“Business has only two basic functions: Marketing and Innovation”
Having devoted my working life as a Strategist and Marketer to Innovation in a number of companies and sectors, I can’t be more aligned with the father of modern Management, Peter Drucker, when he said that without a customer, no business would ever exist. Therefore the fundamental presence of Marketing and Innovation in my professional career resonates so much with what I believe makes businesses possible.
A couple of weeks ago I got a phone call from one of the most relevant Spanish business schools. They wanted me to provide them with insights about the content that a new B2B Marketing executive program should include. So I started reflecting on my early years at 3M as a Marketer and later as a Strategist.
I would like to capture in this post a framework and a vision on how I would create an innovative Marketing unit from scratch if I was given that mission today, and the capabilities a modern marketer should have in my view these days.
Let’s start with the basics. I do believe there are two fundamental dimensions in Marketing:
Doing the right things – Doing things right
A Marketer has to focus on what matters first, doing the right things. But when those things are clear, he has to make sure that execution is flawless. Both capabilities are fundamental and finding someone who masters the two of them is quite unique. I have seen brilliant “thinkers” – “strategists” and outstanding “doers”, but normally they are not the same animal.
Exploitation – Exploration
A Marketer has to master short term execution (“exploitation”) while at the same time he must find bandwidth for envisioning what it is to come (“exploration”). Again, it is difficult to find individuals who can perform both roles, and from the cognitive standpoint I strongly believe the brain cannot handle playing both roles together at the same time. Allocating time and energy for each of the two disciplines is key.
If we would merge the two dimensions together, we would end up with a matrix like this one, with what I call the 4 fundamental capabilities an innovative Marketing team should have:
- Strategic Foresight
- Business Modelling
- Operational Excellence
- Technology Acumen
So now we have a framework so we can move on and dig deeper. The question then would be: what Marketing disciplines are expected under each of those 4 fundamental key capabilities of a modern and innovative marketing team? Let’s review them together:
STRATEGIC FORESIGHT (Doing the right things + Exploration)
Someone once said that “the best way to predict the future is to create it”. Understanding what the future will bring, the new market trends and how value platforms and ecosystems will be reshaping, gives an advantage to every marketer with the ability to explore the future.
- Competitive intelligence and Customer Research will help to anticipate market dynamics and how key purchasing drivers are changing, therefore creating new opportunities to capitalize.
- Predictive Analytics will leverage the power of Data and will anticipate the probability of future competitive scenarios. Propensity models, customer retention alarms, up-selling and cross-selling opportunities discovery, content personalization,… are just a few of the possibilities Data bring to marketing organizations.
- Understanding Value Ecosystems Maps (complementing Michel Porter’s Value Chains), assessing potential coopetition opportunities, exploring alliances and partnerships to deliver added value to the customer,… moves the competitive paradigm from a “zero-sum game” to an endless world of possibilities.
- Futures Thinking or the systematic study of the “possible, probable and preferable”, provides marketers with a semi-structured approach to better understand what the future may bring.
[ Keywords: Competitive intelligence / Market intelligence / Data analytics / Predictive modelling / Value Ecosystems / Value Chain / Adaptive Management / Strategic Foresight / Futures Thinking / PESTEL analysis / Marketplaces / Coopetition ]
BUSINESS MODELLING (Doing the right things + Exploitation)
While the term “business modelling” can also be used for exploring new disruptive business opportunities, I am referring to it in this cluster associated to everything related with the classic and fundamental marketing skills: creating and delivering value for the customer.
- The Marketing 4 Ps described by Kotler are now frequently replaced for new paradigms in Marketing, but I do believe they are still 100% valid. Product is the cornerstone of the 4 Ps, as delivering a strong product and a powerful value proposition related to it (addressing customer pains and opportunities), is a foundational element of business success. Optimal Pricing plays a pivotal role in achieving profitable growth. Dynamic pricing, value pricing, price elasticity,… are just basic concepts a modern marketer must deeply understand. Promotion and brand management are necessary elements of the communication with the customer. Understanding market dynamics, channel management and Placement, very often differentiates the marketing rock starts from the others.
