all its information
into easily accessible, accurate, integrated databases, so that nearly
any person in the company can view information about transactions, customers, and products, all in real time. It’s this uniform
view of information across a company that’s new.
Like every new technology, these systems break down into someneat three-letter acronyms. Think of this as some just-in-timelearning:
CRM—customer relationship management. A categoryof enterprise-wide software applications that allow companies to manage every aspect of their relationship with acustomer. The aim of these systems is to assist in building
lasting customer relationships—to turn customer satisfaction into customer loyalty. Customer information acquired
from sales, marketing, customer service, and support iscaptured and stored in a centralized database. The system
may provide data-mining facilities that support a sales opportunity (a.k.a. pipeline) management system.
These systems help answer questions like: Are wegoing to hit our sales target this quarter? Which deals
have to close in order to do so? Who was the last person tovisit customer X?
ERP—enterprise resource planning. A category ofenterprise-wide software applications that are designed
to support and automate the core business processesof medium and large businesses. This may include
manufacturing, distribution, personnel, project management, payroll, and financials. ERP systems are generally accounting-oriented information systems for
identifying and planning the enterprise-wide resources
needed to take, make, distribute, and account for customer orders. ERP systems were originally extensionsof material resource planning (MRP) systems, but havesince widened their scope.
These systems help answer questions like: Where’s
my order? What are the financial results?
SCM—supply chain management. These software applications provide an enterprise with oversight of materials,
information, and finances as they move in a process from

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supplier to manufacturer to wholesaler to retailer to consumer. SCM applications involve coordination and integration of these flows both within and among companies.
It is said that the ultimate goal of any effective SCM
system is to reduce inventory (with the assumption that
products are available when needed). There are twomain types of SCM software: planning applications andexecution applications. Planning applications use advanced
algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, themanagement of materials, and financial information
involving all parties.
These systems help answer questions like: What isavailable to promise to customers? Where are the products in the supply chain? What is the best way to expedite
and deliver this order?
While the rest of the company has largely become integrated
thanks to ERP, SCM, and CRM initiatives, marketing remains theisland within the enterprise. This inability to leverage company andcustomer information—the second most valuable asset of the company (the most valuable being the brand, of course)—has mademuch of the new science of marketing almost impossible to realize.
Once marketers get in step, true optimization will be possible.
Thus, the role of marketers should be to inform decision making across the enterprise as the owners of the brand experience. For
example, marketing may suggest a reduction in a production forecast or a change in the promotion calendar, which in turn will
impact the focus of the sales force—all in support of the needs andwants of the target customers.
The good news is that knowing what these systems can do foryou will help you adapt to the new science of marketing. The badnews is that you can’t afford to stand still any longer because thesetechnologies are creating great opportunities for you.
MANAGE YOUR BRAND, NOT YOUR CUSTOMER

Leveraging customer data to build a brand architecture and plugging marketing in to the rest of the enterprise represent the rightfirst steps. The next piece missing from the puzzle is to take the12

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value proposition spelled out in the brand architecture and translate it into a productive and profitable brand experience for yourcustomers.
Creating this brand experience means that marketing must
develop the specific content, functionality, and messages that aredelivered at each customer touch point. These touch points can beanything from a meeting with a salesperson to clicks on a web site.
The brand experience addresses all aspects of the way your company interacts with your customer, including downstream, postpurchase interactions concerning how to use or service what you sell.
REINVENT YOUR BUSINESS,NOT JUST COMMUNICATIONS

The final reason that EMM has failed to take hold is that companies
simply haven’t constructed the processes or organization required tobuild and manage a brand experience across every customer touchpoint.
From a process perspective, marketing still functions as if itexisted in a vacuum, separate from nearly every other financial decision made in the company. Enterprises that agonize over whether tobuild a factory to fill additional capacity, whether to make that next
technology upgrade, or even whether to buy a company to fill out its
product line routinely make marketing decisions that make it
appear as if they’d left their spreadsheets at home. As Sergio Zyman
rightly notes, marketing is an investment, pure and simple, not an
optional expense or a luxury. The processes that surround executing
and tracking a marketing program should mirror the processes thatare put in place to ensure that every investment earns the required
return.
This level of discipline just doesn’t exist in most marketing
departments today. Many marketers characterize hard-facts duties
such as the size of the marketing budget or the determination of
return on investment (ROI) as too difficult or not worth the effort.
This sort of behavior only contributes to the reputation of marketers as profligate spenders without any notion of financial responsibility.
Customer insights drive brand decision making and marketinginvestments. The term investment (rather than expense) connotes theway that marketing should function. Just as you should think twice

MARKETING IS NOT AN ART—IT IS A SCIENCE

13

before you pour your 401(k) funds into high-risk tech stocks or yourneighbor’s latest start-up idea, so should you think carefully before
you spend your marketing budget on a long-shot gamble when you
likely can find more solid marketing investments out there.
It’s worth noting at this point that the customer insights thatdrive decision making must be both relevant and timely. Compilingsuch information is an enormous challenge for nearly every company on the planet, but it’s a necessary burden. It’s critical that you
understand the amount of marketing investment required to generate business with your target customers, as well as the amount of
the return from doing business with those customers over time.
Consider a marketing investment profile, as noted in Figure
1.1. This profile indicates the timing of the investment and the timing of the return, which in turn lets you monitor both the incremental and the cumulative ROI for a specific marketing initiative.
It offers an immediate snapshot of the validity of the marketinginvestment.
Creatively minded marketers shouldn’t let all this science andinvestment talk scare them. The art of marketing is also more
important than ever. The creative genius that drives brilliant marketing remains a critical part of everything that a marketer does.
But the left-brain aspects of marketing—investment management

FIGURE 1.1 Marketing Investment Profile

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and other hard-numbers processes—can be enabled and strengthened by information technology. Furthermore, new marketing technology applications can give marketers the freedom to focus onbrilliant creative ideas to deliver on strategy. The marketing investment approach, combined with creative drive, gives marketers aneven greater ability to build brand and drive value for their company.
As Sergio Zyman indicates in The End of Advertising As We Know
It, brands stand at the center of everything that marketing does.
The EMM approach to marketing indicates that the way to evaluate a brand is based on how much it sells, not on the kind of fingerto-the-wind approach that might show up on the front page of USA
Today. Brands are only valuable as long as they sell. (Ask department store Montgomery Ward about the value of branding in and of
itself these days.) Microsoft is a great brand not because of some
intrinsic value, but because Microsoft sells an awful lot of software.
Brands are powerful and valuable only when they deliver sales.
Brands that don’t sell are just taking up shelf space. Thus, EMM
describes how to build a brand experience that results in sales. A
brand experience encompasses everything customers think about
when they think about your brand, no matter how they’re interacting with it.
Traditionally, marketing has focused on only the front end of
the relationship. It’s almost like a commitment problem—mostmarketers today are so focused on “dating” that they don’t knowwhat to do after they’ve closed the deal. And marketers who aren’t
able to craft a compelling enough brand experience will see their“dates” jumping ship as soon as something new and interesting—or
maybe just a tad cheaper—comes along.
It’s also worth noting that having a brand experience that justfeels good isn’t worth anything. If your campaign’s not generating
money for your company, you won’t last very long in the spotlight.
This is the dangerous side of the current CRM trend—focusing on
the fun side of branding at the expense of hard science is a recipe
for disaster.
For too long, marketing has suffered behind the unseen wallsthat exist between marketing and all the other departments of thecompany. How can a company develop a brand experience for its
customers that encompasses traditional selling and marketing activities, as well as operations and service, when it’s almost impossible toTeam-Fly®

MARKETING IS NOT AN ART—IT IS A SCIENCE

15

get marketing and sales departments to speak with one another—much less marketing and operations?
You’ve got a lot to tackle if you’re going to put EMM into placein your company. You have to develop a deep understanding—a scientific understanding—of your market and your customers. Only
then can you adequately develop your brand’s value proposition, as
well as the right way to communicate it to your customers to makethem buy your product and not just “feel good” about it.
Next, you have to translate that value proposition
framework—the brand architecture—into specificactions across the entirety of the brand experience
cycle: need-evaluate-buy-use-support.

In other words, marketing has to move beyond its traditionalreliance on third-party media, such as TV or print ads, and put allof its customer touch points to work as sales drivers. Not only is thischeaper, but it’s the only way to learn over time while building yourown franchise that can’t be duplicated by your competitors.
Finally, marketing processes, and everything that makes themrun, must be rethought from the inside out. Implementing a scientific approach to marketing cannot be accomplished with just a sheafof studies or brainstorming. You have to put real changes in place,bringing together organization, culture, incentives, and information
technology to make building and retaining a brand experience possible. Financial discipline and scientific rigor must take hold acrossevery marketing decision. Otherwise, you’ll stay stuck in the past,gambling away your marketing dollars.
The first step on the journey to EMM: Know your brand.

2
ARCHITECT YOUR BRAND

A

ccording to Sergio Zyman in The End of Marketing As We Know
It, “Every brand has to have a positioning strategy and everything you do with regard to that brand must communicateit.” He goes on to assert that brands are the most critical valueproducing asset for the enterprise and that they are the only true
source of preference and differentiation for your business from yourcompetition. Therefore, it should come as no surprise that thestarting point for enterprise marketing management is to develop a
deep understanding of your target customers and architect yourbrands to secure strategic market positions that will drive sustained
profitability for your business.
A simple example of a well-architected brand is M&M’s candies.
First are the brand attributes: milk chocolate with a candy crunch.
Next is the primary functional benefit: “melts in your mouth—
not in your hands.” Finally you have the key emotional benefit: fun,family-enhancing experience. It’s well architected because it works.
In this chapter you will learn how to dimensionalize your brand, to configure the building blocks of brand adoption, to assess your brandequity against that of your competition, and to bring it all together
in a brand architecture that can be used to position your business toachieve sustained profitability.
16

A R C H I T E C T YO U R B R A N D

17A short refresher in building a brand architecture is called for.
However, as you’re developing your brand architecture, don’t be constrained to thinking about benefits that can be delivered only by traditional communication vehicles. Expand your benefit exploration
to include benefits that could be delivered on or communicated byeveryone from your company’s truck drivers to your customer service reps. At every step and at every interaction, your customer
forms an opinion of your brand and builds a rationale for whether tobuy or not buy. Why leave that up to chance?

What Does Your Brand Say about You?
Every brand that’s ever had the slightest measure of success has
managed to communicate its company’s core beliefs and attitudes—
what the company stands for—to its target customers. Brands allow
you to clearly define and communicate what you stand for, whether
you’re the lowest-cost provider, the most innovative, the best totalsolution, the preferred choice, or whatever. But you’ve got to decide
what your brand stands for and communicate that value proposition(e.g., Wal-Mart’s “Always Low Prices” or FedEx’s “Absolutely, positively overnight”) effectively and repeatedly. It’s not good enoughsimply to run a quality business—you’ve got to let everyone knowwhat sets you apart from the pack.
Furthermore, you need to maintain constant control over theperception of your brand, because if you don’t, it’s a sure bet thatthe competition will. The brand should help customers navigate
their way to your business even in the face of competing enticements. Under ideal circumstances, brands can even put customers
on autopilot, bringing them back again and again to your door without them even considering your competitors. Keeping a tight reinon your message ensures that your competition doesn’t siphon off
your customers.
Consider the unfortunate case of Kmart, an extremely wellknown brand with diffused brand messages—low prices in the formof blue-light specials, a high/low pricing strategy driven by advertising circulars, some desirable brands like Sesame Street and Martha
Stewart, all delivered in a mix of retail locations (older, more urbanneighborhoods than Wal-Mart’s locations). After nearly a decade ofturnaround efforts, Kmart’s sales have declined and its cost structure rose to the point of driving the company into bankruptcy. Why?

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ENTERPRISE MARKETING MANAGEMENT

Because Kmart forgot or, even worse, lost the central messageof its brand. It confused its target customers, and its competitors(Wal-Mart and Target) took control of its message. The competition changed the rules of the low-price game, changing it from a
promotion based strategy (using periodic specials) to an everyday
framework. Wal-Mart carved out this everyday low-price positioning, invested heavily in the infrastructure to establish a superior
cost position (even when it was at the same sales levels, Wal-Mart
was overwhelmingly more efficient than Kmart), and then executed flawlessly, over and over again.
Target, wishing to stay out of Wal-Mart’s way, has aimed higher,delivering to more upscale buyers who still want great prices but
don’t want to make the perceived sacrifice in quality and selectionthat Wal-Mart can sometimes imply. Target (said with a French
accent, accompanied by a sassy and hip attitude) can deliver what
has been termed the “affordable luxury.”
Kmart got caught in the squeeze play. It was too far behind ininfrastructure investment to catch up to Wal-Mart once it was
eclipsed in sales, and it didn’t have the goods to deliver to Target’s
customers, either. Sure, Wal-Mart was more efficient—even in the
mid-1990s when the stores had roughly equivalent sales. But WalMart rapidly doubled and then tripled the sales of Kmart. Soon it
occupied the most powerful position with vendors and not only
could it execute more efficiently, it could purchase merchandise atlower prices than could Kmart.
Kmart lurched in the other direction, likely thanks to hiring
new management from Target in the mid-1990s, by attempting tomove into specialty retailing, such as Martha Stewart’s Everyday
line, at a time when it should have been vigorously repositioning its
core brand. What chance do upscale brands like Martha Stewart
Everyday stand in dirty, run-down, poorly merchandised stores inwhat Kmart’s own management deemed as some of the least desirable shopping centers around the country? (See the Kmart casestudy later in this chapter.)
And just as you can’t stand pat and let the competition overwhelm you, you also can’t spread yourself too thin and be all things
to all consumers. Kmart’s more recent moves suggest that thebrand had lost its way completely. The company attempted to emulate the everyday-low-price model with a “Blue Light Always” initiative, seeking the same target audience that Wal-Mart pursues.

A R C H I T E C T YO U R B R A N D

19

But a family of four with an annual income of $50,000 has little
interest in specialty products from Martha Stewart. The net result,from a consumer perspective, is confusion: Just what exactly does
this company stand for? Nowadays baby boomers use Kmart as acultural reference point demarcating the middle and lower classes.
In other words, they wouldn’t be caught dead shopping there.
The lesson has been brutal for Kmart, but instructive: You can’t
have a productive, profitable relationship with your customers
unless you bring clarity to what you stand for. This applies to bothyour target customers and every other player in your competitive
set. Your brand is the focal point, the repository for both the intrinsic and the extrinsic benefits associated with your offerings. If it’s
not clear in the minds of your customers, you’re going to start taking on water quickly and may never recover.
Do your customers know what your brand means?

THE ARCHITECTURE OF A BRAND

Like a person, a brand has individual values, physical features, personality, and character. Like a story, a brand has characters, setting,and a plot. Like a friend, a brand offers a personal relationship, one
that—in the best-case scenario—evolves as you do.
Given the great interest and potential reward in building a powerful, premium-earning brand, it is not surprising that there exists
an array of theories, models, and techniques put forth by consultants, authors, and academicians, each purporting to be the final
word on building and managing brands. The more complicated thetheory is, the less likely it’s any good. Building brands, like marketing
itself, is a science, not an art. You don’t need to contemplate the blackarts or have to give your firstborn to Rumpelstiltskin. You can build apowerful brand by simply following the instructions described in thischapter.
The term brand architecture is actually the output of the brandbuilding exercise. It’s a critical step in building a brand that provides
you with everything you need to know to get your customers to buy
more. From there, subsequent chapters will explain how you can use
enterprise marketing management and its scientific approach to put
the brand architecture to work across your enterprise.

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A brand architecture, analogous to the architecture for a building, lays out the key elements of the brand in detail and reveals specific messages and important take-aways for the target audience.
A brand architecture can include emotional benefits,
functional benefits, physical benefits, productattributes, occasion appropriateness, user imagery,and a variety of other intangibles.

The brand architecture represents the structural integrity of thebrand, delineating how it is built, how it works, and how the components fit together to deliver meaningful benefits to the consumer—
just as a skyscraper’s architecture does for the building (see Figure 2.1).
A brand architecture, grounded in the science of understanding
why customers purchase and use products, provides direction about
which combination of specific emotional and functional benefits cangenerate the greatest amount of customer purchase intent. Once

FIGURE 2.1 From Structural Integrity to External Façade ofa BrandA R C H I T E C T YO U R B R A N D

21completed, a brand architecture produces a strategic marketing
framework visible to the entire organization. You can then use thisframework to begin communicating and delivering these benefits toyour customers.
KEY DIMENSIONS OF A BRAND ARCHITECTURE

So what makes a brand architecture tick? The key dimensions of abrand architecture are its foundational attributes (or product features), functional benefits, and emotional benefits (Figure 2.2). You
can determine the structure of a brand architecture by focusing on
the key purchase intent drivers—the attributes or benefits that influence
customers’ overall decisions to purchase or use a product.
Despite the concrete-sounding name, purchase intent drivers areoften intangible qualities. Marketers can measure these drivers by

CUSTOMERS & CONSUMERS
Emotional Benefits

Functional Benefits

Product
Features

YOUR BRAND

FIGURE 2.2 Dimensions of Brand Architecture

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determining how much a given emotional benefit, functional benefit,
or brand attribute drives a customer’s desire to purchase a brand in acertain competitive frame. For instance, some soft drink consumers
may prefer a clear drink over a caramel-colored cola; in that case, the“clear” attribute will be deemed a driver of purchase intent. Other
consumers might care more for drivers such as taste, cost, or convenience, leaving the clear/caramel-color distinction aside.
It’s important to note that drivers of customer purchase intent(the specific benefits that get customers to buy) are not always
intrinsic to individual brands, but can be relevant to categories ofcompetitors as a whole, providing opportunities to siphon volume
from competitors. It’s the reason that knockoffs or me-too versionsof popular new products spring up almost immediately—the theory
is, “It’s worked for them, why not for us?” In a brand-savvy environment, once one brand sees that another has uncovered a driver ofpurchase intent, then it’s only a short time until a copy appears.
So why bother with branding if it’s just going to be copied in shortorder? The secret here is to, of course, keep up with the Joneses but
also to put most of your effort in defining and owning that mix of benefits and attributes that is indeed difficult to replicate and that yourcompany is uniquely capable of delivering.
The most compelling purchase intent drivers often reflect
underlying emotional benefits associated with the competitive
frame and the brand—which is why you so rarely see well-known
products being described with basic product attributes or simplistic
functional benefits. How often are Oreo cookies lauded for theirchocolate flavor? What you often see are emotion-charged advertisements aimed at mothers, which focus on teaching your young
child how to eat an Oreo (the dunk, the twist) as part of being agood mom (emotional benefit) and something of a rite of passage.
These ads don’t address the fact that Oreos are a better deal, pound
for pound, than Pepperidge Farm cookies (a functional benefit).
This emotional benefit is something that, according to many people, only a few snacks could offer. If a competitor launched a new
product, how might it compete with Oreo’s heritage and ability todeliver on specific emotional benefits?
While purchase intent drivers can be emotional benefits, functional benefits, or brand attributes, they’re not all created equal(see Figure 2.3).

A R C H I T E C T YO U R B R A N D

23

Building Blocks of Brand Adoption
PREFERENCE
CrucialSignificant points of leverage with target
consumers/customers■ Can propel a brand to category
leadership■

Begins to positively separate you fromthe pack■ Lacks the mass appeal to drive
meaningful volume growth■

D I F F E R E N T I AT I O NMotivating

Must have to gain acceptance to thecompetitive set■ Won't help you if you have it■ Will hurt you if you don't■

C O S T O F E N T RY
Requ ired

FIGURE 2.3 Drivers of Customer Purchase Intent
Cost-of-entry purchase intent drivers encompass the benefits that any brand must deliver to be considered a viableoption. If you’re a fast-food provider, you’d better be able
to serve your customers their burgers and fries in a hurry.
Everyone in the competitive frame can deliver these benefits; they’re the minimum ante necessary to play thegame. To determine the cost-of-entry benefits, you needto understand why consumers purchase any brand in thecompetitive frame and determine how your brand stacks
up on these benefits.
Differentiation purchase intent drivers are the benefits
that begin to positively separate you from the rest of thecompetition. These are capabilities or equities that you
possess that others in the competitive set may not. Of
course, these benefits may not appeal or be motivating
to all customers in the target audience. Indeed, if thesebenefits are not of significant importance, they may
remove you from customers’ consideration—it doesn’t
matter how comfortable your minivan is, for instance, if
someone’s determined not to buy a minivan. More
important, your distinct benefits may not be in the topof your consumers’ minds and will require a certain

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amount of communication and education in order toinduce purchase.
Preference drivers are benefits that can propel a brand tocategory leadership. These benefits are crucial in theminds of customers as they consider various brand alternatives in your competitive set. These types of benefits
represent significant points of leverage with customers
and can become the source of sustainable advantages.
These may be as simple as a “buy American” consideration, or they may come about through extensive researchand experience with a variety of competitors. Preference
drivers are the trump card, the brand attributes thatkeep your customers coming back again and again.
BRINGING IT ALL TOGETHERIN A BRAND ARCHITECTURE

TE

A brand architecture provides a strategic hierarchy of the brand’s
key dimensions and outlines the way in which each of the aforementioned drivers fits into the overall matrix. As a result, the brandarchitecture is the most crucial document in your entire marketingplan. In the simplest form, the brand architecture informs you
which benefits will be most effective, which will be the least effective, and which will be ineffective at driving the purchase intent of
your target consumers as portrayed in Figure 2.4. Consequently, it
must guide all company activity related to the brand.
To better communicate and help you understand the elementsof building a brand architecture, we’ve conjured the hypothetical
Refreshing BeerCo from thin air. The beer category provides a great
example because just about everyone can relate to it and has been
faced with that challenging question from the barkeep, “What’ll ya
have?”
Consider the hypothetical brand architecture for Refreshing
BeerCo shown in Figure 2.5. The Refreshing BeerCo brand is a
repository for a set of product attributes, functional benefits, andemotional benefits, all of which combine to promote Refreshing
BeerCo’s image to its target customers. Some of these benefits andfeatures are just the cost of entry for the beer category (e.g., great
taste). Some of them are actually differentiators (e.g., “real beerdrinking experience”), and some have the potential to drive true

Team-Fly®

A R C H I T E C T YO U R B R A N D

FEATURESFUNCTIONAL
BENEFITS25

EMOTIONALBENEFITS

Most
Effective

PREFERENCEDIFFERENTIATION

Least
Effective

COST OF ENTRY

FIGURE 2.4 Determining Effectiveness of Brand Positioning

preference for the Refreshing BeerCo brand (e.g., “turns any time
into a special occasion”). This architecture can then be used to
inform the content communications and investment decisions
related to the entire marketing mix and every element of the brandexperience. What are the key messages that we are sending? How
What We
Stand For

BeerCo is genuine, honest, real refreshment.

Emotional
Beneﬁts

Turns any time into a Special Occasion.

Relaxing

Functional
Beneﬁts

Foundational
Attributes

Break Routines

Friendship

Satisfying real beer drinking experiences.

Well Balanced

Always Great Tasting

Unsurpassed quality

FIGURE 2.5 Refreshing BeerCo Brand Architecture

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do these messages reinforce what Refreshing BeerCo stands for?
Are we weighting messages appropriately or focusing too muchattention on things that are just the cost of entry for the category?
When properly used, the brand architecture becomes the ultimate
tool for making sure that your tactics (e.g., marketing communications, promotions, pricing strategy) stay aligned.
BRAND EQUITY DRIVERS

STATED IMPORTANCE

Once you’ve got the basic framework of your brand architecture, it’stime to figure out what you can do that no one else can, to establish
the unique attributes that set you apart from your competitors.
These brand equity drivers encompass the sets of benefits whereby
your brand has an advantage over all others in your sphere. If no one
brand holds a sustainable advantage, it’s an open opportunity—
nobody has enough sway to pull consumers one way or another. It’s
the high ground not yet taken—and the turf you should strive toconquer.

MINOR
ADVANTAGESKEY
EQUITIES

Low Performance but
significantly higher thancompetition

High Performance andsignificantly higher thancompetition

POTENTIAL
VULNERABILITIESPARITYEQUITIES

Low Performance but
at statistical parity withcompetition

High Performance andat statistical parity withcompetition

DERIVED IMPORTANCE

FIGURE 2.6 Brand Equity Drivers

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27

Brand equity drivers include those shown in Figure 2.6 and aredescribed as follows:
Key equity drivers are those that give you direct leverageagainst your competition. Quite simply, your businessperformance is higher than that of your competition, andyou can use this strength to take new ground, building
new equities in areas that were previously open opportunities.
Minor advantage drivers are those benefits whereby yourbrand rates are statistically stronger than the competition, but your business performance is actually lower thanthat of the competition. Your brand is intrinsically strong,even if your performance is weaker than that of your competition. And in this case perception is reality—if yourtarget customers think you’re a stronger company thanyour competition, in the long run, you will be.
Parity equity drivers come into play when your brand ratings are statistically equivalent to those of your competition, but you have a higher level of business performance.
In this case, it’s to your advantage to highlight your own
strengths and your competitors’ weaknesses.
Potential vulnerability drivers are those benefits whereby
your brand rates at a statistical dead heat with the competition, but your performance is actually lower thanthat of your competitors. This is dangerous territory;
it’s only a matter of time before the competition seizeson this vulnerability—and reveals it to your target consumers.
A detailed analysis of Refreshing BeerCo’s brand positioning
found significant vulnerabilities in relation to the category’s
leader, Budweiser. However, Refreshing BeerCo possesses advantages over its competition in several key drivers. In other words,
although there are parity equities with the category leader, there
also exist open opportunities to take share from other competitors
based on key drivers: brewed smooth, not watered down, neverharsh or bitter, relaxing, refreshing (see Table 2.1). Accordingly,
these drivers will form the backbone of the Refreshing BeerCobrand architecture.

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Table 2.1

Refreshing BeerCo Competitive Equity Analysis
Relative “BeerCo” Ratings
Top Two Box Ratings by Brand Drinkers

Opportunistic
Equities
Brewed to be smooth
GenuineNot watered down
Never harsh or bitter
Helps me relax
Maximum refreshment

VersusBudweiser

VersusRegional
Competitor

Versus
Mexican
ImportVersusEuropean
Import

=
=
=
=
=
=

+
+
+
=
+
+

+
+
+
=
=
=

+
+
=
+
=
—

(+) Key Equity (=) Parity Equity (–) Potential Vulnerability

HOW TO DEVELOP A BRAND ARCHITECTURE

Looking inward to help develop brand architecture is necessary, but
it’s only half the battle. Developing a brand architecture also
requires a deep understanding of customer needs and wants. Suchunderstandings must derive from quantitative data—that is, surveys of broad ranges of customers—rather than the qualitative data
gained from focus groups. Analyzing the brand and its key competitors across a spectrum of potential consumers helps determine drivers, equities, and opportunities. Qualitative data is not typicallysufficient to develop an appropriately thorough brand architecture.
However, as with so much in life, the devil is in the details. For
your brand architecture to provide necessary insight, you’ve got tohave specific information on the subtle but meaningful differences
between brands. The amount of insight and ability to take action
are directly proportional to the specificity of benefit statements andratings of competitors.
Now, back to Refreshing BeerCo for more on how customer
articulations reveal meaningful differences and provide direction.
As Refreshing BeerCo developed its brand architecture, it uncovered literally thousands of different articulations of category- andbrand-related attributes and benefits. In the area of taste alone,customers generated roughly 100 different expressions! With thislevel of detail, the analysis could distinguish among cost-of-entry

A R C H I T E C T YO U R B R A N D

29taste attributes (great taste), equity taste dimensions (not watereddown, genuine beer flavor), and open opportunity taste dimensions(energizing or invigorating taste). Refreshing BeerCo tested statedversus derived importance of various customer benefits, breaking
down into the following six driver categories:
Credentials
Individual
Transformation
Social connections
Responsibility

Possibility

Features of the beer and the historyof the brewery
What drinking the product says
about you and your personality
How the product makes you feel
while you’re drinking
The occasions and events associatedwith drinking beer
Addressing irresponsible consumption, drinking and driving, knowing
your limits
What is possible for you when consuming the product, positive outcomes

Based on the findings of this analysis, Refreshing BeerCo now had
in hand a detailed understanding of which benefits were important to
consumers (i.e., cost of entry), which ones were potentially motivating, and which were absolutely critical benefits that they had to headline (see Figure 2.7). In this way, specific strategic directions for
consumer communication and creative promotion could be directly
informed by consumer insights that correlated directly to consumer
intent to purchase Refreshing BeerCo branded products—rather
than gut intuition.
Analyses of Refreshing BeerCo’s competitive frame also collected brand ratings across a wide variety of dimensions, including
product attributes, functional benefits, emotional benefits, usage
occasions, and user characteristics. Factor analysis summarized thedifferent dimensions of the brand architecture—that is, the consumer’s mental image of the brand. Regression analysis, using
consumption frequency and brand preference measures as thedependent variables, identified the purchase intent drivers.
It’s important to point out that this is a more complicatedprocess than simply asking the people what they like. Direct questioning along stated importance or stated reason lines elicits purely

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ENTERPRISE MARKETING MANAGEMENTStated Versus Derived Importance of Benefits

60

IMPORTANTCRUCIAL
Not watered down
Never harsh%Saying Very Important

55
50

Brewed smooth45

Maximum Refreshment

40

Quality Assurance
Addresses irresponsible
consumption

35

Genuine30
25

RewardEnergizing

20

Memorable
moments

15
10

Helps me relax
Being myself

Innovative

Youthful
Attitudes

New experiences

NEITHER
0.22

Meet new people

0.27

Preferred intaste tests

Not the default

Liberating

MOTIVATING
0.32

0.37

0.42

0.47

Correlation between Applies to BeerCo and Purchase Intent
Credentials
Individual

Transformation
Social Connections

Responsibility
Possibility

FIGURE 2.7 Refreshing BeerCo Purchase Intent
Driver Analysis
rational—not emotional—responses and tends to favor existing,
intrinsic product benefits. The correlation of behavior and attitudes
will yield a far more comprehensive and valid insight into customers’ behavior.
BRAND ARCHITECTURES DIFFERFROM BRAND TO BRAND

A brand architecture is a matrix of components unique to each brandwithin a competitive set—meaning that it’s like a fingerprint, something that can’t be copied and pasted from one brand onto another.
Brands that are multidimensional (like, say, regular beer) have different architectures than brands that deliver more focused benefits,
such as nonalcoholic beer. The architecture demonstrates how thevarious components come into play when different opportunities

A R C H I T E C T YO U R B R A N D

31arise. The architecture must reveal appropriate purchase intent drivers, equity drivers, and opportunities across various markets, consumer segments, and usage occasions. Consider again the Refreshing
BeerCo brand architecture for regular beer, shown in Figure 2.8.
Taste and authenticity hold the key equities for regular beer;
consumers looking for “real beer taste” obviously gravitate to real
beer. However, functional and emotional benefits are the key drivers of the category. Many consumers aren’t just seeking beer for
beer’s sake; hence, they represent a higher level in the architecture.
Most open opportunities reside in the arena of emotional refreshment. Thus, the architecture demonstrates how and why beer manufacturers can leverage the concepts of taste and authenticity tosupport and ultimately own emotional refreshment.
Naturally, the architecture for nonalcoholic beer brands is very
different from the architecture for regular beer (see Figure 2.9).
Nonalcoholic beer appeals to a much more homogeneous segmentof consumers, and the reasons for drinking nonalcoholic beer are
generally more similar across situations than is the case with regular beer.
Nonalcoholic beer’s brand architecture depends on the linkage
between the authentic taste of nonalcoholic beer and the self-respectcomponent that arises from maintaining control over the drinking
situation. This connection between intrinsics of taste and the extrin-

What We
Stand For

“BeerCo” is genuine, honest, real refreshment.

Emotional
Beneﬁts

Turns any time into a Special Occasion.

Relaxing

Functional
Beneﬁts

Foundational
Attributes

Break Routines

Friendship

Satisfying “real beer” drinking experiences.

Well Balanced

Always Great Tasting

Unsurpassed quality

FIGURE 2.8 Regular Beer Brand Architecture

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What We
Stand ForCHOICE
It's simply my choice.

Emotional
Benefits

CONTROL
If I choose to indulge and refresh myself- there's
no need to sacrifice my control over the situation.

Functional
Benefits

I'M A PRIORITY
I'm a priority and I choose to live on my own terms.

FIGURE 2.9 Nonalcoholic Beer Brand Architecture
sic equities is a unique aspect of brands in the nonalcoholic beer segment. Its extrinsic qualities don’t even apply to regular beers; thus,
nonalcoholic beer marketers must draw up their brand architecturefrom scratch or risk alienating potential core customers.
HOW BRAND ARCHITECTURE IS USED

Marketers use brand architecture as a means for bringing the brandto life via all elements of the marketing mix and across every customer
touch point. It is the only way to guarantee a unity of appearances,appeals, and interactions. The key drivers focus energy on yourstrengths, open opportunities draw your notice to opportunities (obviously), and brand equities show you how to play to your best characteristics. With all of this scientific data in your corner, you now have aconcrete starting point for defining and accentuating all of your product’s benefits—however they might be presented to customers.
Remember that brand architecture forms the basis for developing operational strategies: How will you design your business so thatabsolutely everything orbits around your brand message? How does
every element of your company contribute to the benefit of your customer? As you’ll see in upcoming chapters, the brand architecture isa guidebook for operational changes across your enterprise: how toorganize, train, and reward your personnel; how to design your sell-

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33

ing and servicing processes; and how to implement various types oftechnology to support your customers throughout the process.
BRANDS A S BUSINESSES

Intuitively, we all know that successful businesses earn more thanthey spend. And the most successful businesses have built-up management processes and systems that help them continuously measure and monitor how much they earn and how much they spend.
Today most companies structure themselves into business units (orproduct lines) or perhaps around the geographies where they sell
their products. However, you should view your brands not as a partof the marketing department’s budget but as discrete business
units in and of themselves. Brands are your most valuable assets. In
fact, brands are critical business assets (not unlike plant and equipment), each with its own characteristics, maintenance needs, profit
and loss (P&L), and obligations for return on capital invested.
With this in mind, treating brands as businesses means applying the very basic elements of portfolio theory. Given the challenge
of developing a brand architecture and then applying resources tobring it to life, are you suffocating under too many brands? Has yourcompany proliferated brands, none with the adequate level ofunderstanding or investment required to generate a return? The
overwhelming majority of businesses suffer from one of these problems. Either they’ve not developed a firm enough understanding of
their brand, the purchase intent drivers, the brand equity drivers,
and the opportunities to be able to know where to invest marketing
dollars, or, perhaps being lucky enough to have developed a sufficiently deep understanding of their customers to build a brandarchitecture, they may labor under the weight of too many brands
without adequate investment.
It’s very simple. Your investments determine which brand or
brands live or die. Choose too many to support and none thrive.
Make investments before building a brand architecture and you’re
doing little more than gambling.
A critical tenet of enterprise marketing management and its
scientific approach is to let the facts speak for themselves. Don’t let
opinion or the status quo or your company’s mythology dictate anything that you do. Stop and think: Why do we do it this way? Whatdata actually support this decision?

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Brands serve as a mental shorthand for customers looking todecide what to purchase. Marketing’s primary purpose is to continuously optimize the levers of segmentation and differentiation for
its brands because the target moves and—oh, by the way—so does
the competition. Markets are inherently dynamic and changing.
The right brand architecture one year may be the wrong one twoyears later.
Marketing must ensure that customers select your brand at
every potential purchase occasion, through every desired channel.
What does this mean for investments? How does it answer that ageold question of how much to spend on marketing? There’s much
more on these questions to come, but the short answer is to invest
resources behind each and every brand to the point of diminishingreturns. Again, this is where science comes into play in supportingyour ability to run brands as businesses—if you can generate complete P&Ls for every brand and every activity, you can maximize youradvertising and resource allocation efficiency, standing behind whatworks and effectively and efficiently getting rid of what doesn’t.
The marketer’s scientific method that comes at the end of eachchapter will help you put management processes and systems inplace to ensure that you are investing resources in marketing activities that generate a superior return on investment, while ensuringthat your brands are being managed and run like the businesses
they are.
Once you’ve architected your brand, you’ve taken the first andmost critical step toward developing the deep understanding of theparticular bundle of benefits that will drive your customers to buy
and the equities that your brand owns and can leverage to drive
sales and profits higher. So you’ve nailed down the “what.” Read on
for a much more detailed explanation of the “how.”

