Nils Koch Jensen, Partner
Marketing’s shift to digital channels has brought an increased tactification with it. More and more often, we see companies spend the majority of their efforts deploying a digital marketing calendar instead of a solid marketing strategy and associated plan. So, while this shift is providing ample opportunities for real-time evaluation and optimisation, it has a tendency to overlook key business objectives and forget the “big questions”.
But our experience shows that if you can successfully merge these two mind-sets, taking the strategic view into the test-and-learn opportunities enabled by digitalisation, you can gain the best of both worlds.
“Why are we not on Twitter?”
To understand the rise of tactics and increased need for agility, we have to take a quick glance back in time – not that far though. Just a few years ago, best-in-class marketing departments followed a classical planning process. Simply put, based on the corporate and brand strategy, the CMO and their team developed a marketing strategy by identifying the most valuable segments and the strategically most important products, initiatives and launches.
Based on this marketing strategy, a marketing plan was then developed to define sales and communication channels, and the media was booked several months ahead. While this process ensures marketing takes a point of departure in business objectives, it has proven rigid and unable to handle new opportunities or adapt along the way.
A result of digitisation is that many marketing departments have experienced a shift from traditionally being ahead on new trends to constantly feeling left behind on competencies and the latest fads. Marketing used to be the department that owned access to customers’ hearts and minds. But social media, and the opportunities offered by technology for everyone to be content creators, has changed that. With these new opportunities comes increased attention from business stakeholders. So a CMO will inevitably hear questions such as “why are we not on Twitter?” or “why don’t we have a chatbot?” and they want to be prepared with a clear response.
As a result of the fascination surrounding the latest fads and trends, many CMO’s end up shifting to more short-sighted planning based on tactical opportunities instead of strategic considerations. This means we see more and more companies proposing next year’s marketing strategy with statements such as “we have a strong video strategy set for next year”, “we will increase sales by implementing an inbound content marketing strategy“ or, worryingly, “next year we have a really exciting VR strategy in scope”.
Statements like these are only implying tactical tools and have nothing to do with strategy. If marketers don’t realise this, they risk marginalising the strategic role of marketing that digitisation offers.
Digitisation and short-sighted tactics risk
marginalising marketing’s strategic role and can turn it into a digital gimmick department
Lack of strategic thinking hurts your growth
The lack of a strategic based marketing strategy, and associated plan, isn’t felt from day one but rather incrementally. We often see that it defocuses efforts and increases spend on digital gimmicks, tech and hype. The usual point of having a strategy and plan is not just to guide marketing decisions on what to do. It’s also a question of what not to do.
In its essence, strategy should be about establishing possible scenarios and making a choice. But marketing organisations are blessed and cursed with a plethora of possibilities. As without a structured or fact-based approach, they tend to add complexity and ineffectiveness. We see some common outcomes for companies that lack a strategically rooted approach and plan. These include:
- Disconnection with the business: As the line of thinking often starts with the opportunities in tactics and tech, business, brand and strategy cycles aren’t embedded or represented strongly enough in the marketing activities.
- Loss of channel and media neutrality: As thoughts on target groups, markets and commercial objectives are often neglected, we see decision-making usually shifts away from cross-channel decision making. It fragments into different tactical pockets of the marketing organisation to optimise channels, silos and tech ambitions instead of brand position and sales.
- Obsession with efficiency over effectiveness: Being overly focused on efficiency (doing things right) than effectiveness (doing the right thing), leads marketers to tweak existing solutions instead of creating something new and impactful. Too often, marketers – especially digital-only – get caught up on the colour of call-to-action buttons or the placement of images, instead of spending time on the bigger issues. This means you might have your entire marketing team working on optimising tomorrow’s performance by 0.3% instead of looking into how next year you can grow by 30%.
- Moving marketing from proactive to reactive: With zero link to the company’s commercial agenda, marketing ultimately becomes reactive due to pressure from internal stakeholders, such as sales, R&D and purchasing. They often move into the marketing arena and begin calling the shots based on short-term objectives and hearsay.