- Portfolio management (new product introduction, product discontinuation,…) is the bread and butter of a marketing strategy. Most successful companies are very often those who shine in this discipline (e.g. Apple, Zara, 3M,…)
- Strong market segmentation capabilities and Customer Lifetime Value management will tell you if everything done in Performance Marketing was worth the effort and a recurring business has been achieved, or acquisition costs have been wasted.
[ Keywords: Business Model / Product / Price / Placement / Promotion / Portfolio / Channel / Distribution / Research / Design Thinking / UX / Human Centered Design / Market Segmentation / Brand / Product Life Cycle / Customer Lifetime Value / Partners / Cost Structure / Revenue Streams / Value Proposition / ABM Account Based Marketing / Inbound Marketing / Content Marketing / Affiliate Marketing ]
OPERATIONAL EXCELENCE (Doing the things right + Exploitation)
This capability is about flawless execution at scale. Priorities have already been defined and now it is time for performing like hell. This is one of the most relevant levers in native digital businesses, while it is being widely adopted by legacy companies as well.
- This is the world of Performance Marketing (SEM, SEO, Display), with strong focus in CRO (Conversion Rate Optimization).
- It is also the discipline of Marketing Automation, to ensure the right proposition arrives to the right customer at the right time, supported by strong automation platforms and solid customers and leads databases with a sharp segmentation (CRM).
- Strong Loyalty schemes frequently improve customer retention and increase the yield of the existing customer base.
- In companies like start-ups where there is not a solid track-record or a historical business to manage, Growth Hacking is frequently a discipline and an attitude where “growth” is the mantra and funnel conversion KPIs are like the North Star.
[Keywords: CRM / SEM / SEO / Display / CRO / Loyalty / Growth Hacking / Analytics / Marketing Automation / CPC / PPC / CPA / CPM / Trade Marketing / Inbound Marketing / Social Selling / Employee Advocacy / NPS / Customer Satisfaction / Service and Aftersales]
TECHNOLOGY ACUMEN (Doing the things right + Exploration)
Technology has always been an accelerator for change. There are two approaches to technology from a Marketing perspective: utilize it for the benefit of operational excellence (e.g.: RPA Robot Process Automation, Marketing Automation,…) or fully embracing it to incorporate it as a fundamental element of your product / service offering (e.g.: cognitive assistants, AR / VR experiences,…). I am covering here the second, when technology is not an enabler for your product offering but an element of it. In that situation, marketers need to understand and explore the possibilities of technology to incorporate it as an essential element of the value proposition.
While pure tech players will drive technology as a core competence and will develop it internally, if you are a marketer in a non tech industry chances are high that you will need to search for it outside. If that is the case, there are a number of possibilities (externalize R&D, embrace Open Innovation initiatives, acquire technology to incorporate to your product,…)
[Keywords: RPA / AR / VR / AI / Cognitive / Voice / R&D / Open Innovation / Corporate Venture Capital / Startup / Intrapreneurship]
So… are these capabilities above everything that a Marketing team should have? No, I have been just focusing on the pure marketing practice, but I would strongly recommend to complement the Marketing team with these other disciplines as well:
- P&L literacy: knowing how to build and action a profit and loss statement and how different revenue streams and cost drivers affect to the overall profitability of the business.
- Project Management skills: from classic project management to agile and scrum basics, in order to be effective and efficient when managing the business.
- Soft skills: Negotiation expertise, team management mastery and strong empathy with customers and stakeholders.
- Sensitivity towards environmental sustainability: understanding how sustainability is reshaping the whole business landscape and drives customer willingness to interact and buy from corporations.
Having reflected about all these capabilities required to run a solid Marketing team these days, I’m curious about the feedback that my colleagues and friends will provide. Are you missing something? Do you have another view on everything above?
I would love to hear your voice…