CASE STUDY: Kmart
A BRAND THAT LOST ITS WAY—AND ITS CUSTOMERSBackground
Kmart’s origins date back to 1897, when the S.S. Kresge Company
launched a chain of five-and-dime stores. By the 1950s, Kresge wasTeam-Fly®

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35

one of the largest general merchandise retailers in the United States.
In 1962, Kresge gave birth to discount retailing in America when it
opened its first Kmart store, and later it renamed the company after
its leading retail brand.
During the 1970s, Kmart rode high, doubling its annual sales andstunning its competitors by opening as many as 250 stores a year. But
the 1980s were not as kind, and Kmart began losing ground. Whileother retailers constantly upgraded their operations, Kmart did not
make sufficient efforts to improve its merchandise or its accounting
and inventory systems. Most visibly, Kmart did little to modernize thelook of its stores.
Kmart established itself as the place to shop for discountmerchandise—a branding that it accomplished a little too well, as it
was unable to ever break from its cut-rate origins. Wal-Mart, also
founded in 1962, experienced an initially slower growth curve but
realized greater operational efficiencies along the way. In 1990,
Wal-Mart surpassed Kmart as the largest discount retailer in thenation via a pervasive “We Sell for Less” slogan.
Ousted from its price leader position, Kmart plunged into an
identity crisis from which it has yet to recover. The company had
numerous other problems along the way, including location issues,
inventory management problems, overreliance on promotions, management distractions, and heavy competition. But at the heart of it all,Kmart lost sight of its brand—and paid the price.
Strategic and Operational Blunders
Kmart used promotional tools such as the blue-light special andadvertising circulars to pursue a classic high/low sales strategy. The
company’s objective was to lowball a few items in order to lure customers to the store, expecting they would fill the rest of their baskets
with full-priced products. Naturally, those full-priced products needed
to have as high a profit margin as possible. As far back as the early
1980s, Kmart had begun stocking designer labels with the dual purpose of squeezing more profits out of its high/low strategy andattracting a more affluent clientele.
But stocking designer labels at higher prices while touting lowpriced promotions created a positioning dichotomy for Kmart. Analysts recently pointed out this disconnect in Kmart’s simultaneous
pursuit of a Martha Stewart partnership and a “Blue Light Always” initiative, but this kind of identity crisis has been pervasive for years.The

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question became: Is Kmart a destination for bargain hunters seeking acheap can of beans or for upwardly mobile shoppers desiring measuring cups in Martha Stewart–approved colors?
Meanwhile, Wal-Mart steadfastly pursued a strategy of everyday
low pricing in lieu of sales or promoting certain items. Experts predicted that the Wal-Mart strategy wouldn’t work with coupon- andsales-addicted consumers—and the experts couldn’t have been morewrong. Customers simply assumed that a cartful of items would costless at Wal-Mart than anywhere else.The strategy enabled Wal-Mart
to eliminate most newspaper advertising and simply to run image
commercials boasting about low prices.
Kmart also failed to respond to its changing consumer base andheightened competition by literally repositioning itself. Having grownquickly in the 1970s, Kmart ended up with two-thirds of its store basein cities, while Wal-Mart and Target located in more suburban locations. Kmart did not respond adequately to the situation in the cities
and to urban flight, leaving it with a low-growth customer base and little access to burgeoning numbers of suburban consumers. Attempts
to rehabilitate the company’s reputation for untidy, difficult-to-navigate
stores proved fruitless.
Kmart’s management also did a little too much shopping of its
own. Between 1984 and 1991, Kmart aggressively dove into specialty
retailing, adding several lines to its business, including Waldenbooks,
Builders Square, Payless Drugstores Northwest, Pace Membership
Warehouse, the Sports Authority, OfficeMax, and Borders bookstores.
Not surprisingly, a generalist like Kmart did a poor job of runningthese specialty retailers. By 1994–1995, Kmart flirted with bankruptcy,
and it was forced to sell or spin off OfficeMax, the Sports Authority,
Pace, and Borders.The company still pays $250 million a year in rent toguarantee 350 store leases for such spun-off chains as Builders Square,
Borders, Sports Authority, and the defunct Pace Membership Warehouse Club.
The Pain of Heavy Competition
While Kmart’s wounds are arguably self-inflicted, it’s still worthwhile
to take a closer look at its chief competitors, Wal-Mart and Target.
Both did a far better job of preserving and enhancing their brands.
Between 1990 and 2000, Kmart saw its market share decline from30 percent to 17 percent. Over the same period,Wal-Mart’s market

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37share increased from 30 percent to 55 percent, and Target’s from 10
percent to 13 percent. According to analyst Kevin Murphy, of Gartner
Inc., the Kmart stores that do well are in urban locations where there
is no competition from a nearby Wal-Mart or Target. But in places
where all three chains have stores, Kmart gets clobbered. Unfortunately for Kmart, there happens to be a Wal-Mart or a Target withinseven minutes of 80 percent of Kmart stores. The profit picture iseven more depressing for Kmart: In 14 years, Kmart has earned atotal of $3.8 billion—a little more than Wal-Mart earns in six months.
Kmart’s failure to definitively reposition itself after losing theprice leadership battle left it squeezed out by these number one andnumber two retailers. Wal-Mart took the low ground on a national
level in 1990 when it surpassed Kmart as the top discount retailer.
Meanwhile, Target staked out a position just above Kmart, with chicmerchandise at low prices.
Wal-Mart outsells Kmart by a margin of nearly two to one persquare foot of store space. Wal-Mart also gained a huge efficiency
advantage through automation and creative uses of information technology (IT). Target has found a niche selling to more upscale consumers than tend to frequent Wal-Mart, and it moves huge volumes ofcheap chic clothes under its Mossimo brand and of housewares by
the renowned Michael Graves.
Marketing Missteps
Most recently, Kmart experienced a series of marketing gaffes that
accelerated its demise.The snowball began rolling when Kmart’s marketing efforts failed to address its poor image with customers. Kurt
Barnard, president of Barnard’s Retail Consulting Group, said Kmarthas made dramatic improvements in recent years but has failed tocommunicate those moves to customers.
One of the most confounding aspects of the Kmart situation isthat the company already has the right tools to be competitive. Its
product offerings include brands such as Martha Stewart, Disney,
Sesame Street, and the Route 66 clothing line, but it has failed to playup these strengths with the public.
Kmart compounded its problems by choosing to go head to headwith Wal-Mart, slashing prices under the “Blue Light Always” slogan
and airing a “Dare to Compare” advertising campaign. But the strategy was an unmitigated failure—Wal-Mart promptly cut its prices,

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while Target sued for false advertising, forcing Kmart to take the ads
off the air.
At the same time, the shift to the “Blue Light Always” promotion
was too abrupt. Again, Kmart’s branding had worked too well—its mostloyal consumers were hooked on newspaper advertising circulars,
thanks to years of training and reinforcement from Kmart marketers.
Kmart vastly underestimated the degree to which these circulars drove
traffic to its stores. Hoping to cut costs and shore up funds, Kmart simply sliced its circular advertising budget rather than weaning customers
off the circulars.
The Latest Bold Move: Kmart Trades Red for Green!
Kmart is planning to change the color of its logo from red (which may
be indicative of the state of its income statement) to green.The company has also been testing a new concept store in a few markets thatfeatures the new-color logo, wider aisles, better lighting, lower shelves,and directional icons to improve the shopping experience. The newstore concept still features many of the same brand names, including
Martha Stewart, Joe Boxer, Sesame Street, and Disney, but in the newformat all of the high-end brands are positioned near the front of thestore. The concept has been nicknamed the “Store of the Future”—
perhaps as a promise to employees that there will be one. Despite desperate measures, Kmart’s same-store sales continue to slide, finishingdown nearly 12 percent in August 2002.
The final chapter of the Kmart story remains to be written. But
because of the company’s failure to preserve and enhance its brand,
that chapter may not be long in coming.

MARKETER’S S CIENTIFIC METHOD:
BUILDING A BRAND ARCHITECTURE

Following are the steps to take in order to build a brand architecture.

Step 1: Develop a Destination Statement
Before you charge ahead and start building your brand architecture, you’ve got to understand the destination you seek to reachwith your brands and your portfolio of products in the long term as

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39well as the short term. After all, if you don’t know where you areheaded, it’s pretty difficult to get there. And the clearer the destination, the better you’ll be able to develop a brand positioning andarchitecture that will get you where you want to go. First of all, youneed to synthesize and articulate a destination statement for the brand
to clearly answer the following:~ What business do you seek to compete in for the longterm?
~ Whom do you plan to sell to, now and in the future?
~ What will customers get from you that sets you apartfrom the alternatives?
~ How will customers benefit from your products and services?
~ How will customers think, feel, and act about yourbrands?
~ How will your business benefit as a result, in the longterm?
The deliverable here must be a clear and concise destination statement for the brand that will provide focus for all the other activities
required to develop the brand architecture.

Step 2: Conduct a Brand Assessment
Marketing does not consist of bells and whistles and cute ideas.
What you do with your brands has to be born of your current reality,
not plucked from the atmosphere because it sounds nice. In thisstep you must evaluate all the research, data, and insight you haveto understand your brands, your customers, the competitive landscape, and the relevant developments that lie ahead. This step
involves a thorough analysis and assessment of all your existingdata and insight and should focus on the following:~ Product characteristics, with key benefits and attributes~ Business performance metrics~ Category trends and insights~ Competitive data and profiles~ Customer/consumer research and insights~ Pricing issues and analysis

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In addition, you’ll need to gather secondary research on the following:~ Industry analysis and trends~ Secondary research on customer usage and consumption
habits~ Expert interviews and surveys
The deliverable here will be a detailed brand situation assessment document that summarizes key findings in the following areas:~ Market environment and opportunity~ Customer/consumer targeting~ Value proposition by target audience~ Competitive analysis~ Summary of data and insight gaps
~ Conclusions and indicated actions

Step 3: Develop Strategic Hypotheses
Everything that preceded this step prepares you to identify andflesh out the corridors that will ultimately lead to the optimal brandpositioning and architecture for your product. An undisciplined
process would start with this step—and would be akin to throwing
mud against the wall and seeing what sticks. Instead, given the due
diligence of the preceding steps, you will be operating in strategicareas that have a thoughtful basis for success.
Based on the conclusions and indicated actions from the brandsituation assessment, you need to develop a comprehensive rangeof brand architecture hypotheses concerning the product attributes, functional benefits, and emotional benefits that may bemost effective at motivating usage and consumption of your brand.
In addition, you must develop research hypotheses on key targeting
variables, usage occasions, and competitor brand awareness andassociations, and any other key knowledge gaps that need to beaddressed.
Your deliverables from this step include:~ A detailed strategic hypothesis-testing brief documentthat outlines all hypotheses

A R C H I T E C T YO U R B R A N D

41~ A ready-to-field, quantitative testing design and survey
questionnaire for current and prospective customers

Step 4: Test, Optimize, and Validate Hypotheses
Despite how well informed your strategy and positioning alternatives may be, you still must consider them to be only hypotheses—
tentative assumptions made in order to draw out and test theirlogical or empirical consequences. In this step you will map out andproject the potential power of each hypothesis and identify ways tomake them even stronger. You accomplish this through quantitative
testing with your target customers. You must use quantitative testing because these strategic decisions are too important to be left tojudgment alone, and they are the basis for finalizing the brand positioning and architecture.
At this point, you may choose to select a research supplier tofield your customer surveys, tabulate the data, and execute analytical methodologies that may include the following:~ Stated versus derived benefit importance~ Likely purchaser profiling~ Demand-based segmentation~ Purchase intent progression
Deliverables from this step should include:~ Detailed electronic tables that summarize all data gathered~ Presentation and summary document to detail all key
findings and implications

Step 5: Create Brand Positioning and ArchitectureWith data in hand from the quantitative study, you are ready tobuild a strategic positioning statement and the architecture foryour brand. The brand architecture is a detailed schematic diagramof how the key benefits and attributes of a brand work together toconvey the overall positioning. The detailed architecture you
develop for your brand will provide the strategic road map needed
to successfully market it to customers and act as a yardstick against

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which all marketing and sales activities should be measured andaligned.
Your deliverables from this step include the following:~ Final customer targeting recommendations~ Brand positioning statement~ Brand architectures (see examples shown in this chapter)

3
PLUG MARKETING INTO
THE ENTERPRISEA

s you can see, brands stand at the center of your marketing
enterprise, driving all your marketing efforts. So the question is, how do you make that brand the most effectiveengine it can be? Good question.
Developing an architecture for your brand is really the only
place to start. Understanding your customer—and, sometimes, yourcustomer’s customer—provides the foundation that underlies every
other scientific principle mentioned here. Without a brand architecture, you don’t have a prayer of success; you literally cannot know how
to focus all of your efforts without it.
In some cases, it’s even more valuable to know what not to do.
To practice enterprise marketing management, it’s important
not just to do your homework in developing your brand architecture. You also have to reconfigure your thinking about how marketing should work with the rest of your company—sales, finance,
operations, service, HR, and so forth—to apply this brand architecture. Furthermore, you should consider how marketing information
flows from marketing to other departments and back again. Two
key principles underlie this entire reconfiguration:

43

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1. The benefits described in the brand architecture are simply too important to remain exclusively within the marketing department. They have to be shared with the restof the company.
2. Marketing has to rely on the rest of the company to help
it deliver the brand benefits and also to monitor whatworks and what doesn’t. It’s critical that marketing be
plugged in to the information flow from all areas of thecompany.

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The problem today is that marketing is an island, often both literally and figuratively shut off from the rest of the enterprise. While
the rest of the enterprise has participated in an information revolution, granting most corporate branches access to critical information, marketing has stood on the sidelines. (See Figure 3.1.)
Since the early 1990s, this information revolution has manifested itself in far more forms than just new versions of Microsoft

FIGURE 3.1 Marketing Is an Island in the EnterpriseTeam-Fly®

P LU G M A R K E T I N G I N T O T H E E N T E R P R I S E

45Windows or the switch from, say, Lotus 1-2-3 to Microsoft Excel.
Companies have implemented enterprise resource planning (ERP)systems, designed to solve the problem of islands of transaction andinventory information. This is precisely the problem that a company scrambles to solve when someone calls with that dreaded
question: “Where’s my order?”Certainly, a customer service rep will have some answer to thisquestion, but the real issue is whether it’s a correct answer. Before theage of ERP, many large companies tracked inventory in several
systems—a warehousing system, a finance system, and maybe eventhe ordering system. IT departments were forever trying to reconcile all the little packets and pools of information, the very definitionof a Sisyphean task. Needless to say, they rarely ever got it right.
Solving the “islands of information” problem means that companies no longer sift through multiple systems, each with its own data.
ERP systems create a single, primary data source shared among
finance, warehousing, and ordering. Presto!—problem solved . . . atleast for those concerned only about transaction and inventory information.
While ERP systems are useful, they don’t provide information
about the supply chain that is necessary to manage an increasingly
complex network of buyers and suppliers. Companies needed programs that could look through the supply chain, programs that permitted greater integration and visibility of the location of productsin their long journey from raw material to finished inventory. To doso, they looked to firms such as i2, which were developing supply
chain management (SCM) software.
These forward-thinking companies understood that it was notenough just to track inventory when it’s at the company’s warehouse. True supply chain management involves keeping a tight rein
on inventory as it works its way through the supply chain, gradually
being transformed from raw material to finished product.
With supply chain management software and ERP software,companies could tell a customer exactly what portion of their order
was in the warehouse, in transit, on the production line, or in raw
form. Developing an answer to “Where’s my order?” has gradually
expanded to include the ability to look at your supplier’s own
inventory to determine whether additional manufacturing runs
are scheduled—or even possible.

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Even with such advancements, there still remained some othercritical information trapped in islands throughout the company:
customer data.
While it may be a relief, from a customer service standpoint, tobe able to answer the “Where’s my order?” question correctly every
time, the bar should be set higher. If every customer touch point(service reps, web sites, direct sales, and retail) knew enough about
each customer to use ERP/SCM-based information to sell moreproduct, imagine the revenues that could result. The customer contact is already there; now the deal needs to be offered.
For example, if a customer calls in and asks, “Where’s myorder?,” company information systems should snap into action. Callreps need to know information about the order, of course, but theyshould also know about the customer’s buying history, delivery preferences, and product desires in order to deliver superior customer
service. In addition, every rep must know about all of the company’s
interactions with each customer. If the customer had ordered froma different division or prefers to purchase products via a customer
extranet, the company must make all these options possible inorder to give the best possible service.
However, simply delivering quality service is never enough. The
golden rule for any IT investment, as any chief information officer(CIO) will tell you, is that it’s impossible to rationalize large investments in software unless you achieve at least one of the following:~ Substantial increase in revenue~ Dramatic reduction in operating costs~ Dramatic reduction in capital employed (e.g., inventoryon hand)
To date, the investments in ERP and SCM systems have pulled theirweight by reducing operating costs and capital employed. They’veturned IT and finance departments upside down, while whittling
down the balance sheet significantly.
The integration of transaction and inventory information withthe detailed, accurate profiles of customers has proven a powerfulcombination for both sales and customer service, as sales and service
reps now have at their fingertips comprehensive and consistent
information about their customers. The major developers of these
total-solution CRM systems include players like Siebel Systems andP LU G M A R K E T I N G I N T O T H E E N T E R P R I S E

47Oracle Corporation. These systems, which are still growing in acceptance and implementation, are expected to be the primary technology investment for companies for several years to come.
These days, most marketers have at least a passing familiarity
with CRM systems. While this integration of customer data has
driven results primarily through sales force automation—applying
common selling processes to a common database of customer
information—marketers are only now beginning to pay attention
to its possibilities.
To this point, CRM has caused consternation among upper
management, since it doesn’t seem to be delivering the returns its
users had expected. Any Luddite could tell you the reason why: You
can invest in systems upon systems, but there’s no guarantee you’llsell any more stuff.
The reason for this is simple—marketing hasn’t been added to
the CRM mix. CRM also means “can’t replace marketing”—all of
the best intentions to help a company cross-sell, or upsell, or justsell differently cannot happen unless marketing participates in theeffort.
And the time for that to happen is now. Now is the chance formarketing to ride to the rescue. Now is the time to plug marketing in to these enterprise information sources, helping your company sell more, more profitably. The information revolution has
taken place around marketers while they’ve stood in the eye of thehurricane. Now is the time for marketing to take up its own cause
in the information revolution and put all of these investments towork.
Marketers know better than anyone that the highest accomplishments aren’t measured in bits and bytes. No company evershrank itself to greatness. The heart of all success lies in selling.
Your company’s ability to survive may very well depend on your ability to learn how to put these new information systems—and theinformation that flows through them—to work for you.
Nervous yet? Don’t be. Although all this sounds complicated,
it’s not . . . as long as you’re willing to put in a little effort. While
there are many options for plugging marketing in to your enterprise, two areas of focus will drive the most immediate returns:~ Connect marketing to sales.
~ Connect marketing to finance.

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The focus you choose depends on the nature of your business. Companies that rely on direct selling with a sales force should focus onbringing sales and marketing together. Companies that sell to consumers through a third party may consider focusing on the upstream community first, integrating marketing with finance tobetter track the ROI of marketing investments. The choice isyours—but you must make a choice yourself, or your competitors
will make it for you.
CONNECTING MARKETING TO SALES

Once marketing has developed the brand architecture, identifying
the brand’s compelling value proposition, a natural next step is toconsider how to enable sales to communicate these benefits accurately. Because the brand architecture—and its shorthand version,
the brand positioning—has been developed specifically to drive customer purchase intent, it should seem obvious for marketing to arm
sales with this knowledge.
Unfortunately, as you probably already know, marketing andsales traditionally mix about as well as oil and water. The sales force
often gets disappointed in marketing, since sales believes marketing creates campaigns and new products without any regard for customer needs.
Marketing, for its part, is often organized around products rather
than markets or specific customer sets. Supplying sales forces withproduct-specific information, marketing expects the sales force toreconcile this information with the solution-oriented needs of theircustomers.
In short, an enormous amount of time and effort gets wasted.
The inability of marketing to connect with sales offers a great
opportunity for marketers who are plugged in to the sales information flow to sell more. In enterprise marketing management, marketers must feed the sales information flow that extends naturally
to every customer, across every customer touch point. This information flow is created with the customer in mind, and it must be
developed with a holistic perspective as well.
Marketers complain frequently about sales. They claim thatsales forces can’t execute well, focusing on quotas at the expense oflearning about the product/service offering. And if sales doesn’t
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49

search firms to get the same information sales has in front of it
every day.
There’s also the matter of temperament. Many marketers
think that selling is too much of a hands-on business, preferring toremain in the realm of concepts or advertising. Some marketers
prefer the theoretical aspects of the product creation process, whileothers may just want to avoid the strict accountability that comeswith sales.
Unfortunately, the disconnect between marketing and sales
means that most selling content created by marketing either does
not get used in the field or does not produce a tangible impact onrevenue-generating activities. In fact, recent surveys of field sales
reps at some of the largest and most respected companies indicatethat upward of 90 percent of the material never even gets touchedby sales. The main reasons cited are that “It doesn’t conform to theway I sell” and “It’s not relevant to the conversation I’m having withcustomers.”
This means that nearly all the time and money spent on generating messaging content for the sales-customer interaction is fornothing, resulting in thousands or even millions of dollars of wasted
effort each year. With every dollar wasted, the gap between marketing and sales grows larger, and the risk grows that marketing will
be cut out of sales operations entirely.
Is this the case at your company? Ask yourself these two questions:~ Is my messaging sales-ready? In other words, does it conform to the way salespeople sell? Is it organized so theycan easily find the right content at the right time, basedon the needs of the customers and sales force? Can it becomposed into a format that is deliverable—easily andconsistently—to each rep in every channel, in accordance with their existing training?
~ Is my messaging customer-relevant? That is, does it represent
the conversation already taking place with customers?
Have you aligned messaging in response to customer
goals, requirements, and business needs—instead of
product feature functionality—and provided corresponding supporting evidence? Is it formatted in a way that isuseful to customers?

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If you answer no to any of these questions and you want to see
an example of how to better connect marketing to sales, read theAmerican Express case study later in this chapter.
CONNECTING MARKETING TO FINANCE

So now you see how marketing can work with its downstream colleagues. Just as it’s difficult to bring about a marriage between two
such disparate partners, marketing also doesn’t have the information to look back upstream—to apply financial discipline to its
work. How can marketing possibly learn what drives sales—andwhat doesn’t—if it’s not able to track each investment and analyze
the relevant sales? Marketing must strike an alliance with financein order to track such revenues.
Plugging marketing into the finance function, in this instance,
refers to the need for marketing to apply a rigorous, systematic
approach to all of its spending. Enterprise marketing management
requires an analytical approach, much like managing investments.
Knowing the specific results of marketing efforts allows marketers to correct their course along the way. The old practice ofrolling the dice at the start of the year and measuring the results at
the end of the year is over. You need to bring analytical financial rigor
to your marketing investments, by connecting marketing to finance.
What form might this connection take? Considering that mostfinancial systems are now part of ERP systems, this connection canbe as simple as performing regular analyses of return on marketing
spending. Or it can be as complex as an integration of marketing’splanning, budgeting, and investing efforts with financial systems, sothat real-time data snapshots are always available. Just as you manage your stock portfolio, you should manage your portfolio of marketing investments. Few companies have this capability in place,but it’s only a matter of time. The sooner you make this connection
between marketing and finance, the sooner you can tell the goodmarketing investments from the bad ones—and start putting yourinvestments to good use.
CONNECTING MARKETING TO HUMAN RES OURCES

It’s easy enough to grasp the necessary connections between marketing and the sales and financial departments. But what on earth

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could marketing and human resources (HR) have in common? It’s
simple: In the modern enterprise, the most valuable assets walk out
the door every day. More important, they’ve got to be attracted
enough to come through the door in the first place.
Marketing develops a brand architecture that is intended todrive customer purchase intent. But what about driving employee
work intent? That may sound like an absurd iteration of the problem, but the savviest employers realize that the winners of the gameare the ones with the strongest team members. As a marketer, connecting to HR means helping HR determine the best players to communicate your message. How do you attract the sales superstar? The
next logistics wizard who will save your company millions? The R&D
specialist who will put your company on the map with a groundbreaking product?
Marketing must translate the power of its brand to potential
employees. Otherwise, hiring becomes just a shot in the dark, andyou may not get a second chance at that make-or-break employee.
The role of enterprise marketing management in this instanceis simply to develop a brand architecture for attracting employees,
just as you would develop a brand architecture for driving purchaseintent. See Chapter 2, to think through the scientific method froman employee’s perspective. The same tools that work for attracting,selling to, and retaining customers can be applied to attracting
employees.
The real shame is that marketing and HR rarely come together
in the best interest of the company. Applying marketing talent to
attracting employees results for the most part from serendipity.
CEOs would be wise to not get caught up in traditional silos andconsider how marketing skills can be used in new ways. All of thecustomer marketing in the world might not make a difference ifyour employees aren’t up to the task of delivering what’s been sold.
CONNECTING MARKETING TO OPERATIONS

The brand holds sway over the entire organization, and operations
is no exception. Even the smallest operational details can take onenormous importance when magnified across the entire enterprise.
Every part of the organization interacts and communicates withyour customers, so it behooves every marketer to think about every
potential customer touch point.

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The term operations doesn’t really do justice to the breadth ofcapabilities required. On a simpler basis, if sales and marketing
represent demand generation, operations stands for demand fulfillment. It’s every single event related to delivering on the promise of
the brand, once the customer has made a purchase.
While marketers may wax eloquently about customer lifetime
value, it’s really up to operations to make sure it happens.
Ergo, if marketing doesn’t connect to operations, this can’t happen. Operations, in this context, refers to manufacturing, service,support, warehousing, delivery, maintenance, and other activities.
Operations is critical to creating and maintaining a brand experience, the subject of Chapter 4.

CASE STUDY: American Express
CONNECTING MARKETING TO SALESTO DRIVE INCREASED CARD ACCEPTANCE
American Express has recognized the importance of connecting marketing to merchants, most specifically through the concept of customer message management (CMM).
The company found general across-the-board agreement on theimportance of consistent brand messaging, but had trouble executing
the concept. Coordinating all of the messages being delivered across allchannels may sound like a good idea, but making it happen—ensuring
a consistent message at the call center or web site or when a salesperson has a face-to-face meeting with customers—is no easy feat.
The company faced several challenges:• The sales force reported back to marketing that they were
suffering from information overload.
• The company needed to balance the quantity of productinformation with the specific needs of customers or customer
segments• The skill sets of sales reps varied across the company—
meaning that some were able to synthesize all of the marketing information, while many were not.

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53• National team and larger accounts benefited from moreexperienced sales reps and accordingly were able to craft the
information overload into consistent selling messages withcustomer-specific adjustments.
• Small- to middle-market sales reps, with more accounts tocover but in many instances possessing less experience, struggled to deliver the right brand benefits to their accounts so as
to communicate the value of the American Express relationship.
Over the course of a year and a half, the company sought to hireabout 100 to 150 new sales reps, focusing on that smaller to midrange opportunity. Obviously, one concern was that these peoplecame with their own baggage from their previous careers, and it takes
a long time to instill new thinking within a salesperson.
Another concern was inconsistent message delivery. Several
years ago, American Express performed an audit of the materials thatsalespeople presented to customers, and found there was little differentiation. The company determined that it needed to understand customers’ specific needs and integrate those with the messages that
American Express is delivering.The company had spent considerable
money, time, and resources training salespeople to sell based on theneeds of customers. It had spent significant labor-hours investing in
those resources. The problem was that all of the strategies that marketing was creating did not necessarily strengthen the message.
In the small to middle market, sales cycles are becoming significantly more complex, looking more like sales cycles of a national
team. So salespeople who typically would go in and sell an account in
one or two visits are now looking at an extended sales cycle, since
they are working with more educated customers who may actuallyknow more about the industry than the salespeople. So the company
needed to create a method by which these salespeople could become
more educated. At the same time, all salespeople are driven to makequotas, which tend to increase every year, a factor the company
needed to take into account.
All of these external pressures and the information overload ultimately lead to disjointed messaging. So the company decided todetermine a way to bridge this messaging gap through a collaborative
partnership between sales and marketing.

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TE

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American Express decided to take a lesson from the success ofothers. The company laid out, in partnership with a group called theSales Executive Council, some of the best-in-class procedures that
other companies with similar challenges had used. The company
grouped these strategies into three primary areas: freeing up rep
time, increasing rep effectiveness, and reorganizing efforts around thecustomers.
The company also created a sales intelligence center, where any
data needed throughout the sales process is housed in one place anda team of cross-functional individuals can tackle any business issue.
Anytime a company tries to alter its operations, there is a significant challenge in preparing people for change.The company definitely
had some adoption challenges, but tried to address those by proactively
approaching the sales teams in developing the collaborative environment.
American Express formed a steering committee of end users to
discuss the issue of customer messaging and how that could best be
executed. These people were established sales leaders, perceived as
thought leadership, and their mantra was to confirm, condense, andconvince others in the organization so that once the company agreed
upon a solution, that would be the path that would be embraced by
the sales teams.
The Solution
Ultimately,American Express launched an initiative called Sales Force
Online. It has been so successful that account managers are working
to find access to the same information. The company is now in theprocess of expanding the application to create a more holistic view of
the customer relationship.
As a result, American Express has leveraged the initiative as a key
communication portal. American Express can adjust the value proposition in conjunction with sales and deliver nuances to it quickly at a
centrally managed content location.
At any given time, American Express has an estimated 300 to 500
different marketing programs with which a salesperson has to be
adept to sell to a prospect. So the company created a filter throughwhich sales reps could create, based on the needs and objectives ofthat customer, an appropriate marketing solution, then print out anagreement and all of the marketing materials they would need.

Team-Fly®

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55One of the key areas of the information portal is called Roadmap,
which American Express developed in partnership with Ventaso, aleading provider of customer message management solutions. Roadmap takes all of the elements that a salesperson uses throughout thesales cycle—the value information, customer testimonials, and survey
findings—and loads them into a central knowledge database. American Express wanted to leverage the good work already being done,
but also marry the sales and marketing effectiveness and layer different product rollouts into one database.
So how did American Express get to the outputs and craft theappropriate message?
In cooperation with its partners at Ventaso, American Express
surveyed its existing customer base to learn the benefits of accepting
the American Express card from the perspective of the customer.
Just getting the perspective wasn’t enough because, as it turned out,marketing and sales interpreted customer perspectives differently.
By working together, sales and marketing agreed on customer messaging that they could deliver in an automated fashion. In doing so,they managed to create a partnership between marketers and salespeople, defusing a traditionally adversarial relationship.
Now an American Express salesperson or an account manager
can customize all of the documents and all communication points
with a customer.The company has moved away from that boilerplated
messaging and toward unique messaging based on the needs of a particular customer.
On the back end, the solution gives American Express incredible
market intelligence.Within a particular market segment, the company
can see what the salesperson delivered in the presentation and thefeatures that resonated with this particular account. Then the company can determine in similar presentations what showed up 100 percent of the time and what showed up 50 percent of the time, whichtells the company what is resonating in the marketplace.
American Express is in the nascent stages of leveraging this technology. The company is currently focusing on the direct sales challenge but is also looking to expand to the call center environments aswell as an interface with its Internet application.And there is interestin global expansion and a rollout to other organizations within thecompany.
The technology has aided American Express in three key areas:
reducing the cost of acquisition, improving sales rep productivity, and,

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most important, enhancing the quality of customer messaging. In termsof hard numbers,the pilot program engineered savings of $240,000 overthe first six months—a significant sum when compounded across multiple regions around the world. Although it’s too early to tell, initial results point to significant improvements in close rates and sales
volume.
In order to provide sales reps with the most accurate and timely
data, American Express now posts its marketing collateral online,
rather than printing it and updating it via hard copy. The readiness andspeed-to-market components of the program, as well as its central
location, give salespeople the appropriate information, at the appropriate time, in the appropriate format.
Most important, however, American Express now knows thatwhen salespeople go out to speak to prospects, they have worked inconcert with marketing to create an effective, targeted message. Marketing can now manage content and deploy new messages rapidly.The
continuous feedback loop also allows the sales force to let marketingand other reps know what’s working and what isn’t. Ineffective messages can be refined, refocused, and reintroduced to the marketplace inrapid order.
Sales Force Online has provided American Express with a wealth of
information—so much so that account managers are seeking access tothe same information.The company is now in the process of expanding the application in order to have a more holistic view of the customer relationship.
Founding Principles:American Express
Customer Message Management• Customer relevant. Messaging should be based on
customer-centric issues (business goals, needs, and requirements), not product-centric features.
• Sales ready. Messaging should conform to the way salespeople have been trained to sell (needs determination andvalue alignment).
• Effective structure. Messaging should be structured in aconsistent, reusable, template-based approach that can be
deployed across a company for more efficient content creation and management.
• Real-time access. Messaging should be available anddelivered online to the right person, at the right time, using a

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simple, intuitive user interface designed to replicate the sales
and customer communication process.
• Personalized outputs. Messaging should be presentablein customized outputs based on specified needs, so that customer communications reflect the unique business goals andrequirements expressed in each sales opportunity.
• Continuous improvement. Messaging should be managed and updated based on proactive, interactive analysis andfeedback to ensure maximum impact and field effectiveness.

MARKETER’S S CIENTIFIC METHOD:
PLUG MARKETING INTO THE ENTERPRISE

How specifically do you plug marketing into the enterprise? The
procedure breaks down into two stages: promoting the brand’s benefits and integrating marketing into the overall enterprise.

Marketing must evangelize the benefits of the brand.

Step 1: Evaluate and Address How Your Brand(s)Positioning Has Been Communicated andEngaged Throughout the Company~ Does the sales force have a clear understanding of thebenefits that drive customer purchase intent, or are they
perhaps the reason why every customer conversation
comes down to price—sales reps don’t really know what
to say?
~ Does marketing focus on products, while sales has to sellsolutions? Have your communication efforts been designed for the customer—and for all of the different situations that your sales force might encounter with yourcustomers?
~ Does marketing actually listen when sales says what itneeds to drive customer purchase?
~ Do you know how much of marketing’s efforts is actuallyused by sales, rather than simply discarded?

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ENTERPRISE MARKETING MANAGEMENT~ Are you measuring the ROI of marketing investments?
~ Does your company know what benefits HR should communicate to attract and retain the best talent?
~ Do you feel constrained by your company’s industry, location, reputation? Do good candidates just not want towork here?
~ Are your recruiting efforts time consuming, ridiculously
expensive, and sometimes fraught with error? Are you
not attracting the right people?
~ Are your HR marketing efforts little more than blasé job
descriptions based on boilerplate?
~ Do you wonder why your competitors seem to be able toattract better talent?
~ Have you discovered that you can’t get the best candidates by simply paying more?
Marketing must be integrated into the company
information flow.

Step 2: Evaluate Marketing’s Integration with andParticipation in Developing Information Systems~ Is marketing participating in efforts to launch CRM
capabilities?
~ Does marketing participate in determining how ERP- or
CRM-based information will be provided to customers?
~ Has marketing connected with finance to develop an
investment-driven approach—connecting marketing investment with specific sales returns?
Marketing hasn’t traditionally played a role in determining
where to make investments in information technology. Wake up!
It’s the twenty-first century! Information technology—and, mostimportant, the information flow that it creates—is a critical element of strategically differentiating one brand from another. If oneof your brand benefits involves service, how are information technology investments delivering on that needed benefit? Marketers
can’t be content sitting back and hoping that the company is able todeliver on the desired brand benefits. They have to jump into thefray.

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59For that reason, marketers must assume greater responsibility
for all information technology investments. To be blunt, nearly
every investment that information technology makes can be madeto evangelize the brand (supporting sales or service interactions
with customers), deliver on the brand positioning (perhaps providing information about where your product is before it shows up at
your loading dock, to deliver on the brand benefit of easy to do business with), and ultimately track the results of marketing investments.
Every piece of information generated by your company isimportant to marketers. The only way for marketing to connect tothe enterprise is to seize every opportunity to drive information
technology investments.
Sitting on the sidelines won’t work anymore. Just as marketersmust consult on discussions over whether the company needs
another manufacturing plant, they must likewise consult on
whether that next investment in information technology will help
deliver on the brand positioning or give marketers greater ability
to manage marketing investments. Nothing is more important toyour company.

PART II

Manage Your Brand,
Not Your Customer

4
TAKE OWNERSHIP
OF THE BRAND EXPERIENCEO

nce you’ve brought marketing into the company fold, what’s
next? The opportunities are myriad. Making a conscious
effort to connect marketing to the rest of the company will
help you achieve two important objectives. First, you can help spreadthe power and knowledge of what drives purchase intent for thebrand across the rest of the company. Thus, even when the delivery
truck driver shows up at your customer’s door, he or she knows how
your company’s brand differs from (and, of course, stands above!)that of your competitors.
Second, and on a broader scale, by connecting marketing to theinformation flow of the enterprise, you put marketing in a muchbetter position to drive value for customers. You can constantly
learn and evaluate which marketing investments are paying off andwhich ones are not.
It’s important for marketing to participate in the decision making surrounding information technology investments. But while
marketing may not have the technological savvy to add value incomparing technology investments, the key is that the technology
itself is not important; the customer is.
Unfortunately, marketing and information technology tend tobe the Hatfields and McCoys of the enterprise, seeing eye to eye63

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only long enough to stare one another down. Marketing professionals are reluctant to embrace technology and, as a result, frequently
abdicate their role as caretakers of the brand experience.
Don’t believe us? Take this simple quiz. Which do you consider
to be more important for your company:

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~ Providing your customer’s engineers access to up-todate product specifications or providing the customer’spurchasing department access to an invoice history?
~ Investing in a new CRM system to improve customer
service’s ability to recognize customers and potentiallycross-sell or creating a product marketplace?
~ Developing a product comparison tool to help self-service
customers or investing in outbound teleselling capabilities?