- Clickbait and test-to-the-bottom: Companies that blindly follow faceless data like clicks and shares also tend to cater to the lowest common denominator. Competitions, discounts and pictures of babies and dogs are sure to drive clicks, but are they coming from the right people, and are they adding or subtracting brand equity? A test-and-learn mind-set is often applied mindlessly, without understanding quality and attribution.
You might have your entire marketing team working on optimising tomorrow’s performance by 0.3% instead of looking into how next year you can grow by 30%
A marketing strategy should be about the big questions
We see many different ways of developing a marketing strategy and its contents. But its key purpose from our experience is it needs to be the link between commercial objectives and the implemented marketing plan. So what are some of the key strategic questions that a marketing strategy and its associated plan should address? We can boil it down to four main issues, which we call the CMO’s four big questions. And we believe any CMO should be able to deliver a clear and concise answer to each of them.
The CMO’s four big questions:
- Who are our current and future most profitable customers?
More companies than you would think cannot answer this fundamental question. Where are we earning money today and where will we earn it tomorrow? What customer segments do we need to acquire? Where do we need to work on retention? And what unprofitable segments should we avoid?
- What is our strategically most important categories, products and themes?
Based on the commercial objectives of the company, what is the strategically most important categories we need to defend or build? What products or themes can help us win a position in new markets? And what products or themes should we not invest our marketing in?
- What channels should we use to go to market?
Your marketing-mix needs to be developed based on the segments you want to win, not just where your sales force has good relations or what tops the hype cycle. Consider what communication channels you should use to reach your target groups and whether you understand the role they play in relation to the customer journey.
- What is our unique value proposition and position?
How do you position your offer to stand out from competition? Are you clearly addressing your target groups’ pains and needs? And is your value proposition leveraging and building your corporate brand position?
While addressing these questions requires insight from the classical planning cycle, a traditional, static marketing plan has its shortcomings. It tends to pre-allocate budgets without taking the value of ongoing tracking and performance into consideration. It also tends to be media-centric, not customer-centric, and is usually built on historic data, meaning it lacks the agility and responsiveness that behaviour-based data enables. In addition, a linear marketing planning process is a one-way street in terms of information flow, where customer insights and learnings are rarely used outside the channels in which they reside. That leaves us with the question:
Can we better merge the rapid digital test-and-learn approach with long-term strategic marketing planning?
Eight core principles to improve strategic marketing planning through testing and learning
In our experience, the companies that get the most out of experimentation without losing the long-term view have a marketing organisation that successfully takes ownership of the commercial strategy. They define how to acquire and retain profitable customers, while feeding crucial insights back to the corporate business strategy on where and how to compete.
To get there, it’s important to always secure the right strategy. This also means establishing an agile marketing operation setup that effectively implements the strategy and feeds insights back to the organisation. Both strategic strength and agile execution power must be present to win in your market. But this is often difficult to achieve as a marketing organisation tends to be weighted too heavily on one side.
To get the right balance between superior strategy and agile implementation, we’ve defined eight core principles based on our experiences.
1. Centralise the marketing power centre
Prerequisite number one is to centralise marketing insights and strategic decision power. Without a strong central marketing organisation, it’s impossible to develop, plan govern and implement successful marketing strategies and associated plans. What’s more is that with the rise of digital channels, all learnings and intelligence provided by these platforms has to be kept close to marketing decision centres. However, a centralised marketing organisation doesn’t necessarily equal huge headcounts. On the contrary, most efficient teams are kept small and clearly accountable to each other while covering the core disciplines of strategy, content, digital platforms, media, analytics and project management with either internal or external capabilities.
2. Re-establish the strategic planning cycle but in a new format
The strategic planning cycle must never disappear. Whether quarterly, yearly or bi-yearly, based on your industry’s nature, it has to be clearly embedded in your way of working. We often see organisations trying to build a state-of-the-art and agile marketing engine room without understanding who their most profitable customer segments are. And if you target the wrong customer segments, the agility and efficiency of your marketing is undermined.
Today’s digital world offers many interesting opportunities to yield insights on your market and customers to take into the planning cycle. Your own digital platforms and analysis of user behaviour on external platforms often represents a goldmine of customer insights, attitudes and preferences. These can be a strong supplement, or in some case substitute, to traditional and resource-intensive market intelligence techniques, such as interviews, focus groups and quantitative surveys. So be sure to integrate the insights from your digital platforms into your strategic planning cycle.
