At Afera’s Annual Conference in Dubrovnik, Bert van Loon, independent marketing innovation expert and strategist, treated the audience to a view into the evolving business environment in the digital revolution and explained how marketing, communications, and sales need to be re-engineered to include the processes of engineering and technical innovation. This means incorporating both optimisation and exploration in the marketing, communications, and sales disciplines.
The bottom line: In a changing business environment, marketeers need to be granted the latitude by CEOs, shareholders, and other managers not only to optimise but to explore through experimentation and discovery, making disruptive moves and visionary decisions on processes, projects and campaigns for their companies.
Re-thinking marketing communications in the digital revolution
The world is changing. Marketing, communications, and sales are experiencing a revolution which isn’t close to being finished. Much of what’s happening today in marketing communications includes sales, which is about how we build our businesses and how we build business relationships.
Optimisation vs. exploration
The processes of optimisation and exploration are different, with different functions, and you can’t do them at the same time. While optimisation is about stability, exploration is about taking risks and reaching for higher ground – new frontiers – and accepting being unstable and perhaps falling over. Exploration is needed in today’s changing business environment just as much as optimisation. A successful business must strike a balance in carrying out both.
Everyone can access, create, and distribute content
Two well-known photos taken from the back of St. Peter’s Square as the new Popes were announced in 2005 and 2013, in which smartphones replace candles and flip-phones held by the crowd, illustrate the tide of the technological revolution of the last few years. The people holding smartphones in 2013 are like all of us now: publishers who can access, create, and distribute information. Whether they have 4, 40, 400, or 400,000 followers, they are publishers.
Beyond that, we are always connected, something which has changed the media and world of publishing fundamentally. So if we publish something and another shares it with his audience, we get the snowball effect of real-time online publishing.
The shift in the buying process
Being connected has also changed the way we shop for and buy things. In our personal lives, how do you shop for a car? How do you book your holidays? If you search for schools, doctors, or a software provider for your business, you do half to up to two-thirds of the buying journey online before you have personal contact with a potential provider, such as an insurance agent or telecom representative, unless you even buy directly online. That is a significant shift.
The digital age has changed the focus from the selling process to the buying process. Businesses have to understand the buying journey through all of its channels and media providers much better in order to be able to engage and make sales.
How do marketeers deal with change?
Marketeers like to keep things the way they are. When it comes to change, they stick their heads in the sand, leaving them in a dangerous position – vulnerable.
In 2003, Philip Kotler, professor of marketing and one of the few people we should listen to like Seth Godin and Lidewij Edelkoort, published a book in which he said that marketing would be re-engineered from A to Z. He started talking about his theory already a few years before publishing his book. Mr. Van Loon shared that he had seen many companies from the inside over the last decade, and very few had significantly developed a process of dealing with re-engineering marketing, sales, and communications. Few businesses hear opportunity ringing and instead focus on the latest fashionable buzzword.
How do engineers deal with change?
Engineers, on the other hand, react to change through a solid process: explore, discover, test. If something is successful, they scale it, and if it doesn’t work, they try again or throw it away. This is something that marketeers should do too, but there are two reasons that they don’t:
A vision in marketing: The Michelin Guide
At the end of the 19th century, André Michelin and his brother Édouard, the founders of the tire manufacturer Michelin, saw the upward trend in cycling and driving. In order to build his brand and boost tire sales, he decided to create more distribution points and to advertise the Michelin name by creating a book. Now, 113 years later, the Michelin Guides have substantially boosted the Michelin brand to triple-A status.
It must be remembered, however, that not only did the Michelin brothers have no idea of how to create and distribute a book, there were only 2,400 drivers on the road at the time, and Michelin printed an initial 35,000 copies. This was a substantial, visionary investment in order to sell more tires. Imagine for a few seconds that you were a CEO, and in 1899 André Michelin said to you, “We’re going to make a book instead of hiring two salespeople.” And if you were a marketeer, just imagine that you would have had to sell that proposal to your CEO. It would be a really hard sell.
