Innovation and marketing. All else is cost!

PvT: In your opinion, what operational changes can organizations make to get a better picture of that customer? You’ve addressed several big topics. However, many organizations have very siloed systems, making it difficult to access needed data. For example, a retail customer may be quite different from an online customer, and rather than integrating that data they keep that data separate, in separate databases. What are some of the things that you think organizations can do, or should do, to address the issue?

MM: Well, let me go back to what I call the axiomatic assumption of the commercial enterprise, and then from that examine some of the propositions or key premise of commercial activity.

Peter Drucker, God bless him, said, ‘The firm has no other purpose than to find and serve customers. Only 2 things add value: innovation and marketing. All else is cost.’

So there you have a quintessential operating principle. There is no other purpose than to find and serve customers. That’s what I call a customer-making process.

So you can put Band-Aids on cancer but if, fundamentally, you do not have a mindset of customer-making, which is, ‘I am building systems, processes, and accountabilities for managing the process of attracting, serving, and keeping customers life, then everything kinds gets muddled, confusing, and a big hairball of politics and turf.

Customer benefit

First, we like to put it into more simple terms: “How does the customer benefit?

Whatever operational or tactical changes that a firm wants to consider, we recommend that that they ‘solve backward’ from customer-making as an integrated analysis-driven process.

Now, there are many companies that aspire to that, but for lack of leadership and the inertia of their business, they encounter a lot of difficulty. We believe that they simply need a better, more fun way of innovating new operational capabilities—yep, from the bottom up with those folks that actually know first-hand what’s going on.

Second, if you accept that innovation and marketing represent the two primary drivers of wealth creation and value, it then follows that customers 30 years or younger will no longer experience the world as online and offline, it’s just the world.

There’s no first life and second life, it’s just life. And as a function of that they start to interact with customers with what I call a digital third hand.

Digital third hands

Now a digital third hand is quite literally how they have developed the cognitive ability and the muscle-memory reflex of interacting in a purely digital world.

In our digital world, we experience an appetite for interacting with brand and communities of brand users that have fundamentally altered marketing and innovation—new business requirements that marketing and innovation must now satisfy.

One, consumers that are 30 years and younger today, for the most part are no longer represent singular economic actors, rather, they represent a clique, a crew, or a pod of 4 or 8 people – their best friends with whom the text message each other 50 times a day!

These younger adults tend to select their best friends not just on shared values and sense of humor; rather on the basis of cognitive specialties—what John Garner talks about as multiple intelligences and cognitive-skill specialties—that offset and complement others in the crew or pod.

This means that somebody in the group will be really good with data, arithmetic, and logic. Somebody else will have aesthetic or design sense—fashion, design, and color. Another person will be really good with interpersonal dynamics, empathy, and support.

This means that marketers must give up the conceit of marketing to an individual demo-psychographic profile.

Rather, we must learn how to market to a pod or crew with collective IQ many times greater than any one individual consumer.

This means that the collective unit will detect any hint of bullshit, manipulation, coercion, or underhandedness, and heap immediate retribution on offenders: the highest form of which is willful apathy and deliberate dis-engagement. Wow. Try marketing in that!

Some marketer will also suffer a public reprimand in front of millions of consumers on YouTube and the mainstream pick-up of outrageous videos.

So, as a function of digital third-handed customers, who then through instant messaging and SMS, and other kinds of presencing thing, be it Twitter or whatever, not only must you market to the pod, but you must market to the cognitive diversity that defines that pod.

Requirement for multimodal content

So that means that you need multimodal content things like Podcasts, and webinars, and newsletters, and interactive calculators if there’s a return on investment.

You need to do customer interviews so people can associate into the narrative, into the journey of customer-making.

So marketing, on one hand, becomes much more integrated, it becomes much more multi-channel and multi-modal in terms of the cognitive styles it must satisfy.

The third thing that happens is that these pods start to form larger networks – federal networks, and out of this they start to organize themselves in terms of movements or de facto unions.

And oftentimes a c-captain – a community captain – will appoint him or herself as the leader of this loosely gathered federal nation of interested people. So they will start – how can I say – exerting far greater influence than quote-unquote “a single loud-mouth” had in the past.

Global marketing strategy

PvT: Okay. What regional considerations must firms accommodate in their global marketing strategy?