TE

The answers are . . . there are no answers. These are trick questions. In truth, it’s impossible to know the answers until marketing
asserts its role as the owner of the brand experience and evaluates its
information- or service-oriented investments on the basis of one
primary criterion: the ability to help the company sell more products and services.
Every single one of the theoretical investments described here
has its merits; in the abstract, none is better than any of the others.
But all of them have something in common: a definite, measurable
impact on the brand experience.
But just what is this brand experience, and how is it different
from the brand architecture and its shorthand cousin, the brandpositioning?
The brand experience is simply a way to describe the sum of acustomer’s interactions with a brand. If a brand is the bundle offunctional and emotional benefits, attributes, icons, and symbols
that, in total, constitutes the meaning of a product or service, thenthe brand experience is the name for a customer’s complete experience with the brand. The term brand implies a perspective fromthe company outward (inside out). The term brand experience implies
a perspective from the customer to every interaction with the company (outside in). As you might imagine, customer interactions
aren’t limited to simply making decisions regarding one productas opposed to another. The brand experience would include theTeam-Fly®

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65customer’s actual experience with the product, as well as every otheraspect of interaction with your company. For everyday consumer
products, this would include how the product is merchandised in thestore, the dynamics of the product itself, learning how to set up the
product (i.e., negotiating the user’s manual), the experience of using
the product (whether that’s pouring a bowl of cereal or using a new
toaster), and even the experience of getting repair.
Every single step in a customer’s relationship with your company goes into forming aspects of the brand experience (see Figure4.1). While the elements may differ, the brand experience for amore industrial product is arguably even more important. As the
product or service complexity/risk increases, the value that the customer places on the overall experience becomes even more important.
As you might imagine, the brand experience covers a lot ofground. As a result, every company struggles with how to optimize
it. There are plenty of blind alleys you could head down in search ofthis optimization, but in truth, the best answer already exists rightin front of you.
Take a close look at Figure 4.1. A brand experience is definedby how your customers purchase and use your products or services,not by how your company is organized. Despite the best efforts of

FIGURE 4.1 Defining the Brand Experience

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companies to reengineer the way they interact with their customers, they’re still constrained by departmental silos that hinder
the ability to deliver customer satisfaction (and, of course, drive
profitable sales higher and higher).
Marketing must take ownership of this brand experience framework, and ownership starts with a prioritization of the use of customer information. In short, marketing must participate in and drive
decisions, which requires a trade-off of time and resources to deliver
appropriate information at any step along the way.
For example, why should customers purchase a jet engine fromyour company if they’re not confident in your ability to provide service? For most industrial companies, the value of the brand experience far exceeds the value of the product sold. If Alcoa sells Ford
Motor Company aluminum to make its new SUV, of course the aluminum is important. However, it’s important within a context. If
the Ford engineers aren’t able to machine the aluminum properly,
or if the aluminum doesn’t show up at the right production plant at
the right time, or if the invoicing for the aluminum isn’t correct, thebrand experience suffers. Quality information about the product—say, the delivery schedule—can be more valuable than the productitself, especially if it is has an impact on the ability to complete a
production schedule worth millions.
When the brand experience encompasses all elements of acompany-customer connection, the truth becomes obvious: Marketers have only been playing in part of the overall marketinggame. With enterprise marketing management, marketers mustleave their traditional territory and venture out to take responsibility for a lot more.
The brand architecture gives you a framework of brand benefits
to apply. In addition, by preaching the benefits across the enterprise,
you will make the entire company your army, mobilized and ready tocommunicate and deliver on these benefits.
Finally, when it steps up to the plate and takes a more significant role in information technology investments, marketing will bewell placed to drive IT to track and build the brand experience overtime.
The brand experience has several different components. The
first two elements are the most important: your brand and your customer. If you are missing either of these, then you’re, no doubt, introuble. The brand is at the top of the hierarchy because that’s what

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67marketers are supposed to keep central. Note that it’s not just something that sits at marketing’s table. As stated earlier, the brand isthebusiness. But the experience is built entirely around the customer.
It’s worth repeating that the way your company is organized—who’sin sales, who’s in marketing, or who’s in operations—is completely
irrelevant to your customers. They simply don’t and won’t evercare—nor should they.
Nearly everyone has experienced customer frustration whensomeone from a company with which you’re doing business says
something like, “That’s not my department” or “That’s Accounting, I’m in Sales.” It happens every day—and, though you may not
like to admit it, it probably happens in your company.
Building upward from the customer, the next element of thebrand experience is customer touch points. These are just what theysound like—every potential place where you might interact withyour customer. Some examples would be retail stores, call centers,
web sites, warehouses, direct sales encounters (person to person),and e-mail. Customer touch points represent a direct connection
between you and your customers without the interaction of a third
party. The term customer touch point further connotes a degree ofinteractivity not found in traditional media.
The next element of the brand experience is the traditional
media with which most marketers are already very comfortable(print ads, TV ads, promotions). While customer touch points arehighly interactive and potentially relevant across every elementof the brand experience, these traditional media concentrate on
bringing in new customers—or, at least, reminding existing customers why they need to buy again. The focus is on the demand
generation side of the table. Except in very rare circumstances,these media are simply too expensive to be employed in helping
customers actually obtain or use follow-up service for their purchase. New media represent an opportunity, which will be discussed
later.
The next element has special significance. It’s the primarychannel and the steps that you take as a company to match up witha specific customer. This is the yin that you bring to your customer’syang, your salt to their pepper. The primary channel represents thedominant vehicle for serving your customer across all elements ofthe brand experience. The primary channel serves as a reminderthat you have a choice in determining how you would like to serve

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your customers and that your channel decisions should be backed
up by a specific strategy. Too many companies wear their channels
like a straightjacket, never daring to ask their customers how theywould like to be served—or even whether they’d prefer to serve
themselves. (Think about the self-scan checkout lane at the grocery
store, immensely popular ever since its debut.) It only took grocery
stores 10 years to figure this out.
The final element in the brand experience is your internalorganization—departments, functions, and silos that are alreadyin place. How well they fit into the overall picture isn’t just dependent on marketing, but marketing should have a say in retrofitting them if necessary.
Now that you have a better idea of the moving parts of a brandexperience, let’s take a closer look at these core elements andexplore customer interactions with each to ensure that you have aclear picture of the task ahead.
IDENTIFY NEED (INFORM NEED)

The first task in determining the parameters of the brand experience is to identify need. This step begins before a customer has had
any interaction with your company, at the moment when a customer determines that he or she has a particular need for a productor service. In the strictest sense, this customer recognizes this needand potentially also understands that a product or service exists tofulfill it.
This is the domain in which marketers would traditionally saythat they “build awareness.” However, awareness alone is almost
never enough to actually motivate a customer to move forward. Enterprises have spent millions of dollars building awareness thatnever actually turned into a purchase. Customers knowing thatyour brand exists is no guarantee that they believe it will deliver the
specific benefits to fulfill their needs.
Scientific marketers use advertising and communication media
not just to build awareness, but to highlight how their brand delivers
the benefits to fulfill customer needs. It’s the difference between a
hot dog vendor simply saying, “I’m here,” and the same vendor
enticing you by saying, “How about something delicious and convenient for lunch today?”TA K E O W N E R S H I P O F T H E B R A N D E X P E R I E N C E

69On a more subtle level, the brand benefit communications
process also works in reverse. Brand communications can actuallyteach a customer that a need exists—and then highlight how thebrand delivers the benefits that satisfy the need. Think about products that you might have at your home or office that didn’t evenexist 20 years ago, such as PDAs, cell phones, or even personal computers. Buyers of personal computers had to be taught the needfirst, then instructed about why a specific brand would deliver therange of benefits to meet that need.
Marketers must think about how to add value to the brand experience in the identify need (inform need) stage in the following ways:~ By developing robust brand architecture and communicating emotional and functional benefits~ By integrating with the customer’s supply chain to makereordering or need identification automatic~ By providing partner-oriented selling information to put
the broader partner network (distributors, alliance partners) to work
Historically, helping customers identify a need has been thedomain of sales and marketing. For most companies, marketing actually stops after this stage, handing off responsibility for what happens
next to other functions in the company.
And therein lies the problem. Constant handoffs from function
to function and department to department don’t take into accountthe importance of a holistic view of the brand experience—and thefact that providing information is critical to differentiating any company’s offering.
EVALUATE OPTIONS (PROPOSE OPTIONS)

Once a customer has identified his or her needs, it’s now up to you
to decide how to close that deal. You need to move to the second element in the brand experience as your potential customer begins toevaluate options.
When the brand awareness efforts take hold, a customer will
say, “Yes, I have a need” (which could also mean “Yes, my company
has a need,” or even “Yes, my family has a need”). Thanks to either

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spontaneity or the assistance of your tireless marketing communication efforts, the customer now moves to the stage of evaluating
options.
Ideally, your marketing efforts have been so persuasive that thisstage is perfunctory: What options are there other than your own?
But for many companies, this point is the critical stage, in which thecustomer determines a set of potential solutions and then evaluates
each of those solutions against the personal need. This is also thestage in which your brand positioning efforts come to fruition.
In the best-case scenario, you’ve developed a brand positioningthat helps your customer understand how your product delivers thebenefits that perfectly meet the customer’s needs—and also why
your competitors’ products are not the right ones. This evaluation
can be as simple as comparing the nutrition information on twoboxes of cookies to determine which has the lowest fat content. On a
more emotional level, it might come down to the fact that one brandof cookies reminds customers of good times in their own childhood,and they want their children to enjoy that experience as well.
On a more complex scale, for a product such as a fleet of trucks
or jumbo jets, the evaluation stage might last for months and require a detailed analysis of functionality, price, difficulty of integration, numerous interviews of signature clients, and excruciatingly
complex negotiations.
At this point, the customer makes up his or her mind and decides
what to buy. As anyone who is in the business of selling expensive
products and services can testify, this stage can be absolute agony forthe enterprise. The temptation is always present to take a shortcut tosuccess—chopping prices to make a quick buck, for instance.
Don’t give in to temptation. When making investments in understanding or impacting this element of the brand experience,
don’t get blinded by cost reduction at the expense of differentiation.
This stage is also where the question of pricing will enter the game.
Generally speaking, the greater the importance of price competition, the less actual marketing is going on.
Price is what all buyers fall back on in the absence of any otheravailable benefits. If a company promotes a product or service without demonstrating the benefits that drive purchase intent, thebuyer has little choice but to make a decision based on price. If you
don’t give your customer some other basis on which to make a decision, rest assured he or she will make price a big part of the process.

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71Whether you’re selling plastics or pierogies, delivering specificbrand benefits gives your customer something to consider beyond
price. Articulating and delivering these benefits is what marketingis really all about.
In what ways might a marketer consider adding value to thebrand experience in the evaluate options (propose options) stage?
~ By continuing to communicate your differentiating brandbenefits, based on your brand architecture.
~ By compiling and providing detailed comparative purchase information with your product and service information. Do the analysis and comparison on your customer’sbehalf, remembering to position your competitors foryour benefit where possible.
~ By providing product and service configuration toolsthat may let him/her choose or configure from multiple
suppliers.
~ By providing expansive recommendation options driven
by past purchase history (e.g., Amazon’s referral links tosimilar or related products or services). In other words,
use what you know about your customer’s past behavior
to recommend products or configurations that only you
could know.
~ By providing interactive profiling tools to identify andchoose the correct product or service.
~ By driving outbound selling scripts based on historicalpurchase data combined with detailed customer information.
~ By building upselling or cross-selling capability for salespeople to help customers understand what products orservices are naturally purchased together or might be
combined to deliver a unique capability or fill a uniqueneed.
BUY (SELL)

The purchase is the coup de grâce, the moment around which thisentire process—and, indeed, the entire economy—revolves. Of
course, this act varies from swinging through the checkout lane todetermining a detailed delivery schedule to locations around the

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world. This element of the brand experience includes all of thedetails of the delivery, including pricing, timing, and recipients.
The purchase can take moments, or it can take years.
Purchasing is another venue where information and process
technology have altered the way the customer does business. In thejust-in-time inventory management system embraced by many
manufacturing-intensive industries, information about the arrivalof the product and its usage might be more important than the
product itself. For a large manufacturer such as Toyota, the value ofa nondelivered part may only be a few hundred dollars, but the costof a work stoppage can quickly grow into the millions.
This element of the brand experience has seen feverish activity
in recent years as companies embrace Web-based transactions andimprove customer access to information. In most instances, these
efforts have focused on taking information that already resides in
ERP systems (traditional finance, purchasing, distribution, warehousing, etc.) and providing it to customers. This could come in aform as simple as giving customers access to their invoices online,
or it could take on more complex dimensions.
Marketing needs to think about how it can use the purchaseitself and all of the information around it to differentiate the company and its brands. Anyone can imagine how much less expensive
it might be to force customers to go to a web site to enter information or execute a transaction. The question is, however, is that what
your customers want? Does it build value for your customers, takenin the context of the total brand experience?
Many companies have stumbled in their zeal to move customer
interactions online. Companies have labored for years and spent
millions of dollars to try to give their customers access to all sorts ofdata. However, in many cases, these companies have seen little or
no return. They haven’t stopped to answer simple questions such as
the following:~ How does this information create value and differentiate our company in the eyes of our customer?
~ Does every customer get everything that we offer, or do
we have a way of differentiating the information we provide for our best customers, for our medium-best customers, and so on?

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73~ Is this a requirement of doing business or a way to makeus stand above the crowd?
~ Is this more important than doing X (spending moneyon communication, traditional marketing, developing
new products, or the like)?
~ What is the cost of providing this information, andwhere do we make this up? Do we charge for it?
It’s worth noting that not all of this information and customer service effort needs to be provided to every customer for free. A key
part of involving marketing in all aspects of the brand experience is
to make certain that the company seizes on new revenue streams.
For instance, companies can create different service levels based on
customer profitability. Platinum customers get access to more
information and opportunities than silver customers. Marketingmust incorporate the power of information into differentiating its
service and delivering value to its customers. Otherwise, the company is just keeping up with the Joneses, treading water rather thanmaking headway.
In what ways might a marketer consider adding value to thebrand experience in the buy (sell) stage?
~ By using the brand architecture to differentiate the purchase process and continuing to deliver the brand benefits that drive purchase intent~ By considering how your brand benefits and, potentially,
the character of your brand can be used to differentiate
your offering from your competition~ By recognizing your most important customers (as you
define them) so that they know they’re important—at
this stage and at every stage of the brand experience~ By integrating your sale so deeply into the customer’s purchasing process that it becomes as automatic as breathing~ By differentiating your offering to allow for cumulative
purchase effects—in essence, giving better products/
services to the best customers, while improving margin
overall (e.g., platinum customers receive premier pages,
such as those offered by Dell Computer to its best customers)

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USE (EDUCATE)

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Congratulations! You’ve closed the deal, and the customer has
purchased your product. For many marketing departments, thisinformation shows up as dollars or pounds or cases, and the customer is forgotten. What’s next? Now your customer must utilize
your product or service once it’s been delivered. If your product is,say, the chocolate chips that you supply to Nabisco to bake into
Chips Ahoy! cookies, then the application would be baking thechips into the cookies for eventual packaging and shipment to grocery stores.
An inevitable part of offering a product or service any more complicated than a fast-food hamburger is the necessity of providing
additional information or contact after the sale. And this is wheremost companies fumble the ball. Flush with the success of the sale,they lose sight of the fact that their job is not done just because thecustomer has signed on the dotted line. Aside from the obvious
shortsightedness in failing to maintain customers, companies missout on all sorts of opportunities to continue selling, upselling, crossselling, and selling services.
There’s also the matter of preserving and enhancing your reputation. Just because you sell a commodity product that forms one
aspect of another product, are you confident that your customers
know what to do with it on their line? Could you help customers
improve their throughput using your product? Or, even better, could
you sell them differentiated services that might drive your margins
higher and leave your customers more satisfied with the overall
brand experience?
There is likely an array of possibilities for you to help your customers in ways that you’re not pursuing today but are uniquelycapable of offering. If you’re not doing so, you’re leaving money on
the table. Many of the world’s finest companies have legions ofengineers that are locked up in developing products. Unlocking
that engineering resource in the form of services for customers
should be considered by many companies.
An icon of American business, Jack Welch, former CEO of
General Electric (the company of superbly engineered products
such as jet engines, energy plants, and medical equipment, in addition to being owners of NBC, GE Capital, and a host of others),

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noted that GE is in the service business. Even in the case of GE’s jet
engine production, the majority of the profit from the sale of theseengines comes not from the product itself but from the service contract that is sold with it.
Marketers have the skill sets necessary to develop new businessmodels and think about how their companies could better manage
the brand experience to drive profits. Who else is going to do it?
Nobody else combines the awareness of customers’ needs with theknowledge of the company’s capabilities to accurately forecast andseize upon opportunities.
Marketing, the future is up to you.
Before we leave the domain of application and usage, we have toconsider how to leverage information technology. As an example,
think about how computer operating systems have changed. Both the
new Windows XP and Mac OS X use the Internet to stay plugged in
to Microsoft and Apple, respectively, to ensure that you’re always
using the most up-to-date version. In addition, both companies canuse this electronic listening capability to conduct repair or identify
the source of problems that you might have.
Why don’t your products use this same capability to offer yourcustomers frequent enhancements and automatic problem solving
so as to improve your brand experience? Why make your customers
have a less-than-perfect experience if they don’t have to?
Marketing must understand enough about information technology to recognize what’s possible. If it does not, then your company is just wishing and hoping that these sorts of opportunities will
bubble to the surface. One way of ensuring that these opportunities
arise and exist is to enforce the idea that marketing has ownershipof the brand experience.
In what ways might a marketer consider adding value to thebrand experience in the use (educate) stage?
~ By leveraging the framework of the brand architecture
to continue to communicate brand benefits and position
your brand~ By providing just-in-time information about the application of the product~ By incorporating with the product learning courses for
its use

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ENTERPRISE MARKETING MANAGEMENT~ By developing and providing differentiated services toassist throughout the use of the product (e.g., call centeror online access to engineers who are experienced users)~ By helping customers find other customers who also use
the product and could benefit from sharing experiences~ By supporting and providing monitoring of your products to ensure that they are always in perfect condition~ By providing ancillary, updated information that drives
value for your product (e.g., Tivo provides the subscription service to TV listings that drives the value of the
hardware)
OBTAIN SUPPORT (PROVIDE SUPPORT)

We’re all familiar with the role of support—and, unfortunately,
we’re all familiar with support’s failure to deliver on its promise. In
this instance, service can also be referred to as support—once a customer has made a purchase and then applied that purchase, what
often arises is the need for service. This function comprises everything from repair of broken purchases to upgrades of those operating at a lower-than-optimum level.
Here, we’re referring to service from the customer’s perspective. Service from the company’s perspective is often quite different. For example, customer service reps may be working at a callcenter, but in fact actually reach across all of the customer stages.
Customer services can help you configure a product (evaluating
options) that you purchase elsewhere—as with a live Dell rep helping you configure a particular PC, which you then buy online. The
same customer service rep could take your credit card for an order(purchase) or aid you in installing a new piece of hardware or software (application or usage). Finally, if after all this, your new computer doesn’t work, you can call back and figure out where theproblem lies. This is the form of service that will be the locus of this
discussion.
For most companies, support as we’ve defined it is seen as something of a nuisance. As we mentioned in the example of companies
dialing in to provide just-in-time service or maintenance, there are
new ways of helping your customers avoid downtime altogether
and, in so doing, building an even tighter bond with them, thereby
improving your brand experience. What is the likelihood that a

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77buyer of your product is going to change to a different one if you’reconstantly updating and improving it with new information? Howabout if you identify potential service issues even before your customers do?
Many companies now want to spend the least possible amountof time on support calls, hoping the problems will eventually just go
away. Smart companies have figured out that contact with customers is where you actually stand the greatest chance of making
more money by selling more stuff. When your customer support orcustomer service reps answer the phone, are they armed with everything they need to know about the brand in order to sell more?
Many companies are in the position of needing to sell service justto pay the bills. Auto dealers, for example, probably wouldn’t cry too
hard about losing the new car sales portion of their business. However, if you took away their service franchise, there would be no auto
dealers left. Again, the product represents the means for creating therelationship, whereas the service is how you make money. If marketing doesn’t own the brand experience as it relates to service, you’relosing a great opportunity to differentiate yourself in the marketplace and generate higher margins. Every company is a service company, whether it likes it or not. Support is the area where you canbuild a sustainable competitive advantage—essentially, an unassailable brand experience that will lead to higher sales and higher
margins.
When it comes to leveraging information technology in the support element of the brand experience, the opportunities are nearly
overwhelming. Here’s a simple question: Are your product manuals
available online? Most companies’ aren’t. In these times, providing
someone at an 800 number who is available only after a long wait anda frustrating navigation through a maze of menu options (“press 2 forservice; press 3 for mailing address . . .”) is just not enough.
Because most companies fail to see the value of support in theoverall scheme of the brand experience, they shunt it off to people
who know the least about the product. Why do so many companies
connect you to a know-nothing customer service rep (especiallywhen you may be their most valuable customer), when it’s just as
easy for you to send an e-mail or an instant message to someone who
knows you and the products that you buy? Again, the information
technology is available that would allow you to route your mostimportant customers deep inside your company to get the support

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they deserve from a knowledgeable source, rather than routing yourbest (and most profitable customers) through a central system.
Providing differentiated service is where IT can help put yourcompany at the top of the heap. If you’re treating everyone thesame, then you’re not optimizing your brand experience, and you’revulnerable to displacement by a company that really understands
what your customers want.
In what ways might a marketer consider adding value to thebrand experience in the obtain support (provide support) stage?
~ By using your brand architecture as a guide to delivering
the support-related benefits that you know drive customer purchase intent~ By building intelligence into your products to inform you
when they need service or repair~ By giving your customers access to a product knowledge
base~ By delivering automatic product or service updates
TOO MUCH INFORMATION?

How should a company weigh the trade-offs that are inevitable
when deciding among the numerous ways to enhance the brandexperience?
The answer, of course, is marketing.
Once marketing assumes ownership of the entire brand experience, it must apply portfolio theory to any potential developmentsthat might enhance the brand experience and determine which
options will help sell more of what it has to offer. Sure, it might benice to give your customers everything imaginable, but it only reallymakes sense if it is actually going to help you increase sales and margins. The science of marketing demands a great deal of analytical
rigor when it comes to what you provide your customers and what
you charge them for this.
Marketers must think outside of their traditional box to own
everything that the company does to interact with its customers.
Marketers have to apply scientific principles in evaluating thetrade-offs to determine which investments in the brand experience
will earn a sufficient ROI and which investments should be avoided.
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to playing around with the advertising agency. Without their input,
decisions of enormous portent, which determine what information
might be communicated to customers, are taking place down thehall. In the age of information and service, marketing that focuses
too much on such traditional venues as promotions and advertising
is the equivalent of dinosaurs circling the tar pits. You—or yourcompany—might not survive such an error.
Most marketing departments focus on the first element of thebrand experience, leaving the rest to mere chance and the whims of
the CIO. Unless marketing can step up and assume responsibility,
there can be no substantive, meaningful, or long-lasting change in acompany’s operations—and the bottom line isn’t going to improve.
Realistically, what is the likelihood that the CIO, or any staff function for that matter, is going to develop a way to differentiate yourcurrent products or services with information—and, from there, figure out a way to leverage it into more revenue or closer relationships
with customers?
To put it bluntly, marketing deserves ownership of the brandexperience. Why? Because marketing can provide a better experience for both customer and company. Marketing understands
what the company’s customers need and want, and should learn tounderstand how the company can best meet—or generate—thoseneeds. This doesn’t mean that companies toss a bunch of undifferentiated offerings in the air and see which ones customers
chase. Rather, marketing must pursue a targeted, focused strategy aimed at bringing maximum value to the maximum numberof customers.
Of course, it would be nice to be able to offer everything toeveryone, but that’s the road to ruin. The key is to offer the rightbrand experience to each customer. Not everyone is a king, nor is
everyone a peasant. It’s the marketer’s job to figure out who’s who
and to deliver what is appropriate to each.
BUILDING THE BRAND EXPERIENCE BLUEPRINT:
THE PATH TO A BRAND EXPERIENCE THAT SELLS

If building the brand experience represents the best way to translate the brand architecture into reality, what steps are required?
Getting marketing to step up to the challenge could easily become
overwhelming. How on earth can marketing accomplish so much?

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Operations

Communications

The question you should be asking yourself is this: How are wemaking decisions about any customer-facing investments or activities
without an idea of what we need to do for every element of the brandexperience? In other words, if you haven’t adequately designed thebrand experience that will deliver the benefits articulated in thebrand architecture, how are customer-facing marketing investments
anything but an unnecessary gamble?
This goes back to helping you answer the questions posed earlier concerning how to weigh the trade-offs between investments.
Which is more important—letting your customers gain access totheir purchase history or providing product configuration tools thatlet prospects match your core products with potential accessory
items?
The answer is, of course, that you have no way of knowing unless
you’ve adequately designed your brand experience. The name for thedetailed design is a brand experience blueprint. While the brand architecture describes the hierarchy of benefits and attributes that drive yourcustomer to buy, the brand experience blueprint describes in extensive detail precisely how your customer is going to experience all of theelements of the brand architecture—across every company touchpoint and every element of the marketing mix. (See Figure 4.2.)
What are the potential challenges to creating your brand experience blueprint? First things first: Creating a brand experience
blueprint requires the development of a brand architecture, as

Brand Touch
Points(Illustrative)

Identify
Need

Evaluate
Options

Buy

Use

ObtainSupportTV

Emotional (1)Attribute (2)N/AFunctional (4) N/ARadio

Emotional (2)Functional (2) N/A

Functional (4) N/A

Print

Functional (1)Emotional (1)Outdoor

Functional (2)Functional (3) Functional (4) Functional (3) N/A

Online/Email

Attribute (1)Attribute (3)Functional (4) Attribute (1)Attribute (4)Telemarketing

Attribute (2)Emotional (1)N/A

Attribute (4)In Store

Functional (3)Emotional (2)Functional (4) Functional (4) Functional (4)Direct Sales

Emotional (1)Functional (1) Functional (4) Emotional (1)Call Center

Functional (3)Functional (2) Functional (4) Functional (4) Functional (4)Direct Marketing

Attribute (3)Attribute (1)Functional (4) Emotional (1)

N/A

FIGURE 4.2 Brand Experience Blueprint

Attribute (2)N/AFunctional (4)

N/A

N/A

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81explained in Chapter 2. The emotional benefits, functional benefits, and brand attributes form the core meaning of the brand thatwill in turn be translated into relevant context.
The steps required to create a brand experience blueprint are
similar to those required to build a brand architecture, but the perspective is, of course, somewhat different. Because the brand experience blueprint designs how the customer should experience every
stage in his/her relationship with the brand, you must go much
deeper than most marketers normally do to understand the experiential elements of customer interactions. In other words, you can’t
just limit yourself to traditional marketing mix elements (advertising, promotion, packaging). You have to do more.
Building a brand experience blueprint requires the following
steps:
1. Develop a high-level destination, aligned with the brand’s
destination.
2. Assess the current brand experience at a detailed level,
across each element.
3. Develop hypotheses for improving the brand experience,
driving to specific outcomes (including, of course, sales).
4. Validate hypotheses—focusing on achievement of key
metrics.
5. Leverage validation to create a brand experience blueprint.
6. Create a blueprint release/implementation plan basedon the relative difficulty/value of changes.
The first step in developing the brand experience is to develop a
destination for each relevant element. The objective for the destination is to develop a high-level direction for the brand experience,
ensuring that it’s well synchronized with the benefits of the brandarchitecture and developing key metrics for each element along theway. The assessment phase will generate much of the detailed
understanding of the way things work, but it’s helpful before digging into all of the current interactions to develop some high-level
direction for the brand experience. Much as with the brand architecture destination planning, destination planning for the brandexperience blueprint will provide direction and alignment and will

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answer the questions of how a customer should think, feel, and act
in each stage of the brand experience.
One other critical element of destination planning (as simple as
it may sound) is to define who the customer is. While it may be aneasy step in consumer goods businesses, it’s not so obvious for mostbusiness purchases. If you’re selling laptop computers to corporate
customers, is your buyer the head of purchasing, the CIO making
vendor decisions, or the user? In most instances, the definition of
the customer will be expanded to include any potential customer
with whom the brand might come in contact.

CASE STUDY: Nabisco
BUILDING A BRAND EXPERIENCE BLUEPRINT
TO ESCAPE THE COMMODITY TRAP
To help with the demonstration of brand experience principles andpractices, consider the following hypothetical case involving two companies: Nabisco and ACME Packaging. In this case, which is based on
Zyman Marketing Group’s experience with similar types of businessto-business relationships,ACME is a supplier to Nabisco of packaging
for its numerous cookie and cracker brands (Oreo, Ritz, Wheat
Thins).These two large companies work together to feed the country’s desire for snacks.
Put yourself in the shoes of the ACME marketer, looking to generate more revenue from consumer packaged goods customers like
Nabisco. As the head of marketing for ACME, you face a problem familiar to most business-to-business marketers. It seems that Nabisco andother consumer packaged goods (CPG) firms are forever focused on
price, price, and price alone.And, if price isn’t the key driver, then thecompany wants you to hold onto your inventory indefinitely, and thenturn on a dime when production speeds up. Even worse, some of yourcompetitors with broader product lines seem willing to cut theirprices on some of your items (say, the cardboard that will be used tocreate the Wheat Thins box) so as to get the larger contracts for thosepackaging materials that are higher volume or carry a greater potential
margin (say, the wrapping for Oreo packages).

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The question here is, How do you build your brand experience
with Nabisco to sell more, but also to bring more value to Nabisco?
For many companies, even very large ones, it seems that escaping
commoditization is next to impossible.
Not true. And here’s the process that will help you map yourescape plan.
Think back to the steps required for creating the brand experience blueprint. More specifically but still on the topic of destination
planning, how do you want your customer to feel, think, and act ateach stage of the brand experience? Defining the destination for abrand experience would look something like Figure 4.3 for ACME/
Nabisco (from ACME’s perspective).
While still at a high level, work through each step of the brandexperience and develop the way you would like your customer (ortargeted customer) to think, feel, and act. In addition, identify those
key metrics that will serve as critical indicators of your achievementof your objectives.
For the purposes of this exercise, it is also critical to identify the
key customer for each element. For large, complex purchases, many
people are usually involved. While the purchasing department may
be responsible for the sale, decisions may also be driven upstream

Operations

Communications

Acme Brand
Touch Points
Print

Identify
Need
Reducesbreakage

Evaluate
Options
Proventechnology

Buy

N/A

Use

Keeps
product fresh

Flexible terms N/A

ObtainSupport
N/A

We comethrough foryou

Online/EmailEasy toState of theart technology change overDirect Sales

Pops on theshelf

Proven - you
don't want tobe first

You will not
lose yourjob

We comethrough foryou

We comethrough foryou

Call Center

N/A

N/A

N/A

Fast turnaroundLimiteddowntime

FIGURE 4.3 Brand Experience Blueprint for
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by decisions made in product marketing (such as the Ritz brandmanager), production (the bakery), commercialization (the engineers that build the line for a new product), or even product development (the food technologists and professional bakers who know
a lot about chemistry).
After developing a destination for the brand experience, it’stime to move on to the real heavy lifting. Situation assessment requires first identifying the relevant steps of the brand experience on
which to focus. For purposes of this example, let’s pick an area thatis often forgotten by marketers of business-to-business products or
product components: the actual usage of the product by the consumer. It would be easy for ACME to focus simply on meeting thespecifications provided by Nabisco, but that’s not usually enough,and that’s not really marketing.This is the point at which it’s important to break down the element of the brand experience into its
component parts.

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Who Is the Customer and How Do You Connect?
For a product such as the packaging for a consumer good like a cookie
or a cracker, there can be a number of different customers. First of all,the actual purchase might have taken place via Nabisco’s purchasing
department—probably by someone looking at current production
volumes and managing inventory of packaging across a portfolio of
products and bakery locations.
The customer in sales such as these is often a much broader
entity than the person responsible for moving the dollars or executing the transaction.
The customer for ACME packaging is also the engineer at the
bakery who happens to be responsible for ensuring that the bag-inbox machine runs properly (and doesn’t result in boxes of crumbs on
the grocery shelf).The package has to be able to work with the existing equipment. It has to show up on time and be easy to move onto
the line at the shift change.
For the big brands in the Nabisco portfolio, of course there’s amarketing or brand management individual responsible for the profit
and loss for the brand. This brand manager is intensely interested in
the consumer reaction to the packaging. (Does it carry colors accurately? Does it communicate the key benefits that were uncovered in
the brand architecture? Does it make the cookies or crackers look

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85delicious and inviting? Is it easy to open and close? Does it keep the
product fresh? Does it prevent breakage?).
Then there’s the Nabisco direct store delivery (DSD) sales force.
These people are interested in how easily the package can be stacked
and merchandised, because they’re the ones who walk into just about
every grocery store in the nation and make sure that the Fig Newtons
are lined up just so. Also, they’re the ones that have to create the big
displays at the end of the grocery aisle, with packages of Oreos stacked
to the ceiling.
Let’s not forget the customer (distinct from the consumer)—in
this instance, the retailer that carries Nabisco’s product. Given the
consolidation of retailers in the United States, each customer is enormously demanding about delivery requirements and the basic logistics
of ensuring that the packages show up on time. It’s a big challenge tokeep Wal-Mart, Safeway, Kroger, and everyone else happy. They wantanswers to questions like these: Does the package communicate
clearly? Does it fit in the shelf space that’s been allotted? Does it keep
the product fresh? Will it keep customers from bothering the store
manager? Will it drive incremental revenue, or is it potentially uniqueor ownable for my chain of stores?
Finally, there’s the consumer who actually buys Nabisco’s cookies
or crackers. The packaging of the product can have an enormous
impact on the desire to purchase or repurchase a box of crackers or
cookies. Is it resealable so that the product stays fresh? Does it looknice so a consumer can simply put it on a tray and serve guests?
You can see that when defining the brand experience blueprint,
understanding who the customer is can take some time. In the context of the brand experience, they’re all customers. Part of the complexity here is that ACME’s brand benefits need to be translated into
something that’s relevant for every Nabisco customer.
Now you understand why taking ownership of the brand experience requires a substantial commitment from marketing.
Given that there are numerous customers who need to be considered when talking about the brand experience, let’s employ theuse/educate element as an example of how to build a brand experience blueprint. Remember that the focus here is on how to help
ACME sell its packaging products to Nabisco (not on how Nabisco
sells to consumers). However, it’s always important to keep in mind
that sometimes it’s necessary to get smart about what’s important toyour customer’s customer to escape the commodity trap.

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ENTERPRISE MARKETING MANAGEMENTWith this in mind, let’s consider the combination of elementsin the marketing mix and the relevant customer touch points thatshould be used to communicate ACME’s brand’s benefits to Nabisco.
In addition to traditional media, which are relatively rare in this sortof business-to-business environment, there are, of course, personalselling (which predominates), telemarketing, and numerous potential
customer touch points to consider (web site, call center, e-mail, engineering support).
When identifying the elements of the marketing mix and the customer touch points that should be used to reach each respective customer, it’s important to do more than simply indicate that a particularmessage needs to be delivered by a representative of ACME. If thecustomer is, for example, the engineer who is responsible for the bakery line that makes Wheat Thins and gets them into a plastic bag anda cardboard box, then the customer touch point might need to be anengineer deep within ACME, using a channel that hasn’t been built yet.
One of the key revelations that this process uncovers is how
important it is for every company to align its employees with theemployees of its customers. In the retail industry, this model was
widely adapted after a successful pilot between Wal-Mart and Procter & Gamble. This pilot brought together many employees of P&G
who had never worked with Wal-Mart and involved logistics, productdevelopment, warehousing, sales, marketing, and so forth.This ability
to align employees on this scale led to better delivery of the brand’s
benefits and ultimately led to more (and more profitable) sales forboth parties.
Today, most companies like ACME rely solely on the interactions of
their sales forces to make do. It’s no wonder companies get trapped incommodity relationships. If the extent of marketing’s effort is focusedon reaching someone in purchasing, then everything will come down towhat drives purchasing—and that is price.
What Are the Topics of Conversation?
Now that you’ve identified each key customer (or even desired customer) and identified the elements of the marketing mix or the specificcustomer touch points that should be used to reach these customers,
it’s time to get down to the specifics:What are the potential topics ofconversation?
The real work to be done here is that for each targeted customer,

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you must identify the scenarios of interaction. For example, assume
that the targeted customer is the bakery engineer at Nabisco.The scenarios might be something like these:• The ACME product doesn’t machine as anticipated (despite
meeting specification).
• The ACME product doesn’t work well with a different supplier’s product (despite both meeting specification).
• The ACME product delivery does not meet expectations.
• When will more ACME product be available?
• What are my options for managing excess ACME product?
• The ACME product exceeds expectations.
These are sample potential interactions that might force a contact
between a Nabisco bakery engineer and someone from ACME.These
interactions form the totality of what the ACME brand means to a
specific customer.The key is to identify the interactions that form thebasis of the current brand experience.
Brand Experience Assessment
Once you’ve identified these interactions, it is time to identify where
customer touch points and elements of the marketing mix play a part.
You also must measure elements of the current interaction, to determine what might be driving current satisfaction or dissatisfaction.
For example, if we take one of the preceding interactions, “TheACME product does not machine as anticipated (despite meeting
specification),” it is critical to develop an understanding of how often
this occurs, why it usually occurs, and what the specific scenario really
looks like in great detail. Does it involve certain types of packaging
machines, perhaps those sold by industrial machine suppliers such as
Siemens or Bosch? The more that ACME can dig into a particular scenario and understand how operations work today, the better it will beable to identify opportunities for improvement.
Even more important, by measuring elements of each scenario,
ACME will be able to determine what might be holding it back fromreaching the next level of sales and profits.
In addition to understanding your own scenarios, this is also thestage where it’s important to look outside—perhaps outside the packaged goods industry entirely—to inject an outside perspective on what

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is possible. How do best-in-class companies respond when a productthey’ve sold doesn’t machine properly, despite meeting the productspecification? Do they make their engineers available on an instant messenger or via some sort of hotline?
When a line goes down for longer than a minimal period, it canhave a major impact on the entire supply chain and end up costing acompany a lot of money. The alternative is that the engineer justmakes do, recommending to purchasing that your product should be
avoided in the future.
Following the situation assessment, you will have the opportunity
to develop hypotheses for how to best improve each interaction. Developing compelling ideas for how to drive improved results requires
a lot of creativity to identify potential new opportunities for bringing
the brand to life. Also, the better an idea you have of the way theworld works today and the aspects of life that your customer reallyexperiences, the better informed you will be when it comes to developing the way things should be.
Having identified the key customers, the marketing mix, the customer touch points, and the interaction scenarios, you may think that allof your work is done.The situation assessment really just identifies allof the moving parts that have to be taken into consideration and thenmay propose direction for how to improve the weak links—usually bycomparing individual parts to best practices.
This process of deconstructing the brand experience to its
component parts often unleashes a lot of creative possibilities—
opportunities to identify new key customers that have heretofore
been ignored; opportunities to leverage new customer touch points
or existing ones in a new way; and opportunities to generate, alter,or even reduce customer interactions to create better opportunities to deliver the brand’s benefits within a specific context.
Once the deconstruction of the situation assessment has takenplace, you’re ready to begin the work of digging back into the brand’s
emotional benefits, functional benefits, and attributes that drive purchase intent; finding the ones that are relevant to each key customer;
leveraging the best element of the marketing mix or customer touchpoint; and developing hypotheses for how to best address or improveeach of the key customer interactions.
Continuing with the hypothetical example of the Nabisco bakery
engineer who is using ACME packaging to supply the carton that carries

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89Wheat Thins, the output of ACME’s situation assessment for this specific scenario might be something like the following.
Current Brand Interactions—Key Customer—
Nabisco Bakery Engineer• ACME product doesn’t machine as anticipated (despite
meeting spec)• Customer touch points:
Web site (product specs)
Call center (calls from bakery engineer routed to sales
rep)
Shipping documents provide copy of product specification• Marketing mix:
Print ads in baking trade magazine• Relevant benefits:
Emotional• None communicatedFunctional• Generic ACME corporate message—ACME offers
state-of-the-art capabilities in packaging
Attributes• Product delivered as “meeting spec”
Desired outcomes/metrics• Limited production downtime for Nabisco• High degree of satisfaction by bakery engineer• Communication of satisfaction from bakery engineer
to brand manager• Communication of satisfaction from bakery engineer
to purchasing
■
■

■

■

■

■

■

■

Brand Experience Hypotheses
Once you’ve completed the situation assessment of your brand experience, which essentially involves taking inventory of every interaction, with every key customer, across every touch point and elementof the marketing mix, you’re then able to apply everything that you’ve
learned along the way to generate hypotheses about how to improve

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the overall experience.This improvement will come in achievement ofspecific outcomes for each element of the brand experience and ultimately in sales.
It’s important that the primary objectives of sales and profitability
never become too distant in your calculations.While it can be tempting to measure success with metrics such as the satisfaction of the
bakery engineer in the ACME/Nabisco example, that satisfaction is
only relevant if it’s a driver of additional sales. In other words, any element of the brand experience is important only to the extent that a
causal relationship with sales can be identified. If it’s not a driver ofsales (or profitability), then it doesn’t really belong in the marketer’sradar.
The hypotheses you develop depend on the knowledge you uncover from your brand experience assessment.To follow through on
the ACME/Nabisco example, you would generate hypotheses such as
the following (remember, you’re in the shoes of ACME, marketing tocookie and cracker giant Nabisco):• Providing an engineering support service to Nabisco bakery
engineers would improve service and overall satisfaction.
• Develop concept details, channels, staffing, and pricing fortest.
• Working more closely with product designers before thespec is developed would eliminate machining problems withACME products, including working with packaging equipment makers.
• Identify marketing mix elements and customer touchpoints to provide this input up front, before spec is created.
• Improving the web site and providing instant messaging support (and connection to in-house ACME engineers) would
provide the fastest response to potential problems.
• Providing “working with ACME packaging” training would
reduce overall call volume and eliminate potential downtime
from machining problems.
These are, of course, hypothetical examples, but they give you an ideaof the types of hypotheses that you must develop. These hypotheses
then must be validated to determine not only whether they have an
impact on a particular metric—say, production engineer satisfaction—

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91but, most important, whether it’s possible to make a connection between the measured outcome for an element of the brand experienceand sales.
Hypotheses Validation
Validation of the hypotheses that will drive improvement of the brandexperience and result in the brand experience blueprint—the specification, as it were, for what you would like your customer’s brandexperience to be—depends on the specifics of your business and thespecifics of your particular hypotheses.
In some instances, you will need to resort to the type of quantitative research described in Chapter 2, similar to the research required
to develop a brand architecture. However, in many cases, you may beable to leverage your living experiment, meaning your current business
operations, to run a pilot or regional test.
One of the beauties of focusing on the brand experience is thatthe subject isn’t something esoteric or distant from your company.
The topic is literally every interaction with every potential customer,
so it is something that will likely be near and dear already to someone
in your company. Rest assured, if the Nabisco bakery engineer isunhappy, then your sales team focused on Nabisco is likely to know allabout it, or at least have an idea that it’s a problem.
This validation is very much a part of delivering on the new science of marketing. It gives you an opportunity to conduct an experiment and then incorporate the results into your brand experience
blueprint.
Develop the Brand Experience Blueprint
Once you’ve validated your hypotheses, you finally have everything
you need to draw up your brand experience blueprint.
Across every element of the brand experience for every key customer, for every scenario, and for every customer touch point andmarketing mix element, what do you want the experience to be, fromyour customer’s perspective? In building this map of the total relationship or brand experience, just as in building a home or a skyscraper, the outcome of a brand architecture and a brand experience
blueprint is the total picture, both from an inside-out perspective(what are the benefits that really communicate the essence of my

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brand?) and an outside-in perspective (what does the customer actually experience when he/she interacts with my brand?).
The brand experience blueprint will become the marketer’s laboratory, laying out every potential interaction with every potential customer or customer segment.The old days of buying media and hopingthat advertising is getting something done are over.The new science
requires that marketers take ownership of the brand experience.The
only way to really do that is to understand what that brand experience is and to stake out a direction for creating the ideal brand experience by creating a brand experience blueprint.With this blueprint inhand, marketing has the tool that it needs to push, prod, and cajole
every other part of the company, so that whenever anyone interacts
with a customer, there’s a specific desired outcome to correspondwith the interaction.That interaction is no longer something marketing has to leave to the whims of other departments.
These days, every customer interaction is an opportunity to sell.
Isn’t it time that you took control of your brand experience? Why
would anyone want to leave something so important to chance?

