January not only marked the start of a new year, but also the launch of two landmarks for the CMO Council. Each year the CMO Council sets out to benchmark the current state of marketing, as outlined by senior marketers around the globe. From budget intentions to greatest frustrations, the CMO Council's annual Marketing Outlook study is the definitive roadmap to the road ahead for senior marketers. More than 800 senior marketers across all global regions responded to the CMO Council audit, which looked at a wide range of planned investments, organizational changes, process improvements and performance indicators. For highlights of the results, read on…we reveal some key findings in The Download.

Our second major launch comes in the guise of a new community, The Coalition to Leverage and Optimize Sales Effectiveness, CLOSE. Thanks to a very powerful partnership between the CMO Council, Oracle and The Wall Street Journal, CLOSE has launched with the goal of delivering a peer-driven community for sales executives that provides content to improve productivity and efficiency…and begins to lay the foundation for the bridge between two typically warring factions – Sales & Marketing.

Sales and Marketing are ideal bedfellows but also the oddest couple imaginable. Clearly, as one group gathers data, has frequent contact with customers, and often has deep understanding of products and services through the eyes of their customers…the other group works alone to craft messages that too often look to please internal stakeholders, not customers. Many of us have had to lead a sales group. In one such occasion, an inside sales executive said to me, "Why would anyone from marketing get what I have to get done in sales…I make the money and you spend it." My attitude was not much different as I would witness sales reps slaughter messaging, change product verbiage to suit any given scenario, and not bother to fill me in if a customer gave any insight into what would get them to buy more, buy faster or just buy something! A dysfunctional relationship at best…a road block to business growth at worst.

In the end, it takes two to tango. Think of CLOSE as the dance instructor. Everyone knows the basic moves. CLOSE is there to point out how sales and marketing can work better together to truly drive business growth. The CLOSE web portal is packed with resources, articles, white papers and information to empower sales to drive business growth. From book reviews to articles from The Wall Street Journal, this is a not-to-be-missed resource. Membership is free and open to both sales and marketing executives, Director and above. Visit www.closebiz.org to see what tools and tips can help you bridge the gap. And we encourage you to recommend membership to your own teams of sales and marketing executives.

GET TO KNOW A CMO:

In this month's installation of Get to Know a CMO, we wanted to deliver perspectives straight from your peers. Dave Couture is a long standing member of the CMO Council and a member of the CMO Council Advisory Board. He is a practice leader for Deliotte Consulting's Marketing Effectiveness service line and proponent of improving efficiency, productivity and value through implementation of executable strategies. We recently had the opportunity to work directly with Dave thanks to Deloitte's participation as an underwriter of the 2008 Marketing Outlook study. His insights and understanding of the challenges that senior marketers face, from his own experience as well as the experiences of his own clients, lent a depth to the contributed content we gathered as part of the Outlook study. The following is an excerpt from the Marketing Outlook report. We encourage you to download the full report to read additional commentary. To access the full report, visit: http://www.cmocouncil.org/resources/form_mo_execsummary.asp.

2008 Marketing Outlook: Execution Matters - Delivering on Commitments, Improving Productivity

Marketing professionals demonstrated strong results in 2007. Based on responses to the Chief Marketing Officer (CMO) Council Marketing Outlook 2008 survey, top accomplishments include:

• Improved accountability within Marketing
• Better use of customer data for targeting and acquisition
• Development of new capabilities, including interactive media and marketing analytics
• Successful support for new product launches and go-to-market programs

Perhaps most important, marketers increasingly managed to avoid expensive branding and advertising campaigns that may achieve the momentary "wow", but do not help deliver a consistent and compelling brand experience.

However, as we move into 2008, much remains to be achieved. In many organizations, marketing analytics are still in their infancy. The relationships most important to marketing need strengthening. Meanwhile, senior executives still expect marketing more for less, given that 75% of all marketing budgets will vary less than 5% from 2007 levels, as highlighted in the Marketing Outlook 2008 survey.

Consequently, 2008 results will depend largely upon solid execution - delivering on commitments while demonstrating productivity gains. Effective execution, in turn, requires enhanced relationships, improved alignment, and better resource allocation.

