The Pig in the Pipeline

If you’re not familiar with midstream transmission processes (like I know most of you are), you may not have heard of a pipeline “pig”.  A pig is a device that is sent though a crude oil pipeline to periodically clear out the residue left by heavy petroleum.   My sentiment is that marketing and sales professionals need to periodically run a pig though their sales pipeline, and to focus their attention on the activities which will result in closing sales, not just filling the pipeline.

Far too many marketing professionals and probably and equal percentage of sales professionals focus their time and treasures on “filling the pipeline”—creating or attending networking events; investing in sponsorships;   fostering a referral network.  All these are worthwhile endeavors, and frankly easier to do than to mine the relationships that already exist.  There’s no pressure to sell, to engage in a deeply meaningful business conversation that might reveal a selling opportunity.   Just chances to smooze, enjoy a glass of wine and some brie on a toast point, and move on to the next new contact, pausing so slightly for another carrot stick. 

My assertion is that marketing and sales professionals should be more strategic about how they fill and cycle through their existing contacts.   Most managing director with whom I’ve worked has 400-500 contacts.    About 10% of those are individuals who have been, or are currently, clients.   I estimate another 20-25% is referral sources, leaving approximately 300 potential buyers or purchase influencers.  Greater marketing and sales attention on that subset is far more likely to result in transactions than by merely adding more prospects to the top of the funnel.   If you subscribe to the traditional five stage pipeline model (Contact-Prospect-Qualified-Proposal/Close), you know that the chances of winning at the Qualify stage are far greater than the Prospect or Contact stage).  But it is exponentially more difficult to master the discipline to segregate buyers, identify needs, develop solutions to address those needs, and rally the team to make a presentation, which is why we too often default to the wine and cheese circuit.

I’m not suggesting that marketing and sales professionals abandon the activities of fostering new client and referral contacts; my belief is that a balanced, more strategic approach is more productive and potentially less expensive.  Have you seen the price of brie lately?  

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The Leaky Funnel is a smart book about professional services sales pipeline, and if you haven’t read it, I would recommend doing so.   It’s a quick read and has some good reminders about pipeline management.  

United, we fall. How not to manage your brand image in a competitive environment

Since the merger of United Airlines and Continental Airlines last year, things have not gone well for the combined entity.  In 2011, for example, the combined entity received the highest number of passenger complaints, according to the Department of Transportation.   Anecdotally, I’ve heard frequent fliers lament the good old days of Continental, where the crews were friendlier, the upgrades more generous, and the food in first class was better.


The most recent erosion of the United brand equity has occurred in Houston (former HQ of Continental) during the past few months.  Southwest Airlines applied for a City permit for construction of an international terminal at Hobby Airport to provide service to Mexico, the Caribbean, Central and South America.   For more than 40 years, all commercial international air travel went through Houston’s Bush Intercontinental Airport, one of United’s largest domestic hubs.   United launched a media onslaught citing loss of jobs, longer lines at security, and a host of other ensuing evils from international travel through Hobby. SWA retaliated in the media, through direct communications to frequent flyers, messaging at the airport, with their version of the story citing job increases, lower fares, and greater consumer choices that would result from competition.   The tone was cheeky and consumer-friendly. And the underlying message as the reminder that in every instance in which SWA has entered a new market, overall fares drop.  It’s called capitalism, which has seemed to work for the past two hundred or so years. 


This week the Houston city council granted the permit to build the Hobby international terminal—the $100M cost of which is being born borne by Southwest.   The Houston Chronicle reported United’s response:


Within hours (of the city council vote), United Airlines told employees in a bulletin that, as a result of the council vote, it would be cutting planned operations at Bush Intercontinental by 10 percent and eliminating 1,300 Houston jobs, with the first buyouts, transfers or pink slips going out in the fall. It immediately canceled planned service to Auckland, New Zealand.
The council's 16-1 vote, according to the bulletin, also puts in "significant doubt" whether United will complete a planned $700 million expansion of Terminal B at Bush Intercontinental on which it broke ground in January.


Many business people with whom I’ve spoken believe the Hobby decision provided “air cover” (pun intended) for actions United had already planned.  No one was quite sure how a potential loss of Central and South American business would impact demand to Auckland.    The PR professionals with whom I spoke this week simply shook their heads, and agreed the “neener-neener” response the day after the Council ruling was both poor timing and poor PR.   “They should have waited until the fury died down,” said one PR counsel.   “Trying to link the Hobby decision—for service that won’t start for years—to layoffs now simply defies logic.  The frequent flier isn’t stupid, and United’s true rationale is pretty evident,” said another PR pundit.  


The airline FKA Continental has already suffered body blows from the merger.  Change is tough for the employees and passengers. But United didn’t have to dig itself deeper into an image hole by taking the actions they did, when they did.


