Pay for performance, but whose?

One of the key talking points in marketing research circles recently has been the notion of 'pay for performance'.  Essentially, this means compensating marketing research consultants based on the 'quality' of their services, and/or value to the client's business. But in my opinion, this notion throws up the age-old question: how does one determine the performance of marketing research and insight?

It is true that advertising agencies have been quick to adopt this practice. Well, I believe this has been driven partially due to the transparency in what constitutes a good advertising campaign. The client and agency can generally agree on the parameters and benchmarks for campaign success such as awareness, cut through, memorability, brand associations or even ROI. This can then be measured either through market-based validations (in the case of sales) or even through post-campaign consumer research. Once the parameters have been determined and their assessment is agreed upon, the performance of a campaign no longer lives in a black box!

However, let's now apply the same principle to marketing research consulting. I am sure we all agree that 'performance' is determined by 'outcomes'. Well, the outcomes of a market research engagement are judged on the quality of the insights delivered and the actionability of the recommendations for the client.  Interestingly, the relevance and actionability of these insights is highly subjective. What agencies think is high quality work may be far from great in the eyes of the client. But who really decides this?

The true test of performance is in the value of the insights to the client's business i.e did the research help the business make crucial decisions that resulted in financial value? In all honesty, we don't even get to go that far - sometimes research is not even acted upon, in which case it is hard to truly understand the value of the piece of research work. The more we try to gauge the performance of a research engagement, the more we realise that the outcome lies in the hands of the client.

In my opinion, the performance of research lies more in the hands of the client, than the agency! Think of the below scenarios:

What the client does with the insight goes a long way in determining its perceived performance. A brilliant piece of insight may not even leave the boardroom of the client, in which case did the research engagement fail to deliver? Or a poor piece of research was executed brilliantly by the client - in this case, should the agency get the credit?

Based on the above, I am not really convinced that 'true' performance-based payment can be implemented yet. It's probably a great notion to work towards, however, I think it is fundamentally flawed as an approach, due to the number of extraneous factors involved!

Process and Creativity: Have you found your balance?

Finding the optimal balance between creativity and process is perhaps the biggest challenge in everything we do.

I often find myself asking these fundamental questions: How do we know what extent of process is necessary? When should we break-free from the process, and start being creative? And, does process kill creativity?

As unscientific as this may be, I think that the relationship between creativity and process probably looks like a classic bell curve:

Process boosts creativity. In the absence of any process, creativity suffers. One could argue that processes provide the fuel for new ways of thinking to emerge. I also think that process makes creativity 'focused' (i.e. productive creativity).

But I think too much process acts as a deterrent to new ideas. The human mind has the tendency to switch-off and be influenced by the inertia of process. It is at this stage that we stop challenging the status quo and see new thinking die.

Ideally, the objective is to enhance creativity in everything we do. You want to be able to take a step back at all times and really question where you sit on the curve. You don't want to be hanging lose and shooting in the dark, nor do you want to be constrained by shackles of process.

If you learn how to find this optimal balance, I would be keen to hear from you.

Innovation or lack thereof?

I recently read an interesting point of view on the Research.Opinionated.Insightful blog of the Research Magazine. The author makes an interesting point: it's not innovation that the marketing research industry lacks, it's implementation.

Every now and then, you will hear the marketing research industry being criticised for not being bold enough or for lacking innovation. While this is probably true in some cases, I actually hold an alternative point of view. Yes, traditional data collection techniques will become obsolete soon, and some agencies still function as if they are still in the dark ages. But, I think that relative to other consulting professions, the MR industry has embraced innovation and change.

Yes, there is still a lack of widespread diffusion of innovation within the industry. However, a new wave of innovation is emerging in the research consulting industry. New digital research techniques, neuroscience and the 'groundswell' (the power and influence of social media) are changing the face of the research consulting profession. While some pockets of the industry have been quick to embrace change and adopt these advances in how they address client problems, I have no doubt the others will follow suit sooner rather than later.