MARKETER’S S CIENTIFIC METHOD: RESHAPING
THE COMPANY IN MARKETING’S IMAGE

The way to improve your company’s brand experience is to develop
the requirements for what that experience should be—across every
element, from the very first consideration all the way through support. Your customer’s experience with your brand is far too important to be left to chance.
To create your company’s Brand Experience Blueprint, you
should follow these steps.

Step 1: Develop a High-Level Destination,
Aligned with the Brand’s Destination
Don’t assume that just because you’re about to invest a huge amountof money everyone on your team is in sync with the strategy. Suchassumptions inevitably turn out to be wrong. Make the time to ensure that this alignment takes place, or it usually doesn’t happen.

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93Step 2: Assess the Current Brand Experienceat a Detailed Level, Across Each Element
Assessing the brand experience requires a significant commitmentof time and resources. The more you understand your customer’scurrent experience with your brand, the smarter you will be atcrafting that experience as you move forward. Look to evaluate thebrand experience not just with qualititative measures but with hard
numbers: How long does it take to get X done? How many customers are experiencing Y? How many people does the company
employ just to address interaction Z? Be sure to apply measures ofcost, time, and quality to the current brand experience. This evaluation must be done with the potential investment in mind that will
set things as you want them to be.

Step 3: Develop Hypotheses for Improving the Brand
Experience, Driving to Specific Outcomes (Including Sales)
Put on your thinking caps and grab every creative person you know.
This is your chance to reinvent the way your customer experiences
your brand. Don’t be constrained by the way things are, and be open
to alternative models from any industry.

Step 4: Validate Hypotheses, Focusing on Achievementof Key Metrics
Don’t forget: Your business is your laboratory. You have an opportunity to learn right on the spot, maybe by carving out a location or
region, or maybe by using one of your hot dog stands to validate
some of your hypotheses about the changes in the brand experiencethat will drive your sales higher.

Step 5: Leverage Validation to Create the Brand
Experience Blueprint
Creating the brand experience blueprint is much like the work an
architect does. It requires a lot of attention to detail. The blueprint
itself may change, but it becomes the bible for how things are supposed to be. You may move a beam here or maybe decide to rewire
there, but your brand experience blueprint should form the core ofyour customer’s experience with your brand.

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ENTERPRISE MARKETING MANAGEMENTStep 6: Create a Blueprint Release/Implementation Plan
Based on Relative Difficulty/Value of Changes

TE

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Once you have the plan, you can’t just slide it in a drawer and hopethat something happens. This step requires that you think throughthe sort of changes in your business model that will be required tomake this plan a reality. Do you have the right people, processes, andtechnology to bring your brand experience blueprint to life? Remember, if you’re not going to build it up to code, then you’re just wasting
your time.

Team-Fly®

5
PLUG MARKETING INTO CRM

So now we have defined the brand experience as the container
for every customer interaction with your brand—across all
physical touch points (e.g., stores, call centers, direct sales) as
well as across all elements of the traditional marketing mix (e.g.,
advertising, promotions, packaging). If your brand represents the
specific emotional and functional benefits that you communicate
and deliver in providing a product or service to your targeted customers, then your brand experience is the gauge of the actual experience your customers have across every potential interaction withyour company and its people—from the moment they contemplatea specific need through their usage of the product and their potential need for support.
At this point, you might jump to the conclusion that a robust
enterprise information system that helps you manage customer
relationships at every touch point is the perfect solution for developing productive, profitable brand experiences. Perhaps you are
tempted to go out and buy the fanciest, most expensive system you
can find. Please don’t fall into that trap. Tell the software vendor
that you’ll call back next week and read on.

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ENTERPRISE MARKETING MANAGEMENTJUST MANAGING CUSTOMER RELATIONSHIPSISN’T NEARLY ENOUGH

Customer relationships taken out of the context of your company’s
brand are irrelevant. Enterprise-wide information systems like customer relationship management (CRM) can be powerful and drivea strategic advantage only if they provide a better way to deliver on
the promise of your brand. Delivering on this promise requires that
before you invest one dollar in software or process changes, youdevelop your brand’s architecture and convert that into a blueprint
for the experience you want customers to have with your brand. A
brand experience blueprint describes how a brand’s benefits are to
be delivered and represents the real business requirements for any CRMrelated project.
How can any CRM implementation deliver
on a brand’s promise if the primary brandbenefits don’t form the starting point for designingpotential CRM functionality?

It’s time to face some hard facts about customer relationshipmanagement, and the way that it is being pursued by many companies today. Plain and simple, CRM just isn’t getting the job done.
It’s the subject of all the talk on web sites, at conferences, in nervous boardrooms: CRM isn’t driving top-line results. And everyone’s getting worried—from the companies that have sunk millions
into buying the software, to the software providers themselves, tothe IT services companies that see CRM as their best chance forpost-dot-bomb survival.
One problem is that CRM can offer some deceptive short-term
success. Implement the sales force automation (SFA) elements of
CRM, and you’re likely to see a bump in sales thanks to newfoundprocess efficiencies. But, like changing tires at the Indy 500, it’s notenough to win you the race—it’s just enough to keep you from getting lapped by your competition. You might have happier customers,
but are they buying more from you? Your salespeople might beengaged in more selling activities and doing a better job of reporting
their progress, but are they actually selling more for you? Outside of
SFA, most companies struggle to determine how to monitor andP LU G M A R K E T I N G I N T O C R M

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track interactions and messaging across all customer touch points—
and, from there, to actually make some money. Let’s take a closer
look at how to do just that.
THE PERILS AND PROMISE OF CRM

CRM isn’t always a low-return investment. Quite the contrary; itserves a useful purpose when employed correctly. And it’s easy
enough to see what motivates a company to make an investment in
CRM. When companies see customer acquisition costs rising andconversion rates decreasing, when potential marketing channels
proliferate and companies need more productivity, CRM is a usefulinvestment that has the potential to drive significant returns. Froma technology perspective, CRM delivers key functional benefits
such as centralization of customer data, access to that data acrossthe enterprise in a secure and private way, and execution support
across multiple channels.
However, amazingly, an estimated 70 percent of CRM projects
don’t produce measurable business benefits, according to a study
performed by Berkeley Enterprise Partners. Even worse, 64 percent
of CRM users in one sample lacked the techniques to even measure
the business value of their CRM systems, and less than 10 percent ofcompanies can measure tangible ROI in CRM. CRM efforts also
suffer from scope or budget creep; almost a third of companies running CRM have had to revise their budget upward, by an average of
46 percent (source: Meta Group).
The current situation is even more disturbing when you consider the testimony of customers of industry-leading CRM solution
providers such as Siebel Systems. Findings recently published by
Nucleus Research (“Assessing the Real ROI from Siebel,” September 2002) revealed that 61 percent of Siebel customers interviewed
did not believe they achieved a positive ROI from their Siebel
deployment. It is important to note that this research did not profile a statistically significant sample of Siebel customers—and wasnever designed to. The reason for this is simple: This research was
designed to focus on Siebel’s reference customers only. To put this in theproper context, the customers surveyed were the individuals highlighted on Siebel’s web site and profiled as achieving success with
their CRM deployment. In other words, even Siebel’s best customers
are not realizing the benefits promised by CRM.

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Table 5.1

Most CRM Projects Don’t Meet Expectations

One view ofExpectation
the customer
One view of the customer

Improved overall customer
satisfaction
Improved overall customer
Increased customer satisfaction
satisfaction
Reduced customer defection andIncreasedcustomersatisfaction
and increased
customerloyalty
Reduced customer
Profitable
growth defection andincreased customer loyalty
Profitable growth

to DateMultiple,Results
functionalviews
ofcustomer
Multiple, functional views of
Only
improve experience locallycustomer
Only improved experience locally
Improved
efficiencies
Increase in retention
Improved
efficiencies
accompanied
by increasein downward migration
Increase incustomer
retention accompanied
Reducedconversion
by increase in downward migrationand market contraction
Reduced customer conversion andmarket contraction

The sad fact is that despite great intentions and breakthroughtechnologies, most CRM initiatives do not meet business (or customer) expectations (see Table 5.1).
CRM AND THE MARKETING GAP

The problem is a matter of focus. To this point, CRM applications
have focused largely on the orchestration and analysis of customer
interaction processes (that is, sales and service automation) anddirect marketing (a.k.a. campaign management). In the grandscheme of things, CRM has just scratched the surface and is still along way from transforming the way companies create value forcustomers. For instance, CRM hasn’t yet been fully employed tosupport such essential marketing activities as strategic planning,market sensing, customer message management, brand architecture development, brand management, product development, andmarketing investment management. Furthermore, CRM has alsotended to make companies overly e-focused—centering their attention too heavily on the Internet, even though traditional selling
channels, such as face to face, business partners, and telechannels,
still account for more than 95 percent of revenues (source: Meta
Group). But before diving further into the possibilities for closing
the gap between CRM and marketing, let’s consider some historicalperspective.

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Before the age of CRM, marketing departments invested all of
their time and money trying to land current and potential customers
when they weren’t interacting with the company—they were watching television, reading magazines, strolling through airports, and soforth. Once a company located its target customers, it would zero inwith messaging that would supposedly sink in far enough to help
customers make the right purchasing decisions when the time came.
But now that CRM has arrived, marketing has a powerful weapon
it doesn’t even think to use. CRM systems give marketers the tools tocatch and communicate to customers at any and all times during
which they interact with your company, whether you’re running alemonade stand or a multinational corporation with web sites, retailstores, distributors, and call centers. A marketer’s most cherisheddream is having the opportunity to fish where the fish are. But it
seems that no one has told the marketers where the pond is located.
Even worse, some companies continue to invest in CRM efforts
even though they’ve been unable to make a clear connection between
their company’s brand promise and the use of CRM. This is like driving faster when you’re lost, and it can lead you to all sorts of strange
places.
You may not believe it, but some companies are so focused onbuilding great relationships with their customers that they’ve forgotten that CRM is all about selling. They prefer to believe that if
only they could create a great relationship with their customers,then the dollars would magically flow in.
Nonsense. Create customer relationships all you want—if they’re
not leading to sales, they’re not worth the effort. This airy foolishness
about the value of relationships is why CRM investments don’t pay
off. It’s already difficult enough to sell more every month, every quarter, every year . . . and it’s that much harder if you’re merely tossing
your brand name to the winds and hoping it will connect with somecustomer somewhere.
However, if you’ve developed a productive, profitable brand experience for your customers (see Chapter 4), you’ve created a marketing asset that can be used over and over again. In other words, if
marketing can teach your customers to associate compelling emotional and functional benefits with your brand, then you’ve got
something to build on. And if you use the architecture of your brandand the desired brand experience blueprint to inform the design
and implementation of your CRM capability, you’re in business.

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ENTERPRISE MARKETING MANAGEMENTSounds logical, seems pretty straightforward, but somewhere
along the way companies are getting off track. Why? A primaryreason is that CRM has been focused (and financially justified)predominantly on creating operational efficiencies for the enterprise rather than doing things differently from competitors in a
way that delivers unique value to customers.
CRM CREATES OPERATIONAL EFFICIENCIESFOR EVERYBODYDeveloping a business case for CRM that promises significant
improvements in operational efficiency is not a bad place to start(see Figure 5.1). Companies must achieve, maintain, and extend bestpractices in sales, service, and marketing activities in order to be competitive. Furthermore, to justify the multi-million-dollar budget
required to invest in the most up-to-date hardware, CRM software,

Customer RelationshipManagement

Operational
Efficiency

Strategic
Positioning

Doing things differently
from competitors, in a
way that delivers uniquevalue to customers?

FIGURE 5.1 CRM Focuses on Operational Efficiencies

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101and networking technologies, you’re going to have to drive out somecost savings and productivity gains. Even more important, you mustshow how you will eliminate waste, defects, and delays in serving customers. Increases in customer satisfaction and productivity gains form
the basis for just about everyone’s CRM business case. But here’s thepunchline: Improving operational efficiency using CRM is necessary
to achieving superior profitability, but it is not sufficient on its own tocreate a sustainable competitive advantage. You will soon discoverthat CRM generates absolute but not relative improvement withinyour industry—and competitive convergence will happen sooner
than you think! In other words, you’ll improve your business performance, but in a way that your competitors can emulate and imitatevery easily. After all, CRM technologies are available to everyone.
So why are most CRM initiatives failing to generate sufficient
returns on investment? Interestingly enough, looking at the component letters of the acronym itself can reveal some of the flaws in thethinking about customer relationship management. Most companies have focused on the “M,” forgotten about the “C,” and failed
to recognize that marketing drives the “R.” And there’s a letter
missing altogether: the “B” for brand. If the collection of emotionaland functional benefits and product attributes that drive purchaseintent aren’t the primary driver of your CRM strategy, then CRM isde facto disconnected from the company’s core asset—its brand.
Simply put, CRM initiatives have focused on managing customer
relationships, not developing them by delivering specific brand benefits. The CRM initiatives that are generating the greatest businessresults are the ones whereby companies are using technology toenable the development of productive, profitable brand-based relationships with their customers—not just managing the customer
interaction in a manner that is more efficient for the company.
Companies that use CRM to generate a deep understanding andinsightful anticipation of their customers’ needs and wants can realize even more substantial returns on their CRM investments.
However, if you’re not careful and you implement CRM simply
to manage your customers rather than delivering on your brandpromise, you can end up doing much more harm than good.
Here’s a simple example: It’s Christmastime, and a large toy
retailer has offered fantastic promotions if you use its web site
to make your purchases. The company has set up a fantastic new

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ENTERPRISE MARKETING MANAGEMENTe-channel, which allows you, the valued customer, to stay out of thebusy stores at Christmastime and make all of your purchases fromthe comfort of your living room. Sounds like a great customer relationship experience. However, when you try to reach the site, you
discover that it’s so popular that it can’t serve you and you’re asked
to come back later. What does this interaction communicate about
the retailer’s brand? Was this new e-channel designed and developed
to deliver on the brand promise across every customer interaction?
When the actual customer interaction—a web site outage in thiscase—conflicts severely with a brand’s key emotional benefit (i.e.,
makes you a better parent by ensuring you can get your child what
he or she wants), tempers are going to flare. What was intended as away to extend a brand’s benefits through a new channel can quickly
become a way to deteriorate the value of the brand altogether.
Here’s another example: After a lengthy and painful negotiation with a car salesman, you’re sitting in the finance manager’s
office at the car dealership, trying to secure financing so that you
can drive the car of your dreams off the lot today. In the middle of
the arduous process of collecting information about you to process
your loan application, he shoves a credit card application in front of
you and suggests that you fill it out. What brand promise is being
delivered on by the auto finance company? In their rush to achieve
the utopian state of cross-selling, financial services companies haveforgotten that consumers often have no interest in cross-buying.
Both of these are examples of CRM run amok, CRM functionality in search of a marketing strategy. Many companies are using
CRM to streamline interactions for their benefit and to bundle disparate product pitches in an effort to penetrate deeper into theircustomers’ wallets. By simply asking customers what they need orwant, companies can discover that, as in the example, negotiating
for and buying a new car is stressful enough and is not the best time
to confuse matters by asking buyers to make another decision! Thatsaid, the same customer may be willing to listen to that credit cardoffer after the deal is concluded—and if it is put in the context of areal consumer need, concern, or benefit (“You know, there mightcome a day when you can’t make a car payment. . . . Wouldn’t it benice to know that you have the ability to pay on credit and not risk
losing your dream car?”). Unfortunately, CRM for many companies
has become synonymous with cross-selling you more of their stuff(more about this in Chapter 6).

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CRM CAN CREATE SUSTAINABLE
COMPETITIVE ADVANTAGE

The lessons are becoming more obvious: Just because everyone
can use CRM doesn’t mean everyone should use it in the same way.
Companies can achieve a sustainable advantage through the use of
CRM, but they need to understand what it’s going to cost them interms of financial investment, strategic trade-offs, and relinquishedopportunity. Traditional business thinking focuses on the ability toimitate competitors, since standard barriers to imitation are often
low. True sustainability arises when competitors do not want to imitate because of the trade-offs they would need to make to keep pacewith an industry segment leader. As Dr. Michael Porter of the Harvard Business School notes, “True competitive advantage can besustained only when operating at a lower cost, commanding a premium price, or both.” When approached properly, a CRM initiative
can help you do just that.
Consider the examples of Southwest Airlines, Enterprise RentA-Car, and IKEA. Each one of these companies generates a relatively
higher level of performance (in terms of profitability) in its respective
industry because each has secured an advantage that others cannot
afford (or do not want) to imitate. Southwest Airlines has made specific trade-offs in serving its customers. Yes, it offers low fares. But
Southwest also doesn’t have the burden of running hub operations, itflies only one type of aircraft (Boeing 737s), and it doesn’t offer
meals, frills, or paper tickets, so it can guarantee 15-minute gate
turns. Similar focused strategies have been carved out by Enterprise(located away from airports, serving longer-term rental customers)
and IKEA (pick out your furniture in a warehouse environment, haul
it to the counter, pay for it, and put it together yourself). Can United
Airlines, Hertz, and Bombay Company easily imitate and developthese types of relationships with customers? Would they want to?
These companies use various forms of CRM technologies in creating value for their customers. But clearly, CRM shows the greatest
results when it delivers new and unique value to customers, andwhen the brand promise and the operational delivery are completelyaligned. Does it make sense for Southwest Airlines to invest heavily
in data systems that track the meal preferences of its customers? Of
course not, but it makes sense for United. Does it make sense forSouthwest to invest in automated systems for expediting gate turns,

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cleaning its 737s and refueling to ensure on-time departure? Absolutely. Does it make sense for United? One could argue that since
many of its planes do not depart on time, its customers have come to
expect a certain amount of delay. In fact, it might make sense toinvest more in CRM technologies that keep the customers informedof delays before they get to the airport and keep them occupied in
the gatehouse when delays inevitably occur. Unless you do theresearch to deeply understand the needs and wants of customers, or,most important, that combination of emotional and functional benefits that actually drive purchase intent, you can easily end up
investing in the wrong CRM functionality—just because everyone
else has made the same mistake.
FROM CUSTOMER DATA TO ACTIONABLE
CUSTOMER INSIGHTSTE

One of the pleasant outcomes of implementing CRM across yourenterprise is that you end up with a tremendous amount of data
about your customers. You will likely have more interesting facts
and figures about your customers and their buying habits than you
ever imagined possible. Then, when you integrate CRM with thedata available through ERP applications, there is no end to thedepth, availability, and various aggregations of customer data now
available to companies. Of course, you still face the daunting challenge of making sense of it all. And even more important, you must
be able to act on that information to drive sales and profitability inorder to justify the investment you have made in the technology.
This is often more easily said than done.
Why? Because there is a big difference between the raw customer
usage data that most CRM and ERP systems provide and the actionable customer insights that you need to drive your business (see Figure5.2). For instance, most commercially available CRM solutions arevery good at tracking descriptive and quantitative data about reachand response rates on marketing campaigns, what and when salespeople sell, what and when customers buy, and what and when customers are being served. The major questions still remaining formost enterprises are these:~ Why are salespeople selling (or not selling)?
~ Why are customers buying (or not buying)?

Team-Fly®

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105~ What do I have to do or say to attract more customers?
~ What do I have to do or say to get customers to buy moreof my product?
~ What do I have to do or say to get customers to pay more
for my product than for that of the competition?
~ What are customers and noncustomers saying about
their experience with our company and our brands?
In other words, how do you translate all of these interesting facts
about your customers and noncustomers into something that you can dotoday to increase profitability?
Consider this example: The director of marketing for a branded
laser printer manufacturer receives a monthly download of datafrom the company’s in-house CRM system on the volume of tonercartridges that is sold each month across the various retail channelsof distribution. In recent months, she has noticed a steep decline in
the purchase of toner cartridges with one of the regional office supply wholesalers. The decline varies by geographic location, but, generally speaking, volume is down across the board in this channel.
The director of marketing investigates further and discovers that
this particular wholesaler has been experimenting with a new service to recycle and refill cartridges on behalf of its national retailaccounts. This action is clearly cannibalizing share for the manufacturer, but even more frustrating is the fact that the manufacturer
runs a recycling service of its own for its large national distributors.
Raw Customer
Usage Data

Customer
Usage of Product A
is greaterthan Product B

Customer
Insight

Low preference ofProduct B iscontributing to lower
usage frequency

Lower usage
frequency is due todisadvantages
versus competition
on important benefits

Improvement on
customer benefit ‘x’will increase usage
frequency

Communicating
customer benefit ‘x’
this way will increaseusage frequency

More
DescriptiveMore Action
Oriented

Interesting
Fact

Something I
Can Do Now

FIGURE 5.2 From Customer Usage Data to Actionable
Customer Insights

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The wholesaler is now in direct competition with the manufacturer!
As you might imagine, the dialogue between the manufacturer
and the wholesaler quickly grows heated from this point forward.
The manufacturer claims that the wholesaler is violating the termsof their distribution contract, and the wholesaler argues that the
cartridge itself is a commodity and that recycling is a higher-margin
business for it. But here is a more important question: Who is missing from this example? The end user, of course. Clearly, the idea of arecycled, more environmentally friendly, perhaps less expensive
toner cartridge is appealing to the end user. The wholesaler and its
retail partners have revealed this insight through experimentation.
Even though the manufacturer was a major player in this business,
it was so distant from the end user that it was unable to uncover andact upon the insight and was blindly motivated to continue selling
more new cartridges even though it had been in the recycling business for some of its larger direct accounts.
This is the classic trap for manufacturers that attempt to implement CRM in a multitiered distribution system: They are often so
distant from their end users that the raw customer usage data ishighly retrospective and lacks sufficient perspective on attitudes andbehavior to provide usable insights. Even if you are lucky enough toreveal a customer insight, if the data is not timely, it may be too late
to take advantage of the opportunity.
An effective CRM implementation in this type of environment
would span the entirety of the end users’ brand experience with thelaser printer, taking into account the various replenishable products
and services that they may require. In this type of implementation,
the manufacturer could end up adding a tremendous amount ofvalue to its channel partners beyond just supplying high-quality
products and services. For example, the manufacturer could use
CRM analytics to reveal that communicating various types of benefits and capabilities of the laser printer will encourage increased
usage—and, in turn, the need to replenish the cartridges.
USE CRM TO PLUG IN TO THE DIALOGUEWITH INFLUENTIALSThe Internet, mobile solutions, and other associated new media
have complicated matters for many enterprises by accelerating theP LU G M A R K E T I N G I N T O C R M

107need for timeliness of insights into customer needs and wants.
Customer and consumer trends now have the potential to turn ona dime thanks to the power of the Internet to seamlessly spread
information by electronic word of mouth. Moreover, wireless communication devices and mobile business applications on thesedevices allow consumers to spread the word anytime and anywhere. At sites such as www.bizrate.com and www.epinions.com,
customers post their kudos and complaints, describe the ups anddowns of their relationships, and profile their experiences withvarious brands and companies in every category imaginable. These
people are not afraid to voice their opinions, chronicle their experiences in excruciating detail, alert other consumers to the hazards
of working with the company, and give pointers on how the company could have better met their needs. As a result, concepts suchas brand preference, reach, and loyalty are much more complicatednow. They are far more amorphous, with the potential to change
whenever and wherever a customer interacts with your brand—
offline, via wireline, and wirelessly. Of greatest concern is the factthat you may not be in control of the dialogue about your brands.
Your CRM initiative may be lulling you into a false sense of security,
so that you believe you are getting the whole story at traditionalsales and service touch points.
In its ongoing research of this subject, Burson-Marsteller has
been tracking a particularly powerful subgroup of consumers that it
calls E-fluentials. These consumers, representing about 10 percentof the U.S. population, were among the first to explore and understand the inherent power of the Internet as a channel for commerceand communication. According to the research, E-fluentials have “adisproportionate impact, relative to their size, on the buzz surrounding brands, products and services.” The research report
goes on to point out that E-fluentials “have a say in the purchasing
decisions—online and offline—of approximately 155 million consumers.”
Given the influential power of such a group of consumers andtheir potential to provide insights into the emerging needs and wantsof millions of customers, it seems only logical that a company should
identify this segment within its own customer base and target thesecustomers with very specific marketing and CRM initiatives to breakinto the dialogue.

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ENTERPRISE MARKETING MANAGEMENTA WORD TO THE WISE

As demonstrated by the cross-selling examples earlier in this chapter,
you may be tempted to leverage some of your newfound knowledge
about your customers, tap into the dialogue of your influentials, andend up abusing your customer relationships. Be careful: You’re walking a fine line here. It’s one thing to be genuinely interested in anticipating the needs and wants of your customers, but it becomessomething completely different if you use that knowledge to inundate them with offers that are designed primarily to help you to meetyour objectives.
If properly implemented and focused, CRM can create sustainable competitive advantages for your business. However, in order todo so, marketers must close the gap that exists between the marketing function and today’s approach to CRM implementations:~ CRM applications must be tailored and configured todeliver on the benefits articulated in the brand architecture and to implement the brand experience blueprint
for each brand across all channels, reinforcing the drivers of differentiation and preference.
~ CRM analytics must be enhanced to go beyond justgathering and reporting customer data. You must tailor
this data to generate proper context and understanding
which in turn will help you improve the brand experience for your customers.
~ You must connect CRM capability with marketing’s ability to understand the dynamic nature of consumer trends.
By combining these strengths, you can take control of the
dialogue with influentials and trendsetters to understandand predict the consumer behaviors that ultimately drive
purchase intent.
GET TING THE PAYBACK ON CRM INVESTMENTS

The key message here is that CRM will pay you back if it builds
on and reinforces an existing strength, advantage, or core competence. Furthermore, you can expect high returns from initiatives
that use CRM to reinforce trade-offs and solidify brand positioning,

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109exploit your skills in customer analytics, provide unique access tocustomer or market data, enable strong service cultures, or accelerate merger and acquisition strategies.
But don’t get hung up on measuring every twist and turn of yourCRM initiative. Believe it or not, CRM projects underpinned by rigorous ROI analysis are more likely to fail than those in which thenumbers are less rigid! The reason is that in the rush to assemble rigorous business cases to justify CRM implementations, significant
attention is paid to the things that are easy to measure (typically,
cost savings) and less attention is paid to the revenue-generating andcustomer-driven parts of the equation. In extreme cases, marketingand the customer demand creation side of the equation are completely ignored. There’s an old saying that describes this situation:
You get what you measure. A rigorous business case focused on costsavings will yield exactly that: cost savings. Furthermore, if marketing and the voice of the customer are excluded from the process,there will be a tendency for the focus of the CRM initiative to shift
inward. Certainly, a business case that is looser in terms of assumptions around increases in revenue and ultimate cost to serve customers may not meet with accolades from the CFO, but it will clearly
indicate that the focus of the CRM vision has shifted beyond the four
walls of the company. Simply put, a leading indicator for success is aless rigid business case in which marketing perspectives have been fully
integrated across every aspect of CRM design and implementation.
THE OTHER OPTION

Of course, there’s always the option to do nothing, to sit tight andstay on your current course with CRM. In this scenario, where nocompany in an industry does anything to distinguish its offerings tocustomers, price becomes the only definition of customer value, as
opposed to specialization, convenience, service, or other forms ofdifferentiation. As a result, companies seek to dominate the entire
market instead of establishing uniqueness and making trade-offs tocapture a well-chosen submarket. It may be a good idea if you’re theleader in your industry and you’re looking to drive off your weakercompetitors. But if not, it’s a tough competitive model to reverse,
and your entire industry will suffer the consequences. Of course, inany scenario, you must make sure that you’re not overinvesting in

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CRM—developing neat new functionality for which you get noacknowledgment or reward from customers.
SMART COMPANIES WILL SWIM
IN A DIFFERENT DIRECTION

The whole world is enjoying the CRM feeding frenzy. Trouble is,most companies are going at CRM like one fish in a school: watchingtentatively to see what their equally fishy competitors are doing andthen going about CRM work exactly the same way. Or, even worse,they’re implementing one vendor’s version of industry best practices inhopes of minimizing the short-term aggravation, implementation
risks, and expense.
The hard truth is that acting just like the other members of yourindustry is no way to develop a winning brand strategy, to increase
sales, and to earn sustained, superior returns for your shareowners.
While there is no one right way to use CRM effectively, the one wrong
way to use CRM is to use it just like your competition. Each company’s take on CRM must be driven by its brand architecture, the differentiated promise its brand makes to its targeted customers. If a
company’s use of CRM is simply to change technology and processes,
then the company has done nothing to build a defensible asset thatdrives benefits for customers while keeping competitors at bay.
One day soon, every fish in the school is going to look aroundand realize that since everyone now has CRM, nobody has a technological advantage. And if you’re not putting your brand to work todifferentiate yourself and sell across all touch points, you’re nevergoing to outswim or evolve into a shark.

CASE STUDY: Toshiba
INTEGRATING MARKETING SCIENCE INTO CRM
Toshiba is a perfect example of how to integrate marketing techniqueswith customer relationship management in order to make a powerfulappeal to the customer.Toshiba is a key player in the hypercompetitive
U.S. PC industry, where six leading vendors control nearly 60 percent

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111of the market.Toshiba’s executives understood the industry’s growing
move toward differentiation strategies and direct-selling channels andresolved to compete head-on to make Toshiba a major player in thechanging PC arena.
Customer loyalty, once a hallmark of the computer industry, is now
at an all-time low. Customers will no longer select a computer simply
based on the name on the box.The physical differences between personal
computers are minor,while the differences in relevant service offerings—
including distribution and customer support—are often vast. Indeed,most major PC competitors are considering their nonhardware divisions
as sources of competitive advantage—or disadvantage.
Toshiba picked up on the fact that change is necessary from market
and consumer research, and decided to reorient itself as a world-class
total computer solutions provider.The company, recognizing the shopping power its customers now wield thanks to the Internet, decided tofocus on customers at every level of its organization.Toshiba thus used
CRM to help establish a company-wide pull strategy, encouraging andallowing customers to source what they need from Toshiba rather thanpushing products onto them.
With the vast resources available through CRM technologies,
Toshiba developed a variety of total customer solutions packages, eachtailored to the specific needs of its customers.Toshiba established anenterprise-wide strategic positioning strategy, coupled with the CRM
solutions, that allows and encourages its customers to source theproducts they want, configured in the way they want, and when theyneed them.
Prior to implementing the CRM systems, Toshiba conducted acomplete analysis of its internal operations. It uncovered disturbing
inefficiencies, such as the fact that its sales reps were spending up to
40 percent of their time conducting administrative activities. Furthermore, customer information was maintained on as many as 18 different external and internal data management systems.
In order to maximize its efficiency,Toshiba rolled out a series oflarge-scale strategic initiatives designed to effect dramatic changes.
The rollout included a supply chain management initiative, an Internet
initiative, and a CRM strategy, all of which were organized around thedemands and needs of the customer.
Toshiba implemented the CRM system in order to establish consistency and unity across all internal and external touch points.With

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the CRM foundation in place,Toshiba developed predictive models ofcustomer behavior and demand, which in turn generated significant
changes in Toshiba’s structure, management, and operations.
The CRM initiative set Toshiba firmly on the path to profitability.
With a new focus on customer demand, Toshiba can now drive andmeet that demand through its centralized customer contact system.
The company has an improved ability to sell products and services tocurrent and prospective target customers. It also has a tighter rein on
its finances through a better management of revenue targets, increased
process efficiencies, and a reduction of costs.
Technology companies have little control over the broad economic upswings and downturns in their industries. But they can control the way in which they prepare for and respond to the demandsof businesses and consumers.With a fully implemented CRM system
and a comprehensive marketing plan,Toshiba has a firm handle on its
market—and its future.

MARKETER’S S CIENTIFIC METHOD:
PLUGGING MARKETING INTO CRM

If you’re currently running or considering the implementation of
a CRM solution, you need to start by asking yourself two hard questions:
1. How do you use all of your customer touch points to sellmore?
2. How does your CRM solution track each customer message used, as well as its effectiveness by customer touchpoint, so that you can improve your answer to question 1?
You’ll note that we used the “s” word—sell—in question 1. Thatmight lead you to believe that this issue belongs in the sales arena.
Wrong. We’re talking marketing, pure and simple.
Marketing is all about closing the sale before the deal even takes
place. It’s about selling more stuff, to more people, more often, formore money, more efficiently. And it’s not a province where IT cangive you the best answers for your money.
So it’s up to you in marketing to do some homework and figureout how to maximize your CRM return.

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113Step 1: Develop a Penetrating Understandingof Your Brand Positioning
We described how to be the architect of your brand in Chapter 2.
The brand architecture embodies all of the benefits that drive customer purchase intent. Put more simply: Know what your brandmeans and how to communicate that meaning to your customers. If
you aren’t doing this, you’re just throwing away money.

Step 2: Leverage This Understanding to Develop
the Ideal Brand Experience for Customers
Flesh out the brand experience your customer has by creating thespecific content, functionality, or messages that are delivered
through the marketing mix and at each customer touch point. This
brand experience blueprint, discussed in Chapter 4, addresses all
aspects of the way your company interacts with your customer,
including downstream, postpurchase interactions about how to use
or service what you sell.

Step 3: Inform CRM Design and Implementation
Decision Making
Now you are prepared to evaluate and make informed decisions
regarding various CRM technologies and implementation alternatives. Making the right choices regarding what you will (and won’t)
implement with CRM is at the heart of building productive, profitable relationships with your customers.
Marketers need to take advantage of opportunities outside thetraditional domain of marketing to build brand preference. The concept of brand experience bridges the gap between marketing’s traditional domain of the marketing mix and the emerging focus on
customer relationship management.
It is not about radical repositioning of your marketing efforts—
it is about taking a new look at what you’ve already got.

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ne of the most basic tenets of marketing is that it’s always
easier to sell to the customers you already have than tothose you don’t. Encouraging the customer already in thestore to pick up an extra item or two on the way to the register ismuch easier than pulling someone in off the street. It’s also much
more profitable over time; it costs 5 to 12 times more to acquire a
new customer than to retain an existing one. Once you’ve won overa customer the first time, it’s always easier to sell them additional
products and services because you’ve already gotten over one of themost difficult hurdles: The customer knows you and knows what your brandstands for.
However, persuading a customer to buy disparate products andservices from you can be a daunting challenge. For example, manyfinancial services companies struggle to convince their customers
to consolidate all of their assets with one institution (e.g., savings,
investments, insurance, home mortgage, auto loans, and so forth).
In most cases, customers just don’t understand the offers and fear
putting all of their eggs in one basket. Furthermore, most financial
institutions have focused on bundling products that they want tosell, rather than bundling benefits that would be of value to theircustomers.
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Obviously, over the long run, you’re going to benefit from holding on to your existing customers. Loyal customers tend to makemore purchases, are more likely to accept price premiums than newcomers, and are less costly and time consuming to service. You’ve
already rewarded your customers with quality service and products;
now it’s their turn to reward you with loyalty, flexibility, and openness to new ideas—if you’re bold enough to ask them.
Sell more to those you know. It’s such a simple idea, and yet so many
companies completely miss out on this vastly untapped resource. Or
they abuse it by failing to truly understand the needs and wants of
their customers, bombarding them with annoying offers in order tomeet internal cross-sell objectives. The fact is, most companies havebeen looking at the problem from the wrong perspective. It’s notabout cross-selling, it’s about activating customer intent to cross-buy.
And to do that, you first need to understand how to cross-market—
making your existing customers even better customers. You’ve alreadygot them in the door; now make sure they take a couple more things
with them before they go.
HISTORICAL PERSPECTIVE ON CROSS-SELLING

Savvy companies have been cross-selling for as long as commerce has
existed. The old general store that sold everything from penny candy
to shotgun shells has evolved into the one-stop big boxes of Wal-Martand Target. Companies like Starbucks know that, although their public persona is that of a coffee retailer, their real mission is to create
the ideal coffee drinking experience and sell their customers on anarray of paraphernalia carrying the Starbucks brand—everythingfrom T-shirts to mugs to compact discs, with the intent being toextend that experience well beyond the store. Once customers havea relationship with your brand, many opportunities to create incremental value for those same customers will emerge. Provided thatthe opportunities are consistent with your brand positioning and you
deeply understand the emerging needs and wants of your target customers, you can create significant growth for your business.
However, it’s taken most companies a long time to understandthe value of what they already possess. Many companies spent the
1980s and early 1990s trying out fad strategy after fad strategy,
seeking to pump up margins. Operational efficiency techniquessuch as total quality management, reengineering, and enterprise116

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resource planning sounded good to investors and upper management, but in many cases they ended up being just different ways ofrearranging deck chairs on the Titanic.
Then came the mid-1990s, when companies started looking attheir top lines and focusing on tracking and analyzing key customer
and transaction data. These companies began drinking deep fromthe cup of customer relationship management, streamlining customer service procedures and training their call center staffs tofield calls in new ways. They spent heavily on CRM installations,fully expecting that CRM would be the Holy Grail of profitability
that ERP was not.
But in their infatuation with the new technology, they missed afundamental truth about the limitations of that technology: The
fastest car in the world won’t get you anywhere if you don’t know
how to drive . . . or exactly where you want to go.
CRM AND CROSS-SELLING

In many industries and companies today, the terms customer relationship management and cross-selling are frequently used interchangeably.
For instance, financial institutions focused on cross-selling multiple
products to their customers will measure their success in terms ofthe number of “relationships” that they have built with the customer, with each relationship representing a different product thathas been sold. To be sure, CRM has its uses in enabling cross-sellinitiatives. Given the wealth of data about customers that CRM iscapable of tracking, it makes sense that these systems would be used
to reveal opportunities to build a productive, profitable brand experience (and thereby justify their existence). Applied properly, CRM
can make the sales, marketing, and service organizations within acompany run more smoothly, keeping the focus on the customer’s
needs and wants—often before the customer is even aware of them.
However, as discussed in Chapter 5, the majority of CRM applications are either misapplied or misused. Berkeley Enterprise Partners estimates that a full 70 percent of CRM projects do not produce
measurable business benefits. The reasons are myriad—inappropriate tools, inability to take action, inadequate corporate structures—
but they all boil down to a single core mistake: the failure to use abrand architecture and the desired brand experience for customers
to inform the design and implementation of CRM technologies

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enablers. Bringing a variety of expensive customer relationshipmanagement systems online is foolish if you’re not using them inconjunction with a tightly focused, targeted, data driven series ofstrategic steps aimed at creating a productive, profitable brandexperience for your customers.
While companies have taken the necessary and critical step ofinvesting in technology and analyzing customer data, many have notthought through the strategic brand implications of focusing on customer retention and relationships. They may now be able to crosssell, but they are not cross-marketing. You may get lucky enough tosell someone a couple of ancillary or related products, but without acoherent strategy, that’s just a happy accident, not a measurable,
repeatable action.
BEFORE YOU CAN CROSS-SELL,YOU HAVE TO CROSS-MARKET

So the secret, then, is not just keeping customers locked in yourstore, so to speak, until they relent and buy something. The goal is
to develop a marketing strategy that activates customer intent tocross-buy from you. You can use enabling technologies to determine
what they’re buying, why they’re buying it, what you must say to getthem to buy more, and how to tailor other existing or potential
products to meet their conscious and unconscious needs.
Contrary to the beliefs (or desires) of some marketers, customers
aren’t lemmings, willing to follow companies anywhere they lead. If abank tries to cross-sell a credit card to a customer just because thecustomer happens to be applying for an auto loan without first developing a cohesive strategy to offer compelling benefits, then the customer just won’t buy it. Worse, he or she may get annoyed with theexperience and choose not to do business with that bank at all. Companies will not be effective in cross-selling bundles of products to new
customers, nor reap the real results of selling more products to theircurrent customers, until they fully understand the needs, wants, andmotivations of their customers—and, most important, how these
relate to the benefits offered by the brand. They must shift perspective from an inside-out focus on a sale and execution of a transaction
to marketing a set of benefits to enhance the customer’s life and relationship with the company’s brand.
Cross-selling, by definition, is driven by business unit level or

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sales representative tactics. From the customers’ perspective, thismay be presented as a laundry list of products that may or may not
be connected to any meaningful benefits for them. The offers are
typically presented in a context that may be difficult for a customer
to understand (e.g., “Just help me refinance my mortgage so I canlower my monthly payment; I don’t know what this home equity line
thing is!”).
By contrast, cross-marketing is driven by a customer-centric
approach whereby customers see individual products in the context
of specific benefits to them and an overarching brand experience
with your company (e.g., “I understand that after I refinance, I havesignificant equity in my house. It would make sense to secure ahome equity line that I can tap into as I need additional funds torenovate my kitchen.”). Obviously, to cross-market effectively, youneed much more information about customers and their specificneeds at the moment of truth. (See Figure 6.1.)
As with any bleak picture, there’s always a brighter side. The
companies that are able to shift their focus and understand thatthey’re responsible for a brand experience over and above a productwill reap the benefits of loyal customers many times over.
Whereas cross-selling is driven bybusiness unit or sales rep tactics...

