Speed: Increase the clock rate of your team, but slow down if the stakes are high

Marketing was once a slow-paced function. Service provider contracts were reviewed every few years, if at all. Campaign planning and media buying were done a year in advance. Impact was evaluated on a quarterly basis at best. At the most aggregated level, it will stay this way, if only because the company as a whole runs on these cycles. But the pace of operational marketing is quickening. The lead time from ideation to execution is decreasing, as is the delay between stimuli and response. Your messages reach your audience more quickly than ever before, information on consumer reactions and marketing impact becomes increasingly available in real time, and your competitors react more swiftly to changing conditions. Sitting and waiting was never a sustainable stance for marketers. Today, it is a form of neglect that markets will neither forgive nor forget.

Acceleration is in evidence across the entire spectrum of instruments, but it is most dramatic in digital marketing (see Chapter 6). Users expect you to enter into a continuous dialogue with them. They have no patience to wait days or weeks for your answers to their questions, your reactions to their ideas, and your resolution of their concerns. To master the digital dialogue, you have to ramp up your capabilities in two respects. First, become more receptive to the signals customers are sending. The signal can be as clear as a customer clicking on a link you have placed in a newsletter or an ad, but it can also be harder to pick up. For example, it takes systematic efforts and dedicated software solutions to track the topics – and gauge the sentiment – of conversations about your company in social media. Second, you need to become more responsive to such signals and get back to customers with appropriate reactions as quickly as possible. Nestlé, for example, has established a digital acceleration programme to train marketers from all parts of the organization in the arts of social media listening and real-time interaction with customers, enabled by substantial investments in technology.⁵

Of course, speed isn't equally important in all areas of marketing and at all levels of your organization. We encourage you to try out new ways of working in central marketing – or in a test market – to get rapid feedback on the impact, and roll out the things that are proven to work to business units and countries. “Speed comes from local autonomy to take local action,” says the CMO at a leading consumer goods company. As you set out to accelerate your organization, differentiate between three types of decisions⁶ and adjust your speed accordingly:

• Frequent, tactical decisions that are part of a continuous process – such as online ad buying, media auditing, or managing online customer dialogues – for which fast responses are crucial to drive customer satisfaction. Use a formal approach – such as RACI codes (responsible, accountable, consult, inform) – to clarify decision responsibility, set up clear protocols, and conduct a dry run before you go live.
• Periodic decisions with strategic implications – such as budget sizing, changes to the instrument mix, or sign-off on major campaigns. For these decisions, you need to balance speed and flexibility with the need for a reliable fact base and correct inferences. Make sure you have repeated, collaborative interactions with key stakeholders – such as the CFO, product managers, and general managers of national subsidiaries – before you make a decision.
• High-stakes decisions with long-term effects – such as hiring a new senior executive, repositioning an important brand in your portfolio, or selecting a new lead agency. Think of these as Jefferson decisions. “Delay is preferable to error,” Thomas Jefferson said about high-stakes decisions in a letter to George Washington. Take your time, take precautions against prejudice, and take counsel with independent experts – such as an executive search consultancy, a strategic marketing consulting firm, or a pitch management agency.

Automation is a key enabler of agility, but it isn't everything. Agility is driven by mindset at least as much as it is driven by processes and protocols. Start accelerating the mental clock speed of the marketing team by introducing a more flexible campaign calendar. Make detailed plans only for major campaigns, but leave wiggle room for smaller, more tactical activities. Meet with your team on a weekly basis to agree on priorities. Encourage your direct reports to conduct daily stand-up meetings with their teams for progress reviews and real-time refinements. Have them run frequent live pilots to instill a sense of achievement in the organization. At the same time, educate your service providers to supply you with impact data more quickly, and make them your partners in a process of continuous improvement. Last but not least, don't hesitate to kill the things that don't work: tools that create more extra work than benefits (see Chapter 9), campaigns that fail to reach predefined objectives (see Chapters 1 to 3), and instruments that don't live up to your standards in terms of reach, cost, and quality (see Chapter 5).

