GET TO KNOW A CMO:

Marketing Magnified: You mentioned that you are opening a new store in Abu Dhabi this month. How are you organized to market the Nautica brand in Dubai and other worldwide locations?

Three senior level people share responsibilities for our overall marketing program and report directly to me. The vice president of Nautica brands is responsible for brand marketing, advertising, media, public relations, and events. The director of creative services handles all of our direct marketing, merchandising, packaging, event planning, fashion shows, store set-up, and all other visual services. And, our director of international and licensing plays a very key role in growing the Nautica brand worldwide. We have over 40 different product categories to market including eyeware, products for the home, tailored clothing, fragrances, small leather goods, kids products, and many others. International is also a major focus for brand expansion. We currently do a lot of business in Mexico, Italy, Greece, and Australia and new markets like China and India are growing at an enormous rate. We open in Dubai this month and Mumbai, India next month.

Marketing Magnified: Considering all the product and international growth that is occurring, what are Nautica’s biggest challenges now and for the future?

Our #1 challenge first and foremost is making sure we continue to connect with consumers. We are a global lifestyle brand with hundreds of products marketed to consumers throughout the world. We consider global relevance a big key to our success. We stay connected to consumers and relevant in all markets by being what we call “glocal”, we think globally as we manage the Nautica brand, but act locally in all of our markets to satisfy the diverse wants and needs of consumers in each country and local market. Another big challenge for us is resources. There are never enough dollars, so we place a very large emphasis on understanding how we spend our money to ensure we are efficient spenders. Finally, a very big challenge is continuing to create powerful new products that make a difference in the lives of consumers. For example, we just launched a new towel line for home products called the “hygro towel.” We invested a lot of time and resources to ensure that it keeps getting fluffier every time you wash it – the thread expands, which creates more pile. We developed this new towel line because consumers wanted it and expect Nautica products to perform. Our consumer insights group works hand in hand with product development. It’s a huge challenge to keep coming out with new hit products.

Marketing Magnified: If those are Nautica’s challenges, where do the marketing opportunities lie?

International growth is our biggest opportunity. As I mentioned earlier India and China have grown exponentially and we are entering the Middle East with first Dubai and then other countries in that region. We work with licensees in international markets to make our “glocal” strategy successful. They understand local market needs extremely well and we provide strong brand marketing support. It has been a winning combination for us. We also see a big opportunity in women’s sportswear. For the past 25 years Nautica has been primarily a man’s brand. We launched women’s products last fall and are now adding accessories, handbags, and other related products. We know that women have a big influence on men and kids, so by adding women’s products we will be helping to drive additional sales in men’s and kid’s products. We are also helping our department store partners with zip-code-specific micromarketing as well as helping them manage inventories to ensure that they have the right assortments at the right times and at the right locations.

Marketing Magnified: You mentioned earlier that one of your key challenges was never enough money and that you spend a lot of time understanding how you spend to improve efficiency. Tell us more about that.

VF has a very sophisticated proprietary modeling tool that was developed by a company called MMA of Wilton, Connecticut. It allows us to measure marketing return on investment down to the marketing program and program component level based upon very detailed marketing information we feed into the model. We track sales gains against marketing spend, which allows us to adjust spend for more effective ROI by improving programs and honing our marketing mix. We work with our agencies and other vendors to review spending every six months and analyze marketing programs down to the individual investment within each program on a global basis. We have spent a lot of time changing and improving our marketing programs by analyzing marketing programs down to the smallest components like daily print media schedules in local markets. Our team now works with the audit team to continually improve our processes. We are at the forefront of marketing performance measurement within the apparel industry, but we are probably behind some other industries.

Marketing Magnified: Finally, marketing turnover is a very large issue, particularly so in a very competitive market like New York. How do you develop and retain marketing talent?

We are very careful to ensure that we have an eclectic mix of people in marketing. We place emphasis on having a very well balanced team. It is so easy to staff with the same kind of people who think alike, but you then end up marketing to yourself. We want people from both outside and inside our industry, MBAs and non-MBAs, and a broad age mix. We want diversity and an eclectic mix. We also place an emphasis on smart people who are agile and nimble and then we work hard to develop them through our “feeder” system by pairing them with a more experienced person. We keep people moving within the organization or they will move on us. We promote from within by hiring people who we think can be promoted at least twice. We put a lot of time into succession planning and it pays off. We have 35 people in marketing, but we lose only one a year. Given the tough, competitive marketing world in New York, we think that is an excellent retention rate.