Moreover, innovation doesn't always have to relate to technology; it could also relate to thought-leadership. Some great thinking exists within the marketing research industry. An example of this is the Brand Value Creator  (BVC) methodology by Synovate, a research technique that links brand outcomes to market share outcomes. Even though I work for this company, I can safely say that this methodology is truly thought-leading. And there are several other such examples in the industry.

However, if you still think the MR industry is too conservative, I think the part of the blame rests with the clients. Too often, clients do not want to challenge the status quo in how they approach problems, and this obviously affects how agencies approach research programs.

Finally, take a step back and think about this: How much has the management consulting industry changed over the years?  I'm not sure if there has been any radical change in how they work or approach problems. Most of the classic strategic concepts and theories developed by the management consulting industry are decades old and are now probably outdated. When I was in University, I kept hearing about the BCG Matrix (by the Boston Consulting Group) and the McKinsey Grid, but I often wonder, hasn't the management consulting industry come up with any new groundbreaking tools since then?

What defines leadership?

Finally, after a month-long writer's block and an incredibly busy period at work, I'm back to blogging again. This post is going to be less about marketing, and more about management. I have been thinking about leadership lately, and what makes for great leadership. In trying to understand this, I have been asking myself one question: what is the true test of leadership? 

Leadership, obviously, can be viewed from many different perspectives. Different people view leadership differently. For some, leadership is about leading people and making things happen. While for others, leadership is about being followed and respected. Both these definitions are incredibly valuable.

As I said, different people view leadership differently. This is probably a function of one's own life experiences and own inherent leadership traits. Having said this, I view leadership differently too.

For me, leadership is about inspiration. A true leader must be able to inspire the people to do their best, and in doing so, unleash their true potential. Under true leadership, the creative potential and cumulative performance of the entire organisation grows. In my mind, this is, by far, the most difficult challenge of a leader.

To inspire others is hard. You can only inspire others, if you're inspired yourself. You can only make others passionate if you're passionate yourself. True leadership is about great emotional intelligence; it is about seeing and feeling what others can't see.

It is about making others think bigger than they thought they could, and in doing so, making them run faster than they ever could.

What is this thing called 'insight'?

As marketing researchers, we live and breathe the notion of 'insight'. Identifying breakthrough insight is probably the dream of every marketing research consultant on every client engagement or research project. But I often ask myself, what is this thing called 'insight'?

Great marketing research is an art, the word 'insight' probably means different things to different people. Some may see it as a new way of looking at a business problem, some may think of it as  identifying a 'eureka' finding that was previously hidden or wrapped up within the numbers.

But, too often, these 'eureka' moments doesn't translate into action. Too often, brilliant findings don't hit the mark, because they are potentially not actionable (or the client doesn't know how to translate them into action). So the way I look at it, there is one (and only one) litmus test to differentiate 'true' insight from the others.

It is this:

True insight makes action planning superfluous. That is, true insight comes with an instinctive recognition that the research problem has been nailed. Not only does it inspire the research consultant, but also the entire client organisation. The action plan to translate this insight into reality becomes overtly obvious. True insight has the potential to not only sell itself and but also action itself in the client organisation, on its own.

Ultimately, the role of marketing research consulting is to solve business problems. Business problems are only solved if research findings are translated into action. So any eureka piece of finding is potentially not 'insight' at all, if it doesn't leave the boardroom of the client.

Re-thinking customer satisfaction research

I am a strong believer in the notion that the ultimate goal of any research program is to drive business results. Customer satisfaction research is no different. I came across an interesting perspective on customer satisfaction research in Research Magazine and it got me thinking.

I think, many a times, customer satisfaction is used as a company-wide KPI without truly understanding how it drives business results, i.e. how customer satisfaction links with key business outcomes such as sales, market share, profit or even share price. I think understanding this causality with business measures is the first step in designing an effective program. I think it is crucial for any business to understand the impact that relative levels of customer satisfaction have on the business. For eg. on a 1-5 scale of customer satisfaction, does it make more business sense to convert 'satisfied' customers to 'very satisfied' OR rather to convert 'dissatisfied' customers to 'satisfied'?

