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As I ramp up the digital marketing practice at etc…group I’ll be blogging more frequently about progressive marketing strategies.  I’ve switched to wordpress.org for a bit more flexibility and will no longer be using this service.  Please change your subscription to follow me at http://mikecichon.com/feeds.  I look forward to seeing you there!

The average tenure of a CMO today is 28 months. That’s right — just over two years according to a report issued by Spencer Stuart, and described here by Frank Reed in a recent WebProNews post. While this is up slightly from last year, it still makes the CMO job one of the shortest-tenured roles in the executive suite.

Clearly when times get tough, it’s not surprising to see changes in marketing. But, what is happening at the top level of our largest corporations illustrates the tremendous amount of change taking place in the marketing function – the likes of which pundits like David Meerman Scott and John Jantsch have been talking about for quite some time now.

Dating as far back as 2004, Spencer Stuart identified several contributing factors for the high CMO turnover, and among them “a disconnect between the skills required of today’s CMO and those of the past.” It’s shocking that after working their way up the ladder, some executives would find their skills have not kept pace with business needs. Unfortunately, innovations in marketing have only accelerated the past few years.

Since 2004, a wave of new Web technologies have been introduced and made available to consumers for the first time (largely for free). All sorts of on-line discussion forums, Web directories, wikis and product review sites have sprung up, enabling consumers to find, create and socialize information across the Web fast.

A whole new generation of digital consumers is also coming of age, connecting and sharing on social networking sites like Facebook. The “echo boomers” are gradually displacing baby boomers whose consumption habits in any event appear to be aging less gracefully than they are. And, at the same time, the economy has slowed, leading consumers to question brand loyalties and scrutinize purchasing decisions more closely.

The new tools and desire to use them have created unprecedented levels of transparency not only in consumer markets, but also in traditionally opaque business-to-business markets. Today, over 90% of all on-line and off-line purchasing decisions start with a search of the Web. Buyers in significantly increased numbers are finding, researching, and comparing products on-line. But it’s not just that buying and consumption habits are changing — they are changing at warp speed. 

The relative isolation of buyers just a few years ago made it much easier for companies to meter-out their market communication across carefully controlled broadcast channels. They communicated in a virtual monotone to a mass audience – via static websites, press releases, emails, and advertising. Messages were broadcast with no real intention to engage individuals in a conversation. For the most part, customers got information that marketers wanted them to get, but customers themselves had virtually no voice at all. 

Things really changed with Twitter and the crush of social media tools that followed. Twitter wasn’t the first or most innovative social media tool, but like a lot of disruptive technologies it sparked sharp debate between enthusiasts and skeptics about the importance and relevance of our growing digital connectedness. Twitter also allowed good and bad information to go viral and spread rapidly.

Since Twitter, so many new tools have cropped up around the micro-blogging service that Brian Solis took the effort on his PR2.0 blog to chronicle about 100 of them. If only marketing were limited to Twitter, our changing world would be magically finite and easier to digest, but unfortunately this is not so.

Today, many companies (not just their CMOs) find themselves at a cross roads. Their executives are probably feeling a growing uneasiness from the need to do something different in marketing but lack of clarity about what to change first or next because the rules have changed. They need to connect with customers in new ways, but old-school marketing tactics are too clumsy and ineffective to serve them well. Of all the avenues provided by new social media and digital marketing technologies, which ones are most promising for them? Which should they pursue, and in what order?   How should success be measured?

These are tough questions and the reality is that in the new world of digital marketing and social media it might take some amount of resource and experimentation to figure out what is right for the business.  I like the “Google rule” when it comes to this – spend 20% of your time investigating new, innovative ideas.  Then, relentlessly execute with the remaining 80%. 
But to keep pace with their markets, companies can’t go it alone. I suspect most will need to look outside the four walls of their own business and develop new ways to “sense and respond” to customer sentiments. On the Web, you can’t be everywhere, all of the time, so marketing will need to adapt new strategies that help them learn from customers while they leverage the eyes and ears of their biggest brand advocates to help guide the way.

As usual, marketers need to keep a watchful eye on competitors’ digital marketing tactics, but more so they need to do their homework and seek out the best and brightest ideas from experts who can help.  Maybe this is why CMO turnover is so high in the first place – marketing is perceived as being too inward focused and preoccupied with day-to-day tasks that they are incapable of bringing fresh new ideas into the organization. 

I’m convinced the CMO job doesn’t need to be a revolving door, but the marketing discipline does need to reinvent itself.  It’s clearly no time to cocoon behind closed doors, but it won’t work to simply mimic what others are doing either.  I’ll be writing more soon about strategies to personalize your brand using digital marketing techniques, and I’d like to hear from you.  If you agree or disagree with the points I raise here, let me know.  What digital marketing strategies are you using?  What is working or not working?  How are you measuring success?