Simplicity: Learn to walk before you run; create a culture of testing and learning in which failure is accepted

You may be tempted to implement everything you have read about in this book all at once, and to go all the way right away: city-level growth planning, segment-specific purchase driver analysis, award-winning storytelling, advanced single-user attribution modelling. We have one word of advice for you: don't. Instead, take things one step at a time. There is no point in buying expensive software if your organization is not equipped to use the output it produces for better decision making. Put yourself in the shoes of line managers in your organization. How can you make their lives easier, rather than creating extra work for them? In the real world, a clean-cut dashboard app that brings key marketing performance indicators to the smart phones of every executive can make a bigger difference than a high-end marketing ROI solution suite. Aspire to spare frontline staff the complexity of gathering information from diverse sources, cleaning up the database, and performing advanced analysis. Instead, give them what they need to make better decisions: up-to-date campaign impact figures, improvement ideas for their local marketing mix, or a typing tool that helps them tailor their propositions to customer needs.

One leading pharmaceuticals company, for example, has equipped its entire sales force with a tablet-based pitch tool. Prior to meeting with a physician or a hospital's representative, the sales rep answers a set of simple questions about who they are about to see – such as their area of focus, typical order volume, and willingness to try out new types of treatment. Based on the answers, the tool suggests an appropriate sales script, a preselection of recommended products, and a sliding scale of price discounts. In the background, all kinds of big data, market research, and advanced analytics are at work: a database of past transactions, needs-based segmentation analysis, competitive pricing intelligence, and dynamic sensitivity analysis. But all that is invisible to sales reps. They only see what they need to see to do a better job. As a result, the tool enjoys the highest acceptance rates the company has ever seen for a new piece of software, and sales force effectiveness has soared since its introduction.

Digital marketing is particularly susceptible to overly complex approaches, simply because so much data is available and even the most outlandish analyses can be performed at the push of a button. But often, simple improvements are more effective drivers of marketing performance than sophisticated systems. Start by having your team monitor the impact of their activities systematically and act on the insights this generates. If personalized outbound e-mail campaigning resonates well with your customers, do more of it, even if it seems old-fashioned and self-appointed gurus suggest premium rich media ads instead. Empower your team to test, track, and learn. Make it clear that failure is accepted – as long as people learn from their mistakes. A simple way to foster a spirit of experimentation is a controlled environment, such as vinoya.eu, an online wine store that is part of McKinsey's Capability Centre.⁷ During hands-on training sessions, executives take over vinoya.eu for a limited time. Participants get to experience firsthand how their decisions influence shopper behaviour, and they feel a real rush from experiencing cause and effect live. The specific success factors of online marketing may differ from industry to industry, but most managers are thrilled at the prospect of transferring what they have learned in a protected environment to their own businesses.

In many companies, real-time improvements to running campaigns may require collaboration across functional silos and outside standard reporting lines. “We need help to get through this jungle,” says the CMO at a consumer goods company. But before you make structural changes, hire a few new people with relevant experience, assemble a cross-functional team, and provide them with a test budget. Before long, you will see whether the new approach produces the desired results – more efficient customer acquisition, higher brand recognition, or better repurchase rates. If it does, roll it out. One telecommunications company, for instance, realized that its complex organizational structure was getting in the way of delivering top-notch customer service. The company created a unit that combined existing call centres and a newly formed social media customer care group. The leader of the unit reports directly to the board. Proximity to the top of the company allows the new team to collaborate more smoothly across the organization. At the same time, the new setup signals to the organization that a seamless customer experience is a top priority for the company.⁸

Substance: Unleash the power of marketing on the guts of your business to create a satisfying end-to-end experience for customers

“It's not a bug, it's a feature.” The line may have originated as a joke among 1980s software developers, but it is indicative of a particular understanding of marketing that still prevails in many engineering-driven companies today. In this view, marketing is little more than an appendix to product development. If the product doesn't live up to expectations, marketers will charm customers into buying it anyway with sweet little lies. In the past, companies might have gotten away with such sugarcoating. Today, there is no more tolerance for fluffy talk – let alone downright deceptive messages. Heartened by consumer advocacy and class action suits for compensation, consumers are more vocal than ever about what they like – and especially, what they do not like. Thanks to social media, disappointment spreads more quickly than in the past, and embellished claims about product benefits can seriously harm a company's financial performance.