1. Enhanced relationships: Marketers know what it takes to maintain a laser-like focus on customers. In 2008, marketing professionals should focus efforts on enhancing relationships with colleagues in sales, customer service, finance and IT. Less than 1/3 of the Marketing Outlook 2008 survey respondents reported progress in building these relationships in 2007. Each of these organizations contributes to the effectiveness of Marketing. Go on a sales call, visit a contact center, collaborate with Finance in developing new approaches to tracking and analyzing marketing spend, and encourage IT to explore and evaluate emerging tools that will help Marketing improve its effectiveness and productivity.

2. Improved alignment: Leverage internal relationships to drive cross functional alignment between the brand promise and the delivery of the brand promise at all customer touchpoints. Brand and outstanding creative rank as high as ever. However, with an increasing number of customer touchpoints and interactive channels, a guerrilla attack on a brand can undermine the best messaging and the most engaging creative in a matter of moments. Take the lead within the company to make sure that every function understands its role in delivering the desired customer experience. It only happens when activities are well orchestrated, managed, and measured.

Similarly, more clearly align with agency partners. Based on the Marketing Outlook 2008 survey, a large number of marketers made changes to their agencies in 2007 or expect to make changes in 2008. The reasons for agency changes include:

• Lack of innovation
• No value added thinking
• Poor creative and / or poor quality

We often notice significant disconnects between what Marketing expects from its agencies and how the agencies are compensated. Take a fresh look at your agency objectives, contracts and performance measures. Make sure they are aligned appropriately. The old adage – "you get what you pay for" – still applies.

3. Better resource allocation: Nearly 55% of the Marketing Outlook 2008 survey respondents indicated they do not track and measure the effectiveness of marketing spend or have minimal 'line of sight' between business results and marketing efforts. Only 7% perform analysis to understand the causal relationships between marketing, revenues and profits.

Make this the year to better understand the drivers of market response:

• Know which marketing activities generate the greatest near and long term ROI
• Quantify the trade-offs, inter-relationships, and elasticities of brand, advertising, promotions, trade shows and other sales and marketing levers - to know where you're investing too much or too little
• Understand how public relations, competition, and other external variables affect sales

In 2008, execution will matter more than ever to marketing organizations. The savvy marketers will be those who pull the right levers in getting there.

DOES COLLABORATION BETWEEN SALES AND MARKETING AFFECT BUSINESS PERFORMANCE?

Prior research proposes that greater collaboration between sales and marketing has benefits to the organization through improved business performance. This study examines the importance of this proposition and finds that there is a direct and positive relationship between these two constructs. In addition, this study identifies five antecedents to improving collaboration between sales and marketing and outlines the management implications of the study. The findings indicate that a positive senior management attitude toward collaboration between sales and marketing, the reduction of interdepartmental conflict, the improvement of communications, the establishment of organizational learning, and effective market intelligence systems are important antecedents to effective collaboration between sales and marketing.

Hypothesis 1: Collaboration between sales and marketing functions is positively associated with business performance.

Interdepartmental Conflict
We have defined interdepartmental conflict as working at cross-purposes, having incompatible goals, being obstructive, and not appreciating each other's roles. Prior research has found evidence of marked interdepartmental conflict between sales and marketing (Dawes and Massey 2005; Dewsnap and Jobber 2002; Kotler, Rackham, and Krishnaswamy 2006; Ruekert and Walker 1987), which is obstructing the development of a collaborative relationship. Yandle and Blythe describe conflict as "a breakdown or disruption in normal activities in such a way that the individuals or groups concerned experience difficulty working together" (2000, p. 14). There are many reasons cited for the lack of collaboration between sales and marketing, including that they have very different philosophies and that individuals often have different backgrounds (e.g., education and experience), which may also be aggravated by poor communications (Dawes and Massey 2005; Griffin and Hauser 1996; Lorge 1999; Piercy 2006; Ruekert and Walker 1987) and the need to work interdependently (Dewsnap and Jobber 2000; Yandle and Blythe 2000).

