John Costello, Vice President, Marketing, Gateway

Interview by The CMO Council

Customer data tells a company what kind of people their customers are, what products they like and dislike and what markets the company should be targeting to generate more revenue.

This is especially important in a company such as Gateway, one of America’s best-known technology brands. According to John Costello, Vice President of Marketing, customer data sharing across many different channels used to be a roadblock for Gateway, but the company has since changed its ways.

Costello explains that Gateway's goal is to market to as many consumers as possible whether it is through direct mail, over the phone, over the web or through channel partners. As a result, there is little channel preference as to what channel is used and instead Costello says that the focus is on how the customer uses the information to make a purchase.

With such a high emphasis on data, Gateway conducts extensive research, including distributing questionnaires asking customers about their experiences with new products as well as their intentions for future purchases. By reaching out to their customers, Costello says that they found that their customers were very loyal and that they end up coming back to Gateway on a regular basis.

With all their customer information, Costello believes that the company is able to have a single view of the customer and which customers they should be targeting. Customer data is also used in product development and marketing and tracking customer behavior.

To keep customers coming back, Costello has a program that captures the customer at the point that they are ready to replace their current system. He also focuses on retaining customers by sending current Gateway users personalized offers that are specific to the customer’s system ID and system tag.

"I think the biggest thing for us is to help customers understand how remaining a Gateway customer can benefit them," Costello explains.

Key Insights:

On The Company's Disparate Customer Data Sources and Repositories:

"We have a very large database that is constantly under maintenance with more information being added or deleted on a regular basis."

On the Company's recent use of Customer Analytics:

"We reviewed some research we did recently around customer’s buying behaviors and buying patterns online versus over the phone or in person. We looked into the logic and reasoning behind what customers do, what drives them to a store or to the phone and perceived benefits of each option."

MINDING THE GAP: RESULTS FROM THE BRAND INTEGRATION & ALIGNMENT SURVEY
By Denise Lee Yohn and Ken Coogan
Exclusive to Marketing Magnified

If "vision without execution is hallucination," as Thomas Edison once proclaimed, then our study reveals many companies are hallucinating about their brands. Our research shows companies struggle to close the sizable gap between brand strategy development and brand strategy execution.

Granular sales data and improved analytics have produced smarter, more fact-based strategies; but organizations are not executing them with the same rigor. Previous conversations we’ve had with company and marketing leaders about their frustrations with brand execution led us to conduct a targeted study to isolate, explain, and diagnose the issues.

We surveyed marketing leaders from over 70 companies in a range of industries. Our goal was to provide an overview of how marketers are working to close the gap between brand strategy and execution. Specifically, this research was designed to address:

• What factors are important in closing the gap between brand strategy and execution?
• What role does leadership, communication, resources, organization and innovation play in formulating and executing winning strategies?
• How can brand strategies be delivered more effectively?

Key Findings:

Here's what the study participants told us:

Nearly three-quarters see a sizable gap between brand strategy and execution in their organization and only 30% say they are "confident" they can close it, reflecting a real business challenge.

Almost all of the 16 proposed drivers of brand strategy execution are deemed equally important.

• Of particular note, communication and internal articulation of the strategy are as important as more expected strategy drivers such as inspirational vision and adequate spending levels.
• Formal organizational structures and reward systems, however, were considered not as important – suggesting that brand strategy execution is less a discrete task and more a systematic, organization-wide culture and process.

Despite the perceived importance of internal alignment, most marketers focus their measurement primarily on external metrics. Measuring internally is an opportunity to achieve more traction in brand strategy execution.

• As the adage "you manage what you measure" goes, people who say their companies have achieved a greater level of progress in creating consistent and aligned brand touchpoints report more measurement efforts.

Pressure to achieve short term goals, the #1 obstacle to implementing brand strategy, might be mitigated by addressing the second most-frequently identified obstacle – lack of discipline or process.

• Consistent with other findings, alignment and culture issues are also frequently named as obstacles.

In answer to the question, "What do you see as the biggest opportunity in developing and executing effective brand strategy?," over half of the comments point to alignment and culture.