Many marketeers today are trained in optimising costs and client value but not in making disruptive moves. Yet as the digital world evolves, business needs marketeers with entrepreneurial talent, building business cases for very uncertain cases, like Michelin’s.
Optimisation and exploration
How can we bridge these disciplines, incorporating the processes of engineering and technical innovation into marketing, sales, and communications?
Beethoven’s Fifth is an execution of a process of optimisation within a company. The conductor – the CEO – executes
something that has been re-versed, pre-orchestrated and planned, and he optimises it. Each instrumental section is a department, such as product development and sales, all working together in planned roles. The Symphony is rehearsed, so running it is about optimisation, not about exploring things. In the bigger picture, it’s almost military, as there is no individualism.
From an organisational perspective, jazz is completely different. An ensemble consists of instrumentalists – bass and keyboard players – but it doesn’t necessarily look like they are on a team. There are soloists, and they battle, challenge, and encourage each other, and they have fun while doing it. It may look like chaos, but the players smile at each other as they decide as they go how and what they will play together. It’s an organisation functioning in real-time. The jazz ensemble serves as a natural organisational model, as there is a position for everyone, with no real visible leaders and ample room for individualism. The audience applauding and cheering represents real-time feedback from the clients. Their encouragement can be seen as open innovation, because the musicians will modify their output according to client input.
If you’re not the worst musician in a jazz combo, go play somewhere else
Mr. Van Loon emphasised that you have to play with people who are better than you in order to develop yourself. It is a smart marketeer who seeks a position where he can learn and discover things – where he has playing room to try out things and discover the boundaries of what is possible and effective.
Classical and jazz music represent different styles of music and ways of working together within a group. In both cases, the members of an organisation work together and complement each other confidently with their very different skill sets.
Business balance pyramid
In order to see what optimisation and exploration in a business looks like, Mr. Van Loon presented the Business Balance Pyramid, a business model developed by Walt Disney based on a company’s continuity. Continuity is driven by a balance between your market footprint and profitability. You market footprint defines when you are strong enough to fight the market battles and go global. (Mr. Van Loon specifically refrained from using the term “market share”.) Your profitability enables you to invest in new products and solutions innovation. If you have a huge market share but are not profitable enough, you will die. And if you’re incredibly profitable but a very small player, a bigger player will come along and swallow you up. If that’s your intention, that’s okay.
What drives your market footprint and profitability? Products and solutions, of course, but they do not sell themselves, although we say that sometimes. The combination of the marketing communications and sales process that you have developed, and the products and services solutions that you have delivered, drive market footprint, market share, and your profitability.
The base of the pyramid is your company’s resources: skilled employees, intellectual property, financial investments, technologies, etc. If you look at the pyramid from the bottom up: You have all your resources with which you create products and your marketing communications process. These drive your marketing footprint and profitability and ultimately your continuity. If you look at any company through this model, you can quickly and easily identify where it can improve.
An essential line in the second layer from the bottom of the pyramid is drawn between current products and marketing communications sales processes, and the future products, services, and solutions and integrated marketing communications sales processes that we’re working on today to be successful tomorrow. The Michelin Guide was developed as a future marketing solution that is now a current product. The balance between current and future is essential. If you only worked on current products and current marketing communications solutions, you wouldn’t have any innovation, and you would lose your continuity. On the other hand, you can’t live solely on innovation, so if you took out your current product, you would lose your continuity as you cannot live solely on new products and solutions.
It’s all about the balance between optimisation and exploration
You have to have one focus in your company on how to do current things better – optimisation – and another culture around how to develop your future products and solutions – exploration. Optimisation and exploration are separate functions, and doing them together is really difficult, so a company has to treat optimisation and exploration as two separate agendas, looking at them from a more engineering, R&D process perspective.