Research into team identification indicates that the value and emotional attachment that group members assign to their "team" encourages them either to interact freely or to disengage from interaction with other groups (Bergami and Bagozzi 2000). Sales and marketing appear to have some cultural resistance to working together (e.g., Dawes and Massey 2005; Dewsnap and Jobber 2002; Yandle and Blythe 2000), created by the acquisition of specialized knowledge and skills that are linked with functional identities (Van der Vegt and Bunderson 2005). Oh, Labianca, and Chung noted, "Groups create boundaries that are both cognitive and real, that are meaningful to the members, and that affect subsequent identification and behaviors" (2006, p. 578). Sales and marketing have a history of poor cooperation. Frequently, sales and marketing have developed mutual negative stereotyping, distrust, and noncooperation based on the strength of their group identities and goal conflict (Dewsnap and Jobber 2002).

Even in well-coordinated organizations, poor relationships between sales and marketing may create interdepartmental conflict that will be detrimental to establishing collaboration; therefore, our hypothesis is:

Hypothesis 2: Interdepartmental conflict between sales and marketing functions will be negatively associated with the level of collaboration between sales and marketing.

This is an excerpt from a White Paper featured on the CLOSE web portale. For the complete article, visit: http://www.closebiz.org/ikorb.php?page=nv_news_rss.shtml.

INSIGHTS FROM EMEA:
WHAT'S THE PURPOSE OF MARKETING?

The November edition of the Chartered Institute of Marketing (CIM)'s magazine The Marketer, dedicated five pages to a single article entitled "What's the role of Marketing?"

The article was extensive, but concentrated on the definitions of marketing ranging from the CIM's own 1976 definition, to alternatives suggested by academics, consultants and practitioners. Strangely, the article completely ignored and never dealt with the fundamental purpose of marketing.

Philp Kotler defined Marketing as "the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others."

Peter Drucker gave a broader definition. "Marketing is not only much broader than selling, it is not a specialized activity at all It encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customer's point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise."

In October 2007, the American Marketing Association Board of Directors adopted a new definition of marketing, as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

These three definitions epitomize a lot of current thinking on marketing, concentrating on customers and "added value". What is meant by "added value" is often never explained, and despite all the customer centric descriptions of marketing, its overlaying purpose seems to be forgotten.

The purpose of marketing in any organization or business is to produce sustainable profitable revenue and nothing else. For many, marketing is still seen as an art not a science where marketing performance cannot be measured in any meaningful way. While this view is demonstrably wrong, the view still persists. Marketing performance is measured by results and those results must include the measurable contribution of the marketing effort to the business objectives and the production of sustainable profitable revenue. The marketing organization generates sustainable revenue by anticipating and satisfying customer demand profitably. This is best summed up in the CIM's 1976 definition of Marketing as "the management process that identifies, anticipates and satisfies customer requirements profitably".

The CIM article shows that many marketers are still fixated on trying to define what they do and hopefully, some way of measuring it to justify the business expenditure.

In any business, the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) are primarily interested in only two things, the generation of sustainable profitable revenue and the necessary investment required to obtain it. The CEO's task is to maximize sustainable profits, while minimizing the use of assets and investment, while the CFO's task is to manage the financial resources to support the objectives of the corporate business plan.

The prime objective of the Chief Marketing Officer (CMO), is to maximize sustainable profitable revenue, while minimizing the use of marketing costs and investment. The CMO has the responsibility for achieving the corporate marketing objectives within the budget. Provided that the CMO achieves or exceeds the objectives within the budget, the way that the marketing function is conducted need not be questioned. Only if the targets are not reached, or the budget is exceeded, will actions and investment need to be justified with quantified data by the CMO.

The overall responsibility of converting profitable revenue into profit is the responsibility of the CEO and CFO, but not of the CMO. However it is the responsibility of the CMO to ensure that the profitable revenue is sustainable for the continuation of the business, and this can only be done by anticipating and satisfying customer demand.

Any business organization consists of three elements, customers, shareholders and staff. If the business is to be successful, then the satisfaction of all three elements must be kept in balance, so that no element has priority over another. Shareholders want a share of the profit in return for their investment. Staff must be rewarded, for without them no profits can be made. Customers must be satisfied or there will be no revenue for profit. If there is no profit there is no business, which fails the shareholders who lose their investment, fails the staff who lose their jobs and ultimately fails the customer, who loses the source of product or service.

The emphasis of marketing needs to be changed. Customer satisfaction is not the purpose of marketing. The purpose of marketing must be the generation of profitable revenue, by the satisfaction of customers.