When Continental was experiencing challenges a decade ago, they launched a great branding effort,  Work Hard.  Fly Right.   This was a terrific internal/external line that captured a spirit of possibility.   As the combined entity contemplates its new branding, it should consider not only what it says, but how it delivers it—in the air and in the airwaves. 

AMC’s The Pitch: The Hive stung by its own pricks

This week’s episode of the AMC series, The Pitch, reminded me why many advertising agencies have become obsolete.   Now in the spirit of full disclosure, as a former FKM shareholder and alumni, my loyalties for the competing agencies were clearly with my former colleagues in Houston who were competing against The Hive in Toronto for the Clockwork account.  Clockwork, despite the name and the, yes, orange corporate color, is a home services company (AC, plumbing, electrical) that’s less Stanley Kubrick and more Middle America.

Maybe that’s what threw off the guys from The Hive.

Despite clear direction from the client to retain the three brand ID’s for the three service companies, the first thing Hive recommended was to change it all.  While that might be the ultimate right answer (which I think it is), coming out of the box to ignore a client parameter is a mistake.  The Hive hadn’t earned the right to challenge the client, and stood on its bravado rather than common courtesy, or maybe common sense.  Strike one.

Their two subsequent creative pitches were 1) illegal in many states; and 2) incredibly self-indulgent.   Their first concept featured a cash truck which would give away money to that month’s customers—the only problem being that’s considered a lottery and therefore illegal.   Strike two.

The other concept was even more bothersome, as it revealed a blatant misunderstanding of the target audience in favor of a self-indulgent creative execution featuring a homeowner destroying her own toilet bowl so she could get a service call from Clockwork's plumbing division. The creative team Bobsey twins with matching-hats-to-make-a-statement were clearly more tickled about their own creation than what made sense for the client’s business or the consumer’s needs.  I now officially amend my previous statements that I’ve never met a Canadian I didn’t like to I’ve never met a Western Canadian I’ve never liked.   And you’re out.

The FKM team, on the other hand, demonstrated solid, consumer-centric thinking.  A Clockwork service call is necessary evil and a response to an interruption to one’s normal life.  The creative execution wasn’t fancy, or overly “CLEVER”, but was true and believable and spoke to the consumer need, rather than an art director’s caprice or an agency's ego.

Until agencies train more grown ups and fewer prima donnas worried only with their book or THE WORK, they won’t be able to satisfy clients’ real need to help create customers that deliver margin dollars over a long period of time.    To paraphrase Tom Monroe,  the “M” in FKM, clients don’t want ads, they want results.   If they could buy results, they wouldn’t need to buy an ad.   Maybe you had to be there. 

Doritos: The chip that crunches (ad agencies)

A USA Today article earlier this week announced the winners of the Ad Meter, that publication’s reader’s poll judging their favorite Super Bowl ads.  The baby in the sling ad, created by “amateur” Kevin Willson (http://www.compassfilms.com/) was judged the best among all the $3.5 million for 70 or so 30-second ditties on the Super Bowl XLVI broadcast.   Another amateur-produced Doritos spot featuring a felonious Great Dane with a penchant for cats and bribery won USA Today’s Super Sunday panel award.  The winners were rewarded with $1million and tons of publicity.  

This contest has termite-ed another leg of the stool of traditional ad agency relevancy.  

When I began in the agency business, the transition of “owning the strategy” was already shifting from agencies to client marketing group.  In years past the account director on Exxon or Shell was those brands’ keeper, since those companies shuffled ad directors every 3 years as part of the management training program.  Today most client companies mimic CPG companies by installing marketing professionals in marketing positions.

In the mid-1990’s, agencies began losing the 15% media commission cash cow to media buying services offering strategic planning and tough negotiations at significantly lower commission.  The effect was to reduce agency margins faster than M&M’s at a craft services table because clients viewed buying services as prescient alternative to media mavens who six months earlier likely were negotiating multiple choice college finals instead of multi-million dollar buys. 

The next leg of the stool was chopped during the 2000’s new media wave, which saw the rise of digital agencies.   My sense is that traditional agencies have only recently awakened to the fact that consumers are media agnostic.  It’s the same bias that bifurcated the PR and advertising functions in earlier eras.   Today digital agencies like New Haven based Caffeine are being appointed AOR for gorilla brands like Timex, which begs the question about how long the traditional agency will… (yes, you see it coming…) keep on ticking. 

