In his seminal work Good to Great, author Jim Collins makes an initial supposition that great companies would first have a "new direction, a new vision and strategy for the company, and then get people committed and aligned behind that new direction." Essentially, he says that top executives would offer a grandiose vision for the company that all employees would rally around.
But his subsequent research proved just the opposite. Collins found those executives who "ignited the transformation from good to great" were first concerned with getting the right team onboard. The right strategy would then follow from getting the right executives in place. Good to great leaders followed a "first WHO" and "then WHAT" plan of attack.
According to Collins, "first WHO" means tapping the right people for the right roles in the organization. People are the most important assets in a company.
The most obvious application of "first WHO"—to the marketing organization—is for Chief Marketing Officers (CMOs) to ensure the right people are filling the right roles. There are plenty of talented marketing professionals in each organization, yet it is critically important that these professionals are in jobs that fit their core competencies.
"First WHO" marketing means making sure the right people are in the right roles. However, another application of "first WHO" is equally important and not readily apparent.
WHO on First
Many marketing organizations struggle to show value to the overall business. Marketing gurus point to trends of more marketers' using analytics to measure marketing effectiveness. Some marketers use sophisticated ROI models, while others use crude Excel spreadsheets to monitor marketing performance.
It is important to measure the business value driven from any corporate investment, whether it is information technology (IT), plants and equipment or marketing. However, measuring the value of marketing is not as simple as measuring the ROI from a supply chain initiative. Marketing is the sum of an intricate and diverse collection of influences. Contribution can be measured, but it is often difficult to determine, with any degree of accuracy, that through the expenditure of marketing investment X, the corporation realized financial benefits of Y and Z.
Indeed, too often marketing professionals are focused on "the WHAT." What tradeshows should be reviewed, what types of direct mail should be sent, what Internet portals should gain the most adspend. Instead, to make marketing more effective, marketing executives should focus on "first WHO."
To accurately apply the principle of "first WHO," it is important for the marketing organization to know its target audiences. In the B2B world, the application of "first WHO" means it is no longer acceptable to have a target list of 500, 100 or even 50 companies. Instead, the list would be narrowed to a group of 10 or 20 key companies. Next, a marketer must ensure that he or she has a deep and thorough mastery of the "WHOs," or core decision makers within those target organizations.
Who the core decision maker is varies by organization, but he or she is usually someone with signing authority. Key things to know regarding core decision makers: What is his or her name? Do they have a nickname? What conferences do they attend? What publications do they read? On what boards do they serve? What is their favorite sport or hobby? Deep customer intimacy and knowledge is required to enact "first WHO."
Applying "first WHO" to the marketing organization means marketing dollars will no longer be spent on "gaining awareness." For example, marketing dollars will now be spent on gaining awareness with the right "WHOs." Advertising, once focused on a few publications, will be halted until research can clearly show the target audience reads the publications in question. If a marketing dollar does not touch the right "WHOs," then it is a wasted dollar.
For B2C organizations with a larger customer base, audiences can be segmented by buying habits and purchasing behaviors. The Wall Street Journal has documented consumer electronics giant Best Buy's effective segmentation practices. Customers are grouped into five distinct segments, from "angel" customers to "devils." Angel customers are those who snap up the latest portable electronics and high-definition televisions at high margins. Devil customers are those who buy products for rebates and then return the product once they have received the rebate check.
Best Buy has effectively segmented the market of its 500 million customer visits per year by using sophisticated analytical tools and behavior analysis. The "angel" customers are the most important "WHOs" for Best Buy. The company aggressively targets these customers with top notch service—making sure high-end merchandise is available in plentiful supply.
"First WHO" is micro-marketing and laser targeted. For example, if a marketing executive is targeting hospital executives, it's no longer important to create awareness among all hospital executives. Instead, focus must be applied to make sure the right audiences—core decision makers on the target list—are aware of the company and its capabilities. Marketing campaigns should be actively developed to target the right "WHOs."
