On behalf of the entire CMO Council team, we hope that your year has been as exciting, fulfilling and fruitful as ours has been. But now, as the New Year takes over, we have the opportunity to look back on the year that was and share all that the CMO Council has accomplished in this past year. From launching the largest global assessment of the consumer mobile mindset with the release of the Global Mobile Mindset, to introducing a new measurement in marketing effectiveness with the recent release of Profitability from Customer Affinity, 2007 has been as challenging as it has been exciting.

The CMO Council now boasts members from every major industry and trade, as well as members from around the globe with regional chapters serving Europe, Asia Pacific, the Middle East, and most recently Africa. As these emerging regions flourish and expand, the CMO Council will be there to offer insight, access and thought leadership to those regional marketers looking to connect with global peers - but to also provide access into markets to marketers looking to expand reach and understanding.

To that end, we are very pleased to announce two global partnerships that will bring CMO Council events to these global regions within the first half of 2008. First, the CMO Council will be a one-day CMO Summit in Tokyo on March 21. Details will be available shortly and we will let our members know when and where to register for this exciting event. Second, the CMO Council has partnered with the IAA in London for the 2008 Global Brand Think Tank. This global summit of leaders in marketing, advertising and media will establish best practices and measures relative to how marketers operating on a global scale must manage a brand’s reputation and growth across cultures, markets and economies. The CMO Council will be leading a contingent to this think tank, being held in Hampshire, just outside of London, on June 24 - 25, 2008.

Looking into 2008, the CMO Council has numerous programs, reports and research initiatives in line to continue our tradition of releasing thought leadership content into the industry. To best outline all that is in store, as well as to learn how you and your company can get involved, I invite you to download the 2007 CMO Council Annual Report. The document, originally presented at the 2007 CMO Council Summit, the Elite Retreat, in December, outlines the programs and initiatives that the CMO Council and the CMO Council Advisory Board have mandated to launch within the next 12 months. If there are any programs or topics that are of specific interest or passion to you, please don't hesitate to get in touch with us to see how you can get involved. Our reports and programs can not be successful without the input, support (and sponsorship) of our members and partner companies. To download the 2007 Annual Report, visit: http://www.cmocouncil.org/resources/form_07_annualrpt.asp.

So, until next month let me wish you a very Happy New Year from all of us at the CMO Council and Marketing Magnified!

INTRODUCING CUSTOMER AFFINITY: THE NEW MEASURE OF MARKETING EFFECTIVENESS:

Despite an increased focus on customer engagement, most B2B technology companies continue to fall far short of meeting customer expectations and commitments. Most technology vendors badly overestimate their effectiveness in addressing customer needs, while a majority of customers feel ignored and trapped in vendor relationships that are marred by broken promises.

These are among the findings of Profitability from Customer Affinity, a new CMO Council study that advocates major customer-centric changes in the way technology companies measure their marketing effectiveness. The study uncovers profound disconnects between vendors and customers and finds that IT companies risk serious customer alienation and lost business if they don’t realign their organizations around customer needs through improved co-innovation and cooperation. Some 99 % of customers surveyed said they would either scale back or terminate relationships with vendors who fail to build customer trust. Meanwhile, less than 7% of customers believe their vendors are extremely well-aligned with their needs.

The study is based on surveys and interviews with more than 1,000 leading B2B technology buyers, IT marketing and customer relationship executives and their channel partners. The report coincides with the CMO Council’s release of the first annual Customer Affinity Index, led this year by top scorer Network Appliance, followed by Juniper Networks, InterSystems, and Polycom. The index was developed in conjunction with Dr. V. Kumar, professor and executive director of the ING Center for Financial Services at the University of Connecticut, and Dr. Girish Ramani, assistant professor of Marketing at Drexel University’s LeBow College of Business.

Profitability from Customer Affinity argues for a new measure of marketing performance, called customer affinity, which incorporates critical elements of the customer lifecycle experience. The survey’s findings indicate that customer affinity-not brand awareness-is the most accurate predictor of customers’ purchasing intentions and decisions. In fact, customers say that brand awareness and existing relationships-often thought to be leading factors in purchasing decisions-have little bearing on their decision to do business with a vendor or channel partner. Customer decisions are influenced by competence, quality service and support, and a sense of true commitment from vendors. Yet vendors continue to direct budget toward initiatives that are ineffective at building customer affinity, the study argues.

Among key findings of the new study:

• 56% of vendors perceive themselves as being extremely customer-centric, but only 12% of customers agree. An overwhelming majority of vendors-85%-are convinced that they are getting better at responding to customer needs, but 45% of customers disagree.
• More than half of customers surveyed described their relationships with vendors as "dependent and captive," "struggling for common ground," or "combative and adversarial." When asked to describe their relationships with the channel, 45% of customers surveyed evaluated their channel relationships similarly.
• More than 30% of customer respondents said they would terminate relationships with companies that fail to gain their trust; 62% would scale back existing engagements, while 7% would no longer consider the vendor for future business.
• Co-innovation with customers is vital to building customer affinity. Nearly six out of 10 customers say co-innovation is extremely or very important, with another 30% agreeing that it is at least somewhat important. Customer responses indicated that collaborative, two-way conversations - followed by continuous improvement - build customer affinity.
• Vendors seem to understand that channel partners truly are partners in their success, and that going to market effectively with the channel is critical to maximizing their value to customers. Yet only 8% of vendor marketing respondents said they do an extremely good job of teaming with the channel to build stronger customer affinity.