But even if things don't go wrong in a big way, companies that treat marketing as an afterthought often miss out on substantial value creation opportunities. One car manufacturer, for example, did not involve the marketing department in the development of a new minivan until just before its launch. As a result, the new model came with all kinds of innovations nobody cared about – such as an adaptive rear axle – while it lacked some crucial features – such as adjustable rear seats for a flexible interior setup. To make things worse, all the innovative engineering had made the car too expensive for many young families, its main target group. This was a clear case of marketing coming too late. But premature marketing is no better. One offline player under pressure from pure online players, for example, ran a large-scale media campaign focusing on “real-time service,” but failed to invest in actual process streamlining. By focusing solely on messaging without bringing the substance of the business in line, the company effectively broke its promise to consumers. The story spread quickly in social media and was eventually picked up by mainstream media. It took years for the company to recover from the resulting damage to its reputation and its business.

We believe that good marketing is truly consequential. CMOs today can create real value if they venture to shape the substance of the business: product features, service interactions, the entire customer experience. Armed with information about customers' needs and their relation with the company, the CMO is in a unique position to help other functions improve their offering, increase customer satisfaction, and create sustainable value. If the substance is flawed, even the finest communication will go to waste. But if the substance reflects what you know about customer needs, communication will be much more effective. If you infuse the entire business system with marketing expertise, everybody wins: product managers, marketers, customers, and the company as a whole.

One energy provider, for example, decided to differentiate its brand and justify its price premium by promising the best service in the industry. But before they went public with the promise, the company used customer insights to conduct an end-to-end overhaul of the customer experience. The programme spanned all major milestones, from onboarding and billing to moving house and changing tariffs. Among other things, the company found through market research that customers were discouraged from switching providers because they found the onboarding process too cumbersome – lots of paperwork, phone calls to different departments, repeated appointments for manual meter readings, and so on. In response, the company went to great lengths to simplify core processes dramatically and move large parts of the customer interaction to a new online platform, backed by a unified IT system that spares customers and service agents the hassle of having to enter the same information again and again. Marketing also took the lead in an effort to create new products. The CMO led a cross-functional team of sales, IT, and product development managers to develop a smart thermostat that would help consumers conserve energy. The company was richly rewarded for this comprehensive, customer-centric transformation effort. It now enjoys the highest level of brand preference in the industry, a growing customer base, and above-average loyalty in a fiercely competitive industry plagued by growing churn rates.

Such efforts are extending the reach of marketing into the guts of the business. As the CMO, you are well placed to help your organization detect and meet customer expectations. You know what customers care about, how much they are willing to pay for it, what bugs them, and what drives their loyalty. We encourage you to take advantage of this opportunity to help your company create more attractive products, more satisfying service interactions, and a consistent, seamless overall experience that reflects the values of your brand.

Story: Reinvent the marketing department as a newsroom and engage consumers as co-creators of brand-related content

Storytelling is a great way for companies to cut through the clutter of competitive communication and engage with consumers on an emotional level (see Chapter 4). But it also makes new demands on the marketing organization. You need to adopt a publisher's mindset, you need to hire and develop a new breed of people, and you need to set up at least part of the marketing department as a newsroom. In the past, a punchline for a new campaign every couple of months may have done the trick. In the future, you need to keep the cliffhangers coming every other day. Note, however, that such real-time storytelling approaches make new demands not only on the marketing department, but also require different, more flexible support models from legal and compliance. There are two basic archetypes of systematic content creation we observe in our work with leading marketers worldwide:

• Multiplatform content creators. These companies develop their own stories for activation at multiple touch points – from TV ads and YouTube clips to print ads and POS materials.
• Online content aggregators. These companies provide a forum for customers and experts to review products, report on experiences, and engage in discussions or co-creation efforts.