Cross-marketing is driven by a consumercentric marketing strategyYour Target

Your Target

Your target sees individual productsthat all happen to be from your firmYour target sees an overall brand value
proposition that happens to be made up
of individual products

FIGURE 6.1 From Cross-Selling to Cross-Marketing

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THE PROMISE OF CROSS-MARKETINGTECHNOLOGIES

Fortunately for corporations seeking to embrace a cross-marketing
approach, the tools that can move marketing to the next level arewidely available and highly configurable. With these tools, companies can develop comprehensive plans to address their existing
markets, create deep and extended relationships with current customers, and identify unseen and unused marketing opportunities—
in short, cross-market in the most meaningful and profitable senseof the word.
For instance, Zyman Marketing Group uses a data-rich analysis
tool called the Return on Marketing Investment (ROMI) model(more about this in Chapter 9), which permits analysis of the historical performance of marketing channels; projects the levels ofprospects, lead meetings, and wins that will be necessary to meetprescribed revenue targets; and develops monthly lead requirements and forecasts to evaluate progress against business goals.
With such a tool, companies can keep constant track of how welltheir cross-marketing efforts are working, analyzing potential areas
for improvement and reengineering.
On a broader scale, enterprise marketing management fuels themost ambitious and successful cross-marketing efforts. For instance,
marketing process reengineering, the management of increasingly
complex marketing channels, rests at the heart of cross-marketing
efforts. EMM applications can aid in the planning, execution, andmeasurement of marketing activities. The most efficient EMM
applications combine intellectual capital associated with marketing
processes and expertise with built-in organizational knowledgecapture capabilities.
At present, early-stage adopters and developers of EMM applications and technologies use the capabilities mostly to help manage
the development of marketing program content, automate work
flow, and integrate some applications. But before long, companies
will adopt and implement EMM on a grand scale, giving them theability to strategically plan, coordinate, and measure all the impacts of their internal and external marketing efforts.
EMM applications can help marketers make better marketing
decisions while decreasing marketing execution costs and reducing
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customers. And higher productivity means marketers will spend lesstime thinking about lower-level activities and more time on in-depth
analysis, strategic thinking, creative efforts, and other higher-value
activities.
POSSIBLE PITFALLS OF CROSS-MARKETING

It all seems so easy, doesn’t it? Bring some brand and marketingstrategies and some new technologies to the table, and your customers willingly enter into an endless loop of purchases, continually
generating income for you and satisfaction for them. What could be
simpler?
Naturally, cross-marketing does have its share of pitfalls, andcorporations must acknowledge the risks. Chief among these is theburden of expectation. As connections with and commitments tocustomers deepen, the customers in turn expect an exponentiallygreater level of satisfaction from the company. The more companies
promise and the more they actually provide to customers, the morecustomers will want and expect them to provide. The bar is constantly being raised. But if corporations fail to perform to expectations, they risk squandering years of goodwill built up by intensive
cross-marketing efforts. All the technology and strategy in the world
isn’t going to help a company that’s not ready to serve its customers
when needed.
BREADTH AND DEPTH

The key to cross-marketing is broadening the definition of markets inwhich you compete and deepening the meaning of your brand—bothfor customers and for the company itself. For instance, a traditional
tax preparer such as H&R Block can increase its market share andshare of wallet among customers by redefining its market by, say,positioning itself as a “leading provider of financial advice services,”offering tax advice, investment advice, and home mortgage services
for its customers. In doing so, H&R Block is well positioned to crossmarket a wide variety of advice products to ensure the financial
health and well-being of their customers. At the same time, they canlock down profitable, recurring, long-term relationships with thosesame customers as their financial services partner of choice. Using a
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121

companies can create measurable, achievable goals for bringing theircustomers back, time and time again.
Cross-marketing carries many risks, but the reward is the mostprized asset of any company: a productive, profitable relationshipwith a loyal, repeat customer.

CASE STUDY: Wells Fargo
CROSS-MARKETING TO INCREASE RELATIONSHIPSPER CUSTOMERFormed in 1852, the financial services firm Wells Fargo Inc. has $312
billion in assets, including 5,400 stores and 6,400 ATMs across theUnited States.With a market cap of $84 billion and 134,000 employees,Wells Fargo reaches into 20 million households.Wells Fargo has
thrived because it’s been able to aggressively cross-market thosehouseholds, selling a variety of services to each of its customers.
The company operates more than 330 subsidiaries in such fields
as consumer and business banking services, investment services andproducts, venture capital investing, and international trade services.
But the big moneymaker for Wells Fargo continues to be retail banking, which generates 42 percent of the company’s annual revenue, primarily through private loans.
Wells Fargo has gone out of its way to connect with its customers
in an attempt to close the gap with industry leader Bank of America.
Customers have indicated that the Wells Fargo brand stands for security, trust, dependability, speed, and convenience, and Wells Fargo has
tried to reward its customers by appealing to them on every levelpossible.
“We still deliver timely information to our customers every day,”says Wells Fargo CEO Dick Kovacevich.“In 1890, it was via the Wells
Fargo Pony Express; today it is via Wells Fargo online.”
As part of its long-term strategic plan,Wells Fargo has decided toincrease its service relationships per customer. Most financial institutions have about 1.5 relationships per customer, including checking
accounts, savings accounts, home equity loans, and so forth. By comparison,Wells Fargo has 3.8 relationships and plans to increase that to
8.0 relationships through aggressive cross-marketing efforts.

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Some of these efforts include plans to put a Wells Fargo credit
and debit card in every wallet; credit cards are now used by 23.1 percent of Wells Fargo’s customers, up from 21.2 percent in 2000. Debit
cards are up to 83 percent from 59 percent three years ago. Wells
Fargo is working to match the service needs of its customers. On thehigher end,Wells Fargo is working to keep its higher-value customers,
each of whom typically carries an average of 7.3 products.The company is working to leverage its key acquisitions in this arena, includingConseco Finance, ACO Brokerage, Acordia Insurance, and HD Vest.
Wells Fargo also wants to achieve a 100 percent cross-sell rate for its
bank, mortgage, and home equity loans.
Cross-marketing doesn’t work if you don’t have customers willing to pay attention to your offerings, and Wells Fargo is working todeliver outstanding sales and service to every customer, providing
advice and guidance as a prelude to cross-selling.Wells Fargo bases
its cross-marketing efforts on the individual customer’s situationand specific needs, wants, and motivations. Taking into account its
customers’ life stages, financial resources, and changing needs,Wells
Fargo organizes its cross-marketing programs based on the way different customers buy and use financial service products.
Wells Fargo’s stated goal is to support its customers from cradle
to grave, so to speak. Initiatives include a “Banking on Our Future”
program introducing financial basics to children; on the other end of
the spectrum is a complete suite of retirement planning and management services.
Wells Fargo has a comprehensive plan in place for capturing information on its customers. Every mortgage application provides anin-depth look at customer needs and financial resources. A Homeowners’ Pack bundles checking, credit cards, and a home equity loan
into a single offering. And Wells Fargo’s e-bank software retains andlinks customer data. On the internal side, cross-marketing targets arebuilt into operating budgets and performance goals, providing for increased accountability and commitment throughout the organization.
In short,Wells Fargo has cracked the code on cross-marketing, realizing that cross-selling, by its very definition, is not customer-centric.
Lines of business mean nothing to customers, so Wells Fargo decided tocross-market to customers based on the way that they purchase rather
than the way the company is organized.The benefits are apparent for
both sides: Customers see better pricing on products and time savings

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with one-stop shopping, while Wells Fargo enjoys higher customer retention rates and increased profitability and shareholder returns.

MARKETER’S S CIENTIFIC METHOD:
CROSS-MARKET TO CROSS-SELL

Fortunately, most companies understand the value of cross-selling
and the capabilities of CRM technologies; the key now is to get them
to work together. In order to build on their cross-selling capabilities
and transform these assets into cross-marketing successes, companies
need to alter their mind-sets, and even their corporate structures, totake advantage of the potential for cross-marketing to customers.

Step 1: Always Start with a Deep Understandingof the Customer
Base cross-marketing efforts on the individual customer’s situationand specific needs, wants, motivations, and purchase occasions.
~ Consider customer factors such as life stage, current andfuture financial resources, changing needs, and channel
preferences and capabilities (e.g., Internet access, wireless usage) for service and support.
~ Recognize that the way you talk about, organize, and run
your company means nothing to your customers—you
must speak their language and organize around theirneeds.
~ Organize your cross-marketing programs based on theway different customers buy and use your products andservices.
~ Analyze the specific occasions on which your products andservices are purchased or consumed, and hypothesize reasons for additional consumption on that particular occasion or ways to create new occasions for consumption.
~ Create products and services to support customers from
cradle to grave—anticipating future needs and evolving
offers to mirror evolving need sets.

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ENTERPRISE MARKETING MANAGEMENTStep 2: Align Everyone That Speaks with Customers
When it comes to cross-marketing, nobody stays on the sidelines.
Companies must initiate tighter integrations with their marketing
partners, including promotion agencies, ad agencies, public relations,and vendors, so that cross-marketing execution is consistent withstrategy.

Step 3: Measure Results and Debrief Successes and Failures

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Companies must monitor cross-marketing results and quantify new
knowledge and improvements on a frequent, continuous basis. This
information must be matched and tracked against a series of corporate goals, expectations, and milestones in order to keep on track.
Sometimes debriefing the successes (Why did this program work so
well? How can we do more of it?) is more important than analyzing
the failures.
The most important tenet to remember about cross-marketingis that it’s all about brand and the relationships that your customers
form with your brand. Brand and marketing strategy must comefront and center, form and inform the connections attempted with
consumers and the relationships developed over time.

Team-Fly®

7
USE NEW MEDIA FOR
BRAND ACTIVATION

I

magine, for a moment, that it’s 1999 again. The dot-com revolution isn’t a bubble, it’s an elevator with only one direction.
Everybody’s rich, everybody’s happy, every marketing decision isa stroke of brilliance, right?
Now return to today. After the dot-com bubble burst, the truth
about the Internet revolution became clear amid the ruins ofdestroyed portfolios, shattered careers, and horrific spending levels
dressed up as marketing. The Internet revolution had done more
harm to the notion of a new science of marketing than could havebeen imagined.
The so-called great marketing of the day was nothing morethan gambling. When you win the lottery with your venture capitalfirm, you turn around, put your money on red, and roll the dice. In
this case, the dice were anything from obtuse or absurd televisioncommercials to crazy PR stunts. Newly anointed zillionaire CEOs
would proudly announce that they were spending $40 million creating their brand, using everything from trinkets and trash to people
dressed up in chicken suits parading around American cities.
Thankfully, that era is over, leaving everyone poorer but
smarter. The enduring lesson of the dot-com revolution is that “eyeballs” do indeed matter—but only when they’re connected to a
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brain that tells the hand to pull out a wallet and make a purchase.
Otherwise, they’re not worth the time you’ve spent trying to capture them.
Even though the Internet bubble caused a collective cringe
among real marketers worldwide, it wasn’t entirely without merit.
It helped engender the development of a superb new marketing
tool for managing a brand experience and tying together disparate
elements of marketing. The new media utterly changed the scienceof marketing as we know it.
First things first—what are new media? They are all of the toolsof the electronic channel used to communicate with and engage current and prospective customers. This definition includes the Internet, web sites, e-mail, instant messaging, online services, cell
phones, and PDAs, among many other forms of media. In theirmost basic form, new media deliver the ability to engage in an electronic conversation with customers, wherever they may be. This electronic conversation can take place at whatever stage the customer
may be in the brand experience—considering needs, using a product, waiting for service, or any other point.
Suffice it to say that the new media present a marketing opportunity unparalleled in history. Never before has it been possible tomanage your brand experience by using such an intimate, ongoing
conversation with your customer.
Certainly, companies have communicated electronically for
decades. But tools such as electronic data interchange (EDI) were
historically used only to ship data files between two computers.
That’s not what most people would consider a conversation, and it
certainly can’t deliver much in the way of a brand’s benefits.
All of this doesn’t even touch on the most beneficial trait of new
media—in most cases, they are incredibly cheap. When you compare the cost of preparing and delivering an e-mail against the costof nearly any other media (consumer promotion, call center support, billboards, print, radio, or TV), new media will invariably win
on the efficiency scale. While new media make managing a brandexperience possible, you simply can’t leave it to chance that sales orservice or operations will get it right when it comes to communicating and delivering those brand benefits that you know will drive
purchase intent.
Marketing must play a significant role—and here’s why. Because
the other parts of the organization look on working with the cus-

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tomer as something of a chore, and because new media are rapidly
becoming the primary communication vehicle for all of these areas(e.g., invoice confirmations are sent as e-mails these days), marketing has an opportunity to use its mastery of new media to mastermind all communication across all customer touch points. As theelectronic conversation increasingly becomes the primary conversation with customers, marketing has an opportunity to exert itself as
the primary owner of that conversation. Marketing can ensure that
all of the benefits of the brand are communicated clearly, consistently, and compellingly, regardless of the customer touch point orinteraction.
There’s no more time to waste—the time is now for you toassert your role as a marketer and to use new media to make thatrole possible.
But just as you didn’t learn how to use e-mail by simply turningon your computer, you can’t expect new media to work for you assoon as you flip the switch. Putting new media to work requires thefollowing steps:
1. Development of a brand architecture that articulates
the combination of attributes, functional benefits, andemotional benefits that drive purchase intent.
2. Establishment of the brand’s character or personality.
This will come into play once you decide to execute amarketing program and need to answer questions aboutsuch elements as the tone of your communication—
serious, whimsical, smarmy, or some other approach.
The brand’s personality provides a description of thebrand in human terms. This description establishes theoverall tone for marketing executions.
3. Definition of the elements of the brand experience andcreation of a brand experience blueprint. The brandexperience blueprint must take into account the multiple channels that a customer might use to interact withyour company. For example, if your customers interact
with you via a distributor, then you must build the presence of this distributor into the model.
The brand experience blueprint should take new
media into account when planning for specific customer
outcomes. These outcomes are the behaviors that you

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would like for your customers to emulate. They can beanything from downloading a brochure when they begin
to consider a purchase to enrollment in an e-mail-based
service newsletter. These outcomes must be measurable
and must include traditional financial metrics, such as
revenue, volume, profit, and cash flow.
4. Evaluate, once the blueprint is in place, how you might
continue to integrate new media (web sites, e-mail,instant messaging, and so on) to further segment customers by behavior and continue to deliver those benefits that you know drive purchase intent.
For many companies, especially those in industrial or businessto-business sectors, this sort of electronic communication is thelion’s share of any customer communication. The electronic channel tends to be the most efficient vehicle for companies to communicate with each other, across all departments—from engineer toengineer, from purchasing agent to salesperson. Unfortunately,
these same companies are the ones most likely to think of marketing’s responsibilities as limited to corporate communications (i.e.,press releases) or annual reports. The same companies that are themost likely to derive the benefits from putting new media to work
seem to be the furthest behind in imagining how this approach cancommunicate and deliver on brand benefits to targeted segments.
Despite the compelling benefits of new media, many companies
are still behind the curve when it comes to putting them to theirbest use. When you combine the ability to engage in a one-on-one
conversation with your customers with remarkably compelling costadvantages, what could possibly stand in the way of making new
media the centerpiece of every marketing effort under way today?
In addition to the general economic conditions, the “head in thesand” mentality, and resistance to experimentation, big companies
cite several reasons for avoiding the adoption of new media.

We Don’t Know with Whom to Speak
A life history of not using new media means that a company simply
doesn’t have the e-mail addresses of its customers or prospects. For mass
marketers, up until recently, the value of creating an extensive
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129for every company. The math is excruciatingly simple. Your company
will simply not be well placed to compete in the future if you don’t
start right now gathering the e-mail addresses (and electronic conversation habits) of your current customers and prospects.
In addition to not knowing the e-mail addresses, many companies aren’t really sure of their customers’ needs. In industrial examples, the purchasing agent who actually executes the sale could be aworld apart from the engineer who has to use your product to create another finished good. New media represent an ideal vehicle forreaching out, economically and electronically, and delivering yourbrand benefits to ensure that you’re marketing correctly at eachstage of the brand experience.

We Don’t Know What to Say
It’s hard enough to get one message right. Very few companies areorganized or prepared for delivering highly customized messages—that is, actually engaging in a lively conversation—across all possible customer touch points and all marketing communications andmedia vehicles. The required level of capability doesn’t exist in
most companies today.
EMM requires that the brand architecture be applied acrossevery stage of the brand experience. However, the traditional messaging generated by the brand architecture is entirely too narrow.
While it’s important that the brand architecture should form theheart of any and all messages and conversations, most companies
have yet to think through all of the potential conversations theymight have—and what benefits can build the greatest customer
value. For example, how should the company communicate withlapsed customers—those who have purchased one product or service
but have never come back to the brand for more? How should theelements of the brand architecture be translated to address reenlisting someone in the brand franchise? These are just a few of thequestions that must be addressed in the brand experience blueprint.

We Don’t Know What’s Possible to Do
The historical corporate gap of understanding between marketers
and information technologists has left most marketers unable toeven conceive of how to put new media to work. There’s very little

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experimentation in this area, even though it’s inexpensive to do so.
Just understanding how elements like a database work is so unfamiliar to marketers that they don’t even venture into discovering
ways to use an electronic conversation with their customers andtheir prospects to drive more sales.
The most sophisticated marketing techniques will forever lie
beyond the grasp of marketers who continue to market as if it were
the twentieth century and not the twenty-first. The key to understanding what you need to do is, first and foremost, determine what
you want to happen. Consider: What is your destination for thebrand experience? What are the desired outcomes at each stage?
Broken down further, what are the potential scenarios at each stageof the brand experience and how are you going to communicate
your brand’s benefits within those scenarios? Again, these questions
are part of developing a brand experience blueprint.
Once scientific marketers have a grasp of this customer-centric
perspective, they can use the brand experience blueprint to identify
potential fixes or combinations of content and functionality that willaddress the gap between where they are and where they want to be.

We Don’t Know What or How to Measure Results
When new media first became available, companies initially usedthem to focus on simply attracting eyeballs to a site. This is theequivalent of evaluating advertising by focusing on awareness; it’s
not very useful. Just because customers are aware of your brand, that
doesn’t necessarily mean that awareness will translate into any kindof purchase.
While purchases are important, marketers need to count morethan sales dollars. Each stage in the brand experience can be measured, usually by identifying those specific customer outcomes or
behaviors that you would like for your customer to experience. For
example, if your customer comes to your web site for the first timeever and is considering your company or your set of products andservices, what do you as a marketer want that customer to do? Do
you know?
The desired customer outcomes are just that—if you could
design the brand experience at a certain stage, what would that be?
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131driving customers to buy more stuff. The key to selling more is making sure your customers know exactly what you’re offering—and it
takes a lot more than just hanging out your shingle and saying
something is available for sale.
THE NEW MEDIA HURDLE:
GET TO KNOW THE CUSTOMER

One irony of the emergence of new media as a powerful marketing tool is that it has actually put mass marketers on the defensive. The Procter & Gambles, the Coca-Colas, the Krafts of theworld—veritable fortresses of marketing that spend billions ofdollars trying to reach their consumers—are now in an awkward
situation. They can’t take full advantage of new media because
they don’t actually know the names of their customers or theire-mail addresses.
When the potential of one-to-one marketing became apparent,
the traditional consumer marketers weren’t really ready. They still
remain far from the vanguard when it comes to putting new media
to work.
The companies best positioned to put new media to work today
are those that have built on a direct relationship with their customers. Companies like American Express, Blockbuster Entertainment, and even Microsoft and Apple are much further ahead.
Companies that sell through a retailer or another party are at a distinct disadvantage.
What traditional brand marketers have been slow to catch on tois the fact that new media make all media new again. The advent of new
media makes it inexpensive to include a call to action on literally
every piece of communication delivered. That call to action could be
as simple as a single tag line: “Learn more at Coke.com.” Whatwould have been an expensive exercise using a call center (say,1-800-Get-COKE) that would be quite limited in what it coulddeliver—after all, what breadth of communication can you have via
a customer service rep?—can now be replaced with a much more
complete and interactive communication.
Companies that want to make the most of new media must
integrate them into literally every element of the marketing mix.
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marketing mix should be tracked and monitored at all times, which
in turn makes closer tracking of consumer behavior a possibility.
The role of the marketer is to build the database of customer
knowledge over time, to gradually enable new media to be better
integrated with many other elements of the marketing mix.
New media can also aid business marketers. While business marketers may have the addresses of the buyers of their products, mostof them still haven’t taken the critical step of creating a profile, centered on an e-mail address, of all of the potential players in the overall brand experience between the two companies. EMM requiresthat the compelling brand benefits drive communications or a conversation across all customer touch points. In many instances, especially for corporate purchases, the buyer of the product is not theuser of the product.
Taking up our prior example of ACME packaging, a hypothetical supplier to Nabisco, ACME might work very closely with
Nabisco’s purchasing department to close the deal. However, building the brand experience extends outward both ways from thepurchase—upstream to the prepurchase period and downstream toafter-purchase support. If ACME uses new media to build the brandexperience, then the critical communication will begin with thetrue decision makers upstream, including the package designers
and the bakery engineers responsible for producing the cookies &crackers. Downstream, communication will include the Nabisco
marketers and salespeople, who are in turn responsible for managing their brand experience with the consumer. New media givebusiness-to-business marketers the power to communicate brandbenefits across every key touch point and offer the opportunity toescape the “you’re selling a commodity” trap and build more value
into their products and relationships.
For most companies, the critical difficulty isn’t getting theirhands on e-mail addresses. The issue is figuring out what to do once
those addresses are available and those relationships are built.
Most marketers are smart enough to leverage all existing media tobuild an extensive and up-to-date database of their customers. The
problem is, up to this point, the lack of a coherent objective has kept
such organizational management from happening. If you haven’t
started, start today—because now you have an idea of what you
might say and why you would want to say it.

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LET ’S GIVE THEM S OMETHING TO TALK ABOUT

It’s a significant challenge just to provide sales with a highly targeted message to speak directly to buyers. It’s a rare marketing
department indeed in corporate America that possesses all of themessaging needed to speak to every customer touch point at every
stage of the brand experience. These companies can convert thebrand architecture, as well as all associated emotional and functional benefits, into appropriate messaging. These messages arethen delivered using new media, of course.
The key to translating the brand architecture into an engaging
electronic conversation is the development of an understanding of
the customer scenarios that are appropriate for that particular
touch point, part of creating a brand experience blueprint. Continuing with the ACME and Nabisco example, a critical step in putting
new media to work across the brand experience is to break down
the potential conversation into its component parts.
YOU CAN’T WIN UNLESS YOU CAN SEE WHATNEW MEDIA MAKE POSSIBLE

While it’s nearly impossible to miss examples of new media being
put to use in the more traditional domain of marketing communication (for instance, the dreaded e-mailbox of spam), what hasn’t
been covered in great detail are those opportunities for putting new
media to work across all of the elements of the brand experience.
Marketers enjoy an unprecedented ability to leverage low-cost new
media to create, build, and maintain a lifetime relationship with acustomer, without requiring any physical interaction with that customer.
The beauty of new media is that the efficacy of any of theseconcepts is easily measurable—provided you establish measurement parameters in the development of the concept. For example,
a Web-based cholesterol monitoring tool might be an enjoyable
perk, but it’s worthless if no one is using it, and it’s almost equallyworthless if it can’t be shown that use of the monitoring delivers
more patients who stay on their medication. The name of the gameis delivering on customer outcomes and also delivering on brandbenefits.

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ENTERPRISE MARKETING MANAGEMENTHOW DO NEW MEDIA MEA SURE UP?

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New media have come a long way in a very short time. At its introduction, the concept of “eyeballs”—simple views of a given site orcontent selection—was the limit of what was measurable. Today’s
software can provide most marketers with more information thanthey can actually use. So what should marketers be measuring withnew media?
For any new media investment, the overarching concern isreturn on investment. Given that many marketers aren’t eventhinking about ROI—and would have a challenge ahead of them ifthey did (think billboards)—new media is a welcome change.
Return on investment for new media tends to come from anumber of different sources:

TE~ Sales of the same stuff: For those companies that are
executing transactions using a web site or some othernew media–driven vehicle, this is an easily attainable
metric. Many companies look to new media as their new
channel for selling their existing product or service set.
~ Cost reduction: An alternative return might comefrom the reduced cost of servicing existing customers.
The cost to serve a banking customer via a web site is
dramatically lower—and, in many instances, better—
than the cost of maintaining branches filled with tellers.
This reduction of cost to serve might be an element of
your return on investment.
~ Customer retention: You may be able to use new
media to show that your efforts to build a brand experience have actually reduced the churn of existing customers. Put another way, you have used new media toincrease customer retention. The end result is moresales and, possibly, reduced spending on traditional
media or direct selling. For nearly every company, it’sremarkably more efficient to sell more to your current
customers than to try to find that elusive new customer.
~ Sales of new stuff: This is where worlds are opening
up. The smartest companies are figuring out how new
media provide previously unimagined opportunities forcreating and selling new combinations of products andTeam-Fly®

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services. General Electric serves as an excellent example of this new opportunism. Before the advent of new
media, GE Medical earned the lion’s share of its revenues selling products.
Over the past several years, the share of product revenue has dropped dramatically and the share of service
revenue has skyrocketed. Even more appealing is thefact that service revenue carries higher margins against
the cutthroat competition on products. So how is thispossible? GE realized that using new media to provide
ongoing services, software updates, and maintenance on
a long-term, contract basis was a far more profitablebusiness for the medical division. Much as the latest versions of Microsoft Windows and Apple OS X (and manyother software packages) include automatic updates, GE
realized that these updates could solidify the brandexperience, smooth out revenues over time, and also
lead to higher margins. As an added bonus, the service
level for GE Medical’s customers improved dramatically.
GE is on top of any maintenance problems, sometimes
before its customers are even aware of them.
~ Achievement/optimization of customer outcomes:
On a more basic level, marketers need to understand not
only what is selling, but also what actually makes sales
happen. Part of bringing a scientific approach to marketing is experimenting with all of the different levers thatmight improve sales. New media can be evaluated basedon their ability to achieve desired customer outcomes. If
you have learned that 25 percent of the people who
receive a certain coupon or offer will walk into your retailstore and buy something, then you can simply measure
the ability to deliver these offers. What are you going to
put in place—what content, what functionality—to drive
people to download that offer and get them to bring it
into a retail store?
Alternately, it may be just as important to use new
media to keep customers engaged in your business. If
you’re Blockbuster, you may want to measure the powerof new media to drive traffic into your stores or, more
specifically, use new media to drive incremental visits.

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Or you might use differing levels of new media to drive
traffic, based on what you know about the behavior ofyour customers. At what point do people fall out of thepurchase cycle and need that extra push to get themback into the cycle? While Blockbuster has a short cycle,
companies like Disney, with its theme parks, have amuch longer cycle. Disney might measure the power of
new media to shorten the cycle between Disney World
visits, not just the sale of stuffed Winnie the Pooh dolls.
So how do you measure these outcomes? The advantage of new
media is that nearly everything that every customer does is recorded
at some point. The challenge—and granted, it’s a good problem tohave—is that you’ll end up with reams of data. Software vendors
today can give marketers the ability to track specific customer outcomes and then adjust efforts and campaigns accordingly.
For example, many companies today look at new media metrics
that resemble the graph in Figure 7.1. It’s no wonder that marketing gave up on measuring campaigns with metrics like these. How
can you tell what on earth is going on? Part of the problem for many
companies is that they haven’t actually designed their new media
efforts around desired outcomes, so the metrics aren’t really clear
either. They can’t be.
New measurement software will let marketers see what customers are actually doing when they interact with new media. ConTop Page Hits

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Visits

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6/12 6/19 6/26 7/03 7/10 7/17 7/24 7/31 8/07 8/14 8/21 8/28
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Company/

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FIGURE 7.1 The Meaninglessness of Measuring Page Hits

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sider again the Nabisco/ACME example: A marketer dedicated tobuilding ACME’s brand experience for Nabisco will want to knowwhether he or she is (1) achieving desired customer outcomes and(2) understanding correctly the behavior of his or her target at thisstage of the brand experience—to wit, the bakery engineer. Whatare packaging designers doing when they interact with ACME? Are
marketing’s assumptions correct about how Nabisco likes to interact with ACME’s new media resources?
To get at customer outcomes, marketers have to get down in the
trenches and measure such outcomes. Fortunately, the software
now exists that will provide images of the actual behavior of customers, which can let you know whether they’re doing what you
thought they would do and give you the opportunity to make alterations if necessary. Figure 7.2 is an example from a company named

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FIGURE 7.2 Analyzing Customer Behavior to Reveal Insight138

ENTERPRISE MARKETING MANAGEMENTClickFox. By evaluating these customer behaviors, marketers can
get real insight into whether their new media investments are generating the brand results that are required.
Results are only as good as the questions asked of the data.
Superficial questions yield superficial returns. Why not ask your IT
department to give you an idea of what your customers are doing,rather than just showing you how many people might have visited
your company web site?
YOUR SECRET WEAPON

New media represent the most compelling way to experiment as amarketer. Every company can benefit from rolling up its sleeves andexperimenting with how to use new media to drive profitable sales,deliver on the benefits articulated in the brand architecture, andachieve desired customer outcomes for every scenario. It’s almost
unthinkable to try to manage a brand experience without new
media.
Marketers need to expand their notions of new media beyond
the notion that it’s anything like a print ad, a TV ad, or a coupon.
Instead, they need to think about how new media can be the secretweapon that lets them manage and take ownership of the brandexperience. Whether you’re ACME working with Nabisco on abillion-dollar relationship or you’re selling bumper stickers out ofyour basement, you can always use new media to drive your businessto new heights.

CASE STUDY: M&M’s
USING NEW MEDIA PROMOTIONS TO ACTIVATE
PURCHASE INTENT
M&M’s, the candy-coated chocolate that “melts in your mouth, not inyour hands,” is manufactured and globally distributed by Mars Incorporated. According to company folklore, it was Forrest Mars, son offounder Frank Mars, who came up with the idea to give chocolate a
protective candy coat to stop it from melting. He was working inEurope during the 1930s and identified the need for a convenient

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139snack that could be transported easily and traveled well in a variety ofclimates.That idea became M&M’s candies—more than 400 million ofwhich are produced each day, totaling more than 146 billion each year.
Today, Mars Inc. is a truly global business and M&M’s are famousworldwide. The company continues to be known in the market for
innovation and manufactures many leading brands within the snack
category, including Snickers, Mars, and Twix.
Consistent with their heritage of innovation, Mars has been oneof the leaders in using Internet marketing and new media to market
their products and build online communities to connect with theirtarget audience.There are several sites that the company supports foreach entry into the snack foods category. For M&M’s there are at least
three unique sites:• www.mms.com—a distinctive web site that serves as theportal to many of the other sites that support the M&M’s
brand. The site cleverly highlights M&M’s sponsorship of
NASCAR racing and gives youth a chance to interact withdriver Ken Schrader and the M&M’s Racing Team.The M&M’ssite is frequently updated, and completely redesigned on aregular basis—although it always retains its core content sections.There is an online shop that sells M&M’s and associatedproducts. However, the main purpose of the site is to promote interest in M&M’s with colorful, highly interactive, andvery entertaining content.The site also recognizes that M&M’s
are sold around the world, so there are country buttons forat least the most significant M&M’s markets. M&M’s haveoperated this web site over several years, and it is now a very
sophisticated and successful example of online marketing.
• www.marsbrightideas.com—This site appears to be targeting moms and dads more than the kids. It is an online community, hosted by M&M’s “spokescandies” Red and Yellow,that delivers useful information for parents on how to use
the product in baking, recipes of kids’ favorites, decoratingideas, family fun activities, and other many other tips for how
to get the most out of the “M&M’s experience.” Visitors areencouraged to join the community and enter their own holiday recipe ideas, family activity or cute craft idea, and they
are given a cash incentive to do so. Besides M&M’s, many ofMars’s other snack food category entrants are featured on
the site, including Snickers, Starburst, Dove, and Skittles.

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ENTERPRISE MARKETING MANAGEMENTInterestingly, the site is organized around seasons and special
events—consumption occasions when Mars products can beused to enhance the overall family experience.
• www.colorworks.com—This innovative site appears to be
the real engine for driving sales of M&M’s online. In this case,the site is targeting a much broader audience beyond theircore youth market. Consumers can customize the collectionof colors that they would like to have in their own personalized batch of M&M’s—picking from 21 available colors toassemble their own bag of treats. For those who need a little
inspiration there are preselected combinations such as teamspirit school colors (University of Virginia: dark blue andorange), special color combinations (e.g., Patriotic: red, white,and blue), seasonal colors (e.g., Autumn Hay Ride: yellow,
gold, cream), special occasion colors (e.g., “It’s a Boy”: blue
and white), even corporate colors to be used at the next
corporate golf outing or given away as promotional pieces.
The M&M’s colorworks site also features a simple affiliate
program that allows other companies to add links, banners,
buttons, or even an entire online store to their company website as a way to enhance the company site and earn commissions on whatever their visitors buy on the M&M’s site after
they click through the links.
M&M’s serves as an excellent example to emulate when considering how to put new media to work at selling more products. The
M&M’s brand has a distinct brand architecture that articulates the
combination of product attributes (e.g.,“sweet milk chocolate with acandy crunch”), functional benefits (e.g.,“melts in you mouth—not inyour hand”), and emotional benefits (e.g., “fun, family-enriching experiences”) that drive purchase intent. Over the years, M&M’s has established the brand’s character and personality by executing marketing
programs featuring their “spokescandies.” As such, the brand hastaken on a personality in human terms: Red, the wise-cracking, knowit-all chocolate on your pillow;Yellow, the nice guy in touch with his
inner child; and Green, the feminine heroine who “melts for no one”;
and so forth. Furthermore, Mars understands they must continuously
define the experience that consumers have with the M&M’s brand.
They take into account the multiple channels that a consumer might
use to interact with the brand, identify purchase influencers (e.g., parents) in the decision-making process, and plan for the specific con-U S E N E W M E D I A F O R B R A N D A C T I VAT I O N

141sumption occasions (special occasions, team sporting events, etc.)that may occur across the brand experience. Now that Mars has all ofthese elements in place, they have been able to use new media (websites, e-mail, instant messaging, and so on) to enhance the consumers’
experience with the M&M’s brand even further and deliver the specific brand messages that they know drive purchase intent.There is no
better example of this than what Mars was able to achieve with the
M&M’s Global Color Vote in 2002.
Global Color Vote
The most ambitious effort undertaken in recent years has been
M&M’s Global Color Vote promotion. Essentially, Mars created a promotion to conduct an online global vote to determine the next newcolor of M&M’s to be added to the colorful mix of chocolate candies.
The M&M’s Global Color Vote had to be positioned as different fromall other consumer promotions—in scope, tonality, imagery, and execution—in order to signal its significance to the world while still
maintaining the brand’s positioning of “colorful chocolate fun.” A comprehensive media relations campaign announced the Global Color
Vote in the United States.Tactics included an advance to the Associated Press, B-roll distribution, and the creation of an online news
bureau. A second announcement was made on March 6, 2002—poll
opening day—featuring a live animation of M&M’s “spokescandy”: Red.
In addition to building buzz around the brand, Mars was also aiming tosee some immediate sales as a result of the campaign. Mars’s thinking
was that consumers—perhaps looking to inform themselves about
the candidates prior to voting—would purchase specially marked
M&M’s packages containing the new candy colors.
And the Winner is . . .
The program culminated with an event in New York City on June 19,
2002, to reveal the winning color: purple. More than 10 million people from over 200 countries cast their vote via phone, mail, andthrough the World Wide Web. After months of sampling the choices
in specially marked bags, the world chose purple, with 41 percent of
the vote.Aqua received 38 percent of the vote, and pink garnered 19
percent of the vote.The remaining 2 percent of the vote went to various write-in colors. Beginning in August 2002, purple was to be added
to the traditional blend of red, yellow, orange, green, blue, and brown

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ENTERPRISE MARKETING MANAGEMENTFIGURE 7.3 M&M’s Global Color Vote Promotion

in M&M’s bags. Figure 7.3 shows how the vote played out across theworld. Detailed country-by-country statistics can be found at the official M&M’s Global Vote Count web site (http://global.mms.com).
Results
The beauty of new media is that the efficacy of a promotion like
M&M’s Global Vote Count is easily measurable. Within three days oflaunching this online promotion, M&M’s had achieved 1,250 placements
and over 660 million impressions (an increase of over 170 percent),
according to Nielsen/NetRatings.Traffic to the www.mms.com web site
increased by 400 percent, and AOL welcome page hits generated over
600,000 votes in one day and more than 18,000 message board postings. Furthermore, the promotion successfully targeted the company’s
primary audience. The M&M’s site attracted a predominantly female
audience with a 67/33 gender split.“The recent online ad campaign by
M&M’s is a great case study in how Web advertising can leverage astrong brand, drive site traffic and enhance brand loyalty all in one fell
swoop,” said Charles Buchwalter, NetRatings vice president of media
research. “M&M Mars scores twice by including the consuming public

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143on the choice for a new color and also in receiving a significant boost in
brand exposure.” Most important, M&M’s was able to enhance its leadership position as the largest candy brand in the world and maintain ahighly profitable position in the $13 billion global snack foods category.

MARKETER’S S CIENTIFIC METHOD: USING NEW
MEDIA FOR BRAND ACTIVATION

Following are the steps to follow in using new media to activate yourbrand.

Step 1: Identify the Stage of the Brand Experience
The first step is to understand who your customer might be at eachstage of the brand experience. In many instances, there are multiple customers behind one purchase. Also, if possible, identify thebrand preferences for these customers.

