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 / Summer 2012 / Issue 67(originally published by Booz & Company)


How to Be a More Coherent Marketer

A recent survey highlights the challenges facing today’s marketing organizations, and reveals a path to differentiation.

The dramatic evolution of technology has fundamentally altered the way consumers approach buying decisions. Thanks to the Internet and mobile technology, they can make a purchase anytime, anywhere. The proliferation of buying channels is also enabling marketers to interact with consumers and businesses in ways that weren’t possible before. And because they have access to more and more data about consumers’ habits and preferences, marketers can tailor these interactions to maximize their impact.

Yet according to a recent multi-industry survey of 350 marketing professionals conducted by Booz & Company, Korn/Ferry International, and the Association of National Advertisers, many marketers are struggling to manage these powerful societal and technological trends. Their survey answers highlight the significant pressures that marketing organizations now face: They are being asked to do more to drive growth, with the same or fewer resources, while their spending is subjected to a new level of scrutiny. The survey also reveals that most marketers are trying to tackle these challenges by spreading their bets across a variety of activities, a multipronged approach that is leading to the incoherent use of funding, talent, and other resources.

With so much in flux and so much at stake, marketing organizations need to be strategic when it comes to managing their resources and teams. We have identified two key priorities based on our findings. First, marketing leaders need to narrow their focus, identifying ways to support the few differentiated capabilities that their company as a whole should pursue to establish a right to win — the ability to engage in any competitive market with a better-than-even chance of success — in the markets in which they compete. Second, they need to hire and retain the talent that will support their role in developing these enterprise capabilities.

Choosing the Right Capabilities

Marketing leaders agree that they need to invest more wisely in capabilities. Yet when they were asked to score these capabilities on a scale of one to seven, our survey respondents experienced difficulty prioritizing them. (See Exhibit.) In fact, 50 percent of respondents rated five or more marketing capabilities as “most important” to their company’s future success. This pursuit of multiple capabilities within the marketing function is problematic, because it tends to exacerbate a number of challenges that marketers already face. Funding constraints are particularly thorny in today’s operating environment; in our survey, funding issues ranked as the top challenge (selected by 44 percent of respondents) for companies trying to build capabilities.

Marketing organizations’ lack of focus runs counter to a critical lesson proven by leading companies in the marketplace: When it comes to capabilities, less is often more. The cover-your-bases tack that marketers seem to favor now may allow their companies to do a variety of things pretty well, but no single capability differentiates them. In contrast, companies with best-in-class marketing nearly always establish the right to win by being superior at only a select few capabilities. For instance, American Express Company has established a reputation for customer service, in part through its use of digital assets, such as open forums that help it develop personalized relationships with its customers. The company strengthens the effectiveness of its marketing efforts by tracking customer responses to its marketing messages across a range of touch points.

Leading marketers have learned to distinguish three separate classes of capabilities. Right-to-play capabilities are the basic functional capabilities, such as campaign management, media buying, and budgeting, that any marketing organization should have. Right-to-compete capabilities are those marketing capabilities that any company must have to compete effectively within its industry. These would include, for example, a customer relationship management platform in the financial-services sector, format optimization in retailing, and brand management in consumer packaged goods. The third category includes the overarching capabilities that leading companies cultivate at the right-to-win level. These capabilities, which are generally cross-functional and complex, reinforce one another as part of a single capabilities system. They link directly to the company’s fundamental strategy (its “way to play” in the market), and are relevant to most or all of its products and services. It is this coherent alignment between all the critical capabilities, the market, and the portfolio that differentiates a company from competitors.

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