MM: Sure. Let’s start by breaking localization into four geographic mental maps.

First, we have what many call pan-regional marketing area. For example, this typically includes Asia Pacific (also called APAC) or in some cases Indo-Pacific where the mental map falls along the lines of English-speaking areas (which would include India, Australia, and New Zealand) And, EMEA—Europe, Middle East, and Africa as well as Latin America (although my Brazilian clients remind me that Brazilians do not consider themselves as Latin Americans!)

In each of those areas, a global marketing organization has to localize the marketing material, both print and online, across dozens of languages and currencies.

There’s a whole new business eco-system that has begun to emerge around facilitating or driving pan-regional localization of marketing content, as well as services related to the pre-sales and post-sales interactions with customers.

Then, the second geographic mental map address cultural markets with a more or less a unified language and currency, emphasizing the challenges how to maintain a global voice and cultural resonance. From an operational perspective, this emphasizes the integration of traditional and newer marketing processes.

So it’s, if you will, a global brand with local flavors. For example, many Americans make the mistake—I should say many North Americans—make the mistake of translating a piece of collateral or web content into German and consider their work done—that it will work well or good enough in Germany, the German-speaking parts of Switzerland, and Austria. In most cases, it does not work.

You don’t need more than 5 minutes in a conversation in the café in any one of those areas to understand that they are incredibly tribal, and they make hyper-acute discernments about haircuts, shoes, facial expressions, so as to establish you’re part of my tribe or you’re not part of my tribe.

What works in the Southern part of Germany doesn’t work in the Northern part of Germany, and it certainly doesn’t work in Switzerland, and it categorically won’t work in Austria; different metaphors, different visuals, different motifs, and different underlying narratives in terms of what it means to be a consumer and in a relationship with the brand and the tribe of brand users.

The third geographic mental map address mini markets within a country—I’ve already tipped my hand by saying micro-localization within a country.

So, for example, my work with clients in the Netherlands led me to discover the hyper-tribal nature of their local markets. I am astounded just in this tiny little country of the Netherlands, the Dutch remain fiercely tribal with respect to the very southern parts of the Netherlands, such a Einhoven, to the greater Amsterdam area, to the northern parts which are more Flemish as opposed to the more French folks in the southern parts. The Dutch make very, very sharp distinctions about, again, haircuts, clothing styles, inflected speech, manners of metaphors, key words and phrases, that all mark out, oh, you’re not one of us; oh, you are one of us.

Neo-tribalism

You know, Marshall McLuhan was right. All this technology of electronic media cools us down, making us very primal and triabal—what he even called Neo-tribalism. Wow, if he could have only seen instant messaging, SMS, and social networking in action, he would smile with great satisfaction of having understood the root sociology of the Networked Age.

As this relates to marketing, it means that marketing has to become much more tribal too–much more specific to the subcultures and niches within an otherwise unified market.

And finally, we come to the fourth geographic mental map of localization.

It has to do with the newer developments of mass customization, shopper marketing, and remix culture.

Shopper marketing drives the idea of segmentation into the floor plans of individual retailers and shopping malls, specifically drawing upon the very rich practice of database marketing and database analytics.

Shopper marketing takes that same analytic principles to the actual physical footprint of each retail store, specifically asking the question, ‘Who are my most profitable customers?’ and ‘How can we stage products micro-theaters, or ‘design moments’ in interior design-speak that engage with very specific shopper demographics.

Say, for example, a married woman with 3 or more children. Single dad with 1 or 2 kids. Divorced or bachelor male, late 40s. And when these individual demographic or psychographic segments walk into a store, they have certain core needs that you could think of as the basic staples. Then around those staples, shopper marketing details higher margin impulse items that we know appeals to that particular shopper demographic. Imagine that these little stages track to particular local high school or college sporting events.

I see this Whole Foods and WalMart—at both ends of the competitive spectrum.

So as a global brand marketer, you must have brand architecture and promotional content that express the basic narratives and core values of the brand while providing enough flexibility, within a robust framework, that will work at the pan-regional, cultural, in-country, and shopper-marketing levels.

So localization now means getting it right down into the individual store.

For marketing organizations, this means that they must specify and source content in ‘liquid’ form. They must have content that various staffers and partners can mix and match into very unique expressions right down to an individual store kiosk, or a trade show booth, or a direct mail piece like a catalog, and so on.