DEMAND GENERATION: ARE WE MAKING PROSPECTS LIE?

One of the dirty little secrets of online marketing is that the leads you generate are only as good as the data that the customer prospect chooses to share about themselves. And very often they lie. We’ve all probably lied when we want to download an interesting looking white paper but don’t want a phone call from a sales rep within five minutes of the download. Some might say they’re an engineer instead of an executive just to throw the dogs off their scent. Or we might intentionally transpose the phone number to guarantee they can’t reach them. So what can we do as marketers to encourage truthful responses from our target prospects? Here are a few thoughts on the topic.

Treat prospects as individuals

Prospects are people. And people buy products and services not companies. So it’s important that you treat these people with respect so that they will trust you enough to continue developing a relationship with you. One of my pet peeves is web registration forms that ask you extremely intrusive questions before granting you access to their vaunted whitepaper. For example, besides the usual who are you questions, they will demand to know your company size, revenue, budget, purchase intentions, and a variety of probing questions about your business and technology investments. A more effective approach that doesn’t encourage lies is to ask questions over time. At Market2Lead (M2L), we invented a marketing automation solution that “progressively profiles” prospects. That is, we glean more and more information over, say, five different communications each with three or so questions.

A customer example of progressive profiling

Here is an example from one of our customers, InfoBlox, a leading network identity appliance maker. They deployed Market2Lead’s solution because of its “progressive profiling” feature. They now ask their customer prospects a limited number of relevant questions at the right time in the process, to build accurate profiles gradually, at a pace prospects are comfortable with. All customer interactions flow through a single marketing data mart.

The Market2Lead solution was implemented in six weeks. They reduced their lead abandonment rate by 50 percent and had more quality leads. Plus, their staff was now able to run 3 to 5 programs per person per week versus one to two in the past.

In addition to generating much higher quality leads, the improvement in execution efficiency has enabled the client’s marketing team to increase its focus on executing more targeted regional, vertical, and topical programs. The combination of data clarity, progressive profiling and execution allowed them make the best of every marketing dollar.

Now try it for yourself

Click here to download three white papers that share first hand experiences of our clients using progressive profiling.

DEFINE AND ALIGN THE CMO INITIATIVE TACKLES TENURE PROBLEM

Just what does it take to be a Chief Marketing Officer? Despite the rising popularity of the CMO moniker, this is a serious and fundamental question that remains unanswered at many of the companies that have adopted the title for their senior marketing executives. Ironically, all the hyperbole – combined with a real lack of definition and a failure to align qualifications with business expectations – threatens the very viability of the Chief Marketing Officer as a meaningful and critical position.

Not surprisingly, there is no shortage of complicit parties undermining the credibility of the role. The role itself is a much hyped position – fostered in part by self-described “superstar marketers” who leverage personal style to elevate and inflate their titles but whose narrowly focused marketing experience does not prepare them for the level of strategic thinking and breadth of business expertise required. The role also has not been clearly defined, beginning with C-level executives and their Boards who create a CMO position for many wrong reasons, such as to fix a broken marketing organization, or execute on poorly-defined strategies, including to vaguely “demonstrate return.” Exacerbating this is the tendency on the part of senior executives and recruiters to give CMO titles and compensation packages to marketers skilled primarily in managing marketing programs on a tactical level, and then expect them to provide long-range vision and contribute in the Board room.These same CEOs and Board members then quickly grow impatient when the newly minted CMOs do not deliver results fast enough.

And although fifty percent of today’s executive searches for Fortune 500 CMOs are for replacement hires, executive search firms themselves have invested little in collaboration with their C-level clients to identify appropriate attributes and define the profile of a successful CMO. The result is a poorly articulated definition of the role of the CMO, unsuccessful alignment of the position within the organization, and predictably a continued high turnover rate of those who fill the position.

The CMO Council is an objective, albeit highly engaged, observer of this alarming trend and as such has grave concerns about the sustainability of the position under the current circumstances. In fact, given the monumental scope and breadth of qualitative and quantitative research as represented in this report, together with the insight and perspective the Council possesses by virtue of its proximity to senior marketers and their marketing organizations across industries and company sizes, we strongly advocate nothing less than an immediate and shared consensus on the part of all key stakeholders – chief executives, Board members, executive recruiters, and senior marketers themselves – around a clear definition of the role of Chief Marketing Officer and its effective alignment within the organization.