Step 2: Identify All Relevant Stakeholders/Customers
It’s important not just to understand the role and position of your customers behind a purchase when preparing new media solutions. You
need to have an idea of all stakeholders in the game—the suppliers,
the manufacturers, the distributors, and all others involved in communicating and delivering on your brand benefits. Aligning theseplayers ensures that you have consistent messaging no matter where
your customer encounters your brand—which constitutes Step 3.

Step 3: Identify the Specific Touch Points That Are
Currently Used for Each Customer
Each customer behind a purchase decision may interact with yourcompany across multiple touch points. The next step is to understand your current customer behavior when it comes to interactingwith your company. What have you “trained” your customers todo—call your sales rep, wait on hold at your call center, or send an
email? Understanding the current customer touch points is criticalto putting new media to work.

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ENTERPRISE MARKETING MANAGEMENTStep 4: Develop the Specific Scenarios
for Customer Interaction at Each Stageof the Brand Experience

AM
FL
Y

The next step is to determine specific scenarios for customer interaction. Like all good marketing, this stage requires getting into thehead of your customer. A bandwidth-heavy marketing campaign
could annoy some of your online customers with slower connections;a contact-intensive campaign involving instant messaging ande-mailing could annoy your customers who prefer privacy. The key isto understand which customers prefer which means of interaction.
Creating this sort of structural advantage in your go-to-market strategy inevitably leads to higher margins and many years of profitablesales thereafter.

Step 5: Craft the Elements of the Conversation

TE

Once you’ve determined the proper methods of approaching eachcustomer segment, you can craft the conversation to address theneeds of each scenario, pulling from a mix of emotional benefits,
functional benefits, and brand attributes developed in the brandarchitecture. It seems obvious that this kind of targeted marketing works better than scattershot advertising or spamming, but asurprisingly large number of companies prefer to just throw theircampaign funds in the air and hope they’ll reach their proper customers. Targeting and focusing your message will inevitably leadto higher returns, since you’re giving your customers exactly what
they want.

Step 6: Develop the Mix of New Media That Deliverson the Identified Key Brand Benefits
Now that the scenario and the critical benefit have been identified,
you can develop the new media content, concepts, and functionality
than can best deliver the benefits. Is an interactive web site the best
way to reach your customers? Direct e-mailing? Instant messaging?
Or some combination of these and other new media? The opportunities to deliver your message are myriad; now it’s just a matter of
figuring out how to get your message into the right hands.

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145Strangely, one of the biggest challenges in developing the content across all stages of the brand experience is actually using thetools you already have. Most marketers have yet to embrace thepower of new media, so in many cases it’s become the burial groundfor digital forms of all of the other media. It’s relegated to little
more than the library of the other media. That’s like buying abrand-new Porsche and using only the CD player.
There’s a lot of potential to use new media to speak directly tocustomers, no matter where they are. If your company is ever going
to truly unlock all of its value, it has to realize that value lies inside
the heads of your employees, not just in your products. Giving yourbest customers access to your great employees, and ideally sellingthem services, is the way that most of the product companies of thetwentieth century have rapidly transformed themselves into theservice companies of the twenty-first century.

PART III

Reinvent Your Business,
Not Just Communications

8
RESTRUCTURE BASEDON BRAND EXPERIENCE

B

usiness leaders in virtually every industry face a common andrecurring challenge: designing and maintaining effective
and efficient business models that maximize profitability andreturn on marketing investment (ROMI) for their enterprise. Whilethe quest for the optimal people, process, performance measures,and technology capabilities is hardly new, a collection of current
forces—both internal and external—has forced the reinvention ofbusiness models across a wide spectrum of industries (see Figure 8.1).
Consider how the following drivers have impacted businessmodels:~ The globalization of competition~ Decreased sustainability of competitive advantages due
to technology innovations~ Increasing demands from customers~ Lowering of traditional barriers to entry and heightened
demand for demonstrable returns on marketing investments

These changes have forced many companies to seek businessmodel designs that yield the scale efficiencies of a centralized set
149

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ENTERPRISE MARKETING MANAGEMENT

BRAN

D

Brand Architecture

Organizational
Structure

Enterprise

PeopleProcess

BUSINESS
MODELTechnology

Measures
Consumers

Customers andDistributors

BRAND EXPERIENCEFIGURE 8.1 Restructuring the Business Modelof capabilities, while still achieving the maximum effectiveness of
close proximity to customers and consumers. Some enterprises aregoing even further, completely redefining how they build productive, profitable relationships across their extended enterprise,
including suppliers, channel partners, customers, consumers, and,most important, their own people.

FORCING A REA SSESSMENT OF
BUSINESS MODEL DESIGN

Several key changes in the competitive environment over the past
few years have necessitated a change in the way enterprises craft
their business models:

RESTRUCTURE BASED ON BRAND EXPERIENCE

151~ Increasing power of consumers. An unprecedented
access to information about competing products, services, and pricing has given consumers more power thanthey’ve ever had before. Business leaders must maketheir current business designs more consumer-centric tomeet and anticipate the needs and wants of their major
constituencies.
~ Increasing availability of high-quality information
about customers. The other side of the coin is that,
thanks to other technological advances, everyone acrossan enterprise can capture and mine extraordinary
amounts of valuable customer and consumer data. In
order to capitalize on the benefits of these consumer
insights, many companies are reorganizing around key
customer segments and centralizing common activities
such as database marketing.
~ Increasing demands of consolidated customers andchannels. Across many industries, a few strong customers are concentrating and controlling buying power,
placing suppliers increasingly at the mercy of customer
and channel demands. Forward-thinking business leaders are taking these customers’ specific needs into
account by creating more customer-centric structuresand developing targeted customer plans that treat thesepowerful customers and channel partners as priorities.
~ Expansion into global markets. Trade liberalization
and advances in communication technology have broken
down traditional international barriers. Some companies are centralizing brand management and strategicplanning to ensure consistent branding and marketingstrategy across the globe, while others are capturing
global economies of scale by centralizing activities suchas media buying.
~ Increasing financial scrutiny of marketing expenses. Marketing as a function is now being held tothe same rigorous return on investment (ROI) standards as the rest of the enterprise. Rising spending andinadequate demonstration of marketing’s ROI are drawing greater attention (and resistance) from the CEO’s

152

ENTERPRISE MARKETING MANAGEMENT

office and the finance department. In order to improve
efficiency of marketing investments, many marketers
are centralizing those activities that may benefit fromscale economies, such as market research and media
buying.
These forces are driving business leaders to reassess their business model designs and generally move in one of the following
directions:~ Toward centralizing business activities such as procurement in order to improve overall operating efficiencies
and reduce costs through improved buying power andscale economies~ Toward reorganizing business activities around customers to improve effectiveness of relationships,
enhance overall strategic positioning, and increase revenues
As is often the case with some business activities—first among
them, marketing—there is a need to move in both directions simultaneously.
STRUCTURE FOLLOWS STRATEGYAs presented in Chapter 2, your strategy is embodied in your brandarchitecture, and so that is where you must begin (see Figure 8.2).
The brand architecture identifies the individual parts of the brandin order to pinpoint its contribution to customer value creation. The
brand architecture is the foundation for the brand positioning,which clearly and concisely articulates how you want your customers to think, feel, and act regarding your brand. It represents
the structural integrity of the brand, as well as how that brand isbuilt, how it works, and how the components fit together to deliver
meaningful benefits to your customers.
The brand architecture must define and guide everything andeveryone associated with the brand. Everyone means everyone, notjust the marketing people. Marketing is too important to remain
only in the marketing department. To fully leverage a compellingbrand positioning, all of the brand’s activities must focus on the fundamental marketing objective of increasing profitability. If every

RESTRUCTURE BASED ON BRAND EXPERIENCE

Strategy+

Structure=

153

Profitability

Identify andCommunicate
Customer Value

Activate
Brand
Experience

Maximize Returnon Marketing
Investment

Brand
Architecture

Business
ModelEnterprise
Destination

FIGURE 8.2 Structure Follows Strategy

segment of an organization understands the value of brand positioning, then every segment can contribute to a significant growthin sales and profits. The brand positioning is the strategic compass
by which every program, activity, or initiative that the brand undertakes, whether directly or indirectly relevant to the consumer, must
be measured.
The concept of brand positioning is so important that it can’t berepeated enough: Any business activity that is inconsistent with thebrand positioning is, at best, a waste of resources. At worst, poor
marketing management can inadvertently destroy the brand you
are attempting to build.
Everything about your business communicates a message: what
you say, what you don’t say, what you do, what you don’t do. The way
your salesperson dresses can say far more about the performance ofyour business than the multi-million-dollar advertising campaignthat you just launched. The condition of your trucks and stores says
more than the beautiful billboard advertising. The attitude of thecustomer service representative in the call center sends a stronger
signal than the clever jingle on the radio. Effective marketing
encompasses business design and operations as well as communications. Building a productive, profitable brand experience will
require a total rethink of how you run your business—and thatmeans keeping an eye on everything your business communicates.

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ENTERPRISE MARKETING MANAGEMENTUSING A BRAND ARCHITECTURE TO
ACTIVATE THE BRAND EXPERIENCE

AM
FL
Y

Traditionally, businesses have grown up, evolved, and structured
themselves around what they make. Business units, product units,
and functional support units are the common structures in place in
Global 2000 companies today. Enterprise marketing management
demands that the enterprise shift from a make-centered to a sellcentered business model. In other words, how would you design yourbusiness to deliver on your brand promise from the customer’s perspective rather than from the company’s perspective? Procurementof raw materials, manufacturing, warehousing, shipping—all ofthese essential activities must keep the customer’s best interests at
the forefront.
BUSINESS MODEL COMPONENTS

TE

Think of your business model as the collection of assets, capabilities, and activities that you perform to create value for customers(see Figure 8.3). Every enterprise can be defined in terms of thePeopleProcess

BUSINESS
MODELTechnology

Organization Structure
Alternatives

Measures

FIGURE 8.3 Business Model Components

Team-Fly®

RESTRUCTURE BASED ON BRAND EXPERIENCE

155

business model and the various components that you must build,buy, or borrow in order to deliver on the promise of the brand.
These components include the following:~ Measures. Performance measures must be definedand metrics targets set to monitor your investment inmarketing and to hold marketing people and projects
accountable for business results. (This concept will be
the subject of Chapter 9.) Measures are critical to making decisions on investing the scarce resources of thefirm in order to maximize profitability and deliver on
the brand promise.
~ Process. Business processes are the recipes for how
you get things done across the enterprise. They describe
the activities that are required to make, sell, and service
your products. Within the marketing function, processes
must manage brands, inform product development,interface with sales, run and monitor campaigns, workwith outside providers, develop creative executions, andso forth.
~ Technology. In recent years, investment in technology
has increased dramatically for most enterprises. The
challenge is determining which technologies truly differentiate and drive sustained preference for your brand.
Technology innovations in your business model will pay
you back if they build on and reinforce an existing
strength, advantage, or core competence. Furthermore,
you can expect high returns from technology initiatives
that reinforce strategic trade-offs and solidify brandpositioning, exploit your skills in customer analytics,
provide unique access to customer or market data,
enable strong service cultures, or accelerate merger andacquisition strategies. But remember: You can save a lotof money by not “keeping up with the Joneses” when it
comes to technology innovation—use only the innovations that benefit you, not the ones that everyone else isbuying just because they can.
~ People. Everybody in the enterprise must understandtheir role as a marketer, and marketing must understand156

ENTERPRISE MARKETING MANAGEMENT

every facet of the enterprise. Your business model musthave the marketing competency not only to reinforce thebrand architecture but also to execute winning marketing strategies and tactics to get you to the destination.
Furthermore, your people need to embody the values andbeliefs that marketing is about selling, first and foremost,and that they are willing to be held accountable forresults. Ensure that you have a culture in place that reinforces the kinds of behavior that are consistent with yourbrand.
BRAND EXPERIENCE BLUEPRINT (REVISITED)

Operations

Communications

This concept was first introduced in Chapter 4. The brand experience is simply a way to describe the sum of a customer’s interactions with a brand. Of course, a customer’s interaction with yourbrand isn’t limited to simply making decisions regarding one product versus another. The brand experience includes the customer’s
actual experience with the product, as well as every other aspect ofinteraction with your company. A brand experience blueprint allows you
to understand every single step in a customer’s experience withyour brand that reinforces what you stand for and, ideally, activates
their purchase intent (see Figure 8.4).

Brand Touch
Points(Illustrative)

Identify
Need

Evaluate
Options

Buy

Use

ObtainSupportTV

Emotional (1)Attribute (2)N/AFunctional (4) N/ARadio

Emotional (2)Functional (2) N/A

Functional (4) N/A

Print

Functional (1)Emotional (1)Outdoor

Functional (2)Functional (3) Functional (4) Functional (3) N/A

Online/Email

Attribute (1)Attribute (3)Functional (4) Attribute (1)Attribute (4)Telemarketing

Attribute (2)Emotional (1)N/A

Attribute (4)In Store

Functional (3)Emotional (2)Functional (4) Functional (4) Functional (4)Direct Sales

Emotional (1)Functional (1) Functional (4) Emotional (1)Call Center

Functional (3)Functional (2) Functional (4) Functional (4) Functional (4)Direct Marketing

Attribute (3)Attribute (1)Functional (4) Emotional (1)

N/A

FIGURE 8.4 Brand Experience Blueprint

Attribute (2)N/AFunctional (4)

N/A

N/A

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157

STRUCTURAL ALTERNATIVES

There are a wide variety of organizational structures that support
the delivery of a productive, profitable brand experience. But
before you set off on designing your new organization, it is imperative that you have developed a brand architecture and mapped thetype of brand experience that you plan to deliver to your customers
through your business model. Jumping right to an organizational
restructuring without fully considering your brand and operating
strategies will result in a design and structure that is misalignedwith the delivery of your brand promise.
Structural alternatives generally are dictated by two key variables (see Figure 8.5):~ Degree of centralization—from highly centralized tohighly decentralized• Centralized—activities directed from a corporate center• Decentralized—activities directed by groups within
business units that operate independently but ideallywithin the bounds of the overall brand and businessstrategy

CustomerBusiness
Focus

HybridProduct

Centralized

MatrixDecentralized

Degree of Centralization

FIGURE 8.5 Structural Alternatives

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ENTERPRISE MARKETING MANAGEMENT• Matrix—activities directed by groups within business
units operate fairly autonomously but report to thecorporate center~ Business focus—from product-centric to customer-centric• Product-focused—people structured around specific product or service categories or focused on logical groupingsof products and services• Customer-focused—people structured around relationships with key customers or logical grouping of customers (e.g., demographic or need-based segments)• Hybrid—people structured around both products andcustomers (either as separate groups or combined)
Think of these as two structural continuums with many combinations in between.
Furthermore, various business activities within your enterprise
may exist in different structural models. For example, many firms
have centralized procurement activities and focus their organization
into product-centric categories of spend in order to leverage scale economies and buying power. The sales organization, on the other hand,
may be highly decentralized with sales reps spread across geographies with some even working inside customer organizations. Eachbusiness function may require a different structure depending on
business objectives and how they support the customer’s brandexperience.
For most enterprises, the marketing function has evolved into
various hybrid structures with some activities centralized in order
to consolidate buying power, and other activities highly decentralized to allow for local market optimization. Your strategy, as embodied in the brand architecture and brand experience blueprint, will
determine the structure that is best for your enterprise, how to
structure each function, and how to structure partnership andalliance relationships beyond your enterprise.
RESTRUCTURING YOUR BUSINESS MODEL BA SED
ON THE BRAND EXPERIENCE BLUEPRINT

So how do we use the brand experience blueprint to inform criticaldecisions regarding the way that we create value for customers andRESTRUCTURE BASED ON BRAND EXPERIENCE

159

then provide the appropriate structure to deliver on the brandpromise day in and day out? To help understand this process, let’s
consider the case of Intouch CellCo, a hypothetical leading provider
of wireless communication services.
Intouch CellCo currently faces significant challenges, as thetelecommunications industry has undergone significant upheaval
over the past 24 months. A lack of differentiation among cellular service providers has led to aggressive switching behavior, or churn, by
Intouch CellCo customers. Nearly a quarter of all mobile users havechanged service providers within the past year. When questioned,
customers cite price as the primary reason for switching and the capabilities of the handset (phone) as the secondary reason. This suggeststhat the competitive structure of the industry and Intouch CellCo
offerings are rapidly losing their distinctiveness. Clearly, Intouch
CellCo must reposition its brand and drive to reverse this trend.
THE IMPORTANCE OF SET TINGDESTINATION FOR AN ENTERPRISE

Intouch CellCo set an ambitious goal for itself, intending to become
the primary means of communication for its customers. It sought tocompete not only with other cellular service providers, but with allcommunications alternatives—wireline, fax, e-mail, pagers, and soforth. Intouch CellCo wants its customers to understand that byusing Intouch CellCo products, they will benefit from enriched relationships with people who are close to them, simplify connections intheir lives, and receive products and services highly tailored to their
specific needs. Only Intouch CellCo can deliver on all of thesepromises, because it has taken pains to understand its customers
and their communities better than anyone else. As a result, Intouch
CellCo will make its products and services more attractive to new
customers, retain existing customers through new switching costs,
and generate more profitable usage of wireless services.
BRAND ARCHITECTURE DICTATES BRAND
EXPERIENCE POSSIBILITIESTo reach its destination, Intouch CellCo needed a breakout strategy
to differentiate itself from the other communications alternatives,to create a lasting preference for the Intouch CellCo brand, and to160

ENTERPRISE MARKETING MANAGEMENT

KeyTakeaway

Emotional
Beneﬁts

Intouch lets me communicate my way

I feel liberated

I feel like I belong

I have a senseof power

Adds pleasure
to my life

Keeps me in touch
Functional
Beneﬁts

Feature/Attribute

I’m in touch
everywhere

Doesn’t slow me
down

Easy to use

No difﬁculties
connecting

Broadest
coverage

Superior
voice quality

Most reliable
serviceBest network
dependability

FIGURE 8.6 Intouch CellCo Brand Architecture

determine strategies for increasing the usage of wireless services
from its existing customer base. Figure 8.6 shows the Intouch
CellCo brand architecture.
After conducting market research to determine the key driversof purchase intent, Intouch CellCo identified the following benefits
that it would have to deliver in order to maintain its relevance inthe category, differentiate it from other alternatives, and create
true brand preference:~ Reliable coverage~ Quickly and easily gets customers connected and keeps
them connected~ Enriches customers’ lives by letting them communicate
the way they want
BRAND EXPERIENCE BLUEPRINT DRIVES BUSINESSMODEL DESIGNOf course, Intouch CellCo’s ultimate goal is to integrate the brandpositioning into customers’ every touch point with the brand. To thisend, the Intouch CellCo brand experience blueprint (see Figure

161

Operations

Communications

RESTRUCTURE BASED ON BRAND EXPERIENCE

Brand Touch
PointsIdentify
Need

Evaluate
Options

Buy

Use

ObtainServiceTV

Communicate
my wayAdds
pleasure to
my lifeN/A

Communicate
my wayAdds
pleasure to
my lifePrint

I belong

Sense ofpower

Reliablecoverage

Superior voice
quality

Reliableconnection

OutdoorIn touch
everywhere

In touch
everywhere

Doesn’t slow
me down

In touch
everywhere

In touch
everywhere

In StoreCommunicate
my wayAdds
pleasure to
my life

Doesn’t slow
me down

Easy to use
handsets

Doesn’t slow
me down

Call Center

I belong

Sense ofpower

Doesn’t slow
me down

N/A

N/A

Direct Marketing

Communicate
my wayCommunicate
my wayN/A

N/A

Communicate
my wayFIGURE 8.7 Intouch CellCo Brand Experience Blueprint
8.7) should provide guidance for execution throughout the Intouch
CellCo operations, not just marketing communications. By mapping the brand architecture elements to key customer touch points,
Intouch CellCo determined that there were 10 critical functions of
the business that directly influence the brand experience (see Figure 8.8).

Network
Construction

Customer
Service

Network
Operations

Retail Store(Distributors)

CompanyStoresIntouch Brand
Architecture
New ProductDevelopment

VendorManagement

MarketingBill Presentment

Sales

FIGURE 8.8 Integrating Brand Architecture into the Daily
Activities of Intouch CellCo

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Role

ENTERPRISE MARKETING MANAGEMENT

Network Construction must build a network that delivers on the brand’s
promise of broadest coverage, reliable connections, and superior voice
quality upon which all other beneﬁts are based

Elements of Intouch Brand
Architecture Support

Network Development
Objectives/Implications

Performance Measuresand Metrics

FIGURE 8.9 Drive Out Implications for All Areas of theBusiness: Network Construction

Each of these functions reinforced emotional benefits, functional benefits, and various product features and attributes of theIntouch CellCo brand. In order to reveal these elements and help
each function bring the brand to life at the key customer touchpoints, Intouch CellCo developed specific business model design
briefs for each of the functions. An example of the brief created forthe network development team is shown in Figure 8.9 and discussed
in the next section. While the network development function of acellular communications provider would not appear to be connected to the delivery of a brand promise, this group, in fact, playsa critical role in conveying the brand’s benefits.
DEVELOPING A BUSINESS MODEL DESIGN BRIEF

The role of the network development group is to build a wirelesscommunications network that delivers on the Intouch CellCobrand promise of best coverage, fast and reliable connections, andRESTRUCTURE BASED ON BRAND EXPERIENCE

163

excellent voice quality—the foundation upon which all other benefits of the brand architecture are based. The specific brand benefits that this group can influence include attributes like these:“Lets me get connected when I need to,” “Doesn’t slow me down,”
and “Keeps me in touch with the most important people”—a powerful mix of emotional and functional benefits.
To ensure delivery of these benefits, the network constructiongroup intends to design faster, more reliable networks that optimize voice quality and drop fewer calls. The group’s contribution
to the activation of Intouch CellCo brand experience along these
dimensions can (and must) be measured in terms of connection
times versus competition, percentage of dropped calls, percentage improvement in network coverage, and so forth. In turn,these measures can be used to design rewards and recognition
programs that will motivate the network construction group toachieve its objectives, exceed its target metrics, and enhance thebrand experience.
By taking this approach, Intouch CellCo effectively shifted theenterprise from a make-centered to a sell-centered business model.
The company aligned the business to deliver on its brand promise
from the customer’s perspective rather than from the company perspective of procuring and distributing handsets, building networks,
tracking cell phone usage, and preparing monthly statements. Furthermore, it demonstrated how practically every employee had thepotential to impact the customer’s brand experience. And, mostimportant, it showed people how their individual actions, whenproperly focused, could reinforce and enhance the positioning of thebrand every day.

CASE STUDY: Aspen Skiing Company
REPOSITIONING ASPEN/SNOWMASS
AND ITS COMPETITORS
Aspen/Snowmass is the brand name for four ski/snowboard areas
owned by the Aspen Skiing Company. For decades, the town of Aspen
has served as a winter playground for the elite, its very name summoning up images of glamour, wealth, and privilege. However, this164

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widely held perception had become a weakness for the resort, asmany skiers viewed Aspen/Snowmass to be expensive, hard to get to,and so glitzy as to be unapproachable.
Aspen/Snowmass reigns as one of the premier ski destinations in
the world, but it has faced ever-increasing competition from other
Colorado and Utah resorts. In the 1990s, the skiing industry declined
overall. But when attendance growth for several ski resorts spiked
during the 2000–2001 season, Aspen/Snowmass determined that
additional marketing and brand architecture help was necessary.The
company needed to reposition its brand meaning and inject new life
into its operations.
The Aspen/Snowmass loyal visitor profile skewed significantly
older than the general skier population, so the resort needed to identify and capture a broader spectrum of skiers (especially younger
skiers) to ensure its future prosperity. And the resort had to entice
new skiers to try Aspen/Snowmass even though it is not easily reachable. Because of the small size of the airport serving the town ofAspen and the limited population surrounding the resort, most skiers
must drive four hours from Denver to get to Aspen, passing morethan a dozen quality ski resorts along the way.
The resort did not have the luxury of time for extended planningand program execution.The 2001–2002 season would mark a watershed for the skiing industry, as Utah would be hosting the 2002 Winter Olympic Games. Overall, Utah resorts were expected to see a
decline of 10 percent or more in skier days captured due to Olympic
events and associated preparation—meaning that an estimated half
million skier days would be up for grabs that season. Those Utah
resorts would also come out of the 2002 Olympics with worldwide
recognition and reputation, thus increasing their appeal for skiers. So
Aspen/Snowmass could not afford to stand pat.
Setting the Strategic Brand Destination
Aspen/Snowmass’s most valuable visitors are destination skiers—
out-of-towners who fly in from locations all over the world for ski
vacations, rather than local skiers driving in for day trips or longweekends.The challenge for Aspen was to identify and target thosesubcategories of destination skiers that represent the greatest
opportunity and probability of success for Aspen/Snowmass. The

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resort’s primary competitors were other destination ski resorts in
Colorado and Utah. Resorts on the east and west coast tend to
draw regional skiers who are less interested in a Rocky Mountainskiing experience. The management team also hypothesized thatnone of these Rocky Mountain resorts were differentiating themselves significantly. The resorts were marketing generic ski resort
features—outstanding powder, rapid lift lines, beautiful weather—rather than the unique features of their own resort. In short, they
were selling the category of skiing, not their own particular brand of
skiing.
Developing Initial Brand Hypotheses
and Validating in the Market
Aspen/Snowmass’s initial brand positioning hypothesis held that there
was a substantial segment of the skiing population that would be lessconcerned about price and more concerned about the total vacation
experience.While the resort will never be the least expensive skiing
destination in the region because of its cost structure, the management team believed that there is a sizable group of skiers that would
be willing to pay for a superior experience. In addition to hostingworld-class skiing, the town of Aspen/Snowmass is a rustic former
mining community that features first-rate dining, shopping, and lodging. No other resort can deliver Aspen/Snowmass’s combination ofoutstanding skiing and top-shelf nightlife.
To test and validate its preliminary assessments and strategic
hypotheses, interviews were conducted with 800 active destinationskiers, defined as skiers living outside of Colorado and Utah who haveskied at least twice in the past three years and at least once in Colorado or Utah during that time.The surveys focused on segmenting
the U.S. destination skier population according to their skiing attitudes, behaviors, and demographics, while also identifying the key purchase drivers for Colorado/Utah destination ski resorts.
The testing indicated that three key segments of interest
accounted for only 48 percent of the skiing population, but represented 90 percent of the total potential Aspen/Snowmass ski days.
These desirable skier segments shared a core set of attitudes about
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Bringing the Brand to Life at Every Customer Touch Point
With the knowledge of the most viable skier segments in hand, themanagement team developed a brand architecture and positioning
promoting the features and benefits unique to Aspen/Snowmass thatwere most likely to motivate the target population to visit theresort. These segments were already sold on the benefits of skiing,
but they needed to be sold on the benefits of skiing at Aspen/Snowmass in particular.The brand positioning they developed tapped into
the key customer benefit that the target segments craved in a ski
vacation and allowed Aspen/Snowmass to differentiate itself so thatit did not have to compete on price, as many of its competitors were
doing.
The management team also repositioned what had been seen as
one of Aspen/Snowmass’s greatest drawbacks—its location—into acompetitive advantage. Aspen/Snowmass’s most desirable segments
could be persuaded that while the resort is harder to reach, the extra
effort was worth it to get away from more crowded roadside highway
resorts.The Aspen/Snowmass location hurdle was thus repositioned
as a unique benefit, since it protects the total vacation experiencefrom the burdensome local traffic that clogs the resorts located closer
to Denver.
Most important, the Aspen/Snowmass management team recognized that the new brand positioning must be brought to life acrossall customer touch points (see Figure 8.10)—creating a highly differentiated brand experience, not just another advertising campaign. The new Aspen/Snowmass tag line—“the difference is nightand day”—builds the initial expectation of the total Aspen ski vacation experience, highlighting both the on- and off-slope virtues of
the resort.The brand positioning is reinforced through the reservations and customer service operators, and is further delivered by
the actions of the ski school, hotel staff, restaurants, and mountain
operations. Business design briefs were created for each of the critical stakeholder groups that would have an opportunity to impact
and reinforce the Aspen/Snowmass brand experience (including
mountain restaurant operations, ski and snowboard schools, pro
mountain sports, mountain operations, lodging and reservations,central ticket sales, and human resources). To be successful, all ofthese groups must work together to bring the new brand positioning to life.

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Mountain Restaurant Ops- Atmosphere- Food Quality- Customer Service

Communication Strategy- Advertising- Direct Response- Public Relations etc.

Lodging & Reservations- Product Offerings- Selling Scripts- Data Collection

Ski & Snowboard School- Special Programs- Course Offerings- Public Relations, etc.

Aspen/Snowmass
Brand Positioning& Architecture

Central Ticket Sales- Product Offerings- Selling Scripts- Data Collection

Pro Mountain Sports- Mountain Coverage- Products & Services- Store Layout

Mountain Operations- Ajax & Highlands- Snowmass & BM
- Mountain Photo

Human Resources- Training & Education- Internal Communication- Incentives & Recognition

FIGURE 8.10 The difference is “night and day” at every
customer touch point
The Results
The short-term results have been remarkable for Aspen/Snowmass.
At the outset of the 2001–2002 ski season, Aspen/Snowmass was
rated the number one resort in the United States by Skiing magazine.
This was the resort’s first top rating ever, up from number four
the previous year. In addition, despite a 30 to 40 percent downturn forthe skiing industry in Colorado during the first few months of the
2001–2002 season (due to the impact of the September 11 terrorist
attacks and the global recession), Aspen/Snowmass saw a downturn of
only 10 to 15 percent. In fact, during the critical 2001 holiday skiing
period, Aspen/Snowmass skier visits actually exceeded the previous
year’s levels. What’s more, Aspen/Snowmass achieved this without
resorting to the type of deep price discounts made by its competitors.
At the close of the traditional 2001–2002 ski season, Aspen/
Snowmass’s earnings saw an increase of 36 percent from the previous
year. And the resort’s skier days dropped only 4 percent from theprior year, while key competitor Vail saw its skier days drop more significantly versus the previous year.

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MARKETER’S S CIENTIFIC METHOD:
RESTRUCTURING BA SED ON BRAND EXPERIENCE

Following are the steps to take in restructuring your marketing
based on brand experience.

Step 1: Ensure That Everyone Understands the Destination
If people in your enterprise don’t know where the brand is headed
and exactly how you want your customers to think, feel, and act withregard to your brand, there is no way that you’ll be able to achieve
your business objectives. Take the time to make sure that everyone
involved with your operation—your people, your critical suppliers,
partners, service providers, and anyone who represents your brandto customers—understands your ultimate destination. Crystallize
your destination in a destination statement (see “Marketer’s ScientificMethod” in Chapter 2 for more detail) that everyone can reference
and use to validate marketing and operational changes that could
impact your brand. Consider enterprise-specific questions such as,“If we run this advertisement will it help us get to our destination?”and “If we make this change to our script in the call center, will it
help us get to our destination?”

Step 2: Create the Brand Experience Blueprint
Generally speaking, customers contact your business to identify
their needs, evaluate their options, buy products or services, use
those products and services, and possibly obtain support. At every
one of these stages, they experience your brand. The goal is to
map the key benefits from your brand architecture—the aspects
that you know motivate purchase intent—to each of the stages ofthe brand experience. Your enterprise and associated partners cancreate brand preference by bringing the benefits to life as you
inform, propose, sell, educate, and provide support to your customers. Obviously, these broad stages will have to be broken down
into specific interaction points unique to your business (telemarketing, direct sales interactions, financial transactions, call centerinteractions, field service interactions, and so on). As part of thisstep, you should also identify key stakeholders inside and outside

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the enterprise that have accountability. The brand spans the entire
enterprise, so stakeholders may end up representing many of thefunctional departments across your business, including finance,
operations, sales, procurement, and legal.

Step 3: Develop Business Model Design Briefs
and Enlist Key Stakeholders
Now that you have developed the brand experience blueprint, thekey stakeholders across your extended enterprise accountable forcustomer interactions, and the specific brand benefits that can be
activated at each touch point, you are ready to begin designing the
optimal business model to deliver a productive, profitable brandexperience. Create cross-functional teams to design the businessmodel from the customer’s perspective—use the brand experience
blueprint as your guide. For every key customer interaction, a business model design brief would specify requirements for performing
the following tasks:~ Characterizing the interaction in customer terms (e.g.,
requesting information about handsets, coverage area,
and usage rates)~ Identifying and prioritizing the elements of the brand toactivate (e.g., “Keeps you in touch with people who matter to you,” “Lets you get connected when you need to,”“Best coverage of all providers”)~ Identifying a key stakeholder accountable for the brandexperience (e.g., inbound sales)~ Setting out the roles and responsibilities of the stakeholder (e.g., inform, propose, and sell)~ Determining the people skills and capabilities required
to deliver the optimal brand experience (product knowledge, solution selling, sensitivity training, and so forth)~ Establishing the changes to current business processes
required (e.g., restructuring the sales script to focus onemotional benefits first, functional benefits, and finallyfeatures)~ Setting out the customer data and insights required inorder to activate the brand experience (e.g., current
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or requirements for new enabling technologies (e.g.,
integrating the customer insights database with the callcenter contact management system)~ Establishing performance measures and metrics to evaluate activation of the brand experience and associatedbusiness outcomes (e.g., close rate, incremental usage
rate, brand affiliation with best coverage ratings)
It is critical to engage the key stakeholders in the businessmodel design efforts—people will support what they help to create!
Try to include external stakeholders as well, especially people whoare part of your extended enterprise and come into frequent contact with your customers. These individuals have significant influence over the brand experience but may feel like they have not had
a say in how you position your products and services in the market.

Step 4: Develop an Organization Structure
to Support the Business ModelAt this point, you are ready to develop the organization structure—
the hierarchy of jobs, reporting structures, spans, and layers required
to support the activation and sustained delivery of the brand experience. Again, it is critical to engage all key stakeholders from the previous steps in this exercise to ensure alignment and commitment to
the new structure. Depending on the diversity of needs of the customer segments that are served, you may end up with an organization structure that is highly centralized at one extreme, highly
decentralized at the other extreme, or some form of hybrid or matrix
structure in the middle. Based on the roles and responsibilities
defined in the previous step, you can begin to logically group activities together and define jobs. As a general rule, customer touchpoints should be logically grouped together to minimize the numberof handoffs between various stakeholder groups. Based on thesegroupings and the relative size of the customer segments, you canbegin to determine the level of centralization or decentralization as
well as the spans and layers that will be required to deliver the brandexperience.

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D

espite the need to rethink their business model, when facedwith economic uncertainties and increased pressures toachieve quarterly targets, most corporate leaders respond bybattening down the hatches, focusing on the necessities, and riding
out the storm. The year following September 11, 2001, saw massive
layoffs, deferment of investment decisions, reactive decision making, more inward focus (and, consequently, less focus on customers),
and deep cuts in discretionary expenses. These discretionary cuts
also include disturbingly large slices into spending on marketing initiatives. Many shortsighted corporate leaders continue to insist thatthey cannot afford—or, worse, do not need—marketing in a slow
economy. Effective marketing drives customers to businesses more
frequently and persuades them to buy more products and services
for more money—no matter what the economic situation.

MARKETING IS AN INVESTMENT—AND
NEEDS TO BE MEA SURED A S SUCH

Companies like Coca-Cola, Starbucks, and Ritz-Carlton havebecome leaders in their industries because they have embraced
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the fact that marketing is an investment, not an expense. Further,
they rigorously analyze their investment alternatives and adopt
proven investment management practices, such as ROI analysis, toevaluate any marketing initiative or campaign. Given the fact thatmarketing initiatives, by their very nature, can be difficult to measure, Zyman Marketing Group has developed proprietary techniques for facilitating the return on marketing investment(ROMI) analysis process and determining which marketing activities actually create value for the enterprise and at what cost.
Zyman Marketing Group refers to this methodology as activitybased marketing (see “Marketer’s Scientific Method” later in thischapter).
Businesses that do not apply these rigorous financial management approaches to marketing projects have experienced a precipitous falloff in their valuation over time. The reason is simple:
Without an awareness of ROMI and a comprehensive set of marketing investment management tactics, leaders continue to makethe wrong decisions and inexorably erode their company’s value. If
you’re running a business and you think that marketing is something that you just don’t get, you’re probably spending money in thewrong places. It’s time to reevaluate your priorities.

STOP BUDGETING FOR MARKETINGAND START INVESTING WISELY

In many instances, business leaders consider a collection of marketing initiatives as a bundle of expenses, simply another entry in anannual marketing budget. Visionary business leaders don’t budget
for marketing; they develop a marketing investment strategy. Businesses that still attempt to figure out how much they will spend on
marketing by extrapolating how much they believe they will sell—
for example, “Let’s go with a 10 percent marketing budget”—arenot really marketing, they’re just marking time. In general, marketing managers receive minimal training in return on marketinginvestment measures, and many highly skilled marketers still do
not use this measurement tool accurately or strategically. In its simplest form, ROMI can be calculated as follows:(DCF − MI)
ROMI = ᎏᎏMIMEASURE INVESTMENT PERFORMANCE

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where:
DCF = discounted cash flow. The future flow of gains andlosses over time must be discounted back to the present(net present value) to reflect the time value of money.
MI = marketing investments required to generate the cashflow.
A key objective of the marketing organization should be to maximize ROMI for the firm—as Sergio Zyman would say, “To sell more
stuff to more people more often for more money in the most efficient manner.” The ROMI measure can be broken down into subcomponents to make it more actionable for the marketer (seeFigure 9.1).
For instance, to maximize ROMI in the preceding calculation,
it is imperative to increase DCF while decreasing MI. Intuitively,
this makes sense: Increase the cash flow and decrease the investment required to generate the cash flow, and you’ve maximized

ROMI

Discounted Cash Flows

Revenues

Cost to Serve

More Stuff
More People
More Often
More Money

Time Value of Money

FIGURE 9.1 What Drives ROMI?

Marketing Investment

Efficiency

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your return. So, what makes up DCF? Many factors influence thisvalue, but, stated simply, they are:

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More sales. If you increase the volume of goods and services that you sell, you should have a positive impact on
DCF—assuming, of course, that you are not selling themfor less than what it costs you to produce them (COGS =cost of goods sold).
More people. By increasing your total number of customers, you should also have a positive impact on DCF.
Again, this assumes that the lifetime value of the customer exceeds your cost to acquire the customer (acquisition costs).
More often. By increasing customer frequency of purchase or usage, you’re really selling more stuff to more
people. Of course, the same caveats apply here regarding
maintaining margins on every incremental sale. A key
measure that drives DCF is conversion rate. If you have
low rates of conversion (customers buy less of your stuff
less often) you will negatively impact DCF.
More money. Through your marketing efforts, you may
be able to command a premium price for your products
and services. Pricing strategy and how well you maintain
prices and avoid discounting will have a significant
impact on DCF. Customer lifetime profit is a key measure for understanding how DCF will be impacted overthe long-term based on the amount of profit generated
by each customer. Obviously, lowering total cost to serve
the customer over time (customer lifetime cost) will also
have a significant impact on DCF.
Most efficiently. Measuring and optimizing what you
invest in marketing is critical. In general, you should continue to invest in marketing until you begin to see diminishing returns on your investment. Other critical ratios
to track to determine the efficiency of your marketinginvestment include:~ Cost per lead: On average, what does it cost to generate each lead?
~ Cost per win: On average, what does it cost to wineach deal with each customer?