On his Influential Marketing blog Rohit Bhargava caught my attention this morning with a great title for his entry — Customer Satisfaction Doesn’t Matter.  Rohit makes the point that particularly in commodity markets, companies would do well in their efforts to compete for business by cultivating satisfied customers, building loyalty, and then developing advocates who will refer them to their network.  In this regard, he says, Social Media and Word of Mouth marketing have a place.  On the other hand (I infer), companies with a tacit focus on customer service (particularly those with products where switching costs are minimal) will be pressed to succeed.  Traditional “customer satisfaction” efforts and metrics will not be enough.

Rohit is right that social media plays a part here, but it’s a complex mix right now.  Customer service communities (e.g., Helpstream), marketing communities (e.g., HiveLive), and word of mouth marketing (e.g., Zuberance) all play a part.  At this point, it’s anybody’s guess which approach (or combination of technologies) will rule the day and what the optimal mix of people, process and technology will be for different kinds of businesses.

I do think it is safe to say that at least in North America most companies will find some element of social media to be critical in their service, marketing and sales programs.  The practitioner leaders are and will continue to pave the path, and some will gain significant competitive advantages by being first to endear their brand with customers by closely aligning their products and services with the distinct preferences of their customer base.  The reason — customer advocacy morphs the relationship dynamic from company / customer to peer / peer, and it’s much more difficult to displace the latter than the former. 

Those companies who lag too far behind in this regard and who remain too comfortable with traditional product, service and marketing constructs may very soon find themselves hopelessly minimized in their target market(s) by more innovative companies.  Their prom dates will have already left the ball with somebody else.

The difference in this wave of innovation is the speed of change and the amount of wiggle room for error.  Unlike many previous innovations, this wave doesn’t require a huge technology investment, so anybody can play – there are plenty of relatively affordable social media toolsets available.  The obstacle this time is more cognitive, and those who make the mental shift can quickly break away from the pack.  In this regard, since smaller companies tend to be more organizationally agile, you might say the playing field might even be tilted to the benefit of small and medium sized business (SMB) than it has been in recent past.

Here is what I mean.  Sincerity is a requirement for any interaction – personal or professional.  Would you really want to be in a relationship with anybody who isn’t sincere?  I think for almost everyone, the answer to this is a resounding “no.”  Social media is no different, and if companies are not dedicated to sincerity with their customers, they will likely find social media to be a train wreck in slow motion.  But, before we agree on the need to be sincere, let’s agree on what this means.

Sincerity means engaging customers as equals and having the willingness to proactively adjust strategies, organizations and product offerings.  Moving forward, many companies might find sincerity requires the need to displace or reduce sales and marketing organizations with larger product and service teams and better customer-facing technology infrastructure.  (After all, if true customer advocates are going to be doing the selling for you, why would you need to pay sales people high commissions or marketing people to generate “leads?”) These will be difficult decisions, and this is just one example. Sincerity implies the willingness of c-level players to make some very basic structural decisions about how company resources will be allocated to address the changing needs of their customers and target markets.  This is much easier said than done.

My guess is that companies will find that social media exposes areas of weaknesses – product shortcomings, organizational dysfunctions, unserved needs, and competitive threats.  It gives voice to customers, and by virtue of the democratic nature of the Web it happens whether companies participate or not. 

Companies can choose to ignore it and even attempt to shout over the conversation with traditional advertising and PR strategies, but in the long run this won’t work. Social marketing and sales initiatives will need to be built on sincere relationships so to be successful, companies will need to consider how prominent of a component sincerity will be to their brand. 

If you have a category killer product with great features and break away technology you’ve either found yourself to be extremely lucky or your product teams have engaged customers and understand their needs already.  Why not formally extend that “discovery” practice to the after sale relationship with customer community and word of mouth programs?

On the other hand, if you have an average product, maybe investment in R&D should come first. If you find yourself anywhere in between, using service as a differentiator and leveraging word of mouth marketing to build customer advocacy is something you probably should not put off for too long.

There was a subtle, but tell tale shift in the wind in Silicon Valley last week. It came via a relatively innocuous promise imbedded in the Service Cloud announcement from Salesforce.com. 

First reported by Anthony Ha of VentureBeat, Service Cloud christened “the era of cloud computing” and came with some fanfare – a stable of pre-briefed pundits and even a CrunchBase profile. Their well choreographed launch garnered mention in over 20 articles and blogs by my count (and I stopped counting a while ago). 

What I found most interesting wasn’t the headline at all. Several companies including arch rival Oracle have declared movement into the “Social CRM” arena for a while now. It was the mention of SEO in the context of Customer Service that caught my attention. As reported by Jeff Widman of TechCrunch the SEO promise read “SEO–make sure your company’s community shows up high when I reach for Google.”