The survey results highlight the challenge marketers face in driving organizational and cultural changes to focus the business around customers. Customers want vendors to rethink the structure of how they embrace, interact with and respond to customers. Cultivating higher customer affinity will lead to better business performance and higher profitability-if companies will pay close attention to the qualities and factors that customers care about.

The need to build customer affinity is further bolstered by recent industry research indicating that relationships between vendors and the Channel are shifting. The research from CMP Channel indicates that 50% of Solution Providers rate current levels of vendor relationships as ‘less than positive’. According to CMP’s research, the top three most important program elements Solution Providers evaluate when considering a vendor for a strategic partnership include: product quality/reliability; technology relevance to the customer base; and relative profit potential.

For the complete CMO Council Executive Summary report, and a complete listing of the Customer Affinity Index, please visit http://www.cmocouncil.org/resources/form_cai_execsummary.asp.

NEW AFFINITY GROUP FORMATION

New Peer-Powered Network Invites Sales Executives to Learn, Connect and Capitalize to Optimize Performance

Oracle, The Wall Street Journal and CMO Council Partner to Launch Learn, Connect and Capitalize to Optimize Sales Effectiveness (CLOSE)

In an effort to stay atop-of-the-curve, sales executives are continually looking for resources and solutions that can improve technique, efficiency, productivity and outcomes in acquiring, closing and growing customer relationships.

To answer this need, the CMO Council, Oracle and The Wall Street Journal have partnered to launch the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE) - a dynamic web destination and membership community that will engage sales executives seeking to advance their organization's competencies and competitiveness as well as their own.

The mandate of CLOSE will be to champion best practices in sales empowerment, aggregate relevant knowledge and insight, and provide a peer-powered environment for networking and interaction among sales executives and professionals. In addition, CLOSE will explore the strategic value derived from closer integration and alignment with marketing, channel and customer service groups within the enterprise.

LEARN

The CLOSE global web portal will provide registered members with relevant content, powerful solutions, expert insights, evaluation and scorecarding tools, and peer-inspired ideas to maximize performance. To do this, the channel will team with training and certification bodies, associations, online communities and notable sales commentators and bloggers to aggregate resources and first-hand knowledge from those that are "in the trenches." A monthly eJournal and ongoing series of online and offline events, as well as syndicated content and on-demand webcasts will extend the reach and appeal of the CLOSE community.

CONNECT

Sales executives from diverse companies and business sectors will connect through the CLOSE community, building a vibrant network to share critical knowledge. From pain points to over-the-moon successes, members will have an open forum to share "how I got it done" stories and ask peers for constructive advice and perspective. The CLOSE dynamic web portal will include message boards, blogs, podcasts and a web 2.0-powered social network to connect sales executives with each other and to experts, mentors and leading voices.

CAPITALIZE

CLOSE will give sales executives the opportunity to be strategic and proactive with the business requirements and deliverables of their organizations, helping them close more efficiently by capitalizing on cutting-edge productivity and performance tools, on-demand services and tried-and-true ROI strategies. It will also deliver information on incentives that are effective in motivating sales teams toward reaching sales objectives - and exceeding them.

The CLOSE program will be focused on actively recruiting a peer-powered network of top sales producers and team leaders. Membership will be free and is also open to business development, marketing, channel and customer service professionals -- important stakeholders working with sales to optimize demand creation, close rates and customer retention.

A series of corporate sales and marketing team invention sessions will be held in the first half of 2008 at leading business schools and institutes in New York, London, Paris, Sao Paulo, Sydney and San Francisco under the auspices of CLOSE and the CMO Council. A global research initiative is already underway to determine where and how sales and marketing organizations should be deriving greater business value from tighter synergies, unified strategies, better information sharing and analytics, as well as well-defined measures and metrics.

COMING NEXT MONTH: THE RESULTS OF THE 2008 MARKETING OUTLOOK SURVEY

The 2008 Marketing Outlook Survey, the largest independent assessment of senior marketing executives today, is an annual global benchmarking initiative undertaken by the Chief Marketing Officer (CMO) Council to review the accomplishments of 2007 as well as scrutinize the top issues and challenges facing marketers in the coming year. Specifically, it explores projected changes in budget, marketing spend, agency and staff recruitment. Sponsored by Marketo and Deloitte, the Marketing Outlook Survey 2008 polled senior marketers to explore these and other critical areas that determine how marketers track and measure marketing spend as well as allocate their marketing dollars in 2008.