One way of identifying the key levers is by understanding the nature of the relationship customer satisfaction has with business measures. This relationship could be one of the following:

Scenario 1 is a classic example of a case where the true focus of research must be on 'dissatisfaction' rather than 'satisfaction', given that higher gains may not be achieved by delivering superior customer experience levels. In such cases, the research must be designed and tailored to focus specifically on the dissatisfied segment, and how to improve their experiences.

Scenario 2 is an example of a business where satisfaction or customer experience is a critical part of the overall offering (for eg. the airline industry). Here, the research program must be more holistic; and designed to not only address poor experience levels but also build and drive superior experiences.

Scenario 3 is an example of a business where customer experience is not part of the overall promise/ offering but where superior customer experience can be leveraged to build competitive advantage. Here, the focus of the business and research programs must be on converting the 'satisfied' into 'very satisfied', and even further into promoters or advocates.

One still needs to track customer satisfaction with all customers as a high-level KPI - however, prioritising further research based on the above will not only help in getting the biggest bang for the buck from these programs, but also help in operationalising the results internally.

Is your social media investment worth it?

I recently saw an interesting presentation on the basics of social media by Olivier Blanchard. Personally, I think the framework and approach is really valuable in order to understand the basics of ROI on any marketing program in general.

Quite simply, it is the distinction between non-financial and financial ROI. Even though your social media campaign achieves high click-throughs, visits, online conversations, this does not necessarily imply conversion into sales. This is the same principle as advertising - I mentioned in one of my earlier posts that awareness means nothing if it doesn't convert consumers through the funnel (both in the short and long term). This throws up the question of whether what we should really be measuring is the salience and relevance of the advertising?

Blanchard's presentation is great to have a quick browse through. It tries to make the point that establishing a base line measure of sales/ profits is a great starting point for any ROI measurement program i.e. comparing the baseline level of sales with the lift in sales achieved during the period when these social media activities were engaged in.

However, I think this might be too simplistic, as the lift in sales may not be attributable to the social media alone. Also, not everything is meant to impact in the short term. By definition, brand building is long term, and I think social media is a long term channel. Consumers engage with social media to have conversations and be heard, and not primarily to buy brands. Brand building is the result of these conversations and interactions.

Anyway, I will leave you to enjoy this presentation for now.

Olivier Blanchard Basics Of Social Media Roi

Marketing: The undervalued or the engine room?

One of the areas in marketing I am immensely passionate about is demonstrating the strategic value-creation philosophy of marketing. By definition, this implies that marketing is more than just sales or advertising, and definitely more than just a P&L expense. Marketing's standing in a firm goes beyond being merely a  business function - it is the driver of the long term sustainable and profitable growth for companies.

Given that marketing must be responsible for long-term growth and profitability, its domain, by definition, can't be restricted to advertising or sales. On the contrary, I look at it as an all pervasive discipline spanning all functions in the company.  However, in reality, there is a high variance in how companies define and treat the marketing function. 

Through my personal observations, I have built up a typology of the different roles marketing plays in companies. Simply put, these can be classified as : the undervalued, the underdog and the engine room. 

The first category is the undervalued. Here, marketing is viewed merely as a communications tool. For these companies, marketing is little more than advertising and promotions, with its main purpose being to influence consumer decision making. I have also observed that it is in these companies that there is the highest pressure to justify marketing ROI and the highest risk of marketing budget cuts, demonstrating the lack of belief and support for the function by senior leadership. Naturally, these companies also tend to be less sophisticated in their marketing organisation and practices.


Then the second category is of the underdog. Here, the marketing function is viewed as a challenger, with increasing emphasis placed on contemporary marketing philosophies and practices. Marketing in these companies encompasses consumer insights, product innovations, strategy and pricing, and is often leveraged to drive long term business growth. The marketing organisation tends to exhibit a high degree of sophistication in these companies. However, inspite of this, marketing lacks a seat on the table in these companies. Finance usually pips marketers in winning top leadership roles in these companies.