Whether fully supported or not, the capability sounded reasonably straight forward:

  1. connect to social networks, forums, blogs and other sites where your company’s products are mentioned,
  2. funnel that information into your own web-based knowledge repository.  Now you have a repository about your products and related information – presumably containing all the latest questions, comments, recommendations, partner offerings, reference requests, etc.
  3. enable customers to socialize that content by adding comments, voting it up/down, adding follow-up questions, linking other relevant information on the web, etc.
  4. expose the knowledge base to search engine spiders and let it be indexed. 

The result of this is you’d now have a bevy of content filled with clustered keywords, authored by customers themselves, all pointing to your domain. Now, the more customers get conditioned to using a web-based Service community for answers, the more they’d naturally do so in response to real life events (e.g., new product launches, new partnerships, competitive developments, economic pressures, etc.). This means they would continue to actively populate community sites with all sorts of content filled with the exact keywords pertinent to the day – questions, answers, referral requests, etc. And, this is the type of content (void of marketing spin) that customers seem to want the most.

But, it’s not just customers who would find this information when they reach for Google – so could prospects (shoppers), partners, competitors, your competitors’ customers, your partners’ customers, and so-on. The implication: for companies who not only want to participate in social media, but who go the next step to hosting their own community, they’ll be a great deal easier to find on the web. But, if your company and products suddenly become easier to find via natural search, why would you continue to invest additional funds into paid search?

The thing is, until now, being found via search on the web was a matter of tinkering with expert generated web-site content and meta data, and paying to be found via paid ads. Even key word based “inbound marketing” techniques rely on carefully selected anchor text and careful search term selection. Now, with companies deploying community applications there is a truly organic path to seeding natural search, and one that is destined to follow the sentiments and interests of the participants in nearly real time – or at least as real time as the latest web site crawl from Google, Yahoo, MSN, etc. Particularly for companies actively monitoring their community, this would seem to be the ultimate source for drastically improved natural search results. 

What’s happening on the paid search side is even more telling. This morning, for example, Andy Beal reports an Efficient Frontier predication that search revenues are dropping, and he asks if Google revenues will reflect the same. Now we are in a severe recessionary down turn, so it’s no surprise that quarterly earnings across the board will reflect tough times; in this case, smaller marketing budgets. But, as with any investment outlook, the long term is often more compelling than the short term.

It’s not just that search revenues are down last quarter, or that ad-based business models (once all the rage) seem to have dropped out of vogue, or that my boss cut my paid search budget six months ago. If you look behind the headlines, we may be seeing a not-so-subtle shift away from traditional SEO and paid search strategies to community strategies. For one, paid search expense is proving ineffective – people are getting tired of broadcast messaging and marketing spin. Two, the promise of SEO via communities might be displacing or at least freezing search spend. And, three, we’re seeing the first evidence of broad interest of Service-focused communities that could bring with it tectonic implications for paid search long term.  Here’s why.

Salesforce is a bell weather CRM company, and their customers seem to be very interested in Service communities. In the Service Cloud announcement, we’re seeing a shift in attention around web-based Service communities from a handful of early adopters to the early majority. It remains to be seen whether we’re at the tipping point where web-based Service communities combined with word of mouth marketing tools and clever tactics completely or substantially displaces paid search, but in this harsh economic environment a few things are clear.

In marketing, deep cost cuts are a fact of life. On the service side, it would be hard to imagine a time when retaining customers could be as important as it is today. This combination will certainly motivate many companies to entertain structural changes in the way they market and service their products. Web-based service communities simply represent too much promise to be ignored as a way to substantially improve both marketing and service — cutting hard dollar costs and enabling companies to get closer to customers to better service their needs.

Over the next 12-18 months or however long this recession lasts it’s likely that many of your competitors will explore web-base Service and Marketing communities for their potential. Just as likely, some will have begun to lay the groundwork for their own community initiatives. If you are a marketing or service professional who has not yet evaluated web-based community strategies, you are rapidly approaching the risk of being behind the learning curve by putting it off much further.

But it’s not enough to simply know what’s possible. You will need to discover how to leverage social tools and community strategies appropriate for your company, its stage, your market and your customers. Good advice would be to keep an eye out for first movers in your industry and learn all there is to know about what they are doing with communities and how they’re doing it.

It wouldn’t hurt to also follow news from the likes of companies like Google and Facebook. Whatever transpires to bring about wide spread adoption of web-based communities, one of these two companies will likely be in the middle of it. It’s not that every company needs a Facebook page, but the synergies between natural search, web-based communities, and social networks seem all too promising. So much so, that moving forward I’ll personally look at talk of a Google-Facebook combination a bit differently than I might have just a few short months ago.

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