"Not for profit" businesses tend to think that the current definitions of marketing do not fit their organizations. However, a "not for profit" business cannot exist without being profitable, if only to allow for the necessary investment and development, without which any business will die. Similarly, the marketing functions in Government departments do not generate their revenue, which is provided by the taxpayer. But the marketing organizations should ensure that the taxpayer gets value for money and it is therefore responsible for ensuring customer satisfaction through effective quality control of the service to demonstrate and justify the return on the taxpayer's investment.

Marketing actions do not take place in a vacuum. Satisfying customers does not in itself make a profit. Customers can easily be satisfied by providing free goods and services, but without profitable revenue there will soon be no business. The generation of profitable revenue is the purpose of marketing and for that reason any definition of marketing that ignores profit is incomplete, for it ignores the purpose of the action.

Some may regard it as heresy to say it, but Kotler, Drucker and others in their definitions of marketing, got the emphasis wrong. The CIM's current definition contains all the necessary elements that define the marketing function, but the emphasis should be changed to include the purpose of marketing within the business organization.

"Marketing" encompasses all those activities which generate sustainable profitable revenue by anticipating and satisfying customer demand.

(988)© N.C.Watkis, Contract Marketing Service 02 Jan 08 Contract Marketing Service, (Specialists in Measuring Marketing Performance and Return on Marketing Investment.)

SMART MANAGEMENT: SHOULD SALES DO MARKETING?

By David J. Cichelli

Your first response to this question should be, of course, "No." And with good reason: The dividing line between marketing and sales is clear. Marketing does marketing and sales does sales, right? Well, if you lead a sales department, you might want to reevaluate this division.

Think back to when you were a youth, looking at a map of the world. "Gee," you probably thought, "it looks like Africa and South America share the same connecting sides of puzzle parts, but that can't be." Your uneducated mind dismissed the likelihood that these two great continents were actually, at one time, snugly connected. Later on, in fourth grade Geography, you learned that plate tectonics actually pulled these two great bodies apart and a big ocean now separates them.

Does that sound like the marketing and sales functions at your company-two distinct entities separated by a large body of water? If so, don't be alarmed; it's natural. Be warned, however, that this division could be the basis of future failure if left unaddressed.

Yes, sales should do marketing, and here's why: Market segments (what marketing understands) will evolve into buyer segments (what sales professionals fully grasp) as markets mature.

Thankfully, this is a non-issue for start-up, fast-growing young companies. But don't get too comfortable; your challenges will come.

Here's how it plays out: As sales volumes grow and new products are added, the need for marketing specialists become unequivocal. Marketing and communications professionals are transformed into product managers with special competencies in product definition, market sizing, promotion, pricing, collateral, distribution and, hopefully, customer research.

The sales department begins its own tectonic journey of specialization, beginning with geographic territories, moving on to stratified sales units, progressing to the addition of field specialists and, finally, the creation of new, unique sales channels.

At the peak of this division of responsibilities, there are multiple product managers attempting to access the sales department ... by this time a well-defined fortress. Failure is near. This rigid model is highly susceptible to new value propositions promoted by competitors and, at times, requested by customers. Neither of these two highly specialized continents (marketing or sales) can do anything to stem the loss of customers to niche competitors.

So it's time for sales to do some marketing, specifically, buyer segmentation analysis. Using data gathered by market managers, the sales function needs group buyers to weigh in on how they want to buy. Accordingly, sales departments need to identify buyer populations for new, unorthodox coverage models based on buyers' needs, not on historical sales coverage solutions.

This critical planning effort will help determine buyer populations, product requirements, revenue opportunities, sales coverage choices and sales messaging needs.

The bottom line? It really is time for sales to bite the bullet and do some marketing.

To read this article online, please visit: http://www.salesandmarketing.com.

ATTAINING TRUE MARKET LEADERSHIP IN A CUSTOMER-DRIVEN AGE

In today's demanding business environment you either lead or you fall behind. So what defines leadership in an environment where business models shift all the time and CEOs have 90 days to please shareholders or face their wrath?

Oracle believes that leadership can be summed up by two changes you need to make to consistently outperform your competitors. You have to empower your employees to continuously improve how you do business and you have to enable your business to be responsive to the many changes and opportunities that come your way. Simple, right? You are probably saying to yourself, "Well hold on, they told me on-going profitability was the hard part."