And last but not least - I like to refer to the third and most influential role of marketing as the engine room.  Here, marketing is more than a business function - it is the single most important driver of market share, growth and profits; it is a mindset of winning in the marketplace through robust consumer-centric strategies. These companies define marketing broadly to include P&L delivery, and hence, marketers in these companies go on to key top management positions in the company. Given that marketing includes cross-functional business leadership, marketing in these companies tends to be the most sophisticated and analytically driven. These are the companies that acknowledge the value of brand building and consumer insights, and invest heavily in advertising and marketing research. It is the companies that treat marketing as the engine room that are the best training grounds for classical marketing fundamentals.


Ideally, you want to be pushing to the right-hand side of this continuum, if you are to truly drive long-term growth and value through marketing.

Marketing's deadliest sin : Measuring the tip of the iceberg in advertising

One of the biggest sins a marketer can commit is scratching the 'tip of the iceberg' in advertising. It surprises me how often clients gauge the impact of their campaigns through superficial metrics such as awareness and message take-out.

Don't get me wrong. Awareness and message take-out are crucial in assessing the first level of impact of the advertising, but these are just the tip of the iceberg, in terms of the actual impact of advertising. One campaign may have an awareness of 90% and the other 60%, but would this mean the latter is less effective? Even though the latter reached less people, it could have had a stronger impact on equity and subsequently on sales.

What goes on 'between' message take-out and the actual sale is referred to as the 'black box' in marketing. It is every marketer's fundamental responsibility to see through (or atleast try to see through) this black box. Advertising is ultimately intended to have the following two impacts: 1. short term sales impact 2. equity impact which then leads to sales in the long term.  So if you are not measuring these when trying to understand the impact of your campaigns, then what exactly are you measuring?

I may remember your ad, may love it and could talk all day long about it. But this still does not mean that the ad strengthened the power of your brand in my mind and if I will buy it. Awareness and message take-out will tell you if your brand reached people, but not if people reached for your brand!

Measuring the value of insight: Closer to the holy grail - Part II

A few weeks ago I wrote a post on the topic of 'measuring' the value of insight and proposed a conceptual framework demonstrating this concept. One of the key points that I was trying to make through the article was the differentiation between measuring the value of insight versus gauging the effectiveness of marketing research programs. As mentioned earlier, gauging the effectiveness of a program is relatively simple i.e. ascertaining if the research delivered insights that then enabled the company to make certain decisions towards meeting its marketing objectives. Measuring the value of the research is potentially more complex. By definition, it means linking the outcomes of the research program to financial metrics such as ROI, profitability or even shareholder value.

This post is the second of my articles that hope to get one step further towards finding the holy grail !

I have illustrated my framework by using the example of a new product concept testing program.

From the 'insight funnel' above, it is evident that the new product testing program was effective. It enabled the company to successfully launch the new concept and boost sales, which then led to improvement in profits and ultimately shareholder value. But what was the 'value' of this research program?

What makes this topic fascinating is that just as beauty lies in the eyes of the beholder, the value of insight lies in the eyes of the decision maker.. What I mean by this is that the value of a research program is subjective

Let's assume that the company invested $100,000 in the program, and the ultimate net profit impact as a result of the new product was $1 million. Can we attribute this $1 million to the research program? Does this mean that the research delivered a ROI of 10x? The answer is YES, only if research alone led to the new product launch. More often than not, this will not be the case.

There are situations when managers would probably take the same decisions in the absence of research, as they would with the support of research. In the example illustrated above, what if the managers (based on intuition and judgement) would have launched the concept anyway and created communications that resonated with the target? Does this mean that the research program was not valuable?