What our research bears out and amplifies, is this: candidates for the position of Chief Marketing Officer must not be evaluated primarily on their skill at creating hype or their attributes, expertise, and experience in traditional marketing functions and disciplines. Rather, to effectively align within any successful, forward-looking organization, the position must be occupied by an executive who can come in and help drive company growth, lead in innovation, provide strategic vision, champion the customer experience and be fluent in the nuances and particular characteristics of the company’s product development or service delivery models.

The CMO Council will release the Define & Align the CMO final report in early April.

MESSAGE TO MOBILE MARKETERS:

The just-released Global Mobile Mindset Audit™ that surveyed nearly 15,000 consumers in 37 countries finds function fatigue and feature frustration among users will challenge mobile marketers to improve usability and education.

The comprehensive milestone study conducted by the CMO Council’s Forum to Advance the Mobile Experience (FAME) in concert with GMI, Inc. (Global Market Insite) offers mobile marketers a number of important key consumer insights:

• Function fatigue and feature frustration among users will challenge device makers to improve usability and education.

• Internet destinations have eclipsed friends and family as the most important source for researching and selecting devices.

• There is a new generation of mobile technology power users in developing nations.

• Global mobile users – particularly in developing countries – are willing to pay for a wide range of mobile content and service offerings.

• Pain begins at point-of-purchase as users see lack of demos, product knowledge, and slow service as problematic at retail.

• Cost of service along with poor battery life top the Irritation Index globally.

• Americans and Western Europeans are most bothered by loud cell phone conversations.

• Paranoia of phone and data loss or theft is a key concern along with the annoyance of disconnects and drop-offs.

An executive summary, findings presentation, and detailed study results are available for download from the CMO Council website or:
http://www.fameforusers.org/programs/gmm_register.html.

THE EMPATHY ENGINE:

Common sense tells us customer service is important to a company’s success. The majority of corporate executives embrace it and almost all customers demand (or at least prefer) it. But achieving a high level of customer service – and sustaining it over the long haul – is a goal that has eluded all but a relatively small number of companies.

Katzenbach Partners LLC recently interviewed executives at 13 companies widely viewed as existing or emerging leaders in customer service in order to better understand their views on how exemplary customer service can be achieved and used to create a sustainable competitive advantage. Our research reflects the experiences of a number of senior executives at top performing companies in a variety of industries, including financial services, telecommunications, hospitality, airlines, retail, insurance, technology and energy, as well as Katzenbach Partners’ collective experience working with large organizations and their frontlines.

What makes customer service so hard and how can we do better?

We discovered that much of the accepted wisdom about customer service is incomplete and can actually undermine delivering great service. For example, many companies make the following customer service mistakes:

• Adopting a customer-comes-first ethos at the expense of employees
• Providing scripted responses for customer interactions
• Relegating customer service to a cost-center status

Despite the widespread acceptance of these and similar practices across many industries, our research shows that these practices do not consistently deliver a sustained, high level of service to customers.

Don’t let customer service stop at the frontline

Nearly all of the executives we interviewed identified customer service as a strategic source of differentiation and recognized the importance that their companies’ frontlines play in achieving it. But, unlike many of their industry peers, they also realized that customer service does not – and should not – stop at the frontline.

Our research found that while many companies have recognized the need for an empathetic frontline – one that can sense and respond to a customer’s issue – only companies that embrace an ethos of institutional-wide empathy in their values and practices are able to realize the highest levels of long-term benefits from customer service.

THE PROFITABILITY FROM CUSTOMER AFFINITY INITIATIVE:

The CMOC has kicked off a milestone new research initiative in partnership with CMP enterprise IT and channel publications called Profitability from Customer Affinity. The initiative will determine what drives customer affinity, advocacy and attachment and how brands in the BtoB technology space stack up in rankings of customer equity.

With the participation of top solution providers, industry experts, and leading university business schools the study will determine what drives customer affinity, advocacy, and attachment in the technology sector to help technology companies better understand how to improve return on account and customer relationships.

The new initiative will identify what deepens, solidifies, and perpetuates customer relationships. In-depth qualitative and quantitative research will explore customer views, opinions, and observations from IT buyers and specifiers, customer engagement specialists, and global marketers at leading technology firms.

The initiative will establish measures and metrics for determining customer affinity based on:

• Frequency of contact, caliber, and consistency of touch points
• Value-added services, responsiveness, business policies and practices
• Effectiveness of the customer interface and problem resolution

It will also determine levels and drivers of loyalty, intimacy, retention, preference, word-of-mouth, trust, handling performance, and retention marketing effectiveness of the top 100 IT vendors, IT consultants, and integrators.