Leading personal care companies, for example, have assembled cross-functional teams that develop online tools to match products to skin types, produce makeup tutorials for dissemination on YouTube, and provide live customer advice. Some of these players also venture into the content aggregation space, e.g., by encouraging consumers to counsel each other on the company's website. Examples of pure content aggregation include travel portals like Expedia and TripAdvisor, which provide a forum for users to review hotels and describe travel destinations, but reserve the right to select and edit consumer contributions to fit the overall narrative of their brands as independent brokers. For online retailers like Amazon, user reviews of books and movies are a big deal. In 2013, Amazon acquired goodreads.com, a user-populated database of books, annotations, and reviews that has since been cross-linked with Amazon's retail business to enrich the user experience and provide an additional incentive for readers to explore and buy new books.⁹

Science: Infuse the marketing team with a spirit of systematic experimentation and fact-based optimization

There's often a perceived conflict between art and science in marketing. We don't see it this way. Marketing needs both art and science to succeed. Of course, science can mean advanced analytics, sophisticated regression modeling, and automated algorithms for auction-based media buying (see Chapter 6). More fundamentally, though, science is about forming a hypothesis, conducting an experiment, and observing what happens to validate, refute, or refine the hypothesis. This is exactly the approach – and the mindset – modern marketing needs. Direct marketers have done it for a long time: send mailing A to one group of customers, send mailing B to another group of customers, see which one generates more responses, and then run with the winner on a larger scale. Scientific marketing is about making a habit of this practice – across campaigns, target groups, and instruments. Put an end to hit and miss. Instead, test and learn. Whatever you do, clarify your intention, record your ingoing assumptions, track the impact, and incorporate the lessons learned into future activities. The challenge is to do it comprehensively and systematically. The good news is that the fact base is growing. Thanks to the rise of targeted digital instruments, a growing share of the budget can be tied to detailed impact figures and submitted to scientific optimization. “The beauty of marketing today is that we can really show the return. The data allows us to demonstrate impact in a much more transparent way than in the past,” says Google's CMO Lorraine Twohill.¹⁰

A leading European communications provider – a former state-owned monopolist – has implemented scientific marketing on a grand scale. It all started with the CMO's frustration about the disconnect between marketing action and consumer reaction. Because of the company's byzantine bureaucracy, it took months to sign off on a new campaign, a new rate structure, or a new service model. Then more months went by while the company called for bids from dozens of service providers in several countries. More than a year elapsed before any new idea actually hit the market, and new propositions had often become obsolete when they finally reached consumers. In the meantime, many other things had happened in the market – changes in regulation, competitor moves, new market entrants going live with virtual operator brands. As a result, it was impossible to connect market impact to marketing activities and learn from experience. To change this, the CMO set up a marketing lab, but not as most people know it. In this case, the lab was an entire country, although a small one on Europe's eastern fringes. With a small team of like-minded people and a network of trusted providers, the CMO developed a system of rapid prototyping, live market tests, and real-time adjustments to running campaigns and new rate structures. When she finally went to the board with a new proposal, it would be backed by detailed reports on how it had affected the test market in terms of customer acquisition, retention, average revenue per user, brand equity, and other KPIs. She has never had to endure lengthy discussions and cumbersome clearance processes again.

Good marketing is and will remain a combination of art, craft, and science. It has always been, and will always be, about art. The craft, though, has changed with more touch points, and the science has changed with more data. Millions of customers are interacting with companies, and with each other, at dozens of touch points, leaving a trail of terabytes of data. Retailers are under pressure to manage thousands of price points and hundreds of promotions in real time across multiple channels. Increasingly, machines are talking to machines as price comparison portals are taking hold and automated ad auctions are getting more common. Without science, you will be lost. This is why we encourage you to expand the analytical skill set of your team. Hire and develop marketing analysts who are comfortable handling large amounts of data, looking for patterns, and deriving inferences from their observations. Also, hire marketing technology experts who will help you bridge the gap between strategy and operations. Then have the new guys mingle with veteran marketers to make sure marketing is infused with science, and science with customer understanding. Some CEOs we know believe it's time to create a new position rooted both in technology and marketing, the marketing technology officer (MTO) – someone who knows what can be automated, when judgement is required, and where to seek out and place new technical talent. But even the MTO may leave your company eventually. This is why you also need to invest in tools and systems that embed evidence-based decision making in your business system (see Exhibit 10.3 for an example and Chapter 9 for details).

In essence, scientific marketing is nothing but gathering evidence to make better decisions – systematically, continuously, and with an eye to return on investment. For marketers, science is an opportunity, not a threat. Embrace it, and your company will prosper.