Absolutely not. In fact, any insight delivered plays the role of mitigating risk or increasing confidence. Given that businesses face multiple decision choices and need to make trade-offs based on the risk-reward potential of decisions,  an increase in confidence leads to an increase in probability of making that decision. If the managers were only 60% confident of success (before the research), the insights from research can said to have increased confidence ( or probability of making decision) by 40%. Hence, if the net profit impact was $1 million, $400 (40%) can be attributed to to research program.

This throws up another potentially complex variable into the mix, negotiation. Negotiating the value of the insights we deliver, in terms of risk reduction and increased confidence, is key in resonating with our clients' business needs. The more robust our programs and insights, the better will be our ability to negotiate, and the higher will be the value of the insights we deliver.

Making the transition from insights to value creation: How do you stack up?

One of the biggest challenges (or opportunities) facing the marketing research industry today is the blurring of boundaries between research and consulting. Increasingly, clients are expecting research firms to not only provide insights, but also act as consultants in overall business and marketing strategy planning. I believe that firms best placed to thrive in the next decade are the ones that adopt the 'consulting' mindset, rather than the pure 'information' mindset.

Even though most researchers like to think that they are consultants (by default), this is not the case in most instances.  Adopting a consultant's mindset requires a significant face-shift not only in terms of skills, but also in terms of approach and the overall delivery model. 

Quite simply put, I differentiate researchers and consultants based on one fundamental criterion: a researcher works with data, while a consultant works with data gaps. This essentially means that a 'consultant' doesn't rely on the primary data to solve the client's business problem. Solving a business problem goes beyond merely using primary data - it is a combination of data (primary and secondary), expertise, context, judgement and intuition. 

I have a quick audit to determine where one lies on the strategic value creation continuum.

1. Do you know the key forces affecting the client's industry and business in general?

2. Do you know the client's strategic objectives for the next financial year? This not only includes marketing objectives, but also their advertising strategy, media, brand plans. 

3. What is your level of collaboration with the client throughout the research process? Do you attend the client's internal planning sessions?  Do you meet with the client at on-going intervals to discuss findings and brainstorm hypotheses/ possible actions? (rather than going away once the research was commissioned and coming back after 2 months with a magic solution!!).

4. Have you used alternative knowledge sources to address the problem? (i.e. secondary data, client's internal database information, industry context, expertise and judgement). 

5. Do you provide 'insights' versus just 'information'? More importantly, do you provide a strategic action plan for the client based on the findings?

6. Do you help the client operationalise and implement these strategic recommendations? Do you follow up and see if these strategic recommendations were implemented and if they had any value to the client?

7. Finally, and most importantly, would you still be able to solve the client's business problem if there were gaps in the primary data?

If we can answer "yes" to each of these questions, we can be sure to have made the transition from being a source of "information" to a source "strategic value" to our clients.

So, based on the above, where do you stack up?

"Measuring" the value of insight: It can and must be done, but how? (Part I)

I had the privilege of attending the AMSRS State Conference last week and really enjoyed all the presentations and ideas put forth by the speakers. However, the one that resonated with me the most was the one by  Duncan Rintoul on "The real value of market research". This is a fascinating issue and whilst there have been considerable advancements in measuring the value of 'marketing', the same cannot be said for 'marketing research'. 

The concept of measurement is not a new one, and neither is the idea of measuring the value of marketing research. But the presentation essentially crystallized some of my own thoughts on this topic, and provided a framework for thinking critically about the 'net' value of the research we do for our clients, as marketing research consultants. I think Duncan's approach is an excellent one, and I must commend him for this; not to mention that the idea has actually sparked a lot of discussion both within the agency and the client-side on how this could be taken further and implemented. 

The reason why I have inverted commas around the word measuring in the title of this post is because I wanted to differentiate between the notion of 'measuring the value of insight' versus 'evaluating the effectiveness of marketing research'. A research program is deemed to be effective if it enabled the company to make key decisions, which then translated in the achievement of broader marketing and corporate objectives. Measuring the value of marketing research, on the other hand, is quite different, and potentially more complex. It is about ascertaining the net dollar impact that the research had on the bottom-line of the company.