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MEASURE INVESTMENT PERFORMANCE175~ Deal cycle time: How long does it take to close a deal
from start to finish?
~ Opportunity cost: What other ways could the marketing investment dollars have been used to drive higher
returns and increase profitability for the enterprise?
Marketing assets are just as important on a balance sheet as
any traditional assets, such as manufacturing plants and production
equipment. Business leaders should approach marketing assets inthe same way, by aggressively tracking return on marketing assets(ROMA). Getting started is a simple process. Consider the newrules of marketing investment, as outlined in Table 9.1. If yourbusiness thinking falls on the left side of the table, you need to moveright. To do so, you need to look at how to apply financial theory to
the marketing function. You must use measures and metrics thatwill help ensure that you maximize the efficiency and effectivenessof your marketing investment, regardless of the external economic
condition. You also need to consider how to shift the values andbeliefs of your people to achieve the greatest returns on marketinginvestments and hold everyone in the enterprise accountable forresults.
In marketing, as in life, the conventional wisdom is not always
wise. Even in recessionary times, companies can ill afford to ignore
their customers and marketing outreach efforts in order to save a
few bucks. Purchasing still takes place; customers still attach themselves to new companies and new products. Indeed, the depressed

Table 9.1

The New Rules of Marketing Investment

From

To

Marketing is an expense.
Allocate marketing budgets.

Marketing is an investment.
Create strategic marketinginvestment plans.
Give budgets to projects.
Measure ROMI and ROMA.
Maximize existing marketing
assets.
Collect lots of relevant data
and derive insights.

Give budgets to people.
Measure budget variances.
Expand marketing asset base.
Collect lots of data.

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economy offers the truly innovative companies a distinct advantage.
Just imagine how much further ahead you’ll be if you’re running
while everyone else is standing still.
MAKE ROMI A RELIGION, NOT JUST A FAD

While the marketing department is responsible for specific marketing programs, the programs are much more effective when all
departments act in sync, as Chapter 3 demonstrated. For example,
if your brand stands for the highest-quality products in your category, you target consumers who are interested in high quality anddon’t mind paying a high price for it. Your marketing department
leverages the elements of the marketing mix to target those consumers, driving sales for your product. To a certain degree, setting
a high price point connotes both high value and high quality. Yoursales force must be trained and provided incentives to minimize any
discounting that would tarnish the brand.
Further, the product must be manufactured to the highest quality standards in order to reinforce the brand experience managed
by marketing. In the unfortunate event that defects do occur, your
distributors and field service organizations must stand ready to act
immediately to address any quality breakdowns. As a result, thebrand positioning is completely in sync and reinforced by the execution of the pricing strategy, sales incentive programs, manufacturing process, channel strategy, and service commitment. The
elements of the marketing mix and all customer touch points areharmonized to deliver on those critical emotional and functional
benefits that build a lifelong brand experience—of course, all with
the intent of maximizing sales and profits.
Now consider the case in which, again, to drive purchase intent,
the brand delivers a functional benefit of high quality and targets
consumers who are not price sensitive. However, in this instance,
the price is set too low. At the very least, the low price will undercut
your company’s potential profit, and it will also potentially repel
those very customers you wish to attract. While the interplay of
price, quality, and brand is driven largely by category dynamics,
there are many examples in which customers use price to connote
value. And if the brand stands for high quality but is actually
manufactured to a lesser standard in order to maintain margins,

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customers will be disappointed. While the marketing programs you
execute may appear to achieve their intended purpose, because of
the pricing and manufacturing decisions, then any marketing programs executed under these conditions will generate suboptimal
results.
It’s the same when aiming for the profitability of the firm: A
company is much more effective when all functions act in sync. All
departments, all employees, should want the firm to be profitable.
Without profitability, no one will have a job in the long term. Therefore all employees have a vested interest and responsibility in contributing to the profitability of the firm, and all need to work in sync
to achieve this profitability.
Just as marketing programs are more effective when everyone
supports the same strategy and objectives, so is profitability. Using
ROMI analysis enables the firm to ensure that the money invested
in the marketing activities of the business generates a sufficient
return. ROMI ensures that the entire firm is consistently measuring its marketing investments.
The firm invests funds in many ways in order to make a profit.
It invests in the manufacture of the product, making trade-offs inmanufacture that result in either a high-quality or a high-value
product. It invests in its distribution, often trading cost for time. It
invests in marketing, in order to build demand for a product andsell more. It invests in customer service in order to build repeat
sales.
The firm also invests in marketing campaigns. These campaigns are necessary to generate primary demand and enhancesales. And while the campaigns may be evaluated to some degree by
increased sales, that factor tends to be only a side note, often lost in
the glitz, glamour, and hype. If a campaign doesn’t result inincreased sales, it is easy to blame pricing, manufacturing, or evensomething as uncontrollable as the weather.
Every marketing campaign needs to be measured on its bottomline impact to the firm. Not on awareness, not on market share;customer awareness and market share are not indicators of profitability. All marketing initiatives need to be measured on ROMI
to show that they are worth the investment and to help evaluate
where additional marketing funds can be effectively invested toincrease sales and profits.

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WHAT NEEDS TO CHANGE?

First, every program in marketing needs to be measured against
the same scale: How does this program impact sales and profits?
Granted, there are many reasons that this is difficult to do, and you
can predict the responses: “No customer responds directly to a program and runs out and buys our product”; “Linking our marketing
programs to sales figures is too difficult to do.” But difficult doesn’tmean impossible, and if you can figure out how to do it, think how
far ahead of your competitors you’ll be.
At its heart, the concept is simple: Each campaign or marketing
initiative must have one person who is held accountable for its contribution to profits (and losses). In other words, every initiative gets
evaluated like a P&L statement, on the following criteria:~ Every campaign or marketing initiative. You measure the results of each and every program, no exceptions. If you aren’t measuring the results, then why areyou even running the campaign?
~ One person who is held accountable. You can’t holda group accountable for a result—pinning responsibility
on multiple individuals just doesn’t work. There needs to
be one person who is held accountable for the amountinvested in each initiative and for ensuring that the program achieves its targeted sales objectives. And because
this person is accountable for specific, measurable results, then specific, measurable results will be importantto everyone who reports to this person as well.
~ Its contribution to profits (and losses). Each marketing initiative needs to have a P&L. This includes sales
goals, as well as detailed information on investments madein conducting various activities as part of the initiative.
In order to hold one person accountable for the ROMI of a program, that person needs specific financial information about that
program on a timely basis, like how much the program is costing. So
you need to track the funds invested in that initiative. Any timemoney is spent to support the initiative, it needs to be accounted for.
It needs to be clear exactly how much you are investing in the initiative. It also needs to be clear how those funds are invested. Is itMEASURE INVESTMENT PERFORMANCE

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invested in production of advertising? In media buys? In promotional events? In creative fees? This information will provide valuable insights into the best ways to invest your funds, especially once
you measure the results.
You also need to track the results of the investment. This meansthat you track the impact of the initiative on corporate sales in harddollars, not ephemeral measurements like brand awareness. This
activity has implications for both the structural and the cultural
aspects of managing any marketing program.
Consider the structural elements first. The structural elements
provide the support needed to measure the impact of your marketing programs. Two key structural elements need to be in place:~ An accounting system that tracks marketing initiatives
in terms of P&L~ A performance management system between marketingand sales
The accounting system must enable costs to be tracked for eachprogram, at a level of detail where you can analyze the impact ofvarious investments on the program. For example, were programs
equally effective regardless of the amount spent on marketing? The
system also needs to communicate sales results for each program.
And this data must be delivered on a timely basis.
Marketing and sales need to be more tightly integrated. For
example, say marketing creates a program involving a promotion in
Peoria. Then the marketing person who runs that program needs
the sales results for Peoria. He or she needs to understand all theelements that went into the sales and how the program could have
improved sales. If possible, he or she can make changes to the program to drive an increase in sales, and then track whether they
were successful.
MAKING THE MEA SURES MEANINGFULON A DAY-TO-DAY BA SIS

So you change your accounting system and relationship with sales.
These alterations are fruitless unless you actually look at the measures and utilize the relationship with sales. How, then, do youchange the culture of an entire group?

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Begin with the premise that employees will set their priorities
to align with the priorities of their boss. Therefore, start by selecting key people to be accountable for each program. These people
must be influential senior leaders, and they need influence bothabove and below them in the hierarchy.
Once you select these individuals, their incentives must bealigned with managing the P&L for their programs. They must also
effectively communicate the progress of their program to theirsenior management and those outside marketing. Everyone whoworks with these leaders must expect to hear about the P&L of
their programs.
As always, these leaders will rely on their teams to help thembuild a successful program. If it is a priority to this leader, it will bea priority to all who report to him or her—including outside service
providers that may not be direct reports but that influence andpotentially impact ROMI for specific initiatives. They need to sharethe financial information with their teams in terms of specific performance metrics that are actionable and clearly linked to desired
business objectives.
For example, consider again the Intouch CellCo case introducedin Chapter 8. Advertising is one of the most effective ways to communicate the most complex emotional benefits of the Intouch
CellCo wireless communications brand. So, using the Intouch CellCobrand architecture to inform the creative process, the company
determined that the primary objective of the advertising must be tocreate the belief among customers that Intouch CellCo can deliver
key emotional benefits by depicting customers receiving these benefits in situations and occasions that are relevant to various customer
groups. A secondary objective is to indirectly show how Intouch
CellCo adds a little pleasure to customers’ lives by delivering key
functional benefits. Of course, the desired business outcomes fromthe advertising campaign are to increase customer retention rate,
attract new customers, and increase overall usage of the service by
new and existing customers. The Intouch CellCo executive accountable for this campaign needs to communicate with his or her team interms of specific, actionable measures that link directly to thesedesired objectives and outcomes. The measures listed in Table 9.2
were created and monitored throughout the campaign.
It’s important to note that these measures must be consistentin both their application and their delivery. Team members must

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Table 9.2

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Intouch CellCo Performance Management

Performance Indicators

Business Outcome Measures (and Metrics)

Increase in preference for
Intouch CellCo brandSpot recall, message recall,and linkage to Intouch
CellCo brandShare of voice and shareof market (advertising
effectiveness)

Customer retention rate (+15%)
Total number of new customers(+500,000 accounts)
Average minutes of usage
per customer (+250 minutes)

always have access to the appropriate information, while upper
management must be able to compare results from different marketing campaigns on a relevant qualitative and quantitative basis.
If you know what works and why in one effort, you can easily translate that success to another effort—as long as the data remains consistent across campaigns. Keeping every branch of the company,
from front-line sales to upper management, abreast of campaign
activities gives everyone a greater stake in and understanding of all
campaign efforts.
COMMUNICATE THE EFFECTIVENESS
OF MARKETING PROGRAMS

To communicate in a foreign country, it helps to speak the language
rather than rely on native speakers to translate or understandyours. Speaking the language makes it easier to request help fromothers, to do what you need to do, and to get what you want.
To communicate with your customers, it helps to speak their language. You use current slang and styles to reach the teenage market;
you use more mainstream language and conservative styles to market a product to senior citizens. Speaking their language increases
the probability that you will get what you want: increased sales.
To communicate with others in your company, it helps to speak
their language. While some nonmarketers might understand marketing lingo, you are hoping they can translate “marketing-ese” theway you want them to. Avoid this problem—speak their language tominimize any errors in translation.

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Speaking their language not only minimizes confusion, but alsoenables you to show that marketing is working toward the same
goals. So if the rest of the company measures success on ROMI,
then marketing needs to speak of their work in terms of ROMI.
This doesn’t mean just when you are giving a report or just at thesenior level. This means all the time, every day. “What did you do toincrease sales and profits today?” needs to be a key, constant question.
Just as the company knows how many products will be manufactured and at what cost, the company should also know what marketing programs are in place. The ROMI of programs, and thedriving factors, must be discussed in executive meetings, in staff
meetings with the marketing folks, anytime marketing discusses
performance, and anytime anyone outside of marketing discusses
performance. Measuring the ROMI of your marketing programs
will provide valuable information on how to spend your marketing
funds.
LEARNING AND IMPROVING BA SED ON RESULTS

Just possessing knowledge isn’t enough. For instance, every automobile manufacturer knows how an internal combustion engine
works and why four wheels are the optimal number for a passenger
vehicle. What will separate you from your competitors is the use ofthat information, over and over again. By obtaining timely feedback
on your campaigns, linking your ROMI to sales programs and data,
and keeping a constant watch on where exactly your dollars aregoing and whether they are succeeding, you can course-correct asoften as necessary in order to take your company to the top.
At Intouch CellCo, a lack of differentiation among wireless service providers was leading to increased customer switching behavior, or churn. Intouch CellCo executives had always believed that the
primary reason for switching was driven by improvements in network performance and extended coverage. As competitors upgraded their systems, customers would switch to get better service.
Interestingly enough, after analyzing the reasons for switchingamong contract and prepaid customers, satisfaction with service or
coverage did not even make the top 10 reasons cited for switching.
Price was the number one reason, and the handset (type of phone)
was second. The customer focus on price demonstrated the fact

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that there was little differentiation among competitors, and customers were just seeking the best deal—no brand really held any
relevance, and price had become the only discriminating feature.
With this insight in mind, Intouch CellCo executives could coursecorrect, shift marketing investments away from a “better sameness” positioning in the category, and attempt to build real branddifferentiation and preference.
MAKING TRADE-OFFS

In a perfect world, you’d have endless cash flow to spiral out into
campaign after campaign, running all kinds of ideas up the flagpole. The truth, of course, is that trade-offs need to be made;resources are not infinite, and you need to know where and how toinvest your marketing dollars to get the best return. ROMI allows
you to make trade-offs by giving you reliable data on exactly how
much you’ve invested in each campaign. Knowing where and how
your funds are invested allows you to track and compare how each
investment is performing. With this information in hand, you candetermine where the next round of cash should be invested, and—just as important—where it should not. Rather than spraying
money around indiscriminately—or even equally—you can target
the regions, customers, or markets where your investment is taking
hold (more details on this in Chapter 10).
DIFFERENCES TO EXPECT IN RESULTS
AND IN CULTURE

If it’s possible to generate any truisms in marketing, here’s one:
Doing the same thing over and over again will yield—at best—thesame results. If you’re not headed toward where you want to be,
your present course isn’t going to take you there. So you can use
ROMI as a compass to help determine your direction and properly
reallocate your resources. You (and your company) can learn fromwhat works and what doesn’t, and can measure success in hard dollars. With such statistics in hand, marketing no longer needs to relyon ethereal measurements such as “awareness” or “desirability.”
Now, you can communicate more clearly the results of marketing
campaigns, which will in turn generate support for winning efforts
throughout the organization. In the end, this leads to decisions

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based on sound strategy and statistics, not hunches or tradition—and by any measure, that’s a positive change.

CASE STUDY: Harrah’s Casinos
MARKETING INVESTMENT STRATEGY YIELDS APRODUCTIVE, PROFITABLE BRAND EXPERIENCE

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There is no industry more dedicated to the power of marketinginvestment management than casino gaming. Gamblers are creaturesof habit, and no gaming corporation has done a better job of tracking,analyzing, and capitalizing on those habits than Harrah’s. At its 25 casinos around the country, Harrah’s learns everything possible about its
customers, and then presents specifically targeted offers to thembased on their value to the corporation, their responsiveness, andtheir willingness to spend.
At a central processing office in Memphis, Harrah’s compiles anincredibly detailed record of every movement and every bet of every
valued customer in all of its casinos. Harrah’s can monitor the number of machines the customer plays, the number of wagers made, theaverage size of bets, and the total money deposited in machines(called the coin-in). Before a customer has even arrived home from avisit to a casino, Harrah’s has compiled enough information on themto build a detailed profile of their gaming habits, a plan for enticing
them back to the casino, and even an individual profit-and-loss projection that will aid in future marketing investment in the customer.
Harrah’s tracks customer information by using a plastic loyalty
card that valued customers slide into slot machines and card tables
while they play.The benefit for the company is obvious; the information gathered on the customer is invaluable and is used to refine its
database, now segmented into 90 behavior-driven demographic targets. Each segment receives its own custom-tailored direct-mailincentives.
For their part, customers can earn platinum or diamond statusbased on their gambling levels.They can visit www.harrahs.com to findtheir point levels and learn more about benefits. Based on which customers choose which benefit packages, Harrah’s can continue torefine and improve its marketing investment.

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Conventional wisdom would hold that the slots players, playing
only a quarter or a dollar at a time, are Harrah’s least valuable customers. And conventional wisdom would be dead wrong. Slots andother electronic gaming machines account for the majority of Harrah’s $3.7 billion in annual revenue and constitute more than 80 percent of the company’s operating profit. Because it has tracked andretained its slots players, Harrah’s has grown to be the second-largest
gaming company in the United States, behind only MGM Entertainment. Harrah’s also boasts the highest three-year investment returnin the industry. In just the first two years of its Total Rewards program,
Harrah’s saw a $100 million increase in revenue from customers who
gambled at more than one Harrah’s casino.
So how does Harrah’s track its 25 million customers? With a
combination of technology and strategic analysis.The company begins
with four key pieces of information—gender, age, area of residence,and games played—and uses that information to offer early predictions of which customers will become the biggest spenders.The company designs appropriate marketing strategies to lure customers
back. The goal is not a product-based one—say, designing games toreach particular revenue levels—but rather a customer-based one,working to maximize revenue from individual customers, regardlessof which games they play.
Each of the demographic factors demands its own series of incentives. Out-of-town customers typically receive discounts on hotel
rooms or transportation, while local customers receive cash, food,and entertainment incentives. Early expiration dates encourage customers to return quickly or switch from competitors. Harrah’s tracks
each incentive based on response rates and return on investment, andadjusts future incentives accordingly.
Analysis of customer data found that the 30 percent of Harrah’s
customers who spent between $100 and $500 per visit accounted for
80 percent of company revenues and almost 100 percent of profits.
Those gamblers were typically local residents, who visited their
nearby Harrah’s frequently.
With this data in hand, Harrah’s marketing teams developed aprofile of the ideal Harrah’s customer. As it turns out, the ideal gambler is a 62-year-old woman who lives within 30 minutes of a casino
and plays dollar video poker.These ladies typically have substantial disposable cash, plenty of time on their hands, and easy access to a Harrah’s regional casino.

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Harrah’s has made an intensive, extensive marketing investment,
and it’s now beginning to pay off. The lesson for other companies isclear—learn who your best customers are, or you’re liable to lose
them.

MARKETER’S S CIENTIFIC METHOD:
ACTIVITY-BA SED MARKETING (ABM)

By applying activity-based costing theory to marketing, you canestablish a rigorous process for evaluating which marketing activities create value. In turn, you can use this information to develop arobust, fact-based decision-making process for how marketinginvestments are made. The overall objective of this activity-based
marketing (ABM) analysis is to maximize the return on marketinginvestment (ROMI) that an enterprise can achieve. ABM includes
tools for measuring and analyzing ROMI, and it represents a structured methodology to perform the following:~ Apply scientific discipline to maximize the return on
every marketing dollar spent across the enterprise~ Optimize the performance of each marketing channel
and the portfolio of channels overall (i.e., which channels perform better than others? Where should we invest
labor and dollars?)~ Model what-if investment scenarios~ Forecast the number of leads needed per month, perchannel to achieve revenue objectives~ Provide a common language and fact base for the marketing and executive teams to make informed decisions
When appropriately implemented, ABM delivers substantial
benefits to an enterprise:~ Laying out a road map to success for each business unit
across an enterprise, based upon the expected effectiveness and efficiency of each marketing activity, initiative
and/or campaign, and so on~ Identifying risks and critical success factors to hit performance targets

MEASURE INVESTMENT PERFORMANCE

187~ Providing visibility into the number of leads required ateach stage of the sales process in order to achieve financial objectives—giving the management team sufficient
time to take corrective action~ Aligning enterprise marketing and customer strategies
with operational investments (i.e., people, process, andtechnology)
The power of ABM comes from the insights your management
team gains as a result of conducting the analysis, asking the rightquestions, and gaining a new understanding of your business.
ROMI tools alone do not provide the answers; rather, they provide
data on performance and a framework for asking pointed questions.
Of course, as discussed in this chapter, organizational involvement
and buy-in of the analysis is critical.
Your goal should be to conduct the ABM analysis with the appropriate level of rigor to provide “good enough” data for understanding
performance, identifying opportunities, and modeling the future.
Above all, avoid analysis paralysis—don’t spend so much time looking at your plans that you don’t have time to implement them.

Step 1: Understand Past Performance
The first step requires an intimate understanding of where you arein your business and where you have been. This begins with identifying all marketing activities that you perform to reach your target
customers. It is important to break down your activities in sufficientdetail to ensure that you can reveal and measure the things thatreally help generate value for customers and for your business. For
example, if you think one of your key activities is driving brandpreference, you may want to consider breaking this down into several more detailed activities that you believe help drive preference
for your brand. You may publish a newsletter, maintain a web site,or conduct seminars, each of which drives preference for yourbrand. So instead of having an activity called “drive brand preference,” you may have several activities in which you invest, such as“publish newsletter” or “maintain web site.” Give marketing activities clear names and develop consistent descriptions; otherwise, itwill be difficult to track revenues and costs associated with eachactivity and the value of the analysis will be compromised.

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Table 9.3

Sample Scorecard

ID

Activity

Revenue

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Activity 1
Activity 2
Activity 3
Activity 4
Activity 5
Activity 6
Activity 7
Activity 8
Activity 9
Activity 10
Activity 11
Activity 12
Activity 13
Activity 14
Activity 15
Activity 16
TOTAL$ 100,000$ 150,000$ 600,000$ 500,000$ 500,000$ 3,400,000$ 600,000$—$ 100,000
$—
$—
$—
$—
$—
$—
$—
$ 5,950,000

Avg. Deal
Size

Activity % of
Revenue

# of
Leads

$ 100,000$ 75,000$ 300,000$ 250,000$ 250,000$ 309,000$ 150,000$—$ 50,000
$—
$—
$—
$—
$—
$—
$—

2%
3%
10%
8%
8%
57%
10%
0%
2%
0%
0%
0%
0%
0%
0%
0%
100%

6
4
6
3
10
25
20
30
16
—
—
—
—
—
—
—
120

Next, try to attribute customer revenue to each activity. This
will allow you to compute average, maximum, minimum, and standard deviation of deal sizes by activity and begin to identify opportunities. To start with, keep it simple. Try to tie the source ofcustomer leads to specific activities. At this stage you should also
allocate marketing labor costs and discretionary costs to each activity. Once this has been completed, you should begin to get a clearer
understanding of which marketing activities actually generate thehighest return and drive your business. Table 9.3 shows a sample
scorecard that results from Step 1.

Step 2: Model the Future and Perform What-If Analysis
The next step is to model the future performance of your businessand determine how to optimize investments. There are two different approaches. Top-down analysis is used to determine how to opti-

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Table 9.3 (Continued)
# of
Wins

% of
Deals

Total Activity
Cost

Cost Per
Lead (4)Cost per
Win

Activity
COS/Rev

1
2
2
2
2
11
4
1
2
0
0
0
0
0
0
0
27

4%
7%
7%
7%
7%
7%
41%
15%
4%
7%
0%
0%
0%
0%
0%
0%
100%

$ 22,500$ 19,000
$—
$
4,000
$
3,000
$ 50,613$ 339,338$ 90,344$ 153,878$
17,003$
10,266$ 407,941$
22,000$—$—$—$ 1,139,861$ 3,750$ 4,750$—$ 1,333$ 300$ 2,025$ 16,967$ 3,011$ 9,617no qual. leads
no qual. leads
no qual. leads
no qual. leads
no qual. leads
no qual. leads
no qual. leads$ 9,499$ 22,500$ 9,500$ no cost$ 2,000$ 1,500$ 4,601$ 54,834$ 90,344$ 76,989
no wins
no wins
no wins
no wins
no wins
no wins
no wins$ 42,218

23%
13%
0%
1%
1%
1%
57%
no rev
154%
no revno revno revno revno revno revno rev
19%

mize your activities to hit a specific revenue target. The revenue
target is fixed and the analysis focuses on optimizing the levers thatdrive total revenue and provides insight into marketing investment
and hiring requirements. Bottom-up analysis is performed to determine the maximum revenue that can be attained by optimizing revenue drivers. Revenue is the dependent variable. This form ofwhat-if analysis provides insight into the following:~ How total revenue will be affected if we increase theprobability of closing (e.g., enhance training or resource
investment)~ What type of return we will get if we invest more in thismarketing activity (e.g., invest in labor or promotions toincrease the number of leads)~ What type of return we get if we increase the averagedeal size

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ENTERPRISE MARKETING MANAGEMENTStep 3: Forecast Monthly Lead Requirements
The final step of the ABM analysis is to forecast the number of new
customer leads that are required per month, per sales process
stage, to hit revenue targets. Modeling revenue distribution by
quarter, average deal size, probability of conversion, cycle time, andcash flow recognition, the enterprise begins to get a clear picture ofcurrent performance and progress against business objectives.
Using this lead forecasting approach, an enterprise will know wellin advance whether marketing has insufficient leads in the pipeline
to meet revenue targets. The obvious benefit is that with increased
visibility, the management team will have additional time to course
correct marketing initiatives, realign marketing investments, andget back on track to meeting targets.

10
OPTIMIZE MARKETINGINVESTMENTS TO DRIVEPROFITABLE SALES

E

very day, every marketer faces the critical decision of determining where to make marketing investments or—thinking
more broadly—where to position marketing assets in orderto drive profitable sales. Even if you’ve successfully developed abrand architecture that describes that combination of emotionaland functional benefits that drive purchase intent for your brand,translated these benefits across the entire brand experience, andthus developed a brand experience blueprint, you’re still not done.
You still have to think about where to invest your marketing funds
to drive sales.
The brand experience blueprint is just that—a blueprint of allof the potential customer interactions, ideally across both the current elements of the marketing mix, and all of the customer touchpoints. However, it doesn’t tell you where you need to be investing
your marketing dollars. It doesn’t provide you with the creative
spark that might be the basis of a market-based experiment. Soeven after applying a significant measure of science to your marketing efforts, there’s still plenty of room to let your hair down andget creative.
The brand experience blueprint represents the marketer’s laboratory and stands as the compendium of all your opportunities to
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communicate and engage your customers. This is where the experimentation can really begin, at least as it relates to identifying thosetactics that might drive sales. By thinking horizontally, or evenholistically, across the entire brand experience, the scientific marketer can identify those areas where marketing investment andexperimentation make sense. The bottom line is that marketinghas to invest in those campaigns and initiatives that drive sales. If
an idea doesn’t, then it’s not worth your money.
This theory goes back to the premise of EMM. Part of bringing
a scientific approach to how you invest in marketing is realizingthat you will make mistakes. Too many marketers try to avoid eventhe possibility of making a mistake, tending to their sacred cows
and staying on the safe, predictable path.
This isn’t to say that safe and predictable decisions are necessarily good ones. On the contrary, these terrible decisions are all too
acceptable. Outsourcing strategy to an advertising agency, continuing to support investment in marketing events, or paying for sponsorships that have no relationship to sales whatsoever are three
examples of investments that conventional wisdom believes are
safe—and real marketers believe are often heedlessly wasteful.
Marketers must bring an analytical approach, yes, but also adesire to apply the scientific method to what marketing does in aneffort to continually increase knowledge of what drives sales andwhat doesn’t. Unlike the traditional sciences, marketing is intimately connected to the enormously dynamic business marketplace. This means that what you learned last year might not be true
next year. And this constant change makes the science of marketing
terrifically exciting—as long as you’re willing to adhere to the rigorous discipline required to learn what actually works and what
doesn’t.
For example, can the marketers in your company detail whichinvestments pay out and which ones don’t? Or, if that’s not yet feasible, can they rank-order marketing mix investments to indicate
which ones seem to perform better than others? At an even moreelementary level, is there a simple record of investments and sales
results?
Part of bringing a scientific discipline to marketing investingmeans applying the discipline from start to finish, not just waking
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193

been done. When you make a marketing investment, do you ask
your marketing managers to create a financial profile of their proposed investment, indicating specifically where they expect tomake cash outflows and also expect to see sales inflows? Think of it
this way: This is exactly the sort of information you would demand
if you were talking to your broker about where to invest your hardearned money, regardless of risk. Why does your company deserve
any less?
In making the decisions about where to invest marketing dollars, the marketer can use the brand experience blueprint as his or
her portfolio, because it adequately lays out all of the current customer interactions in such a way as to communicate the brand’s
benefits. What levers should we pull for activating the brand?
Where should we invest marketing dollars, either in marketing mix
elements or in altering some current aspect of interaction across acustomer touch point? Should we allow differentiation of offerings
based on geography or targeted segment? All of these questions
form part of the research and investigation that makes up the marketer’s job. Granted, it’s impossible for you to simply read a bookand learn exactly where to make your marketing investments todrive the sales of your company. But you can learn the proper steps
to follow and how to think through your approach to make the mostof your marketing investments.
Generally speaking, every marketer should follow the same
approach to making marketing investments, regardless of whether
the investment is for launching a new product or for continuing topush your current offerings. This approach is relevant for every
potential change or investment in the brand experience blueprint.
Whether you’re spending money to purchase advertising production and media, to create a more compelling customer extranet, or
to ensure that your sales force communicates brand benefits, thisapproach works.
To drive profitable sales using EMM, marketers must take certain steps before even thinking of spending that first dollar:
1. Ensure alignment with the strategy that the marketinginvestment supports.
2. Identify where in the brand experience blueprint tomake your marketing investment(s):194

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a. Create the marketing investment program—marketingmix element or customer touch point.
b. Develop a profile of the investment and the return on themarketing investment.
c. Develop the nonfinancial metrics that are likely leading
indicators of marketing return.
3. Implement the process or system that will let you evaluate the progress of your many investments, even before
they’re complete (prepare yourself to answer the question “Are we selling more?”).

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While it may be tempting to jump right in and make investment after marketing investment, that approach would abandon
the heart of EMM’s principles. A critical part of any investment isplanning for what will happen, but equally as important is thenecessity to measure what’s happening and learn from it. What
good is a winning marketing initiative that you’re not able torepeat?
The appeal of this approach is that with every investment, youhave the opportunity to get smarter, on individual, brand, and corporate levels. If the business model isn’t in place to make this possible, then your marketing investment in learning is going to waste.
You might hit a few home runs, but the loss of one key player willland you back in the cellar. Keep this in mind—learn from everything you do as a marketer. Everything.

ENSURE ALIGNMENT WITH
THE BRAND ARCHITECTURE

Before even thinking about where to put your marketing investments, it’s critical that you align potential marketing efforts withyour brand architecture. While the emotional and functional benefits of your brand have presumably been incorporated into yourbrand experience blueprint, it’s critical to make sure that every
potential marketing program is synchronized and aligned with thatsame brand architecture.
While this may be as simple as reviewing your brand architecture before moving to the next step, many brands have to struggle

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with far more complex questions, like, say, How much does mybrand vary from France to Japan? Which of my brand benefits areinviolable, and which ones are subject to interpretation?
The question that many marketers struggle with is how tomake a particular brand architecture work in a local market. For
example, given Pepto-Bismol’s popularity in the Hispanic community, how should the brand architecture be applied differently in
Latino markets as opposed to the broader U.S. market? Or if you’re
grappling with the age-old global versus local conundrum, how can
the global brand manager ensure that a brand’s positioning isapplied consistently around the world, while giving the local marketers the leeway to make the brand’s benefits relevant?
Figure 10.1 highlights the process trade-offs that any marketer
must make when addressing such a challenge. The bottom line isthat there are inevitably core elements of the brand architecture orcore marketing processes as well as potentially regional/shared andlocalized elements. The placement of the dividing line must be
driven by the inevitable investment trade-offs as determined bytheir ability to drive incremental sales. To answer our own question,
the Pepto-Bismol brand architecture is the brand architecture. The
leeway in interpretation will be driven by the specific return frominvesting in Latino-specific marketing.

Highly Decentralized
Geographic
Unit or
Local
Processes
SharedProcesses

JAPAN

CANADA

U.S.A

FRANCEGERMANY

Sales
Research
Pricing
Promotions
Advertising

Sales
Research
Pricing

Sales
Research
Pricing

Sales
Research
Pricing
Promotions
Advertising

Sales
Research
Pricing
Promotions
Advertising

Promotions
AdvertisingMarketing Recruiting & Training
Customer Service
Corporateor Global
Processes

Global Brand Strategy & Positioning & Trademark ComplianceCorporate Sponsorships & Marketing Alliances

HighlyCentralized

Product Development

FIGURE 10.1 Positioning Brand Assets to
Drive Profitable Sales

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ENTERPRISE MARKETING MANAGEMENTUSE THE BRAND EXPERIENCE BLUEPRINT TOGUIDE YOUR MARKETING INVESTMENTS

Given all of the requirements of building a brand experience, it canseem daunting to determine how to best use marketing assets. In
this instance, assets could include your time, your dollars, yourbrands, your sales force, your customer service reps—just about
anything that you can leverage to improve your marketing position.
Marketers have a difficult time determining where across thebrand experience to make investments and which element of themarketing mix or customer touch point should be included. How
much do you spend on promotions, and how much on advertising?
Should the available funds go toward developing new products or to
support an improvement in customer service? There are so many
competing priorities, and the addition of the customer touch points
on top of the traditional elements of the marketing mix may at first
overwhelm marketers. Don’t worry—with EMM to help, you’re notgoing to drown in options.
THE KEY TO SUCCESS: THINK HORIZONTALLY

Traditional marketers tend to spend an inordinate amount ofmoney on projects such as advertising, promotions, and direct mail.
It’s time to reconsider spending for the sake of spending.
When you need to put your brand experience blueprint to workand choose your priorities, thinking horizontally means thinking
across the entire brand experience, the way you would think about
any networked decision. In other words, the fact that any relationship has numerous inflection points and opportunities for influencerequires a marketer to think beyond the traditional domain of generating demand.
Many industrial companies have no real marketing capability
and tend to think of marketing as little more than a production
warehouse for annual reports or “brochure-ware” web sites. These
companies also tend to combine marketing and sales under one
roof, staffed by salespeople with less expertise in marketing.
Companies that have developed relatively sophisticated selling
processes, usually supported by the CRM investments detailed in
Chapter 5, look to marketing to fill the pipeline with leads oropportunities. In this instance, marketing makes investments that

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generate opportunities on which the sales force can then capitalize.
The sales pipeline diagram shown in Figure 10.2 highlights how
this approach generates rich opportunities to evaluate marketinginvestments. Marketers can track investments not only on theirability to generate opportunities, but also on the net output fromthe investment effort, meaning that all marketing investments canbe tied downstream to specific sales generated by the lead.
Sales processes of this type are generally only useful for companies that fulfill products and services directly (e.g., financial services) as opposed to companies that sell through third parties ormass marketers (e.g., Kraft Foods).
This approach, which is already in place in many companies
today, is certainly much better than leaving marketing unconnectedto sales. But it still isn’t optimal. While using the sales pipeline is an
excellent way to evaluate the impact that marketing is having onsales, it has limited predictive value and looks at the enterprise very
narrowly, giving marketing very little insight into the actual driversof opportunities. It’s a fine measurement system but a poor tool for
deciding where to place investments.
What is important is that the data that make up the pipeline
results help form your company’s profile for specific marketinginvestments. In other words, the pipeline results help you understand the ability of certain marketing mix elements and certain
marketing programs to drive profitable sales. It’s a critical piece ofyour ongoing marketing learning and represents a primary method
for gathering information about the effectiveness of your marketing.
While the pipeline is a great gauge of what works and what
doesn’t, it can’t help you weigh all of your potential investment

FIGURE 10.2 Sales Pipeline

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options and opportunities. Its data will be factored into the decision, but you still need more.
The more in question requires evaluating all of the potential
marketing investments across the brand experience blueprint. For
every key customer, for every interaction, what are the potential
marketing investments, and what is the profile of these potential
investments?
The most sophisticated marketing organizations look across all
customer interactions and then evaluate all of the potential marketing investments as part of a dynamic network. Highly sophisticated marketing organizations recognize the interdependence ofevery marketing investment and evaluate all investments together
to determine how to optimize spending. Which marketing mix element works the best? Which element of the brand experience needs
focus? Should you spend more money on promotions or invest in
more call center capabilities? These trade-offs, for the most part,
don’t currently exist, since the predominant method of traditional
marketing investment sits within the domain of traditional marketing departments.
Some marketers are weighing the trade-offs of investments in,
say, advertising versus promotion versus packaging, but even then,it’s rare that they evaluate these investments together in such a way
as to estimate their combined effect. And in most cases, marketing
doesn’t play a role in many company decisions that affect customer
touch points, so it’s virtually impossible to bring the entire investment picture together.
In those rare companies where marketers bring a holistic view
to investments in the marketing mix and investments in customer
touch points, you can put numerous methods to work to optimize
your marketing investments. This is the key to bringing the mostscientific methods to bear on your total brand experience.
In the scientific community, optimization is defined as a mathematical methodology that allocates finite resources across multiple competitive, conflicting, and overlapping initiatives, each withunique constraints, to achieve an overall objective. Applied to thedemand chain, optimization is a mathematical decision-making
process that allocates finite resources across multiple channels,
business constraints, and scenarios in order to determine the optimal mix of marketing investments to maximize return on marketing investment.
While this method of tracking investments may sound like

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some kind of fantasy, chances are that your company is probably
already using this sort of approach—just not anywhere near themarketing department. Your operations or logistics department
might be using this method to determine the routing of your delivery trucks. Or your CFO or investment bank might be using it tomodel the ideal investment fund portfolio.
The concept of optimization is increasingly being applied topricing, across all industries, but most recently migrating fromstrongholds such as airline tickets and hotel rooms to more traditional retail. The idea behind pricing optimization is quite simple:
Different customers get different prices for the same product orservice. Extrinsic drivers of pricing are taken into account (for airline tickets, channel used, advance purchase timing, Saturday nightstay, etc.) and help the brand discriminate and improve overall revenue and profitability. See the Longs Drug Store case study later inthis chapter to learn how pricing optimization could be happening
at a drugstore near you.
CREATING A MARKETING INVESTMENT PROGRAM

The challenge of applying an optimization approach to marketinginvestments is that you have to get your hands on good input if you
hope to make any use of the output. In order to create your marketing investment program, you need to first consider where you’reheaded.
Create the marketing investment program(your experiment), based on marketing mix element
or customer touch point.

The first step toward determining where to place your marketing
assets is to develop a broad variety of potential marketing investments, looking at ways to activate your brand using both elementsof the marketing mix and every customer touch point around theactual sale.
One of the drivers of the choices of investment should be theinformation that you might have gathered from previous investments. This profile should include not only descriptions, cash outflows, and cash inflows, but should also include components such as
specific profiles of leads at each step in the sales process.

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In other words, determine not just how many leads were created from a particular marketing investment, but also how many
were converted at each stage of the sales process. Measuring quantity of opportunities generated by marketing is simply not sufficient. It’s impossible to evaluate one marketing program against
another unless there’s a sense of potential return.
Develop a profile of the investment and the returnon the Marketing investment.