How This Applies to the Budgeting Process
Many marketing organizations have already started planning for next year. To determine marketing budgets for the next 1-3 years, many organizations simply add or subtract X%, based on how well or poorly the business performed. Other companies implement zero-based budgeting, essentially requiring marketing professionals to justify all expenditures and thereby building the budget from the ground up. Zero-based budgeting is a good step forward, but it will not lead to "great" marketing.
The application of "first WHO" principle during the budgeting process means marketing budgets are determined by whether the marketing mix is appropriate to reach the intended target audience. For example, large tradeshows are out of the mix—unless, of course, the right "WHOs" attend those shows. Broad brush publications with circulations in the millions should not be included in the marketing investment mix unless it can be proven with some degree of accuracy that the target audience reads those publications. In the application of "first WHO," mass media is subjected to more scrutiny, and focused targeting is preferred.
As a result, the Chief Marketing Officer forces the marketing organization to examine the buying behaviors of targeted core decision makers when developing budgets. For example, with "first WHO" marketing it's no longer acceptable to know generalizations about CIOs or CFOs in a particular healthcare segment. Indeed, the CIO or CFO of hospital X must be understood as a unique buyer.
Once deep profiles are developed for targeted buyers, marketing dollars are then assigned based on integrated programs. An integrated program is simply a campaign of a defined duration using appropriate channels such as PR, direct marketing, community affairs, advertising and the like.
Finding the Right People
In his Good to Great research, Jim Collins discovered that the executives who ignited transformations from good to great companies did not articulate a grand strategy and then decide whom to hire. They hired the right people first and offered those individuals the right roles in the organization. Collins points out that "great vision without great people" is irrelevant.
One of the toughest issues for Chief Marketing Officers is determining the right people to fill key roles in the organization. Some CMOs attempt to discern specific attributes like skill sets, character, attitude, passion or even schooling.
Unfortunately, there's no magic formula for determining the best hires. However, CMOs know one thing once they do find effective marketing leaders: They do just about everything within their power to keep those key employees satisfied. The right people are critical for organizational success.
An initial skills assessment is usually a staple of any CMO coming aboard a marketing organization. Yet, just as important, continual skill and organizational effectiveness assessments are necessary to make sure that the marketing organization is helping drive business growth and innovation.
The Right WHATs
A key premise of this article is that good to great marketing starts with "first WHO." Many marketing professionals are trapped in discerning the best tradeshows, direct mail pieces or advertising layouts. For these executives, "first WHO" will not come naturally. Other marketers will argue the critical importance of spending time to decide on the right "WHATs," such as the latest trade publications suitable for advertising or discovering new channels to reach customers. Indeed, the "WHATs" are important, but only in context of "first WHO."
The right "WHATs"—tradeshows, advertising buys, events or even direct marketing campaigns—will come after a careful examination of the target customer needs and wants. The right "WHATs" will flow logically from the analysis prepared by an intelligent and capable marketing team.
Final Lessons From Jim Collins
Good to Great has many simple truths, all of them worth reading and studying. The key truth that should be of most interest to marketing professionals is "WHO questions must come before WHAT decisions—before vision, before strategy, before organizational structure, before tactics."
Marketers must remember and repeat the following mantra from Jim Collins, "think... first WHO, first WHO, first WHO." The transition from seeking new and innovative marketing tactics to truly understanding the customer involves a change in mindset, in effect putting the horse before the cart. In a world of "first WHO," marketing measurement is still important, but energy and time should mainly focus around identifying audiences, understanding customers and then developing products and services to match customer needs.
Good to great marketing also means applying "first WHO" to the marketing organization—making sure the right people are in the right roles, with a laser-like focus on understanding and catering to customer wants and desires.
When enacted properly, good to great marketing will equate with less wasted marketing dollars, more focus and higher returns on marketing—making any Chief Marketing Officer happy.
Continue reading "Who Comes First: Good to Great Marketing" ... Read the full article
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