The initial findings of the survey are already creating quite a buzz as marketers face greater demands on marketing budgets and increased pressure to drive performance, efficiency, accountability and value. Among the key findings already unearthed:

• Improved accountability of the marketing organization and using customer data and analytics for better targeting and effectiveness were the top two accomplishments in 2007. This was followed closely by adding new internal resources, capabilities and skill sets.
• While some 79 percent believe marketing is making significant or reasonable progress in improving the perceived value of the function, over 20 percent of marketers are either still trying to gain traction or are stalled and losing credibility in their organizations.
• Top organizational and operational changes planned for 2008 include adding new competencies and capabilities, improving accountability of the marketing organization, and implementing marketing ROI and/or resource allocation capabilities. This focus on organizational improvement is not surprising considering 50 percent of CMOs are hired to fix broken marketing organizations.
• When it comes to expenditures, 37 percent of respondents say annual budgets will not change in 2008, while 21.78 percent expect to increase spend by one to five percent, and almost 10 percent say their budgets will grow between six and 10 percent. Last year, the majority of global marketers (52 percent) had budgets that equaled less than four percent of revenue and 36 percent said their spend was between 4 and 10 percent of revenue.
• The Top 5 Areas of Allocation are:
• Strategy & Branding
• Events & Trade Shows
• Operations
• Direct Marketing
• Sales Support
• Venting on their biggest source of aggravation and frustration, senior marketers pointed to the following conditions as top of their list:
• Organization culture
• Senior Management Mindset
• Insufficient Budget
• Having to do More with Less
• Politics and Power Plays
• Being to Reactionary and Tactical

For more insights into the minds of marketers (at least for 2008), be sure to stay tuned for the release of the 2008 Marketing Outlook report, expected in mid-January.

GET TO KNOW A CMO

This issue, we move a step away from our traditional interview with a CMO Council member to bring you an excellent interview of a former CMO and great friend to the CMO Council, the CEO of BlueRoads, Shinya Akamine. As strategic imperatives turn to the optimization and maximization of relationships through fully integrated and institutionalized data, more focus is sure to turn on the state of the Channel and how partnerships are built, maintained and leveraged.

"Vendors need to recognize the partner relationship management software won't work for them anymore," said BlueRoads CEO Shinya Akamine. "That's why analysts have started to talk about how PRM has little value left. They will need to go to the next phase -- partner opportunity management tools."

The exerpt is from an interview by CRM Buyer Magazine. In it, Akamine recounts the current state of the channel and what vendors must be aware of as they look to deepen their relationships in the Channel. As the CMO Council hones its focus on the state of the Channel and is set to announce new programs in 2008 that will amplify the voice of the Channel, we felt it was timely and necessary to share insights from a true leader in the Channel ecosystem.

CRM Buyer met with BlueRoads CEO Shinya Akamine, a former CEO at Postini, to discuss the company's view of the channel partner market for vendors. The discussion also revealed the company's plan to change the way business is done -- from a linear model to a more fluid, three-dimensional process that is customer-centric.

CRM Buyer: How would you describe the current state of the channel partner segment of the industry?
Shinya Akamine: We as an industry -- vendors and providers of tools -- are enmeshed in a stalled state after the success of the first generation of channel tools began to die out. People forget about the wave of IT moving through a company. This is an area where few corporate-wide tools exist for managing channel partners.

CRM Buyer: What do you see as the biggest challenges this industry faces today?
Akamine: Channel chiefs face answering questions from their CIOs about how they can be more effective as the company's main go-to-market outlet. Channel chiefs' old view was efficiency of cost. Now they have to start shifting to increasing sales through more productivity over cost. Add to that problem the channel chiefs' need to find channel-specific tools that are not modifications of existing direct sales management tools. No software is available for them yet. This is a hot market for tools that still has to be met.

CRM Buyer: Given the current focus on Web 2.0 applications, how effective has the channel partner segment of the industry been in utilizing this new technology?
Akamine: All the great technologies for Web 2.0 [are] not being used in the channel by the partners. The evolution of the Internet is for consumers. The Internet is still in step one of growth for vendors. We will see the channel side start to use the Internet to deploy partners to increase and close more sales.

CRM Buyer: How do you see the channel industry progressing in the short-term and long-term growth of the channel ecosystem?
Akamine: Vendors need to recognize the partner relationship management (PRM) software won't work for them anymore. That's why analysts have started to talk about how PRM has little value left. They will need to go to the next phase -- partner opportunity management tools (POM).

For example, some Fortune 500 companies still distribute leads to their channel partners via e-mail with a spreadsheet attached. Partners then view the list of customer leads on the spreadsheet and pick and choose from the ones they know and only get a slight response. Our product gives the channel full details to connect the leads to the right partners in the channel. This is why leads management is so vital to the business component.

CRM Buyer: What are the issues that channel partners face in working with vendors? Is it something more extensive than competition for lead conversions and motivating partners to become more effecting?
Akamine: That is one of the biggest questions in the industry today. The No. 1 thing is to understand that partners are not the direct sales force of the vendor. Channel partners are running their own businesses and represent 20 or 30 other vendors. Vendors have to accept that this dynamic is different -- not bad -- but needs new incentives. That's what makes BlueRoads exciting. We can match up both sides to release the sales power for each other.

To read the complete interview, please visit CRM Buyer.