8 questions for adhesive tape companies:
1. What if we took marketing communications and sales as seriously as technical companies do product development?
The princes and princesses of research are in your laboratories with big budgets and liberty, in addition to a lot of responsibility. Do you think marketing communications should be taken at the process and innovational level as seriously as we do R&D and product development?
2. What if we put Mr. Michelin in charge for one day?
Imagine having André Michelin in your company for a day as either CEO or marketing manager. What would he do? What would he think in light of social media today in that content-driven world? In creating a social media campaign such as Afera’s, would he develop it as a trial-and-error process? Fail until you succeed?
3. What if we greatly empowered our marketeers?
In a changing world, everything is about attitude. What if we empowered our marketeers to be entrepreneurs? “CEO, Chief Executive Officer” is a ridiculous title. Optimise it to “Chief Entrepreneurial Officer”.
4. What if we eliminated the silos and integrated sales, marketing, and communications?
In a changing world, give your marketeers and salespeople a solid project: eliminate the silos between sales, marketing, and communications. Communications would be pre- and post-sales, thus having sales responsibilities. In today’s technical world, we can make our marketing measureable, so motivate them with the challenge of getting more leads through marketing in your company.
5. What if we invited all our PR and advertising agencies over at the same time to hear their take?
Talking about silos in your agency landscape.... Invite all your agencies in for a client review at the same time for a breakfast meeting. Advertising people don’t like each other, and they’re always up really late, so they really hate breakfast meetings. Ask them all together to prepare each a 6-minute presentation about the three main issues they think in their discipline are key in developing in the next 2-5 years. Compare the results.
Go one step further and challenge them to stay for the day – while you go about your own work – and work on a presentation on how they plan to work together to improve your company in the next 2-3 years. Ask them to deliver their strategy at the end of the day. This is an important issue, because the powers and dynamics between those classical disciplines of PR, marketing, advertising, and publishing are changing significantly. Mr. Van Loon has issued this challenge on behalf of his clients, and he has seen people leave the meetings crying. While agencies are in the process of reinventing themselves in a changing world, ask them what their plan is while they are doing it on your dime.
6. What if we stop focusing on isolated buzz words and define marketing innovation?
What if as marketers – or just managers – we would stop focussing on the isolated buzzwords: social marketing, marketing automation, content marketing, etc.? Next year the new buzzwords will probably be “social content inbound marketing automation” or something similar. Don’t follow buzzwords. Look at the big picture of marketing innovation, like you do technical innovation. Look at it from a holistic, integrated approach – see where it fits in in a regular business process. It’s not magic. It’s just business, and the tools are changing.
7. What if we embrace fear and dance with disruption at the marketing innovation party?
In terms of attitude, just embrace fear and uncertainty. For marketeers, disruption should be an opportunity, not a threat. Marketing innovation is a party. It should be fun. Your challenge is to show up.
8. What if we realise that we have done all this at the most important moments in our lives?
What if we realised that we as human beings have always loved aspiration and uncertainty at the most crucial moments in our lives, such as when meeting our life partners or having children. We have been given instincts to explore and face uncertainty. Whatever changes in our lives, we deal with it. So as marketeers, why should we sit around and say, “Okay, this is not going to happen – I’ll just stick my head in the sand and maybe the storm will blow over...”? The storm is actually just going to get worse, so deal with it.
About Bert van Loon
Bert van Loon is an international communications and media strategist based in Rotterdam, The Netherlands. With over 20 years’ experience in a wide variety of industries, he specialises in B2B, internationally focused business, and associations. Mr. Van Loon has worked as marketing innovation expert and strategy partner of Afera over the past two years. His ambition is to make communications effective for business purposes while accountable and fun at the same time. He is a regular conference speaker on content marketing and other marketing innovation topics, speaker at Content Marketing World 2015 in Cleveland, U.S.A., the largest event of its kind on the planet, and Masterclass teacher for Belgian technology federation Agoria.
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