I think Duncan's presentation provides a good framework for evaluating if the research has been effective, but the point of my post is around 'measuring' the dollar impact of the research on key financial metrics. So essentially, it is the same idea taken to the next stage in the measurement chain.

So why is measuring the net dollar impact of research necessary? Why isn't ascertaining whether the research has been effective or not, enough? Well, quite simply put, it is because as a client, you are always contemplating between potential research proposals and programs. To truly extract maximum value, you need to select the research program that will deliver maximum net returns to the company.

Imagine this scenario: You conducted two separate research programs on brand tracking. Both programs provided insights that enabled in making key brand decisions and hence, helped in achieving your marketing objectives. But, which was more valuable? If you had to choose one over the other, from a purely financial point of view, which one would you choose? I think this is essentially the premise of my argument. 

This is an issue which needs detailed explanation, and I am not going to give a magic answer to this, but I will end by presenting my framework:

I will be sharing my insights and ideas on how to interpret this framework and also on how to tackle the last level in the measurement chain i.e. financial impact, in my next post. So stay tuned for more, and let me know your thoughts and comments in the meanwhile.

The age old conundrum: "Measurement stifles creativity!"

I read an article in Ad Age recently ("Why metrics are killing creativity in advertising") which made the audacious claim that "when marketing decisions are based on numbers, we lose the desire to be creative".  Well, the classic battle between the left and right brain marketers continues!

Firstly, from the article it is evident that the author (advertising agency creative exec) is someone who disregards the notion of measurement (rational judgement), for the sake of emotion (which is not always rational). This poses the question: Why is measurement seen as alien to the creative process? 

Being a quantitative person myself (someone who likes objectivity), I must admit that I disagree with the assertions in the article. I do not think that numbers hamper creativity. I view numbers as doing one thing and one thing only: turning our subjective judgements into objective, & giving us answers that take us closer to the truth. Agreed that reality is distorted at times and numbers are at times incapable of delivering the truth, but we cannot know this unless we have tried.

I also think that metrics (or numbers or measurements) enhance creativity in marketing, rather than stifle it. I believe that the ability to quantify not only gives answers, but also improves the robustness of our endeavors. Thinking specifically about what the author is referring to (i.e. advertising campaigns), tracking or measuring outcomes takes us closer to understanding what the trigger points are in order to drive objectives, and creativity can thus be a more 'targeted' exercise. Not sure if there is such a concept, but what I mean by this is 'productive' creativity.

Also, with regards to testing new advertising concepts, I believe that metrics aid creativity. An idea is only as creative as the tangible impact it has on the market, and metrics help in gauging this 'tangible' impact. Without measurements or metrics, who would decide what is considered as creative? Metrics give creativity the credibility it deserves.

Well there is always an alternative view to every argument and in this case, it is this: do not "over rely" on metrics to give you answers. I think this is where the problem lies - many a times, we tend to substitute judgement or intuition for hard numeric indicators. Hard numeric indicators are just one part of the entire decision making puzzle. Sometimes, in order to be successful, we need to do the contrary to what the numbers say. Sometimes we need to do the subjective rather than the objective, do the irrational rather than the rational. 

Numbers stifle creativity ONLY if we let them.

The 'ROI' of ROI !

Ever wondered what the ROI of ROI is? What I mean by this is the net value derived from initiatives that are aimed at measuring ROI. Is it even worth measuring the ROI of every marketing activity?

Not really.

There are three key questions to ask before embarking on a marketing ROI measurement program:

1. Why is this information needed? What decisions rely on this information?
2. What is the potential value if these decisions are right? What is the potential risk if the decisions are wrong?
3. What is the degree of accuracy needed (or margin of error tolerated) from measurement?

If measuring the return from marketing activities costs more than the net value derived from doing so, then measurement is a failed exercise. If rough indicators or hypotheses will do the trick, then why waste time, money, effort in chasing 100% accuracy?