The Doritos Super Bowl contest cracks the last leg of the stool of traditional agency relevance—the creative product.  While freelancers and independent producers have played greater roles since the agency downturn in the early 2000’s, Super Bowl ads have heretofore remained sacrosanct.   (Perhaps with the exception of whomever did the dog-crap Sketcher’s ad, the tired Go-Daddy spots, or the ironically boring-as-ever Camry work.)   On the other hand, Chrysler’s  Clint Eastwood spot was ballsy and moving at the same time—in the spirit of the 1984 Apple spot that shifted the Super Bowl broadcast from a football game with commercials to a media extravaganza.

In order to preserve relevance, agencies should consider their own value propositions with the same rigor the good ones put their clients through.  

• What do clients really want?  (More sales with greater margins) 
• How can the product deliver on that? (The business proposition, not the brand position).  
• How is the story differentiated in a compelling way (Advertising, PR, online, promotions, etc)

Without sounding like a Don Draper contemporary in today’s world, that’s the thought process from way back when that empowered agencies to own the strategy, and own the brand relationship.  Without that, in 10 years from now many agencies will have gone the way of the three martini lunch.   I’ll miss them both. 

CMO Profiling: Do any of these sound familiar?

During my long strange trip over the past two months, I’ve had occasion to meet a number of my fellow Chief Marketing Officers, and have arrived at a typology (some might call it spacial profiling) for the spectrum of professionals and others who fill the role of the voice of the consumer and driver of revenue within their organization.

Just like the personalities of our children, the way we evolve as professionals is a function of both nature and nurture.    Some that I have met recently must have been raised in a Dickens novel; others could be found alongside Gandhi, hanging with the other good eggs and spreading the good news.  And a lot fall into the middle.

Here, in my humble opinion, are the various types of marketing people.  Note that this is a composite of types and according to my attorney, does not represent or intend to represent any actual person, living or professionally dead.

See if you can recognize any of the traits in anyone you know:

Consumer Packaged Goods Snob

Strengths:                          Brings a wealth of fact based marketing acumen to most situations.

                                            Excellent in process

                                            Understands the role of all the marketing “P’s”

Weaknesses:                     Can be narrow minded and pedantic in their approach

                                           Repeats stories about their previous national brand ad nauseum 

                                           Propensity to get caught up in their knickers

Drinks:                                Bonarda  

Drives:                                 Lexus 300

Wears:                                 Brooks Brothers (even the women)

The Brand Effete

(Closely related to the agency refugee below, but more often a creative type)

Strengths:                           Understands the value and strength of a powerful brand

                                             Excellent taste

                                             Consummate smoozer

Weaknesses:                       Consummate smoozer

                                             Doesn’t sully themselves with the minor things like driving revenue

                                             Always looking for their next gig

Drinks:                                 Whatever was featured in Saveur this month

                                               

Drives:                                  Lives on the Upper East side, so they don’t  

Wears:                                  Designers I can't spell or pronounce, but always in black or red

Sales Person in Marketing Clothing

Strengths:                           Laser focused on driving revenue

                                            Great at directing marketing that drives action

                                           Good with those outside the company

Weaknesses:                      Bad follow up

                                           Butt kisser

                                           Did I mention bad follow-up

Drinks:                                Like a fish

Drives:                                BMW;  like a bat out of hell

Wears:                                Hugo Boss

Utility Player

Strengths:                           A great balance between practical execution and strategic insight

                                             Peace makers (usually a middle child)

                                             Well-liked across constituencies

Weaknesses:                       Prone to be stabbed in the back

                                             Plodder with a propensity to be an order taker

                                             Takes the safe choice

Drinks:                                  Whatever you’re having

Drives:                                  Volvo Cross Country

Wears:                                 A lot of Dockers

Agency Refugee

Strengths:                            Great at execution of marketing programs at reasonable costs

Give good PowerPoint

                                             Works well with outside agencies

Weaknesses:                       Too skewed to “the brand”

                                             Competes with sales leadership

                                             Toady

                                               

Drinks:                                Vodka and anything 

Drives:                                 E-series Mercedes

Wears:                                Armani

Like I said at the beginning, these are composites.  Do any of them ring true to you?    What types did I miss?

Conventional Media’s Tipping Point

A few weeks ago, the Pew Center for Research’s 2011 State of the News Media reported a media sea change as significant as television replacing radio as the primary mass medium.   This news was ironically overshadowed by the launch of the new iPad (which irks me since my first generation iPad now has lost some of its cool factor.)

The most significant aspect of the Pew study is that 46% of those surveyed reported getting their news at least three times a week online vs. only 40% from newspapers.  So it also stands to reason that online news ad revenue surpassed print newspapers for the first time in 2010.  William Randolph Hearst must be spinning in his grave faster than the printing presses of the San Francisco Chronicle.