The need for potential return leads to the next required step:developing a detailed profile of the investment and, at the very least,
an estimate of its possible return (see Figure 10.3). This is where the

FIGURE 10.3 Marketing Investment Profile

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rubber meets the road. Whether you’re spending on billboards or on
developing better scripts to drive the outbound teleselling, the only
way to evaluate where in the brand experience to make investments
is to put all of the investments on equal footing. Much as an investor
might look at several potential investments and need to evaluate
historical performance, volatility (beta), and numerous financial
ratios (price/earnings, cash/share, return on equity, and so forth), somust a marketer put all marketing investments on equal footing.
The mere exercise of requiring marketing managers to treat all
marketing spending as investments will pay almost immediate dividends in the caliber of the thought and approach applied to selling
more stuff. You’ll stop hearing rationalizations such as “Our awareness is way up, but our sales are still in the tank.”
The idea here is not to require impossible accuracy, but to evaluate marketing investments against each other, so that you have all
the cards in front of you. Part of having all the cards in front of you
for decision making means having an ROI profile for each marketing investment. But even that’s not enough. You’ll need to dig
deeper . . .
Develop the nonfinancial metrics that are likely
leading indicators of marketing return.

In addition to developing a financial profile for each potential
marketing investment, marketers should identify those nonfinancial metrics that give a more complete picture of the potential
investment and might also serve as leading indicators of the performance of the investment (see Figure 10.4).
These additional metrics can mean the difference between seizing a great opportunity and wasting a ton of money. Many marketers look at their marketing as if they were at the tables in Vegas.
Once the money is spent, even if it’s on media, they act as if the die
is cast, nothing can be changed, and nothing is known until themoney, leads, or opportunities roll in—or don’t.
Inherent in every marketing investment is a set of assumptions.
Just like any investment, there are numerous assumptions thatdrive the initial decision—and they can in turn drive the decision toup your bet if you’re on a winning streak or fold and walk away fromthe table if the cards aren’t going your way.

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ENTERPRISE MARKETING MANAGEMENTFIGURE 10.4 Leading Indicators of Performance
For marketing investments, those assumptions might be as follows:
Sales cycle conversion factors~ Any marketing investment that’s tracked across thesales pipeline generates conversion factors at eachstep along the way (for instance, “The coupon generated 150 contacts; out of those, 65 percent visitedthe retail store; of those, 35 percent redeemed the
coupon; and of those, 10 percent purchased an additional item”).
~ These conversion factors form the heart of your company’s CRM system and are an excellent leading
indicator to determine whether your marketinginvestment is going to behave like similar investments that have preceded it.
Channel perspective~ Despite what many marketers may think, your sales
force is often your best proxy for determining how
your customer might respond to your marketinginvestments. Your sales force or your distributors
might be able to vote on the effectiveness of yourmarketing investment even before you’ve put it in
the field. The key here is to tie such input to historical results, just to make sure that your channel isaligned with the way your customer thinks.

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Investment risk (beta)~ It’s important to capture some of the intangible qualities of those marketing investments that are difficult
to measure. In this instance, investigate opportunities for creating your own evaluation system thatwould introduce a risk measurement, thereby capturing a number of the unstated elements of the marketing investment. Ask marketers if one investment
is riskier than another, and they will most likely give
you their gut reaction. The problem is that very littleof this intuition is captured anywhere or incorporated
into broader investment decisions. This evaluation of
up-front risk can play a critical part in determining
where to place investments.
Historical performance~ While you might be making a particular marketinginvestment for the first time in a market or behind aparticular brand, the company’s experience with theinvestment vehicle should be taken into account. If
the company gets a good response from print ads or isable to drive retail traffic from Web-based coupons,
then this historical ability should weigh on the decision making. Access to this historical perspective
should also help generate real risk measures based on
actual performance instead of just gut measurement.
Implement the process/system that will let you
evaluate the progress of your many experiments even
before they’re complete (and answer the question“Are we selling more?”).

A key element of positioning your marketing assets to drive
profitable sales is having the right systems in place to know when
you’re actually being successful. Most marketers follow several oreven all of these steps, but are at a loss when it comes to actuallyknowing what’s working and what’s not. As discussed in Chapter 3,
this is why it’s critical to plug marketing into finance and into theenterprise systems that most companies have purchased and implemented over the past decade.

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TE

AM
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Even if you don’t have fancy systems or a big IT department,
you can cobble together this information on a regular basis to determine the state of your marketing investments: How’s your portfolio
doing? Are you making money?
Marketers can’t just sit around and complain that there’s no
way to track this or track that and throw up their hands. Part ofpracticing EMM means creating the measures and informationgathering capabilities that will let you know the results of yourinvestments. Staying on top of their progress can mean the difference between making your numbers and missing them bya mile.
Why is this? Because when you invest in marketing, you often
have the opportunity to reevaluate in midstream. As Figure 10.5
illustrates, you can evaluate how your investment is faring against
your original budget and, in essence, rethink whether it’s the best
allocation of money at any particular point in time. Much as
investors rethink their portfolio positions on a regular basis, so too
should you bring the same rigor to your company’s investments.

FIGURE 10.5 Evaluate Investment Return Continuously

Team-Fly®

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Armed with a process to measure the impact of your marketinginvestments, you’ll have everything you need to practice EMM
when positioning your marketing assets to drive profitable sales.
At the end of the day, you have to be prepared to answer thesimple question, “Am I selling more stuff?,” as it relates to any ofyour marketing investments, and then make necessary changes
accordingly. The decision of where to place your marketing assets isdriven largely by the quality of the information that you have, therigor that you bring to the decision, and the processes that you’ve
built over time to learn from all of the decisions that have gone
before. And the past is prologue—what you learned yesterday will
help you today, and what you learn today will drive your revenues
higher tomorrow.

CASE STUDY: Longs Drug StoreUSING PRICING OPTIMIZATION TO DRIVE
IMMEDIATE SALES RESULTS
Longs Drug Stores Corporation (NYSE:LDG) is the nation’s sixthlargest drugstore chain. Founded in 1938 by brothers Joe and TomLong as Longs Self-Service Drugs, the company currently operates
stores in California, Hawaii,Washington, Nevada, Colorado, and Oregon. Each store averages annual sales in excess of $9.5 million.
Longs has more than 440 stores and recorded approximately$4.3 billion in sales during 2002.This represented a modest 4 percent
increase over 2001, but was dwarfed by sales of the drugstore industry leader Walgreen Co., which reported $24.8 billion in sales during
2001 at its 3,706 stores nationwide. Overall pharmacy sales in the
United States were $165.2 billion last year. Longs’ performance forfiscal 2002, which ended January 31, was generally disappointing.The
true barometer of growth, same-store sales, lagged behind the best
performers, and margins were low.
How is Longs different from Walgreens? Longs stores tend to bemuch larger, upward of 10,000 square feet compared to the smaller,
5,000-square-foot Walgreens stores.While Longs stores tend to be insuburban strip malls, Walgreens has focused on placing its stores onbusy streets.

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More important, Walgreens has traditionally been a leader in
implementation of new technologies to drive retail operations. It was
the first drugstore chain to equip stores with VSAT satellite communication and install point-of-sale scanning chainwide. These investments have paid dividends over the years and have helped Walgreens
thrive amid ferocious competition. Longs has been relatively late inmaking such technology investments and is now in the unfortunaterole of playing catch-up.
In the past few years, observers say, Longs has struggled to deal
with outdated technology that contributed to inventory control
problems at its warehouses and resultant difficulties in fulfilling individual store orders. When you’re playing the game against industry
giants, including some best-in-class players (Wal-Mart, Walgreens),
then you can’t afford to be playing with old equipment.
Because Longs is grappling with how to compete with muchlarger chains of stores, such as Walgreens and CVS, in addition to thecategory competition from large grocery stores and mass merchandisers (Wal-Mart, Target), it has to identify those investments thatdrive immediate results. It’s not likely to stay out of the consolidation
game, unless it’s able to grow more quickly. One area in which Longs
has seen and acted on an opportunity is pricing.
Most retailers price their items and determine markdowns basedon gut feelings, with some thought given to individual store perspectives or the experience of their merchandisers or store managers.
They generally set their prices one of three ways: marking up fromcost, benchmarking against the competition’s prices, or simply playing
a hunch.This lack of a scientific approach is remarkable, given the precise data available and the ease of making a connection between whatmarketers and merchandisers do and what the end results are.
The cost and complexity of crunching all pricing data to determine the optimal price for every stockkeeping unit (SKU) based on
the critical variables chosen—location, inventory level, weather—have historically prevented retailers from taking such hands-on analytical action. But thanks to the development of specific software thatbuilds on the learning reservoirs of yield management programs pioneered by the airline industry, price optimization programs are now
available to retailers.
These software programs, which gather and analyze the enormous quantities of data that now sit in point-of-sale and ERP systems,
leverage probability algorithms to come up with an individual demand

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curve for each product in each retail store. With this information in
hand, retailers can identify which products are most price sensitive.
Then they can adjust prices up or down according to each store’s
priorities—profit, revenue, or market share—to achieve, in theory, amaximum profit margin.
Longs Drug Stores Corporation has embarked on just such aneffort, putting pricing optimization to work in its retail locations in aneffort to drive overall profitability. From a consumer perspective, one
interesting outcome of implementing price optimization at the retaillevel is that prices at the shelf could be different in different retaillocations, as is the case with airline tickets. Also, prices that normallyended in familiar digits—.99 or .95—are replaced with odd amounts
like $3.21 and $6.36.
In addition to developing a demand curve for every item in every
store, these software programs can also forecast price and promotion
sensitivities for every item in every store, thereby helping to determine how to best execute strategies to drive profitable sales.
DemandTec developed Longs’ price optimization software; othercompetitors in this space include KhiMetrics, KSS, Spotlight Solutions,and ProfitLogix.
Longs is delighted with its results and has expanded its initial testof the pricing optimization software to the majority of its retail locations. Terry Burnside, chief operating officer of Longs Drug Stores,
notes that the technology has brought about a “category-by-category
increase in sales and margins,” particularly in nonpharmacy sales,
which generate most of Longs’ profits.
However, just implementing the software is only part of the necessary investment. Retailers have to ensure that their business models are adjusted accordingly—that is, integrating the pricing softwarewith shelf pricing mechanisms and each store’s point-of-sale system
to ensure that scanners record accurate prices. Further down thevalue chain, retailers can compile knowledge gained from pricing optimization software to inform decisions and communications about
additional orders.There are, of course, cultural changes as well—themost significant of which is the requirement that existing employees
have faith that the system will deliver the profits, despite the quirky
prices.
“Optimizing OTC [over-the-counter] pricing strategies is an
important part of the company’s growth and overall business performance,” said the CEO of Longs. “We anticipate this [pricing

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optimization] implementation will help us improve our profitability,
yet allow us to maintain or improve our competitive price image
with our customers.” If Longs isn’t able to grow, it’s likely to become
an acquisition candidate for some of the larger players. Unfortunately, standing still and not generating ever higher sales and profits
is not the way to survive in the competitive drugstore business.
Even the acquisition prospects for the company are dubious.
Walgreens has a proud tradition of not growing by acquisition, sothey’re unlikely to purchase a company like Longs. Other players, suchas Rite Aid, are still digesting many previous acquisitions and working
through issues such as regulatory scandals.The slow demise of Kmart,another company that has a long history of being outspent on technology, comes to mind for Longs shareholders. Is this going to be asimilar ride?
Longs’ approach of leveraging optimization is at least giving its
sales a shot in the arm. Ironically, retailers have spent comparative fortunes in making sure that their inventories are managed flawlessly,
their logistics efforts are as efficient as possible, and their employees
are managed closely.What they’ve not put nearly enough effort into is
how to leverage marketing to drive profitable sales higher.You’re notwinning the game unless you can continue to grow sales in your existing stores. Pricing optimization offers a window into how the powerof optimization can be applied to businesses and make an impact
almost immediately.

MARKETER’S S CIENTIFIC METHOD: OPTIMIZINGMARKETING INVESTMENTS

Following are the steps to take in order to optimize your marketinginvestments.

Step 1. Ensure Alignment with the Strategy
That the Marketing Investment Supports
While the strategy might be clear in the CMO’s head, it’s often not
clear throughout the marketing organization or even in the mindsof the marketing staff responsible for the details of a particularmarketing investment. Making this alignment happen can go a

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long way to avoiding off-strategy investments, also known as wasted
money.

Step 2. Identify Where in the Brand Experience Blueprint
to Make Your Marketing Investment(s)~ Create the marketing investment program (your experiment)—the marketing mix element or customer touchpoint. Language can have a powerful impact on the way
marketing happens and how it’s perceived in your company. The more you talk about marketing investments
and actually follow up on them with financial rigor, themore likely EMM will gain followers outside of marketing.
~ Develop a profile of the investment and the return on the marketing investment. Remember that you get what you
measure, so if you’re not even making an educated guessat the investment profile for where you put marketing
dollars, you’ll never get any smarter.
~ Develop the nonfinancial metrics that are likely leading
indicators of marketing return. Because your marketinginvestment may require a significant investment before
and during the actual return, the smarter you are at
identifying other potential indicators of results, the better your decisions will be. Just as with stock market
investments, what are those leading indicators for yourmarketing investments?

Step 3. Implement the Process/System to Evaluate theProgress of Your Experiments before They’re Complete
In other words, be able to answer the question “Are we sellingmore?” You’re condemned to staying in the dark until you put theright systems in place to manage your marketing investments. Systems don’t have to be backed by million-dollar investments in information technology. The right process could consist of spreadsheets
and meetings.

CONCLUSION: A NEW DAY
FOR MARKETINGN

ow that you’ve reached the end, don’t forget how you got
here. Marketing’s bad habits are deeply ingrained; take thetime to drag them out into the light. It’s a new day for marketing, and it begins with clearing out the dead wood and taking fulladvantage of what you already have.

WHY IS NOW THE TIME TO BEGIN PRACTICINGENTERPRISE MARKETING MANAGEMENT?

Simply put, the market forces of competition and innovation are
fueling the evolution and adoption of scientific marketing practices,
including the following key drivers:~ Increasing market complexity. Market fragmentation, channel and customer touch point proliferation,and globalization have combined to create a substantially more complex marketing environment. By helping to develop and implement standard, repeatableprocesses, marketing business applications help manage the planning, execution, and measurement of marketing activities.
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ENTERPRISE MARKETING MANAGEMENT~ Accelerating demand for speed to market. As competitive pressures increase, the window of opportunity
for new products and services is narrowing. As a result,marketers face increasing pressure to reduce productand market development cycles. Scientific marketingbusiness applications support and foster collaboration,
making marketing best practices and project management processes readily available to marketers and theirinternal and external service providers.
~ Growing need to capture marketing knowledge.
Increasing dispersion and turnover of marketing personnel put pressure on the ability of enterprises to actually
use the intellectual capital they’ve built up over years.
Customer relationship management (CRM) and enterprise resource planning (ERP) applications aid in theexecution and measurement of marketing efforts, but
ongoing improvement requires an institutional memory
to leverage successes and avoid programs with lackluster
performance. In general, marketing remains an island
in most enterprises today, disconnected from many of
the core business processes and corresponding information flows—such as sales, service, manufacturing, andfinance—limiting accessibility and collaboration, bothwithin the enterprise and beyond the enterprise to critical service providers.
~ Increasing availability of innovative marketing
technologies. Early adopters and developers of scientific marketing applications and technologies are mostly
using these capabilities to help manage the development of marketing-related content, automate work flow,
and offer some integration with front- and back-officeapplications. But these early-stage applications are justthe tip of the iceberg. The coming years will see thelarge-scale adoption and implementation of scientificmarketing applications, which will give an enterprise thefunctionality necessary to plan, coordinate, and measure
the business impact of their branding and marketing
efforts. Enterprise marketing management (EMM) andthe new science of marketing, as a set of business appli-

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cations and disciplines, will evolve to a holistic approachthat addresses a broad array of marketer pain points,
including:• Understanding customers, channel partners, and end
consumers• Understanding markets• Brand management• Project/campaign management• Integrated support for selling channels, direct sales,and service operations• Evaluation, measurement, and knowledge capture
from marketing programs~ Escalating demand for marketing efficiency andeffectiveness. Enterprises are under increasing pressure to deliver short-term profits while fostering enduring growth. With marketing expenditures reaching 15 to
35 percent of overall revenue, marketers face increasing
scrutiny to be more accountable and to optimize returnon marketing investment (ROMI) and return on marketing assets (ROMA).
WHAT WILL IT TAKE FOR ENTERPRISES TO
SUCCEED WITH THEIR MARKETING EFFORTS?

The only way for marketers to succeed in the current environmentis to embrace the scientific methods in this book and get theirhands dirty with the business of selling more, more, more. To help
guide you along the way, keep in mind the key principles listed in
the summary table that follows:Team-Fly®

8. Restructure basedon brand experience.
9. Measure investment
performance.
10. Optimize marketinginvestments.

II

III

• Static investment
decisions• “Make-centered”
operations• Expense and earn

• Customer acquisition
focus• Pulling awarenesslevers• Interactions andtransactions• Customer relationships• “Sell-centered”
operations• Investment andannuity• Dynamic, optimized
decisions• Customer penetration
focus• Pulling activation
levers• Sustain brandpreference• Brand experiencesTE• Brands as identity campaigns• Disconnected andevent driven

AM
FL
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• Brands as business• Connected andoutcome driven

I

4. Take ownership ofthe brand experience
5. Plug marketing into
CRM.
6. Cross-market tocross-sell.
7. Use new media
for new action.

• Marketing as science• Marketing as an art

1. Marketing is ascience, not anart.
2. Architect your brand.
3. Plug marketing into
enterprise.

To

From

Guiding Principles

Guiding Principles of Enterprise Marketing Management

Part

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You’ve got a lot to tackle if you’re going to put enterprise marketing management into place in your business. You have to develop
a deep understanding—a scientific understanding—of your market
and your customers. Only then can you adequately develop yourbrand’s architecture and find the best way to communicate it toyour customers to make them buy your product rather than just“feel good” about it.
Every asset must be considered a marketing asset. Charlemagne, ruler of France, when conjuring up how he thought hewould combat his enemies with limited resources, once uttered,“Let my armies be the rocks and trees and the birds in the sky.”
So must you look beyond the traditional elements of the marketing mix to win in your markets. Let your marketers be every
member of your sales force, every customer service rep, every email, every invoice, every voice mail, every interaction with every
customer at any time. Driving sales higher and outsmarting yourcompetitors means that your brand can’t just live in traditional
communication vehicles.
Your brand must come alive as an experience for every customer.
The longer you delay in understanding what that experience istoday and how you should optimize it, the longer you delay moving
to the next level of sales and profits.
But, once you’ve developed that brand experience, you’ve simply created the plan that needs to be executed. The market battle
can’t be won with just a great strategy. You have to build the infrastructure to make it possible and you have to execute in the field todeliver real brand benefits, real value to your customers. Part oftoday’s challenge is that this brand experience happens largely bychance.
Companies spend fortunes on developing new products, making sure that there are enough salespeople to service customers,
investing in production capacity, and managing cash flow closely. No
marketing mix detail is too picayune for marketing’s attention—
whether it’s the process color of the sales brochures or the placement of the tag line on the package.
Meanwhile, the total brand experience is not being actively
managed by anyone. The bottom line: Marketing must do more andtake complete ownership of the brand experience. Quite simply, no
one else will.
That’s to say nothing of the need to mobilize the rest of the

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company to evangelize the benefits that drive sales. Today, marketing seems to have a hard time just getting its own story straight.
Without investments in infrastructure, such as CRM systems that
help marketing drive how customer service reps respond to specificcustomer interactions, the rest of the company doesn’t have aprayer of keeping to the message.
Keeping to the message is just the start. You have to crawl
before you walk. It may be nice to just get everyone on the samemessage, but the more advanced companies out there have to think
about how to sell a portfolio of products and services, not just sell
the same thing over and over again. Figuring out how to get a customer to cross-buy is marketing’s job, but it’s actually up to the restof the company to make it happen.
Unless you’re working in a new media environment, where thebrand experience and the sales transaction happen in the sameplace, marketing has to rely on sales or customer service in most
instances to ensure that cross-buying actually occurs. Rote memorization of “would you like fries with that?” can only go so far, so
marketing has to raise the capabilities of everyone who interacts
with customers if it hopes to cross-sell against the status quo.
Once you’ve got your plans in place for taking ownership of thebrand experience, you have to make sure that you’ve actually built
the ability to manage it. Where are you going to place your investments? Which ones are working and which ones are not?
Surprisingly, things that we can all access for free about our own
investment portfolios are nearly impossible to access for a company’s marketing investments. What’s the risk of this investment?
What’s the cash flow profile of this investment? How have we donein investments like this in the past?
Admit it. At some time in your career, you’ve sat around a tableof decision makers and had to make a leap of faith on marketinginvestments because you didn’t have the information infrastructure
in place to treat marketing like an investment. You’ve essentiallydecided that you can live with such an enormous risk to your company’s well-being.
We have to admit it. The EMM road is the more difficult roadto take. It brings strict accountability, requires real work to makemarketing a legitimate discipline, forces you to take responsibility
for the success of the entire enterprise, and makes you get out of

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your comfort zone and harness the assets of the company, not justmanage vendors who tend to laugh a bit too loudly at your jokes.
Now that you’ve gotten this far, it’s plain to see that marketingis indeed not an art, it is a science. If you’ve been looking for a way
to reinvent marketing at your company, now you know what to do.
And if you’re short on scientific marketing expertise and need somehelp putting enterprise marketing management to work for yourcompany, help is just a click away at www.marketingscientists.com.
What are you waiting for?

INDEX

Numbers in italics indicate figures
activity-based marketing, 172, 186–90
Amazon, 71
American Express, 52–57, 131
Apple, 75, 131, 135
Aspen Skiing Company, 163–68
Aspen/Snowmass, 163–68
attributes, driving desire, 21–22
awarenessinsufficiency as measure, 130
turning into purchase, 68–69
Barnard, Kurt, 37
benefit communication process, 69
benefits
communicating, 69, 71
driving desire, 21–22
emotional, 22
functional, 22
linking with sales, 9stated vs. derived importance, 29
Berkeley Enterprise Partners, 97, 116
best practices, 100
beta (investment risk), 203
Blockbuster Entertainment, 131
Borders, 36
bottom-up analysis, 189
brand adoption, 16
brand architecture, 9, 16–17, 160
activating brand experience through, 154
applying across entire brand experience,
129
attracting employees through, 51
beer (regular vs. nonalcoholic), 30–32
building, 11changeable nature of, 34
creating electronic conversation from, 133
defined, 20
developing, 28–30
dictating brand experience possibilities,
159–60differences across brands, 30–32
dimensions of, 21–24

elements of, 20
ensuring marketing investment’s alignment
with, 194–95
integrating, 161
most important document in marketing
plan, 24
new media context for, 127
producing strategic marketing framework,
20–21
representing brand’s structural integrity, 20
securing strategic market positions with, 16source for operational strategies, 32
steps in building, 38–42
strategic hierarchy provided by, 24–26
structure following strategy, 152–53
structuring for local market, 195traditionally narrow message, 129
understanding and using, 112–13
use of, 32–33
brand assessment, 39–40
brand assets, positioning for profit, 195
brand benefits
communicating, 75
connecting to CRM, 101differentiation through, 73
brand equity, 16
drivers of, 26–28
brand experience, 11adding value to, 69, 71, 73, 75–76, 78
assessment, 93
brand architecture applied across, 129
brand architecture dictating, 159–60
breaking into component parts, 84, 88
bridging gap between marketing and CRM,
113
building, 79–82
components of, 66–78
creating, 12cycle, 15
defined, 64–66
destinations for, 81–82, 130
evaluating (proposing) options, 69–71

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INDEX

brand experience (Continued)
extending from purchase, 132
holistic view of, 69
hypotheses, 89–91, 93
identifying (informing) need, 68–69
identifying stage of, 143
marketing asset, 99
marketing taking ownership of, 63–68
new media context for, 127
outside perspectives on, 87–88
requiring rethinking of total business, 153
restructuring based on, 168–70
situation assessment, 87–89
topics of conversation, 86–87
using brand architecture to activate, 154validating hypotheses, 91, 93
brand experience blueprint, 80–82, 91–94, 156,
161
base for marketing experimentation, 191–92
creating, 168–69
cross-functional teams based on, 169
driving business model design, 160–62
escaping the commodity trap (case study),
82–92
guiding marketing investments with, 196
implementing across channels, 108
new media context for, 127–28
release/implementation plan, 94
requirements for CRM project, 96
restructuring business model based on,
158–59brand hypothesis, developing, 165
brand messaging gap, 52–54
brand personality, new media context for, 127
brand positioning, 75
creating, 41–42
determining effectiveness of, 24
evaluating and addressing communicationof, 57–58
leveraging, 152–53
brand ratings, 29
brandsbringing to life, 166
as businesses and critical business assets,
33–34
center of marketing, 14
clarity of benefits associated with, 19
communicating core beliefs and attitudes,17
customer’s experience with, 64–66
dimensionalizing, 16
element of brand experience, 66–67
evaluating on sales, 14
expanding benefits of, 17
increasing effectiveness of, 43
maintaining control over perception of, 17
managing, 11–12
positioning through knowledge about customers, 8–9
power of, 14
relationships formed with, 124
running as businesses, 8–11
too many, 33
value proposition for, 5brand situation assessment, 40

brand value proposition, 118
Buchwalter, Charles, 142
Builders Square, 36
Burnside, Terry, 207
Burston-Marsteller, 107
business, reinventing, 12–15
business activities, centralization, 152business-to-business environment, 86
business focus, in organizational structure, 158
business modelcomponents of, 154–56
design brief, 162–63, 169–70
factors affecting design, 149–52
organizational structure designed to support, 170
restructuring based on brand experience
blueprint, 158–59
restructuring, 150
case studies
American Express, 52–57
Aspen Skiing Company, 163–68
Harrah’s Casinos, 184–86
Kmart, 34–38
Longs Drug Stores Corporation, 205–8
M&M’s, 138–43
Nabisco, 82–92
Toshiba, 110–12
Wells Fargo, 121–23
categories of spend, as organizational structure, 158
centralization, in organizational structure,
157–58, 170
Champy, Jim, xiii
channel partners, 151
channel perspective, 202
churn, 182
ClickFox, 138
CMM (customer message management), 52,
56–57
Coca-Cola, 131, 171–72
communication, broadening scope of, 131
company organization, irrelevant to consumers, 67
comparative purchase information, 71
competitive advantage
sustainable, 102–4,108
through service, 77–78
competitive convergence, 101
competitive equity analysis, 28
competitive frame analysis, 29
configuration tools, product and service, 71
consumer insights, 28–29
consumers, increasing power of, 151
conversion rate, 174
cost reduction, from new media, 134
cost-of-entry drivers, 23
CRM, 212
brand connected to, 101
closing the gap to marketing, 108
cross-selling and, 116–17
danger of trend, 14
defined, 10
differentiation required, 110
expectations unmet, 98

INDEX
infatuation with, 116
integrating marketing science into, 110–13
integrating through ERP applications, 104
marketing gap and, 98–100
marketing not added to mix, 47
misapplication and misuse, 116–17
need to develop on brand’s promise, 96
operational efficiencies from, 100–102
payback on investments in, 108–9
perceived problems with, 96
perils and promise, 97–98
research about, 97
sales cycle conversion factors at heart of system, 202
software for, xiv
sustainable competitive advantage from,
102–4
total-solution systems, 46–47
cross-buying, 216
cross-marketing, 115cross-selling’s lead-in, 117–18
increasing relationships per customer,
121–23
possible pitfalls, 120
steps for, 123–24
technology of, 118–19
cross-selling, 102
activating customer’s cross-buying intent,
115
capability, 71
CRM and, 116–17
cross-marketing before, 117–18
historical perspective, 115–16
customer data, trapped in company islands,46
customer information
increasing availability, 151
prioritizing, 66
customer intent, cross-buying, 117
customer knowledge, leverage lacking, 9customer lifetime cost, 174
customer lifetime profit, 174
customer message management, 52, 56–57
customer outcomes, 131
achievement/optimization with new media,
135–36customer relationship management. See CRM
customer retention, from new media, 134
customers
benefits driving, 5consolidated, 151
element of brand experience, 66–67
identifying, 84–85
keeping vs. attracting, 114
leveraging data about, 11
loyal, 115
recognition, 73
understanding, 43
customer segmentation, new media context
for, 128
customer touch points, 168–69
addressing, 166, 167
element of brand experience, 67
customer usage data, insights from, 104–6
CVS, 206

221

databases, 10building for new media, 128–29
data-mining, 10
Dell, 76
DemandTec, 207
destination planning, 92
brand experience blueprint, 81–82
destination setting, 159
destination statement, 38–39, 168differentiated service, 76, 77–78
differentiation, 34
differentiation drivers, 23–24
discounted cash flow, 173–75
Disney, 37, 38
dot-com bubble, marketing during, 125–26
education, for products, 75
E-fluentials, 107
electronic channel, 126
efficiency of, 128
electronic conversation, 126–27
crafting elements of, 144
electronic data interchange (EDI), 126
e-mail addresses, necessity of compiling, 129
EMM (enterprise marketing management)
analytical approach required, 50
applying brand architecture across entire
brand experience, 129
buyer-user distinction, 132
combining marketing processes with intellectual capital, 212
demanding shift from make-centered model
to sell-centered model, 154
driving profitable sales using, 193–94
evaluating brand on sales, 14
facts, importance of, 34
failure to take hold, 12
feeding sales information flow, 48
fueling cross-marketing, 119
guiding principles for, 214
implementation requirements, 15
investment discipline at root of, 3–4
knowing the brand, 15marketers’ taking responsibility for brandexperience, 66, 78–79
purpose of, xiv
reasons for implementing now, 211–13
running brand as business, 8
starting point for, 16
emotional benefits, 22
employee work intent, 51
The End of Advertising As We Know It (Zyman), 14
The End of Marketing As We Know It (Zyman), 3,
16
enterprise marketing management. See EMM
Enterprise Rent-A-Car, 103
ERP (enterprise resource planning), xiii,
115–16, 212
defined, 10
implementation of, 45
integrating CRM through, 104
lacking supply-chain information, 45
providing information to customers, 72
successful investments in, 46
eyeballs, 125–26, 134

222

INDEX

factor analysis, 29
FedEx, 17finance, connecting to marketing, 50, 203
functional benefits, 22
GE Medical, 135
General Electric, 74–75, 135
global markets, expansion into, 151
Hammer, Michael, xiii
Harrah’s Casinos, 184–86
historical performance, 203
H&R Block, 120–21
human resources
connecting to marketing, 50–51
element of business model, 155
IKEA, 103
information, access creating different service
levels, 73
information overload, 52–53
information revolution, marketing’s lack ofinvolvement in, xiii, xiv
information technology
evangelizing brand with, 59
golden rule for investment in, 46
leveraging, 75, 77–78
strengthening left-brain aspects of marketing, 13–14
internal organization, element of brand experience, 68Internet, overfocus on, 98
investment performance, measuring, 171
investment return, continuous evaluation of,204
investment risk, 203
i2, 45
Joe Boxer, 38
just-in-time information, 75
just-in-time inventory systems, 72
key equity, as brand equity driver, 26, 27
KhiMetrics, 207
Kmart, 17–19, 34–38
knockoffs, 22
Kovacevich, Dick, 121
Kraft, 131
KSS, 207
Long, Joe, 205
Long, Tom, 205
Longs Drug Stores Corporation, 205–8
make-centered model, 154
manufacturing, importance of quality, 176–77
market complexity, 211
market development cycles, 212
marketers
evaluating investments in the brand experience, 78–79
lack of understanding of new media,
129–30role to build customer database over time,132

sources of new business models, 75
typical areas of failure, 8marketingaccounting information required for, 179
assuming greater responsibility for IT
investments, 59
business processes of, 155closing the gap with CRM implementations,108
closing the sale before the deal, 112
connecting to finance, 50
connecting to human resources, 50–51
connecting to information flow, 63
connecting to operations, 51–52
connecting to sales, 48–50
continuous feedback loop, 56
during dot-com bubble, 125–26
evaluating integration and participation
with developing information systems,
58–59
evaluating like a P&L statement, 178
functioning without information, 6
gauging effect on sales and profits, 178
generating opportunities for sales force,
196–97
hypothesis for, 5inability to leverage information, 11
increased scrutiny of expenses, 151–52
input on IT investments, 63–64
investment in, xv, 12–13, 177
investment level required, 13
island in the enterprise, 44
measuring as investment, 171–72
not added to CRM mix, 47
operating in process vacuum, 12
owning brand experience, 63–68, 215–16
people misplaced into task, 9plugging into the enterprise, 57–59
primary purpose, 34
relating to finance, 203
reshaping company’s image, 92–94
return on spending, 50
science of, xiv–xv, 3
scientific method applied to, 5–6
in slow economy, 171, 175–76
strengthening left-brain aspects of, 13–14
understanding the market, 5marketing assets, 175
positioning, 203
marketing efficiency, escalating demand for,213
marketing gap, CRM and, 98–100
marketing information, flow within company,
43–44
marketing investmentaligning with brand architecture, 194–95
assumptions in, 201–3
brand experience blueprint used to guide,
196
financial profiling of, 192–93
interdependence of, 198
leading to profitable brand experience,
184–86making within brand experience blueprint,
209

INDEX
new rules of, 175
optimizing, 198, 208–9
profile, 13, 200, 209
program, 199–205, 209
strategy, 172
trade-offs, 183
marketing knowledge, growing need to capture, 212
marketing mix
integrating new media into, 131–32
looking beyond traditional elements, 215
marketing plan, brand architecture as mostimportant document in, 24
marketing process reengineering, 15, 119marketing programs
communicating effectiveness of, 181–82
importance of synchronization among
departments, 176
organizational culture to support, 180
marketing return. See also marketing investment
establishing leading indicators of, 201
leading indicators for, 209
marketing science, integrating into CRM,
110–13marketing technologies, increasing availabilityof, 212–13
Mars, Forrest, 138
Mars, Frank, 138
Mars Incorporated, 138–43
Martha Stewart, 17, 18, 19, 35, 36, 37, 38
Martha Stewart Everyday, 18
material resource planning, 10
measurement, in new media context, 133
media (traditional), element of brand experience, 67
messaging, features of American Express
CMM, 56–57
messaging content, wasted effort of, 49
me-too versions, 22
metrics targets, element of business model,
155
Michael Graves, 37
Microsoft, 14, 75, 131, 135
minor advantage, as brand equity driver, 26,
27
M&M’s candies, 16, 138–43
M&M’s Global Color Vote, 141–42
Montgomery Ward, 14
Mossimo, 37
MRP. See material resource planning
Murphy, Kevin, 37
Nabisco, 82–92
need, identifying (informing), 68–69
network construction, 162
new media
accelerating need for timeliness of customer
insights, 106–7
activating purchase intent, 138–43
brand activation through, 143–45
business marketer’s aid, 132
companies’ reasons for avoiding, 128–31
defined, 126
developing appropriate mix, 145

223

developing scenarios for customer interaction, 144features of, 126
measurement software, 137
measuring results, 130–31
measuring return on investment, 134–38
possibilities of, 133
putting to work, 127–28, 131–32
tailoring messages with, 143–44
Nielsen/NetRatings, 142
nonfinancial metrics, 201, 202
Nucleus Research, 97
OfficeMax, 36
one-on-one marketing, 128–29, 131
online interactions, questions about, 72–73
operational efficiencies, from CRM, 100–102
operations, connecting to marketing, 51–52
opportunity management system, 10
optimization, 198–99
options, evaluating (proposing), 69–71
Oracle Corporation, 46–47
Oreos, 22organizational structure
supporting business model, 170
alternative approaches to, 157–59
outbound selling scripts, 71
Pace Membership Warehouse, 36
page hits, confusion of measuring, 136parity equity, as brand equity driver, 26, 27
partner-oriented selling information, 69
past performance, understanding, 187–88
Payless Drugstores Northwest, 36
Pepperidge Farm, 22
performance measures, element of businessmodel, 155pipeline management system, 10
Porter, Michael, 103
portfolio theory, 78
applied to brands, 33
potential vulnerability, as brand equity driver,26, 27preference drivers, 23, 24
pricing, 70–71, 206–7
primary channel, element of brand experience, 67–68
process, element of business model, 155
Procter & Gamble, 86, 131
product development cycles, 212
product/service offerings, resulting from new
media, 134–35
product usage, element of brand experience,
74–76
profiling tools, 71
profitability, 177
ProfitLogix, 207pull strategy, 111
purchase, element of brand experience, 71–73
purchase cycle, 136purchase effects, cumulative, 73
purchase intent
motivating, 168
new media promotions for activating,
138–43

224

INDEX

purchase intent drivers, 21–22
analysis, 30
features of, 23–24
purchase process, differentiating, 73
quantitative data, input into brand architecture, 28

TE

AM
FL
Y

recommendation tools, 71
reengineering, 115–16
regression analysis, 29
repositioning, 163–68
restructuring, based on brand experience,
168–70results, measuring, 130–31
return on investment. See also return on marketing investment
for new media, 134–38
for marketing investment, 13
return on marketing assets, 175
return on marketing investment, 119, 149
accountability for, 178
company support of, 176–77
determining, 172–73
information needed for, 179, 180–81
learning and improving based on results,
182–83maximizing through activity-based marketing, 186–90
using for resource allocation, 183
Ritz-Carlton, 171–72
ROI. See return on investment
ROMA. See return on marketing assets
ROMI. See return on marketing investment
Route 66, 37

Sesame Street, 17, 37, 38
Siebel Systems, 46–47, 97
software, rationale for investing in, 46Southwest Airlines, 103
speed to market, accelerating demand for,212
Sports Authority, 36
Spotlight Solutions, 207
stakeholders
enlisting, 169–70
identifying, 143
Starbucks, 115, 171–72
strategic brand destination, 164–65
strategic hypotheses, developing and testing,
40–41
strategic positioning, 100
strategic positioning statement, 41–42
strategic positioning strategy, 111
strategy, driving structure, 152–53
structure, following strategy, 152–53
supply chain, integrating with, 69
supply chain management. See SCM
support, element of brand experience,
76–78

sales
connecting to marketing, 48–50
integrating into purchasing process, 73
need to focus on, 99
sales cycle conversion factors, 202
Sales Executive Council, 54
sales force
automation, 47, 96
proxy for customer’s response to marketinginvestments, 202
sales intelligence center, 54
sales pipeline, 197–98
satisfaction, turning into loyalty, 10
science, defined, 4, 7
scientific method, 5–6, 7
building brand architecture, 38–42
plugging marketing into the enterprise,
57–59
SCM (supply chain management), 45
defined, 10–11
execution applications, 11planning applications, 11
successful investments in, 46
segmentation, 34
sell-centered model, 154selling, understanding motivators for, 135servicedifferentiation through, 110–11
element of brand experience, 76–78

Target, 18, 36, 37–38, 206
target customers, understanding, 16
technology, element of business model, 155
technology investments, 206
theories
problems with, 4–5
testing, 6Tivo, 76
top-down analysis, 188–89
Toshiba, 110–12
total quality management, 115–16
United Airlines, 103–4
upselling capability, 71
validation, 4–5
value proposition, 5
defining and communicating, 17
developing, communicating, translating,
15–16
lack of definition for brands, 7translating into brand experience, 11–12
Ventaso, 55
Waldenbooks, 36
Walgreen Co., 205–6
Wal-Mart, 17–18, 35, 36–38, 86, 206
web site performance, 101–2
Welch, Jack, 74
Wells Fargo, 121–23
www.bizrate.com, 107www.colorworks.com, 140
www.epinions.com, 107
www.marsbrightideas.com, 139
www.mms.com, 139, 142
Zyman, Sergio, xiv, 3, 14, 173
marketing as investment, 12
positioning strategy, 16
Zyman Marketing Group, 119, 172

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