Always remember that "not everything that can be counted, counts" ! If we live by this principle, we can probably make a more critical and informed choice of which activities to formally measure, and which ones to crack open through intuition and judgement.

No news is bad news. Probably not!

One of the toughest aspects of being a marketing research consultant is to provide bad news to a client. The bad news could be in the form of declining scores of certain metrics or a discovery that one of their key strategies is 'ineffective'. Fellow consultants will probably agree that this is not the best situation to be in.

I was in a similar situation recently. One of my clients saw their satisfaction scores and other performance metrics decline significantly and to be very honest, this freaked the hell out of me at first.

If handled inappropriately, such situations can easily become a you vs. the client contest, one that you certainly don't want to be in. The key lies in taking the client on a journey with you - a journey of discovery and opportunity identification.

From my own experience of such a situation, I have learnt the following: 

• First the foremost, keep the client in the loop. If you discover something potentially negative, it is probably a good idea to let them know and involve them in the process early. You don't want the news to be a 'shock' to them, which will ultimately pose questions to the validity and accuracy of your claims.
• Leverage the client's insights for hypothesis building. The value of this cannot be  emphasised enough. Clients know their business better than you. In my case, I benefited immensely from bouncing ideas off the client and this eventually led to the identification of certain potential triggers of the problem.
•  Know the data and context backwards. This is probably even more important when reporting something negative to the client. You need to build and demonstrate confidence, which comes from having an in-depth and expert understanding of the problem.
• Try to find solutions through innovation. Situations like this demand more innovation and creativity than usual. Try to find potential triggers of the problem through unique approaches and analysis. Don't be afraid to experiment. In my case, I found value from using a new approach and combining it with interpretation, based on the context and existing hypotheses. Upon doing this, the root cause of the problem was clearly evident.
• Know your communication strategy. By this, I mean your strategy or approach of communicating your findings to the client and their wider stakeholders. You can take one of two approaches : the subtle approach or the 'hard facts' approach. Having done both of these (in two different situations), I think this is purely a function of the nature of the client. If your client is extremely skeptical and aggressive, you probably want to take the subtle approach! (Caveat: Ensure that the essence of the problem is not lost due to the subtlety). Our job as consultants is to accurately reflect the depth and breadth of our findings. 
• Finally, sell the problem as an opportunity. In every problem lies an opportunity. Make sure to communicate this to the client. Demonstrate how your identification of the problem could lead to better opportunities for improvement and re-assessment of some of the key strategies, which could potentially have tremendous long-term value for their business. In order to do this, we need to sell a solution, and not just report on the problem.

If we can follow the above, we can ensure that we not only solve our clients' toughest problems, but also ensure that they come back to us, when they have another one!

The trouble with Brand Value

Brands create value.

Let me re-phrase : Strong brands create value.

Brands create value not only for consumers, but also companies. I see this as a cyclical process - brands first and foremost, create value for consumers, and this then translates into value for companies. You just can't be profitable without delivering genuine consumer value.

Great companies know this. They find ways to re-invent their brands to ensure that consumers love and resonate with them. They do this through imagery (Mercedes Benz), building relationships (Nike) or even by creating experiential value (Apple). The marketing discipline has come a long way. Very few today would argue that brands are the pillars of strong consumer relationships and loyalty.

But the trouble with brand value is that it starts getting blurrier as we move through the funnel.

Kevin Lane Keller, one of the great brand thinkers of our generation has summarised this funnel pretty succinctly.

This is all well and good. But the model fails to acknowledge the difficulty in justifying linkage.

Consider this:

The impact of brands on consumer value metrics (awareness, salience, attachment, loyalty) can be measured fairly easily through primary research. In fact, advances in marketing mix modeling have made the second level of linkage (sales, profitability, ROI) possible too. But how can the perennial 'shareholder value' be justified by marketers ? Today's economic climate makes it necessary for marketers to justify linkage not only with sales but also with long-term shareholder value.