Sample responses:

• "Consistent clear point from which all stakeholders can act."
• "To improve understanding of the importance of brand strategy among internal stakeholders, to obtain even stronger internal alignment."
• "Moving from a product-based culture to a customer-centric culture so that strategy can be better aligned to meet customer and consumer needs."
• "Must empower the people are working on the execution of all areas."

Conclusions and Implications:

• The brand strategy-execution gap is real. There is a sizable gap between brand strategy development and execution for many companies – and people are skeptical of the ability of their organizations to close the gap and remove the obstacles they perceive to block implementation of brand strategy.
• The gap results from the lack of systematic, organization-wide culture and process for brand execution.
• Mitigating short-term results pressure while instilling discipline and process is the path to closing the gap. Measuring internal alignment and engagement with the strategy are also indicated actions.
• A combination of factors – particularly communication, organization, culture, and integration of execution into processes and budgets – plays important roles in formulating and executing winning strategies.

All of the above indicates a lack of know-how in strategic brand execution™.

Strategic brand execution is a systematic, organization-wide undertaking which changes the operations and culture of a company so that brand strategies are executed more effectively. By implementing specific tools and processes (such as brand toolboxes and operational worksessions), focusing on internal communications and alignment, and utilizing metrics to track the full range of brand impact internally and externally, companies can close the gap between brand strategy and brand execution.

We hope our findings will create momentum and provide direction for companies seeking to translate brand strategy into operational reality.

Download the slides from the survey.

The study was conducted in April 2008, among decision-makers from 71 companies, representing a wide range of industries, products and services including 3M, Campbell's, Sony, and Time, Inc. Over three-quarters of the respondents held "Director" level or above positions and almost all participants classified their function/department as "marketing/brand." To learn more about strategic brand execution or the study findings, contact Denise Lee Yohn at mail@deniseleeyohn.com.

Coogan & Partners is a consulting firm that provides guidance to marketers at leading consumer goods companies through research and share groups.

Denise Lee Yohn is a "brand as business" consulting partner who has helped companies like Sony, VF Corporation, and Road Runner Sports operationalize their brands to grow their businesses. She can be reached at mail@deniseleeyohn.com. To receive her periodic emailed briefings on how organizations can operationalize their brands to grow their businesses, brand as business briefs™, please sign-up at www.deniseleeyohn.com.

CALCULATING THE VALUE OF REFERRALS: EASIER SAID THAN DONE
By MarketingNPV

There is still much to be learned about calculating the economic value of referrals and other word-of-mouth (WOM) activities, both online and offline. Current methodologies and research give us small glimpses of a great universe, but in many ways our current approach to charting WOM is like being an astronomer back in the pre-Galilean era. We can see the moon and the stars, but we have no real frame of reference around how big the universe actually is or the activity that's taking place outside of our view.

Consider, for instance, that even the most advanced third-party tools primarily track online WOM — a severe limitation when you look at studies like the 2006 Keller Fay Group survey, which concludes that only 8% of brand-related conversations take place online. "Online tracking mechanisms make it easier to track who's recommending what," says V. Kumar, the ING Chair Professor in Marketing at the University of Connecticut's School of Business and executive director of the school's ING Center for Financial Services. "But still the hole is there, because the offline activities are not captured."

The good news is that the tools and research methods are improving — much as the modern telescope has evolved from the early models built by Galileo — helping us to gain more informed insight around the real drivers of WOM. In this article, we'll look at two emerging bodies of work that advance the discussion about the business impact of WOM and offer some takeaways for marketers who might, understandably, be struggling to get their arms around calculating the economic value of WOM.

Ultimate Question, Elusive Answers

Fred Reichheld's "ultimate question" — would you recommend us to a friend? — helped to catalyze the word-of-mouth movement for corporate marketers. Social media tools such as blogs and user rankings have pushed the concept further from a very personal interaction — a friend recommending something to another friend — into a one-to-many activity online. (Call it the Oprah's Book Club model brought to the Web, where anyone can be Oprah.)

Scores of studies point to the benefits of personal referrals vs. marketing promotions for influencing purchase decisions. No argument there. The burning issue for marketers is that many of these studies only scratch the surface of the true impact of word of mouth. Truth be told, while we understand at a conceptual level the benefits of WOM, we don’t really have our arms around its behavioral or economic impact.

This is an excerpt, click here to download the full paper.