It is and it isn't. Oracle helps companies every day become better run, more profitable businesses and leaders in their industries, but true leadership has a unique set of challenges. Even the best-managed and best-intentioned companies end up with many broken business processes. From a management standpoint, it's nearly impossible to review processes often enough to ensure they incorporate your best ideas.

Let's face it, business is moving at an incredibly quick pace. How you make money today is not how you'll make money tomorrow. If you are a cell phone service provider, tomorrow you may be making more money in downloadable games and videos than minutes. If you are a bank, your most profitable product tomorrow may be an insurance offering from a bank you haven't even acquired yet or maybe even one you never acquire but just partner with. If you are a shoe manufacturer, your most popular and profitable shoe style next year may be one that your prosumers haven't even submitted a design for yet on your Web site. To be a true leader you really need to rethink how your business interacts with your customers.

OK, but this all sounds hard. Your employees today may be too overwhelmed with day-to-day work to help you think about how to take advantage of next year's opportunities. Your IT staff may still be reeling from the effects of your last acquisition. You may be struggling just to see your customers and their activity patterns through the many different ways they could potentially interact with you and the myriad systems you now have.

Like most things that sound hard, the solution lies in breaking the challenge down. As the examples suggest, the answer is in readying your organization to hear, digest, and proactively plan for what your best customers and prospects want to do next, all while keeping them delighted in the present. Here's a key: If yours is like most companies, it probably has hundreds or even thousands of employees whose job it is to work with customers every day-marketing to them, selling them things, taking their orders, providing service, answering their questions. What if these employees had better tools and processes to proactively address what customers are telling them? And what if they were always armed with the insight of your best employees?

We'd like to suggest that your solution is in your CRM business practices. Business practices? You thought that was software. Well the right CRM software helps you empower your employees to continuously improve how you do business and enable your business to be more responsive to the opportunities that appear in front of you. To leverage CRM software to improve your CRM business practices, however, you'll need to start by absorbing the concept that not all CRM software is created equal, or for that matter on the same evolutionary path.

To view the complete Oracle white paper, please visit http://www.closebiz.org/ikorb.php?page=nv_news_rss.shtml

THE DOWNLOAD

According to the Marketing Outlook 2008 report sponsored by the CMO Council, Deloitte Consulting LLP and Marketo, many marketers say they are frustrated and stymied by organization cultures, senior management mindset and insufficient budgets. The executive summary and full report are available for download.

http://www.cmocouncil.org/resources/form_mo_execsummary.asp

More than 800 senior marketers across all global regions responded to the CMO Council audit, which looked at a wide range of planned investments, organizational changes, process improvements and performance indicators. According to the report, 37.6 percent of respondents say annual budgets will not change in 2008, while 33.1 percent expect to increase spend by up to five percent, and almost 10 percent say their budgets will grow between six and 10 percent. Only 7.6 percent expect to see budget increases greater than 11 percent. Last year, the majority of global marketers (52.6 percent) had budgets that equaled less than four percent of revenue and 35.4 percent said their spend was between four and 10 percent of revenue.

Key findings reveal:

• Improved accountability of the marketing organization and using customer data and analytics for better targeting and effectiveness were the two top 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, 21 percent of marketers are either still trying to gain traction or are stalled and losing credibility in their organizations.
• Quantifying and measuring the value of marketing programs and investments remains the top challenge in the year ahead, report some 53 percent of survey respondents. Other key priorities include growing customer knowledge, insight and conversations, as well as upgrading the efficiency and effectiveness of marketing groups.
• Important organizational and operational changes planned for 2008 included adding new competencies and capabilities, improving accountability of the marketing organization, deploying content and web site management solutions, and implementing marketing ROI and/or resource allocation capabilities. This focus on organizational improvement is not surprising considering that 50 percent of CMOs are hired to fix broken marketing organizations, reports the CMO Council.

Given the strong focus on organizational effectiveness, those surveyed for the Marketing Outlook report identified key areas of system and solution spend to automate processes, optimize lead generation, and improve measurement. The top six areas of planned investment include:

• Email campaign management
• Customer relationship management (CRM)
• Marketing performance measurement dashboards
• Customer intelligence and solutions
• Search engine marketing (SEM)
• Sales and marketing integration tools

UPCOMING EVENTS

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