If a marketer invests $100,000 in brand building, what is the long-term impact on shareholder value?

The difficulty arises due to the long lag effect of most marketing outcomes (sometimes even years), making accurate linkage extremely difficult. There is no doubt that brands do create shareholder value (look at the long-term stock market stability of some of the great brand-companies, for eg. Procter & Gamble, and this will be clearly evident). But the trouble is in linkage. 

This is unarguably the biggest challenge facing marketers today. Many probably don't even realise it.

The four habits of highly 'effective' marketing companies

Ad Age's CMO Strategy column is one of my personal favourites. The content really resonates with the idea of this blog and what I am trying to capture with my writings. I read a recent article on Why Measurement Alone Will Not Lead To Better Marketing and I couldn't agree with it more.

However, the article stirred up a whole new set of thoughts in my mind i.e. what makes companies highly effective marketers?  Well, let's start by thinking about it this way : "You can't manage what you can't measure", and hence, the first step to effective marketing is measurement.

But how do we measure the impact of marketing? And, can we measure marketing? Marketing is not something that can be measured, there are too many variables involved, it is highly intangible, right?

Wrong.

I am a firm believer that good marketing practice starts from the belief that marketing IS tangible and marketing CAN be measured. It is a similar concept to winning the Olympics - it seems really difficult and sometimes highly impossible, but people win gold medals at the Olympics, don't they?

So how can we as marketers win gold medals i.e. clearly articulate the impact and value that marketing creates for the organization?

I am not going to propose a secret formula for success or a magic metric to follow, simply because there isn't any. But what we can follow is a set of guiding principles and then apply them to our business context to achieve maximum impact.

Principle 1 - Define:  Understand what marketing means to your company and what it is accountable for, both in the short and long-term. Is it short-term incremental sales, brand equity, bottom-line growth or even long-term shareholder value creation. This first step is crucial in laying the foundations of effective measurement.

Principle 2- Design: Select the right metrics that align with and allow the measurement of these objectives. Is it ROI, cash flow, NPV, share price or even simple metrics such as NPS (net promoter score), brand awareness, intention to purchase or sales? Once there is clarity on what is being measured, the battle is half won.

Principle 3 - Decipher: This is the tricky part. But how do we measure ROI or NPV? How can we be certain that X% to our revenue or profit can be attributed to Y marketing activity. We can't be certain. But what we can do is build hypothesis through an expert understanding of our business and make reasonable assumptions based on our historical experience and current context. So principle 3 is acknowledging that measuring marketing is all about smart hypothesis building & testing! No marketing mix model will yield results with 100% accuracy.

Principle 4- Deliver: The last but most important of them all. Measuring marketing is all about courage and perseverance. It needs senior-level support, buy-in and initiative. It needs alignment with all other functions in the company. It needs to be a shared responsibility of all. It needs continuous learning. And finally, it needs artistic flair (hypothesis, creativity in selecting approaches & processes) as well as scientific rigour ( decision tools, statistical & modeling expertise). One cannot be substituted for the other.

Let's embrace one, and the others will follow.

Is the CMO role necessary?

I recently read a post on the Branding Strategy Insider blog about the Chief Marketing Officer role and whether it is justified. More and more companies are moving towards creating this role within the C-suite. While the article makes many valid points about the importance of the CMO in aligning the organisation with marketing and creating a more customer centric organisation, I do believe that creating a "position" that looks after "marketing" restricts it's role and influence to a certain extent. It is a paradox, isn't it?

Consider this:

1. If marketing's true role goes beyond sales & advertising, pervading through all functions of the company, what is the value in creating a single role that looks after marketing? Should this be a part of everyone's role in the company?

2. If marketing's true role is long-term profit and value creation, then don't business unit leaders or Chief Executive Officers play the role of a CMO anyway?

I feel that the creation of the CMO role is mainly driven by the insecurity of marketing to occupy a seat at the table. It is unfortunate that today, companies need CMOs to be proponents of the marketing philosophy - why can't this be embraced by everyone?