The cornerstone of the initiative will be the development of The CMP Tech 100 Customer Affinity Index. Similar to the value and equity rankings in BusinessWeek’s Top 100 Global Brands list, the annual Index will rank technology B2B brands on their return on account relationship effectiveness.

The CMO Council and the Marketing Division of Columbia University’s Business School will develop an evaluation framework and online auditing tool to determine the level of customer affinity, loyalty, advocacy, and attachment to leading technology and telecommunications brands by major enterprise IT specifiers and buyers.

Findings from The Profitability From Customer Affinity initiative and the CMP Tech 100 Customer Affinity Index will be released in the third quarter of this year.

THE CHANGING ROLE OF THE CMO

The New York Post recently observed in an article on the changing role of the CMO, “as hard as corporate America is on chief executives, it's even harder on chief marketing officers.”

The article reported, “Whenever a company faces severe cutbacks, stiff competition or sluggish sales, it seems the CMO is the first to go. Just look at the list of high-profile marketing heads that rolled in the last two months:

HSBC's Peter Stringham created a brand for the big bank but left after clashing with top management.

Volkswagen CMO Kerri Martin quit not long after overseeing edgy, new ads for the German automaker.

Struggling retailer the Gap axed its head of marketing, Kyle Andrew, before firing CEO Paul Pressler.

Wal-Mart switched CMO John Fleming to a merchandising job after his strategy to target more upscale shoppers failed.

Marketing chiefs were having a hard enough time doing their jobs - peddling product - when companies decided to heap more duties on them. Their duties started to shift about four years ago when they were put in charge of strategy and growth. It's now reached the point that CMOs sit in the C-suite, alongside the CEO, COO, CFO and CIO and are expected to come up with ideas beyond a clever ad campaign.

The expectations are so high that Jane Stevenson, who heads Heidrick & Struggles' global search practice for chief marketing officers, has dubbed it ‘the era of the CMO.’ ‘They're not looking for an advertising person anymore,’ said Stevenson, who's seen a 40 percent jump in CMO searches for her firm. ‘They're looking for a strategist.’

Stevenson is seeing another shift as well. The pressure to keep up with changing consumer tastes and constant innovation has companies clamoring for CMOs that can spot future trends rather than just analyze the past.

It's a tall order for most CMOs, who often lack management and financial expertise because they hail from ad agencies or marketing backgrounds where creativity is valued.

The high rate of turnover is nothing new to Madison Avenue, where a CMO departure usually leads to a change in ad agencies. ‘I can't think of a high-profile chief marketing officer that hasn't been fired at least once,’ said David Gallagher, a managing partner at executive search firm Boyden.

The Post article concluded by noting that “Studies from executive-search firm Spencer Stuart show their tenure is short and getting shorter. Last year, the average CMO lasted 23.2 months on the job, down from 23.5 in 2005 and 23.6 in 2004. And, it's expected to get even shorter. Along with their growing and complicated list of tasks, CMOs are increasingly being called upon to save companies in need of a quick fix.

‘They're looking for a change agent, someone who can invigorate the organization,’ Gallagher said. ‘When their goals aren't met or their campaigns are less than successful, the CMOs are the ones with the target on their back.’”

THE DOWNLOAD

Marketers are confirming both the overall value and cost-effectiveness of experiential marketing, according to a new study by TBA Global and Event Marketer magazine.

Key findings:

• 89% say they are getting “more value” out of their current event portfolios versus three years ago.
• 85% are implementing the same number of events or more than three years ago.
• 36% point to experiential marketing as the most effective vehicle for developing a bond between company and customer.

The study tapped brand marketers across executive-level groups, event departments, advertising departments, online groups, and direct/sales promotion units.

No Differentiated Value

A new customer experience study reports that many companies fail to deliver differentiated value. The 2006 Customer Experience Management Study by Strativity Group, a consulting firm, shows only about half (49%) of marketers surveyed said their company delivers a unique and beneficial product.

Other key findings:

• 70% of respondents say customer strategies are more important than three years ago.
• 66% say their employees do not have the tools or authority to resolve customer issues.
• 75% did not know the cost of a new customer.
• 66% say their company executives do not meet frequently with customers.

The study included 309 respondents from the U.S., Europe, Asia, and Africa.

UPCOMING EVENTS

Business Marketing Association 2007 Annual Conference
“On Their Terms: Winning with Today’s ‘Give Me’ Customer”
June 13 – 15, 2007
The Venetian Resort Hotel and Casino, Las Vegas
Website: http://www.bmaconference.com

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