But the traditional media malaise extends beyond the local newspapers, which have suffered the most attrition of late:

Prime time cable, which was the darling alternative to PT network for a decade (remember when The Sopranos aired its final episode and beat some of the networks?), is suffering as well.   CNN’s PT viewership dropped 37%; FOX fell 11%; and MSNBC slipped 5%.  And according to Pew, median cable viewership across all day parts atrophied by nearly 14%.   You can read the study at

http://stateofthemedia.org/2011/overview-2/press-alert/

The magazine industry continues to beat their drum through ads touting the value of print, the higher level of interaction, and that the average reader spends 43 minutes with the average magazine.   While I’m sure some data proves those claims, I have to wonder about the dwindling size of publications, the long lead time to get ads placed (antithetical to today’s see it now, sell it now mentality), and You Tube induced shorter interest spans that gnaw at magazines as a viable medium.  I also think about the Huffington Post sale to AOL which demonstrates that someone with lots of money believes online magazines are the future, and print is passé.  For the Magazine Publishers Association latest report, visit:

http://www.magazine.org/consumer_marketing/circ_trends/

Even online advertising is shifting.   According to Bill Mulligan, President of Caffeine Interactive, consumer habits are shifting because of the factor of online trust.   Today’s consumers are more prescient about the lack of objectivity of much of paid search content, which are perceived as “advertising”.  Consider your own search habits—are you more likely to click on a sponsored link on the side of a page, or one that comes to the top of the organic list? 

This paid vs. organic debate reminds me of an earlier time when PR and advertising professionals who argue the merits of their respective crafts.  A full page of PR coverage was traditionally valued at 7X that of a full page paid ad, because of the “objectivity” of editorial.   (Countered by the fact that with an ad campaign, you controlled the message and the frequency).  The challenge for online marketers, therefore, is creating the right blend of paid and “placed organic” content to address the increasing online consumer sophistication.  

So Now What?  

Newspapers, cable, and magazines in their current form aren’t going away any time soon (except for cable if Mad Men doesn’t come back soon).  As with earlier media shifts (print > radio; radio >TV; network > cable), there will always be a place in the media mix for both old and new media.  The common pattern of these shifts was once mass, but today it about relevancy, access, and measurability.  Content is still king, whether I’m reading on paper at the breakfast table, on my iPad on a train, or on my PDA during a particularly boring meeting.  The ability to consume media in a spectrum of vehicles is what’s changing habits, especially for those under 30 who grew up wired.

The smart marketing professional needs to understand the value of the old media in reaching certain demographics, but use the speed to market and measurability of new media to its full advantage.   And to use the right blend of paid and organic placements online.  Yes, we’ve reached a tipping point in old line and new line media in 2010, but as we weather the transition period, marketers will have to live in both worlds as the change curve shifts.

Sales and Marketing: Can’t We Just Get Along?

When I was a marketing director at Brunswick’s boat group, a consultant made a very prescient point about the difference between sales and marketing.      

“The difference,” he pointed out, “is that the timing of the priorities is not the same.   Sales people are concerned with today’s quota, next week’s sales calls—things on the immediate horizon.   Marketing people are more geared to longer term goals—building a brand, market penetration, and the like. Until those differences are reconciled, there will always be inherent friction between sales and marketing.”

This was a consultant worth his $300 an hour.

In my career I’ve witnessed the chasm between sales and marketing and seen the detriment it can create in an organization.    In the instance of a wireless company client, the heads of sales and marketing only shared a mutual hate, and would do anything to subvert each other.  As a result, the company was slow to react to competitive pressures in product development and price promotions and suffered a series of avoidable stumbles.

I am blessed by the fact I work with probably the best sales director I’ve ever known in my career—Jana Carpenter.  She knows enough about marketing to be dangerous, and to call BS on me if I’m off track.  (Which, of course, rarely happens).  Jana brings a very strategic approach to sales, which places her above most other of her tactics- driven sales contemporaries.  And best of all, she and I work seamlessly, with the appreciation and understanding that our ultimate goals are the same (to drive revenue) and that the marketing function and the sales function are complementary extensions of each other.    I’ve often described the dynamic in the context of a battle—that marketing is the air cover, and sales is the infantry.   You’ve got to soften the beach before the troops land on it.  And like in battle, it’s a matter of timing, coordination, and cooperation.

A few years ago Jana and I collaborated on an article on this topic, and created a diagnostic tool for companies to gauge the alignment of their sales and marketing teams.   If you’d like a copy of it, I can send you an electronic version. Post a note on this blog or reach out to me at bill.penczak@gmail.com, and I’ll send you a copy.

The discussion question this time is, “What are the prerequisites for successful collaboration between sales and marketing?”   And the tangential question is, “Should the sales and marketing functions be separate and equal roles, or should one person carry responsibility for both?”

Discuss among yourselves.