The Lounge

Tales from the Marketing Wars (2)

Tales from the Marketing Wars (2)

Differentiate Or Be Fired
Jack Trout, President & Founder Trout & Partners Ltd.
posted by Hasan Fadlallah, Managing Director Brand Lounge

Chief marketing officers (CMOs) have a shorter tenure than NFL coaches. In fact, as you can see by the chart, they barely get beyond two years before they move on.
Average number of months at a position
CEO 44
CFO 39
CIO 36
CMO 26

“The job is radioactive,” according to a recent article in BusinessWeek. The problem, it said, is that 70% of companies don’t know what they’re looking for when they recruit a CMO.

The chief marketer at Gap (nyse: GPS – news – people ) for two years, Jeff Jones, reported that he discussed 22 CMO positions over a five-month period. Not one, he says, spelled out coherently what he or she would be accountable for.
It’s gotten so bad that Advertising Age editorialized: “Perhaps we should just call for the end of the CMO position.” They went on, “Put the job out of its misery. It isn’t really working anyway, is it?”

All this caught my attention, so I’ve decided to take a closer look at the problem and figure out what’s going on. I’m starting with a quotation from legendary management consultant Peter Drucker that’s worth repeating: “Because the purpose of business is to create a customer, the business enterprise has two–and only these two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

So there it is. The father of business consulting pointed out that the CMO has one of the most important jobs in a company. And he even went on to describe its function, which is to develop “the distinguishing, unique function of the business.” In other words, what is it that makes the company or product unique and different? That’s the CMO’s assignment. So, in simple language, marketing’s role is to turn the one idea that differentiates your brand or product from all competitors into a full-scale program. The idea is the nail. The program is the hammer that drives it into the mind of the prospect. What could be simpler? Why all the fuzziness? In fact, my book on this subject, Differentiate or Die, lays out how to do all this in great detail.

Then, one day, I opened the Nov. 26 issue of Advertising Age and came across an interesting set of data culled from senior marketers. Anderson Analytics surveyed 1,657 senior marketing executives. Six hundred replied. Wow, I thought, that should tell me what’s going on. And sure enough, it did.

The researchers asked respondents to rank the marketing concepts to which they devote time in their working day. The following list shows where they spend the most time:
Top 10 Percentage
Customer satisfaction 88%
Customer retention 86%
Segmentation 83%
Competitive Intelligence 82%
Brand loyalty 82%
Search engine optimization 81%
Marketing ROI 80%
Quality 79%
Data mining 78%
Personalization (one-to-one marketing) 79%

There, in graph form, is why CMOs are being fired left and right. “Differentiation” doesn’t even make it onto the chart. While they are worrying about customers or segmentation or return on investment (ROI) or search-engine optimization, their brands are sinking into a sea of commoditization. Drucker told them what to do, and they ignored him.

Forget all about data-mining or number slicing or niche segmenting. Why should a customer buy your company’s product instead of the 10 or so other competitive choices? That’s the question you should be answering. Build a program around that answer.

But be careful. Don’t expect the advertising agency to come up with this answer. Chances are, they will try to sell emotion, or entertainment, or something that doesn’t supply that critical reason to buy. I saw another study by a well-known research company that analyzed 340 commercials shown in prime time and identified a differentiating brand message in only 7% of those ads. Ugh. (If you look at much television, I’m sure you’ll agree with that observation.)

Figuring out the right positioning strategy is only the beginning. Next, a CMO will have to convince the CEO and chief financial officer that building or even maintaining a brand is a long-term process that requires patience and incremental change. They will have to avoid line extensions that just undermine what the brand stands for in the mind. And Wall Street’s emphasis on quarterly and monthly results is a problem that you will have to tackle. I never said it would be easy.
All you can do to fight off the financial sharks is to point out that without that point of difference–what Drucker calls “distinguishing and unique”–you’d better charge very low prices. There’s nothing in the middle. And low prices mean very low profits.

Following Drucker’s advice is how CMOs can move from “radioactive” to influential. That’s a far better place to be.

With more than 40 years of experience in advertising and marketing, Jack Trout is the author of many marketing classics, including Positioning: The Battle For Your Mind; Marketing Warfare; The 22 Immutable Laws of Marketing; Differentiate or Die; Big Brands, Big Trouble; and his latest, Trout on Strategy. He is president of marketing consultancy Trout & Partners and has consulted for such companies as AT&T, IBM, Southwest Airlines, Merck, Procter & Gamble and others. Recognized as one of the world’s foremost marketing strategists, Trout is the originator of “positioning” and other concepts in marketing strategy.

CMO

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