3. Zero-base your marketing budgeting
To truly leverage newfound sources of insights into your strategic planning cycle, you need to take a zero-based budgeting approach to your marketing expenditure. Don’t just do what you did last year, or deploy automated and pre-allocated budgets. If you dare to ask yourself the big questions in your planning cycle, you also need to take the big decisions and prioritise them in your business cases and budget allocation.
If done right, this process will help you prioritise fewer but bigger strategic must-win initiatives and say no to the rest. For example, the expensive VR setup for your fairs that no one used. This will help change the focus in your planning cycles from allocating budgets to establishing strategic scenarios, building business cases and allocating marketing investments accordingly. In short, moving from budgets to investments.
4. Move from media-centric to journey-centric marketing planning
We believe it’s time to move from media-centric, spreadsheet timetables to plans that include a more global outlook on marketing architecture. As digital is taking up a bigger share of marketing spend and the customer journey, it also means the interplay between owned and paid/earned channels is becoming increasingly important, as customers switch between your landing pages, apps, customer service and third-party destinations – both physical and digital.
Further on, this interplay should be embedded in the marketing plan, so taking a purely “media-only” view is insufficient. Instead, marketing plans should guide both marketing channels and media placements, while also informing your own marketing and service infrastructure, including digital destinations and conversion points.
5. Keep your tech stack simple
It’s important to remember that your tools will never be perfect. It’s a common pitfall to focus on the tech nirvana of personalisation and data opportunities. Tech adds many interesting opportunities to your marketing tool box but, more often than not, we see a fascination with tech can remove focus from strategy and executional momentum.
The vast majority of companies already have more than what they need in their tech stack. Google Analytics, segmentation opportunities in social media platforms, a standard CMS and CRM system, and a well governed tagging and data policy, will get you a long way. So don’t start by buying the most advanced tech stack you can find. Develop a superior strategy, and use the tech you have available to learn and build from there.
Adding more tools will often yield marginal returns but add exponential complexity.
6. Establish a feedback loop between marketing initiatives and the business
Use data from digital channels to inform the overall marketing planning and strategy. Once used to evaluate the success of this strategy, it should then feed back into corporate and brand strategy. Marketing channels are the perfect laboratory for quickly testing corporate strategy related themes, as simple metrics such as branded search, website interactions, sign-ups and e-mail open rates, can teach us a lot about segmentation, product positioning and messaging.
Marketing channels are the perfect laboratory for quickly testing corporate strategy.
7. Deploy fluid budgets in your marketing engine room
Use the plan to define and set the direction for overall strategic initiatives, campaigns and target groups. But embed testing as part of the plan to either scale or reduce the major initiatives outlined in each of its streams. This also means that budgets, to some extent, need to be fluid. This is necessary to give the flexibility to, for example, move media spend from a channel or audience performing below average. Or to add content after launching a campaign, based on customer interactions you have in customer service, on social media or your onsite chat function.
8. Use the plan as a management tool – not a calendar
We still see too many companies applying the marketing plan as a calendar but its purpose should go way beyond that. In many ways, it’s a management tool. So, instead of a static PowerPoint presentation, plans must be living documents that are constantly updated. In this way, the document can serve not just as a plan but as a reference point. Inside a marketing organisation, it can be used to track progress, plan initiatives, share learnings and align the team. For other business stakeholders, it provides the centrepiece that can facilitate collaboration and discussion with R&D, product management, purchasing or whoever is needed to make growth happen.
Superior strategy moves market shares
Harnessing the ample opportunities of digitisation and test-and-learn marketing can be impactful to your marketing effectiveness. But the sea of tech opportunities available carries a great risk of marginalising the strategic role of marketing by focusing on short-sighted tactics and digital gimmicks.
We believe that tomorrow’s leaders understand how to combine a strategic planning cycle where they dare to ask the big questions – with an agile marketing engine that can feed insights back into the strategic planning cycle and optimise execution. In our world, it’s not a choice between marketing strategy or marketing agility. But rather how superior strategy moves market shares and agility accelerates the move.